UPDATED: Long Beach’s $12M Borrowing Bill Nullified

This story was updated at 12 p.m. on 7.25.13.

A bill that would have allowed Long Beach to borrow up to $12 million to help the city pay its lingering debts was nullified by an error in timing, officials said.

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The senate approved the legislation days before the 2013 state legislative session ended June 30. Long Beach had to issue municipal bonds by that date, the end of the fiscal year, but the senate didn’t approve the bill until June 17, which wasn’t enough time to meet the deadline for Gov. Cuomo to sign the bill, according to Assemblyman Harvey Weisenberg, D-Long Beach.

"I'm not going to blame anybody; that doesn't help us in any way," Weisenberg told Patch when asked who was to blame for the error. "It's easy politically to say it's his fault or their fault. The answer really is, we did everything expeditiously. I didn't blame [Sen.] Dean Skelos, [the Republican senate majority leader from Rockville Centre], when they passed the bill on the 17th and we couldn't even amend it. It is what it is." 

Failure to meet the deadline nullifies the bill and the Assembly and Senate will re-introduce it Thursday to give Long Beach until June 30, 2015 to issue bonds, but lawmakers would either need to return to Albany for a special session to vote on the bill or wait until the next session in January, legislative officials told Newsday. 

Scott Reif, a spokesman for Skelos, told Patch the senator was introducing a bill on Thursday to allow Long Beach to issue bonds by June 30, 2015. Weisenberg said that the governor has to call the special session. "They might have unfinished business that the governor wants us to get done and he would call us back. ... I'm anticipating something like that happening because the governor has some things hanging out that he wants to get done." 

Long Beach City Manager Jack Schnirman said the city’s finances won’t be immediately impacted by the error, since the current 2013-14 budget didn’t count on the borrowing, but the sooner the city can borrow the sooner it can wipe away an average $183 surcharge that homeowners are paying to help balance the budget. Schnirman continued:

"We've been working with [the State Assembly and Senate] through this process and will continue to do so to make sure that technical corrections to the bill are done as soon as possible.”

On March 5 the City Council unanimously approved a home rule resolution to request the state’s permission to borrow the $12 million in bonds, not only to close a lingering $10.2 million budget gap, but also to pay for “extraordinary expenses” due to Hurricane Sandy, including flood relief projects in public places and interests on payments for disaster relief funding. In April, Weisenberg, who sponsored the bill, spearheaded the assembly’s approval of it by a vote of 141 to 0, and on June 17, three days before legislative session ended, the Senate voted 56-0 to approve the legislation. 

Asked why the bill was voted on just before session ended, Reif told Patch that "there is a process in reviewing the bill" and they had to "work on language that was provided by the city." 

Last year, before Hurricane Sandy crippled Long Beach, the city tried to borrow $15 million from the state with the promise of paying it back over 10 years, but Seklos refused the bill to reach the senate floor for a vote. In a letter to Schnirman, Skelos said he was “troubled” by his “insistence on borrowing to address” the city’s financial woes rather than finds ways to cut spending.

In response, the City Council approved a 6.6 percent deficit-reduction surcharge for three years, bringing last year’s tax increase to 14.5 percent that included a 7.9 percent increase in the 2012-13 budget that was approved that May. 

If the governor had approved the $12 bill this year, the city would have returned to a 10-year timeline instead of three years to repay the $12 million, Schnirman said.