Council Approves Newport Dividend Program

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Remodeling a Newport Beach residence has temporally become less expensive.

City Council approved the Newport Dividend program Tuesday, which will temporarily waive building plan check, building construction permit fees and other city fees related to remodels of existing single-family homes and duplex homes

“Basically, this is an attempt to look at our current financial situation and our future short-term needs and evaluating that, at this point in time, we feel that we are adequately funded and that we wanted to do something that would be appropriate to give back to the community,” said Mayor Rush Hill, who proposed the initiative.

Waivers are limited to $1 million in improvement value per home, explained Community Development Director Kim Brandt.

The program starts immediately and continue through Dec. 12. The city posted an announcement about the program on their website on Wednesday.

“With an average value of $42,000 for a simple residential remodel, a property owner would save approximately $1,200 in plan check and building permit fees,” staff concludes in the report.

Staff estimates the lost revenue to be about $1.77 million, Brandt said.

City council approved the program 5-2, with councilwomen Leslie Daigle and Nancy Gardner dissenting.

The two weren’t on board with the idea for a few reasons, the top being because they both felt the program was too narrow and there were other ways to give back to the community that would benefit more residents.

“I’m all for giving back,” Gardner said, but “I’m not sure why we should reward just a few people… I would like to see us do it differently.”

There are other ways the money could be used so the benefit is passed on to more members of the community, Daigle agreed.

“I agree with the mayor’s idea of a dividend, I agree with the idea that we have some extra funds that we can pass on to the community,” she said. “I would just like to see it applied in terms of infrastructure improvements or something along those lines.”

Suggestions between Gardner and Daigle included cutting a percentage of all city fees, landscaping, infrastructure and more.

The lone public speaker on the item, resident Jim Mosher, agreed with the councilwomen.

“If the city is finding itself collecting more money than it needs to operate and wants to give some of that money back, this is one idea, but there are many other ideas that would be more equitable than this,” Mosher said.

He suggested a more modest reduction over a longer period of time so it would benefit more people.

Mosher also questioned why there was extra money from fees and if it could be due to overcharging.

Also, the costs are just being shifted, Daigle explained.

A permit fee has to be connected to a cost, Daigle explained. So when somebody pays a fee, then that is directly connected to the inspector, the plan review and so on, she continued.

“So in effect, if they no longer pay those fees the rest of us have to subsidize the costs,” Daigle said. “So I don’t see where the common good is and where the costs are being shifted to the rest of us.”

Gardner also pointed out that, for some residents, sometimes smaller is better.

There are members of the community who don’t feel that “just because their neighbor wants a bigger house” that it’s going to be a benefit to the community, she said.

Councilman Tony Petros was “wrestling” with the idea, he said.

He thought it was a great idea when Hill announced it at the Mayor’s Dinner in February and has seen it done in other communities, he said.

“I do really appreciate the notion of a dividend and providing back to the city,” Petros said. “I’m persuaded though by the narrow margin that this will affect and I’m wondering, is there anything else that can affect a broader population of Newport Beach residents?”

“You can take the pie and divide it so thin that it’s of no value to anyone,” Hill said.

Several alternatives were evaluated, Hill explained, but this was determined to be the best value to the entire overall community.

Although he can appreciate the argument that it’s fairly narrow, councilman Mike Henn said, as it relates to his district, covering the peninsula and west Newport, there is a fair amount of homes that could benefit from some remodeling.

“So I’m particularly hopeful that this initiative, if passed, will help in that regard, especially in my district,” Henn said.

This kind of program helps make the neighborhoods worth more and look better, Hill said.

And not collecting those fees is only a temporary cost to the city, he continued, but it will eventually come back to the city through property taxes and increased stimulation to the economy.

“It spurs economic growth, it spurs neighborhood revitalization and it enhances the property values for everyone who participates in it,” councilman Keith Curry said.

It will result in a better looking, higher valued and more successful community, he said.

“That’s one of the things that keeps Newport Beach fresh,” Curry said, “that keeps our community special and unique from our neighbors.”

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