Guest Column

Hard choices lead to fiscal progress

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Over the past four years, Long Beach has come a long way by working together to make hard choices. Upon taking office in 2012, our administration discovered the full magnitude of the city’s fiscal crisis.

After years of mismanagement by the prior administration, our city stood on the brink of bankruptcy, downgraded a record five levels to near junk bond status by Moody’s Investors Service. Our team dove in and we immediately analyzed the severity of the inherited deficit, declared fiscal crisis, cut spending, brought reform and accountability, and began to right-size our work force. We adopted a long-term fiscal recovery plan that we continue to execute today.

Hard choices and decisive, immediate action avoided bankruptcy. We welcomed additional oversight from the State Comptroller, and avoided takeover by an outside control board.

As we began our fiscal recovery, we were hit with a second crisis — Superstorm Sandy. Our City Council set a goal to merge our fiscal and physical recoveries, seeking to rebuild for long-term sustainability. The state Government Finance Officers Association’s financial recovery tool indicates that we are halfway to our goal of long-term financial resiliency. To date, our recovery has generated the following results:

• Turning a $14.7 million inherited deficit into a $9.1 million rainy day fund, a $23.9M turnaround.

• Restored credibility on Wall Street with eight credit positive actions from Moody’s.

• Significant improvement on the State Comptroller’s Annual Fiscal Stress Test, a helpful early warning system for local governments and school districts.

• Empowering our incredible workforce to complete FEMA reimbursable recovery projects in-house generated a more than $6 million infusion to our reserves.

• Over $120 million in federal- and state-funded storm recovery overhauls to our infrastructure resulting in lower maintenance costs going forward.

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