Purpose of Budget Review

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s proposed budget for the 2017-18 fiscal year are reasonable, and whether the City took appropriate action to implement or resolve recommendations from our budget review issued in May 2016.

Background

The City of Long Beach, located in Nassau County, has been authorized to issue debt not to exceed $12,000,000 to liquidate the accumulated deficit in the City’s general fund and certain other funds as of June 30, 2012. Local Finance Law requires all municipalities that have been authorized to issue obligations to fund operating deficits to submit their proposed budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• The proposed budget includes revenue estimates of $44.3 million. This includes refuse and garbage charges of $9.45 million, which includes a midyear increase of $15 per sanitation parcel which the City has not yet authorized.
• The proposed budget includes appropriations for overtime salaries totaling $2.7 million, which may not be sufficient. Annual overtime costs averaged approximately $3 million for the last five completed fiscal years.
• Officials did not communicate the rescheduling of their budget vote (from May 23 to May 17, 2017) to our Office in a timely manner. We have provided recommendations in accordance with legal requirements based on the initial budget vote date of May 23.
• City officials partially implemented the Comptroller’s recommendations in our review of the 2016-17 proposed budget.
  • They appropriately removed one-time revenue for an unrealized property sale; modified estimates of beach charges; authorized a proposed increase in sanitation charges, and increases in water rates and sewer rents; and modified sewer rent estimates.
  • They did not modify overtime appropriations. As of March 31, 2017, overtime expenditures were $2.63 million, exceeding the adopted budget by $503,749.
• The City’s proposed budget includes a tax levy of $36,693,869.

Key Recommendations

• Authorize the proposed increase in refuse and garbage charges prior to adopting the budget. Alternatively, modify the budget to agree with the rates in effect.
• Adopt policies and procedures that will reduce overtime, or modify the budget to provide appropriations more consistent with past overtime costs.
• Review our recommendations before the budget is adopted.