Purpose of Audit

The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the City’s tentative budget for the 2014-15 fiscal year are reasonable.

Background

The City of Long Beach, located in Nassau County, has been authorized to issue debt totaling $12,000,000 to liquidate the accumulated deficit in the City’s general, water, sewer and risk retention funds as of June 30, 2012. Local Finance Law requires all local governments that have been authorized to issue obligations to fund operating deficits to submit their proposed budgets for the next fiscal year to the State Comptroller for review while the deficit obligations are outstanding.

Key Findings

• The proposed budget includes revenue of $9,184,475 for refuse and garbage charges, a 17 percent increase over the 2013-14 budget. City officials plan to raise the additional revenue with a fee increase that has not yet been approved by the City Council.
• Overtime salaries are budgeted at $2.2 million, despite such costs averaging over $2.9 million for the last five completed fiscal years.
• An appropriation of $300,000 for contingencies in included in the proposed budget; however, the City’s charter does not authorize such an appropriation.
• The proposed budget for the water and sewer funds includes increased revenues to be raised from an increase in water rates that has not yet been approved by the City Council.
• The City’s proposed budget complies with the property tax levy limit set by statute.

Key Recommendations

• Ensure that the potential refuse and garbage fee increases and the water and sewer rate increases are authorized by the City Council prior to the adoption of the budget.
• Ensure that necessary internal controls are in place and operating effectively to control overtime costs.
• If a contingency appropriation is to be included in the adopted budget, ensure that a local law is enacted authorizing such an appropriation.