Long Beach's fiscal stress is 'moderate'

Posted

Four years after a Democratic administration took over City Hall and faced a multi-million-dollar deficit and a depleted reserve fund that led to the declaration of a fiscal crisis, State Comptroller Tom DiNapoli announced last month that Long Beach has only a “moderate” level of fiscal stress.

In a report of municipalities in stress for fiscal 2014, released on Sept. 23, Long Beach had a score of 57.5 percent, which City Manager Jack Schnirman said marked a three-year improvement since the city was in dire financial straits and had a fiscal stress score of 95 percent. The state upgraded the city’s financial status in April.

“If you look at the trends based on the city’s finances, they appear to be heading in the right direction, but based on where they’re at, they’re not completely out of the woods,” said Brian Butry, a spokesman for DiNapoli.

Since 2012, when the city was on the verge of bankruptcy and had a $14.7 million deficit, Schnirman said, the administration has taken steps to improve its finances, and there is now $7 million in its reserve fund.

Suffolk County, the Town of Hempstead and the Village of West Hampton Dunes were also in moderate fiscal stress in 2014, while the City of Glen Cove and the Village of Amityville are among 15 municipalities that the state deemed in “significant stress.”

The report is part of the state’s Fiscal Stress Monitoring System, launched in 2012 and meant to serve as an early warning to local governments, schools districts and taxpayers by examining financial information and other factors to help head off fiscal problems that could lead to tax increases and service cuts.

“Had this been in place in the years preceding our administration taking office, it could have served as a warning signal that Long Beach’s finances in 2010 and ’11 were in freefall,” Schnirman said, adding that the city had advocated for the monitoring system.

The state said that the monitoring system uses financial indicators including year-end fund balances, short-term borrowing and patterns of operating deficits, and creates an overall fiscal stress score for a municipality: “significant fiscal stress,” “moderate fiscal stress,” “susceptible to fiscal stress” or “no designation.”

Page 1 / 3