City Manager: Budget Averts Tax Increase

Long Beach City Manager Charles Theofan this week submitted to the City Council his proposed 2011-12 budget, a fiscal plan he said will not increase taxes on residents.

In a press release on Wednesday, Theofan stated that the city plans to use $1 million from its reserve fund to avert a tax increase.

“Although this year’s budget preparation was challenging, we have not only provided a proposed budget without a tax increase, but one that was achieved with no reduction in personnel and no cutbacks of city services,” Theofan said. 

The reserve fund will be reduced from $3.8 million to $2.8 million. “In my professional opinion, a $2.8 million reserve fund leaves the city in a fiscally sound position moving forward,” he said.   

Increased payments to the state pension fund and medical insurance premiums and an expected decline in mortgage taxes, as well as the still ailing economy, are factors Theofan cited as contributing to “a difficult budget preparation.” He said the city has reduced spending through consolidation and centralization across several departments, and seeks new revenues and alternative funding sources to upgrade the Recreation Center and sewer treatment facility.   

“While this budget brings economy and efficiency to city government,” Theofan continued, “the city does face future challenges, which includes the ongoing labor negotiations with its police department and with the paid fire department.”

City Councilman Len Torres said he is studying the implications of the proposed budget, and while he agrees that the city must avoid a tax increase, he is concerned about what he called “run-away overtime” in some departments.

“This is evident in the month-to-month reports we have received from our  controller's office,” Torres said. “How we tackle this will have a direct bearing on the up-and-coming negotiations."

Another concern for Torres is the looming prospect of having to replace the city's aging water tower in the North Park area. "The reserve fund may not be enough," he said about this project. "My concerns circle around management and planning.”

According to city code, before the proposed budget can be made public, the city manager submits it to the City Council and a 10-day period follows wherein it is submitted to the city clerk, according to a city spokeswoman. A copy of proposed budget will be available on the city’s website and at the Long Beach Library April 21.

Last May, the City Council passed the city's current budget, a $79.2 million spending plan that Theofan expected then would amount to an approximate $64 to $277 tax increase to the typical homeowners in West End bungalows to waterfront homes and condos. 

Torres and fellow Democrat Mike Fagen voted against the current budget, after they had handed Theofan and their fellow council members an amendment that suggested potential cost savings, including eliminating the Police Department's Marine Bureau and imposing wage and grade freezes for certain department heads. Theofan and Councilman John McLaughlin and council Vice President Mona Goodman said they had not seen their amendment until it was too late to act on any of its proposals.

The City Council will hold a hearing on the proposed 2011-2012 budget at its regular meeting on May 17, and at a special budget meeting on May 24, both at City Hall. The council is legally required to adopt a budget by May 31.