The Newport Beach City Council held a public planning session on January 29, providing a comprehensive overview of the city’s financial status and future infrastructure and service needs.
Mayor Kevin Muldoon, with the assistance of City Manager Grace Leung, moderated the three-hour meeting, which included highly positive department head reports and projections, especially considering pandemic related repercussions experienced by the city over the past few years.
Overall, the best news came from City Finance Director Scott Catlett, who pointed out that the Fiscal Year 2021/2022 budget of $234 million dollars was based on original projected general fund revenue of $238 million, which is now projected to exceed $249 million. The takeaway: a projected revenue surplus of $15 million dollars for FY 21/22.
“Revenues are up from property taxes, sales taxes, and transient occupancy taxes (TOT)”, reported Catlett. “Property tax revenue grew consistently over the last year, sales tax took a short-lived dip then recovered to record levels, and while hotel occupancy remains lower than pre-pandemic levels, TOT is generally up due to strong growth in occupancy rates for short term rentals.”
Once the new VEA hotel (formerly the Marriot in Fashion Island), which has been under construction, and the Fashion Island Hotel, which has been closed for a few years but recently changed ownership, are both fully operational, Catlett projected even more robust TOT proceeds for the city.
Catlett concluded “While we are cautious in our projections, we anticipate a healthy budget surplus in the coming months”.
Catlett spent considerable time reviewing the positive strides made relating to the unfunded California Public Employee Retirement System (CalPERS) pension liability. In 2019 the city started making early CalPERS contributions by building $35 million into the budget and allocating an additional $5 million of budget surplus each year, including during the pandemic. These prepayments combined with CalPERS’ recent sizable 21 percent investment return placed the city on a positive track to pay down the unfunded liability by 2030, well ahead of even the most ambitious projections.
“Remarkable progress” concluded Councilmember Diane Dixon who was joined by Mayor Kevin Muldoon in applauding city staff and the Finance Committee for such prudent management of the unfunded debt.
Homelessness in Newport Beach
Newly appointed Assistant City Manager Tara Finnigan and Homeless Coordinator Natalie Basmaciyan provided a thorough update on the comprehensive approach the city is taking to address homelessness.
Basmaciyan and Police Officer Cynthia Carter serve as the city’s fulltime liaisons for homelessness outreach along with a Rapid Response Team comprised of staff from Public Works, Recreation and Senior Services, Fire, and Police.
Highlights of programs and services include:
- The Good Giving Campaign raises community awareness and encourages donations to organizations with proven experience in homelessness assistance.
- City Net, a nonprofit, provides homelessness outreach five days a week to develop relationships, assess needs, and secure housing, at a cost of $1 million dollars for the term March, 2019 to February, 2022.
- Costa Mesa Temporary Bridge Shelter provides the city with 20 of the 70 beds in Costa Mesa’s new shelter, at a cost to the city of $1.6 million in one-time capital and $1 million annually in operation costs (with operating costs partially funded by contributions from Hoag Hospital).
- For permanent supportive housing, the city selected two developers after a request for proposals and tasked them to develop a viable housing project with up to 50 units. This process is ongoing and has a budgeted city contribution of $3 million dollars.
- Trellis International Community Impact Team Program, a nonprofit, received a grant from the city in September 2021 to assist homeless to reenter the workforce by participating on volunteer teams for projects in the city, at a cost of $30,000 for the term September 2021 to September 2022.
Councilmembers praised staff’s progress, with O’Neill specifically pointing out the host of options that “just a few short years ago did not exist.”
Brenner, Dixon, and O’Neill each commented that residents continue to express concern about the impact of homelessness on their neighborhoods.
Police Chief Jon Lewis reported on department equipment and technical needs for the coming year, requesting $450,000 to purchase body worn cameras to upgrade the existing system implemented in the late 1990’s.
An additional $300,000 will be required annually to manage and store the body worn camera film including possibly dedicating an officer to manage the program. Leung indicated other personnel in the city might be able to accommodate this workload which would result in a savings.
Council inquired regarding the Police Association’s role in the decision to use body worn cameras. Lewis confidently underscored the need for this technology to assist the department with their duties and the commitment of his office to continue the dialogue with the association.
Lewis also indicated the need of $110,000 annually for taser replacement.
Public Services Director Dave Webb and Deputy Public Works Director James Houlihan reported extensively on city-wide infrastructure maintenance and replacement.
Anticipated future projects include, among others:
- Reconstruction of the Balboa Peninsula Fire Station and Library which could include a small community park or “tot lot” and public works equipment bay.
- Construction of new police headquarters, possibly in a relocated site.
- Santa Barbara Fire Station reconstruction.
- Newport Pier and McFadden Square Rehabilitation projects.
- Balboa Island drainage improvements.
- Bonita Creek Park synthetic turf replacement.
- Arroyo Park synthetic turf installation.
An interesting project on the longer horizon is the Balboa Yacht Basin, a city owned facility built in the 1950’s which includes 172 slips, 38 storage garages, the Galley Restaurant, and three apartments (two of which are in disrepair and not rentable.)
The Yacht Basin is old and needs to be reconstructed, said Webb, adding that it is a “good revenue generator.”
Another area of discussion was the corporate yard fueling facility and the role mandates and technology will play in vetting the types of energy in which the city will invest in the coming years.
For more on the city goal setting, tune in to Speak Up Newport’s upcoming community Zoom webinar with Grace Leung, Newport Beach City Manager, on Wednesday, February 9 from 5 to 6 p.m. Register for the free webinar at www.speakupnewport.com.