Long Beach postpones budget vote

Council to hold special meeting on Friday to vote on $98 million spending plan

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The City Council voted unanimously at a special meeting on Tuesday to postpone the adoption of the proposed $98 million budget, after members made a number of changes to reduce an 8 percent tax increase.

The council tabled the measure amid an outcry from residents, who called on officials to hold off on voting until amendments to the spending plan could be shared with the public.

Council members had met at City Hall an hour before the third public hearing on the proposed budget for the 2019-20 fiscal year to discuss the proposed changes, which resulted in a 20-minute delay of the meeting, several members said. Councilwoman Anissa Moore said she was still calculating amendments on an errata sheet, or list of changes, during the hearing.

“We talked about what we could cut to discuss the tax percentage,” Moore said. “We did come to some agreement in terms of what we could cut . . . but we wanted to make sure that the numbers could be validated.”

Until Tuesday, the council had not met to discuss the budget privately since April 16, three members said, amid questions over whether the council had violated the state’s open meetings law. Those concerns, Moore and Councilman John Bendo said, contributed to the delay in the meeting and discussion of the proposed changes.

The council was scheduled hold a special meeting on Friday at 4 p.m. to vote on the budget, after the changes are shared with Acting City Manager Rob Agostisi and the public. The changes, Moore said, were expected to be finalized on Wednesday.

“It’s important for residents to know that the errata sheet will be made available to them with a notice of the special meeting,” Moore said.

The proposed budget, which was floated early last month, includes an 8 percent tax increase, in addition to separate sewer and water rate increases. If approved, the spending plan would raise taxes on the average home by $304.63 per year.

However, if the council fails to pass the spending plan or agree on planned changes by majority vote by Friday, the initial budget and tax hike would take effect. The fiscal year ends June 31.

Agostisi said the tax increase is necessary to plug a $2.8 million deficit, turn the city’s finances around in the wake of a fiscal crisis, restore credibility with Moody’s Investors Service — which downgraded the city’s credit rating to two notches above junk bond status in March — and lay the foundation for a long-term financial recovery plan in the wake of a fiscal crisis and after years of structurally imbalanced budgets.

City taxes account for 35 percent of homeowners’ tax bills, while school and county taxes make up the rest. Revenues in the proposed spending plan declined by $1.6 million, and health care costs are increasing by $586,500. Agostisi said the budget “right-sizes” city revenues and expenses to reflect actual trends, including a $140,000 increase in overtime.

The budget includes $1 million in salary increases, primarily due to contractual raises. While personnel costs make up just over 70 percent of the proposed budget, the spending plan does not include layoffs.

It calls for about $1.9 million for termination salaries — expenditures that have averaged $2.2 million over the last three fiscal years — to be paid for through borrowing, a practice that State Comptroller Tom DiNapoli’s office said is “not fiscally prudent” in its recent budget review.

Council members said they want to see the tax increase reduced, but declined to discuss specific changes after Tuesday’s meeting.

“Personally, I looked at the budget from an historical perspective — there’s a budget limit, and departments have exceeded the limit,” Moore said. “I looked at anything I felt we could cut without losing staff or without layoffs. I also looked at ways in which resources could be shared to maximize our productivity.

“The residents cannot continue to bear the burden for our budget,” she added.

Residents, including former Council president Fran Adelson, called on the council to delay the vote so residents could learn more about the proposed changes.

“Let the people be part of this government,” resident Eileen Hession said. “It all looks like . . . smoke and mirrors . . . and the least transparent budget ever.”

Council President Anthony Eramo disagreed, saying that the council held three hearings to gather residents’ input before voting. “Council members had spoken to each other in groups or in pairs, and then we came together with some different amendments,” Eramo said. “We are taking in everyone’s comments . . . We were working on it until the last, final minutes.”

Scott Mandel, the longest-serving council member, said that this year, the budget “provided more challenges than expected.”

“We went through the budget line by line to prepare our errata sheet,” he said after the meeting. “. . . As for tonight, I think it was procedurally improper to go forward without that errata sheet published for the public.”

“Any and all efforts to reduce the burden on the taxpayer have to be looked at and seriously considered,” Mandel added. “Just blindly accepting the budget is a dereliction of our duty.”

Bendo, meanwhile, said he would like to reduce borrowing in the budget for separation payments. “We need to stop doing that,” he said. “We’re kicking the can down the road, and we’re making future people pay for something they’re getting no benefit for.”

Bendo added that there were two “competing” errata sheets that could potentially reduce the proposed tax increase, “depending on how the numbers add up.”

“The vote needed to be tabled,” Bendo said, “so people have a chance to digest it.”