Newport Beach City Manager Dave Kiff provided a wake up call on issues facing the city for a large crowd during an early morning meeting last week.
The Newport Beach Chamber of Commerce’s monthly Wake Up! Newport meeting was held Dec. 1 in the Friend’s Room at the library.
Kiff gave a quick nine minute speech and then answered questions.
Unfunded pension liabilities and sea walls are his top concerns that keep him awake at night, along with some noisy raccoons in his backyard, he joked.
The unfunded pension liabilities “overshadow” all fiscal issues, Kiff said.
The city pays about $40 million per year to cover pension costs, he explained. They need to pay more in order to stay ahead of it and not borrow from CalPERS, about $11 million over the next 20 years.
“That’s a lot of money,” Kiff said.
Add that to about $5 million needed to replace the aging sea walls and that’s approximately $16 million needed from either new revenue or reduced costs.
“That’s the fiscal challenge this community faces,” Kiff said.
New revenue could come from projects like Museum House, the residential condominium tower in Newport Center recently approved by City Council, which will produce about $500,000 in regular property tax income to the city, Kiff explained.
Cutting costs could come from “services on the street” or the people in city hall who help provide those services, he noted.
“All of that’s kind of on the table at this discussion,” Kiff said. “This is a tough community to reduce costs in.”
It will likely take both new revenue and reduced costs in order to meet that goal.
“I struggle with getting to $16 million.,” Kiff said. “I haven’t got there yet, frankly.”
Newport Beach is not alone in this struggle, he continued. A lot of cities in California are wrestling with this issue. Newport may even be a little worse off because it’s an older city and they previously provided the maximum level of benefits, Kiff said. Newport Beach also has a “hefty” full-service city staff that includes police, fire and lifeguards, he added.
“My hope is that we (CA cities) will all march to Sacramento and say, ‘We need some help here,’” Kiff said.
Help is not that difficult if they start now, he added. If they wait five years, it will be very difficult and other cities may file for bankruptcy, Kiff said. Newport Beach has a lot of resources and probably won’t be in that position, but it’s a challenge.
“If it’s going to be tough for us, it’s going to be impossible for a lot of big cities, a lot of cities around us,” Kiff said.
Other issues he is currently concerned about include John Wayne Airport, and the FAA’s NextGen program, homelessness in Newport, and keeping the community safe.
He also expressed concern about the downturn of trust in government.
“I think that’s happened from the top down,” Kiff said. “I look around at my colleagues and think, ‘They are wonderful, thoughtful people and why is that trust falling?’”
He left a lot of time for questions from the crowd, which covered JWA flight paths, public docks, air bnb, marijuana and more.
Positive things that get him up in the morning, joking that it’s partially because of a little caffeine and to walk his dogs, it’s also that the Newport Beach community is engaged, interested, intelligent, and rich in creativity and resources. The people who live and work here cherish Newport Beach, he added.
“(This is) what motivates you to go to work,” Kiff said. “This community is everything you want it to be.”