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City of Long Beach – Budget Review (B18-7-5)

Issued Date
May 08, 2018
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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 2018-19 fiscal year are reasonable, and whether the City took appropriate action to implement or resolve recommendations from our budget review issued in May 2017.

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 $41.6 million. The refuse and garbage charges of $9.6 million include an increase of $20 per sanitation parcel which the City has not yet authorized.
  • The proposed budget includes appropriations of $1.8 million in termination salary payments, yet expenditures have averaged $2.6 million over the last three years.
  • City officials only partially implemented the Comptroller’s recommendations in our May 2017 review of the 2017-18 proposed budget.
    • They did not modify the adopted budget to reflect existing refuse and garbage rates, in the absence of City approval of the proposed rate increase.
    • They did not modify overtime appropriations. As of March 31, 2018, overtime expenditures were $2.98 million, exceeding the adopted budget by $246,216.
  • The City’s proposed budget includes a tax levy of $41,358,266, which does not comply with the tax levy limit because it is $3,712,839 above the limit established by law. On May 1, 2018 the City Council adopted a resolution authorizing publication for hearing of a local law authorizing the City to override the tax levy limit.

Key Recommendations

  • Authorize the proposed increases in refuse/garbage rates prior to adopting the budget. Alternatively, modify the budget to agree with the current rates in effect.
  • Modify the budget to increase appropriations for termination salary payments to be more consistent with past payments.
  • Review our recommendations before the budget is adopted.