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Former Long Beach city manager returns $52,000 overpayment

County Comptroller Jack Schnirman says he agrees with state audit's findings

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Former Long Beach City Manager Jack Schnirman announced that he would return the $52,000 he was overpaid for accrued sick and vacation time after he left the city to serve as Nassau County comptroller in January 2018, saying that he agreed with the findings of a draft state audit last week.

Schnirman was among at least 10 employees who received more than $500,000 in separation payouts than they should have in the 2017-18 fiscal year, and the findings of the draft audit recommended that the City Council seek to recoup overpayments that were inconsistent with the city’s Code of Ordinances or collective bargaining agreements.

“I am aware of the recommendations in the State Comptroller’s draft audit and, in short, I agree,” Schirman said in a statement to the Herald. “I now understand that the methods Long Beach has been using to calculate payout amounts for at least the last 25 years are different than the stricter formula originally set out in the City Code. What the state comptroller’s draft audit tells us is that the City of Long Beach has paid many types of employees more than necessary for separation pay for at least 25 years, including myself.”

Since the audit was launched by State Comptroller Tom DiNapoli’s office more than a year ago amid a fiscal crisis, residents have demanded answers, particularly after City Councilman John Bendo publicly questioned separation payouts to employees that appeared improper, including Schnirman and a number of staffers who remained on the payroll.

Last year, Bendo and Councilwoman Anissa Moore voted against a $2.1 million borrowing measure to cover payouts in the 2017-18 fiscal year to 57 union and non-union employees — including a number of payments to employees who remained on the payroll, and a $108,000 payment to Schnirman. The dissenting votes led to the rejection of the measure and led to the audit.

The Herald was the first to corroborate Bendo’s claim that Schnirman was overpaid by more than $50,000 in a series of articles after obtaining Schnirman’s separation payout forms and employment contract through a Freedom of Information request. Nassau County District Attorney Madeline Singas’s office and the U.S. Attorney’s Office for the Eastern District of New York are also investigating the city’s payout practices. For more than a year, residents have called on Schnirman and other employees who received separation payments that were not in line with City Code or contracts to return the money.

According to the draft audit, Schnirman was overpaid by $52,780. He was paid $73,113 for 100 percent of his 878 unused sick hours — more than the City Code’s stated rate of 30 percent, which auditors calculated to be 263 sick hours totaling $21,934. Schnirman’s employment contract also specified that he should be paid 30 percent. Additionally, Schnirman received $34,910 for 419 unused vacation hours, more than the 50-day cap in the City Code.

Schnirman, who was appointed city manager in 2012 after Long Beach Democrats regained control of City Hall, said last month that he had submitted his time sheets to the city’s payroll department and that he did not calculate or process his own payment “because that would be inappropriate.”

“Since the day I first heard questions being raised about a possible miscalculation, I have always said that I didn’t want any money that I shouldn’t have received, and would return any overage,” he said. “And that’s exactly what I’m doing — I’m taking the necessary steps to return the overage, and doing so as quickly as possible.”

Schnirman later told the Herald that the $52,780 check was given to the city on Sept. 6.

"The city continues to cooperate with the law enforcement investigation and as such, the city declines to comment at this time," the city said in  statement.

Schnirman said that he was proud of his accomplishments as city manager, including his work to turn around a financial crisis in 2012 followed by the recovery efforts after Hurricane Sandy that year.

“We rebuilt our city and community as the waters receded, we built a newly resilient boardwalk and buildings — on-time and on-budget — we started work with the Army Corps [of Engineers] beach protection project that was debated for decades, and is now a reality,” Schnirman said. “Long Beach is stronger and safer than it was 10 years ago.”

“During my time in Long Beach, we instituted so many reforms — that’s the work I’ve always done and will continue to do,” he added.

Still, many residents have questioned Schnirman’s handling of the city’s finances during his tenure after last year’s fiscal crisis, and the draft audit determined that the city mismanaged funds that resulted in operating deficits totaling $8.5 million over the past four years, among other findings.

The state audit’s examination of separation payouts and drawdowns of accrued time to union and non-union employees, found that the city had failed to take corrective action for over two decades after audits in 1992 and 1996 identified a number of instances in which the city paid employees for accumulated time that were inconsistent with the city’s code or contracts.

In his statement, Schnirman said that the draft audit, as well as a recent, separate review by the state’s financial restructuring board, “lay out many more reforms the city can make to achieve sustainability if there is the will.”

“Thanks to the work of the State Comptroller’s Office, Long Beach now has the opportunity to implement even more reform, this time at least 25 years in the making –– and the right thing here is to do my part first,” he said. “They are exactly the reforms and restructuring I have long advocated for, outlined in numerous presentations, and finally in my 2017 exit memos. I remain hopeful that the City Council will implement these recommendations going forward.”

On Tuesday, Moore, now the council president, said at a news conference that the city would seek restitution for any overpayments, saying that it was “an abuse of the public's trust.”

“This problem stands over 25 years and didn't just start yesterday — this has been going on for a very long time,” Moore said of the city’s payout practices. “The residents carry the burden. The City Council is committed to seeking restitution –– we want all of our monies.”

She could not immediately be reached for comment on Thursday.

Additionally, State Sen. Todd Kaminsky urged the city at Tuesday’s council meeting to recoup the payments amid the “payout scandal.”

“Our city has seen some tough times,” he said. “But, governmentally … this is probably one of the worst periods our city has ever had, and I think that after the draft audit’s release last week, it’s time to address some things and time for you to take action.”

“It is incumbent on you to get the money back,” he added.