Purpose
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City's proposed budget for the 2022-23 fiscal year are reasonable, and whether the City took appropriate action to implement or resolve recommendations from our budget review issued in May 2021.
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 City’s financial condition is susceptible to fiscal stress.
- The City’s proposed budget includes a tax levy of $53.1 million, which is $2.1 million above the legal limit, unless the City Council overrides the tax levy limit.
- Based on the City’s historical overtime cost trends, the City’s overtime appropriation appears insufficient.
- City officials did not include cash flow projections with the proposed budget. Although not required, cash flow projections would provide officials with another gauge of the effectiveness of the proposed budget.
- City officials only partially implemented the recommendations provided in our May 2021 budget review letter.
Key Recommendations
- Be mindful of the legal requirement to maintain the tax levy increase within the legal tax levy limit, or properly override the tax levy limit prior to adopting the budget.
- Consider increasing the appropriations for overtime or ensure that controls are in place to reduce the use of overtime.
- Develop cash flow projections as part of the annual budget.
- Review our recommendations before the budget is adopted.