Long Beach Is Set To Borrow $26 Million For Capital Projects. Here’s What The Money Will Be Spent On.

LONG BEACH, NY — The Long Beach City Council passed a resolution Tuesday night authorizing the city to issue $26 million in bonds to pay for capital projects across the city, $9 million of which will be offset by grants.

$16 million of the bond request is being described as a general bond, while $10 million will be for water and sewers, City Manager Dan Creighton told the council Tuesday night. In a presentation, Long Beach comptroller Inna Reznik said the $26 million figure wouldn't be borrowed all at once, but would be spread out over the coming years.

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"The total that we will have to borrow eventually doesn't mean that the borrowing will occur the next time the city issues bonds. The total of the projects to be approved is $26.5 million — of which, $17 million will become debt of the city," Reznik said. "The [remaining] $9 million will eventually be covered by the grants that we receive, they'll work on a reimbursement basis, which means the city will have to get working capital, advance the money, spend it on projects and then ask for the reimbursement on the grants. Once that's received, that short-term borrowing will be paid off and will never become the debt of the city."

The biggest items on the borrowing list are $4 million for hazard mitigation at the water treatment plant, $3.5 million for bus replacement, $2.9 million for road reconstruction and $1.5 million for FEMA reimbursable building projects.

For the water treatment plant, $2.7 million of the construction will be reimbursed with grant funding, while $3.15 million of the bus replacement cost will be reimbursed through grants, per city council records. Additionally, $866,000 of the FEMA building projects is slated to receive grant funding.

That water treatment plant, the city said, was rehabilitated after Hurricane Sandy but wasn't mitigated against future hazards.

In public comment, Long Beach resident Dale Greenstein asked the city council when city residents could expect to see an increase in taxes from this borrowing, to which Creighton said the debt incoming from these bonds would be offset by other bond debt coming off the city's bills.

"There will be other capital items coming off of what we've been paying, so it should be a net positive in this situation. But, the tax increase is based on overall budget...this item ends up $1.3 million more, but there are also items coming off of our debt service, as well."

In short, Creighton told Greenstein, the city could see a net decrease of about $200,000 from its $108 million budget due to that debt difference. That decrease wouldn't immediately trigger a decrease in taxes, however, as Creighton said costs could rise in other areas.

City Council President Brendan Finn said the city's health insurance costs increased by $1.6 million this year, and said that similar cost increases could change the tax levy.

Also giving public comment Tuesday was Kathleen O'Leary, who asked if the ice arena was generating a profit for the city and asked about the scope of the improvements to it.

Creighton said the arena generated about $150,000 more in revenue last year than the year before, and said the city could have an analysis done by the next meeting to see the ice arena's exact impact on the city's bottom line. As for the improvements, Creighton said the bonds would fund the replacement of some equipment that has been in the arena since the 1970s.

"I was here when the city was not able to make the payroll," O'Leary said. "The way we got into it was by borrowing money for things that we shouldn't have...I don't want to go down that road again."

When asked if the city could "tone [the borrowing] down," Creighton said part of why this amount is being borrowed is a poor state of repair in multiple areas of the city.

"It takes a lot to run a city," Creighton said. "When you neglect stuff for a long time, it's going to cost you a lot of money. And, if it wasn't neglected, you wouldn't see these kind of increases now."

The full list of projects being funded through this bond issuance is below:

The life cycle of these bonds runs from five years on the low end to 40 years on the high end. The only projects hitting that 40-year mark are sewer and water upgrades.

"The benefits to our community are several. It really helps us to have a state of good repair, we'll have more reliable services," Creighton said. "We really need to get our utilities, our roads [and] our buildings up to a place where we know that they're reliable, and we don't have to keep fixing stuff over and over again."

"It's really for long-term sustainability and efficiency gains," Creighton said.