The City of Long Beach was awarded $4.6 million last week by the state Financial Restructuring Board for Local Governments to pay for lawyers and financial consultants to restructure the city’s debt and manage a $145 million legal judgment.
State commissioners also included $500,000 for the city to add paid parking kiosks in the city’s central business district.
The city has received the full $5 million eligible for struggling local governments which comply with recommendations by the state board to reduce expenses and improve revenue. The city was referred to apply for funding by State Sen. Todd Kaminsky (D-Long Beach).
"As a Long Beach taxpayer, I am delighted to have helped deliver $5 million to the city, from New York State, to assist it in navigating out of the financial mess it finds itself in," Kaminsky said in a statement.
The city previously received $375,000 in 2019 to pay for a financial consulting firm and to replace 600 LED lights to save costs.
"The report recommended the city continue to be looking for more shared services and efficiencies," board secretary Tim Ryan said during the meeting Friday in Albany. "We ask cities to talk to us about how we can help down the road. The city’s fiscal operations are still tenuous."
Long Beach’s bond rating was reduced in July to Baa3, one step above junk bond status as it faces a $131 million judgment in a decades-old suit with developer Sinclair Haberman, who sought to build oceanfront condos. The city was ordered to pay lost revenue after officials blocked development 30 years ago. The judgment has been accruing interest daily and now totals about $145 million, Ryan said.
The state board approved a $3.7 million grant for the city to hire attorneys and fiscal consultants to manage the city’s finances and settlement discussions in the Haberman case.
The city hired a team of financial advisers and bankruptcy restructuring attorneys in April to help manage more than $100 million in bonded debt and $400 other outstanding liabilities and obligations including the Haberman judgment and owed retirement payments to former city employees.
Long Beach city retained New York City firms M3 Partners and O’Melveney and Myers initially for $1.5 million, that they planned to be reimbursed by the state restructuring board. The city is voting Wednesday to issue $2.4 million in bonds for payments to the firms it expects to be covered by the state.
"This is a huge win for the residents of Long Beach, who now can rest a little easier knowing some of the burden of financial recovery won’t rest solely on their shoulders," City Council President John Bendo said Monday.
The city is also receiving $200,000 to add an automated time clock and eliminate its paper timekeeping system along with $50,000 for a city asset-tracking system.
The state board also awarded $120,000 for an electronic beach pass system for the city to sell and track beach passes online.
State funding for Long Beach
- $3,745,000 for legal and fiscal consultants
- $500,000 to install parking meters
- $200,000 for a modern time and attendance system
- $120,000 for an electronic beach pass system
- $50,000 to install a new citywide asset tracking system.