An emergency meeting of the City Council has been called for Wednesday night, when city officials will determine whether to borrow $4.25 million to pay city employees for December and pick up the costs of “unanticipated” retirements.
During the emergency session, scheduled to begin at 5 p.m., the council will be asked to authorize borrowing $1.75 million to cover the payroll for December and $2.5 million in payments to a handful of police officials, including acting Commissioner Thomas Sofield Sr., who have suddenly announced their retirements.
“It is my understanding that this is necessary as a cash-flow fix,” said Republican City Council Vice President Mona Goodman. “Eventually everybody has got to be paid. It’s also to cover unexpected retirements, their sick time and vacation time. These are very unanticipated expenses. There are three high-ranking police officials who decided, ‘OK, I’m done.’”
City officials have been scrambling to come up with the cash after City Comptroller Sandra Clarson notified City Manager Charles Theofan
in a Nov. 18 memo that the city was facing a $1.3 million deficit at the end of the year, threatening the year-end payroll.
Theofan has reportedly blamed the cash-flow problem on Tropical Storm Irene, which he reportedly said cost the city $1 million, as well as delayed tax payments from a large property owner that is alleged to be the Allegria Hotel.
Theofan did not return a call for comment on Tuesday afternoon, but Goodman said the city is relying on the Federal Emergency Management Administration to come through with the $1 million in funding.
City officials were still trying to figure out how Long Beach’s cash-flow problem has spun seemingly out-of-control. But Len Torres, a Democratic city councilman, said the warning signs were in place months ago.
“You could see the diminishing funds in specific areas,” Torres said. “The city administration should have known this well into the summer.”
Torres said the city was boasting an $8 million surplus about eight years ago.
“That $8 million surplus has been pretty much spent,” Torres said. “Where were the safeguards? It looks like the warning signs were
ignored.
“We have to maintain a reserve in case of an emergency,” Torres added.
Goodman said, “I don’t think this in any way reflects fiscal mismanagement, but that’s how some people are labeling it.”
One of the major concerns included not properly budgeting for overtime, Torres said. In addition, firefighters were recently hired amid the city’s current financial woes, and two boats costing about $30,000 apiece were never used even though they were purchased for the Police Department’s new Marine Bureau.
“The boats never hit the water,” Torres said. “It’s a waste of money.”
He said a new fleet of police cars was also purchased but the city never attempted to sell the old ones.
“We don’t have the right to do whatever we want with public money,” he said.
Torres said in order to keep its finances under control the city must seriously consider cutbacks or Long Beach’s financial picture will continue to look bleak.
“Without trimming, we could have a very, very gloomy picture of our finances,” Torres said.
Torres said he expects the council to approve the loans at Wednesday night’s emergency meeting. “Going forward, we don’t want people not to get paid,” he said.
