Financial Troubles May Have The Riviera of the South Shore In Deep Water
CITIES OF HOPES AND SCHEMES
As local students of geography know, LI has only two cities, Glen Cove and Long Beach, and they’re both in Nassau County. Glen Cove attained its urban status in 1917, and Long Beach followed in 1922. Today, according to the 2010 census, Glen Cove, in the Town of Oyster Bay on the North Shore, is smaller, with 26,964 people, compared to the Town of Hempstead’s Long Beach, which has 33,275 residents sharing a low-lying stretch of the nine-mile barrier island barely 10 feet above sea level.
Today both cities are drowning in debt with the same lousy bond rating, Baa3, which is one level above “junk.” Glen Cove’s fiscal degradation was more gradual and less newsworthy—it’s been under review by Moody’s Investor Services for several years—but the City of Long Beach’s slide was sudden and created quite a splash when Moody’s slashed its credit by five levels on Dec. 20, 2011, just after the city administration had to borrow some $4.25 million to meet its December pay roll and its other contractual obligations.
Long Beach voters went into the booths in November not knowing the full extent of the city’s situation.
Speaking to Bloomberg News after State Comptroller Tom DiNapoli announced last month that his office would soon conduct an audit of Long Beach as requested by the new city council, Schnirman claimed that the previous administration had served up “a cooked election-year budget….They were trying not to raise taxes, and spending continued to go up as revenue went down.”
That accusation does not sit well with Schnirman’s predecessor, Theofan.
“Let’s be honest,” he says in an e-mail to the Press. “The current city council is inflating deficit numbers and playing political games in an effort to scare taxpayers and benefit politically.”
Schnirman stands his ground.
“I think that the previous administration mislead city residents as well as the Wall Street rating agencies for a period of time in saying that the finances were okay,” Schnirman says, choosing his words carefully, “and it all came crashing down at the end of December.”
Theofan countered that “there was never a miscalculation. The information transmitted to Moody’s was accurate.”
Schnirman said he knew walking into the job “there was a tremendous problem” in Long Beach and that’s why the new council majority hired a new comptroller and ordered an independent audit. “It wasn’t until March that our comptroller was able to fully determine the depth of the deficit that we’re facing.”
