HomeMy WebLinkAbout16 - Quarterly Business UpdateNEWPORT CITY OF
NEWPORT BEACH
Foa "" City Council Staff Report Agenda Item No. 16
May 24, 2011
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: City Manager's Office
Dave Kiff, City Manager
949 - 644 -3002, dkiff @newportbeachca.gov
PREPARED BY: Rob Houston, Assistant to the City Manager
APPROVED:
TITLE: Quarterly Business Report Update
IT 3i;7e[o�
Provide a quarterly update of City Business that includes a current financial review and
detailed project tracking for current key projects.
RECOMMENDATION:
Review and comment, as desired.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item.
DISCUSSION:
The attached report contains a quarterly update on City business for City Council
review. The report contains a financial review including an overview of the proposed
FY11 -12 budget. The report also contains project summaries of the top 20 projects that
the City is working on. The Council has asked that the City Manager report back
periodically on the current status of this work and ensure resources were appropriately
designated to complete these projects. The summaries are laid out in a project tracking
template that was used in the February 2011 Quarterly Business Report to Council, and
summarizes the important highlights of the project by providing a description, goal
objective, staff lead, target completion date, milestones, project budget, and a quarterly
status update.
Your comments are welcomed
Quarterly Business Report Update
May 24, 2011
Page 2
ENVIRONMENTAL REVIEW:
Not required.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
Submitted by:
Dave Kiff
City Manager
Attachments: A. Quarterly Business R eport
LZ=
r p
NEWPORT BEACH QUARTERLY
. BUSINESS REPORT
January - March 2011
a- ,.«till
QUARTERLY FI
REPORT
NANCIAL
City of Newport Beach, Administrative Services Department
www.newportbeachca.gov 949.644.3127
May 24, 2011
Volume 1, Issue 2
INSIDE THIS ISSUE
Executive Summary 1
News and Initiative for the Quarter 2
Status on Long -term Funding Programs
CaIPERS 3
OPEB (Retiree Insurance) 3
Facilities Financing Plan 3
Economic Update 4
2010 -11 Budget Update
Revenue Summary 6
Expenditure Update 8
2011 -12 Budget Update 10
Quarterly Business Report
Executive Summary
We are pleased to submit the second Quarterly Financial Report.
Page 1
To recap the past couple of years, Fiscal Year 2009 -10 was marked by retrenchment as a result of
the Great Recession. Fiscal Year 2010 -11, the last quarter in particular, will be remembered as the
start of our transition from "Good to Great." With revenue growth stagnating and pension costs rising
sharply, the objective of restructuring was to redeploy resources to focus on programs and activities
that support the Council priorities. To this end, much of this quarter was dedicated to analyzing,
costing and vetting plans to restructure the organization to be more strategically focused and
operationally efficient.
While signs of economic recovery still remain mixed, a combination of revenue forecast
improvements and cost reductions are likely to produce a balanced budget in FY 2010 -11. The
budget proposal for Fiscal 2011 -12 as proposed, was built on three core values, identified by the
City Manager and approved by City Council, that make Newport Beach special. These values are:
- A high quality physical environment - shining Cityby the Bay
- Public Safety and how city services and programs reinforce safety, and
- Civic engagement
The 2011 -12 Budget initiates a "rebalancing" of the City's resources emphasizing the need to rebuild
and protect community infrastructure.
The management team continues to focus on the long -term goal of improving our performance
management. The introduction of a Performance Plan also represents initial steps toward program -
based budgeting and refined decision making tools for the City's increasingly scarce resources.
"The development of the City's annual budget takes an enormous amount of
staff time and effort, and this year, especially so, given the tough decisions
that were made to move the organization forward in a new direction. "
Dave Kiff, City Manager
Quarterly Business Report
News and Initiatives for the Quarter
Outsourcing of Parking Meter
Operations and Enforcement
In the spirit of community
reinvestment and efficiency,
Administrative Services negotiated
a contract with Central Parking
Systems (CPS) this quarter,
outsourcing parking meter operations and
enforcement. This was an extremely detailed and
deliberative process, spanning several months. Our
community is now equipped with more than 1,300
modernized single space parking meters accepting
credit cards, and will soon be equipped with 11
multi -space pay stations which will include credit
card and pay by cell options in addition to the
traditional coin option. These meters will be
maintained within 24 hours of breakage/ damage.
The City maintains sole responsibility for all meter
rates /locations /hours and will own all equipment
replaced by Central Parking. The City will also
receive a guaranteed revenue flow equal to our
current net parking meter revenue, with
opportunities for increased revenue estimated to
potentially be $4 million over the life of the 7 -year
contract. CPS and City staff have been performing
significant community outreach to listen to our
businesses' and residents' concerns, questions and
comments to ensure a positive and effective
transition.
Remote Deposit System
Implemented
A new remittance processor
system was put in place this
quarter that eliminates the
need to courier checks to the bank and reduces the
float time of a check from 3 days to 24 hrs. The
remote deposit system will not only process
remittances received in the mail but also processes
over - the - counter payments by walk -up customers.
Page 2
The Check 21 Act came about as a result of the
September 11th tragedy. When all air traffic was
grounded, banks became paralyzed by not having
the ability to physically move paper checks from
bank to bank. Check 21 allowed banks to accept the
digital image of a check as a legal document.
New Treasury Format Introduced
The Finance and Treasury team is pleased to present
the new format of the City's Treasury Report. The
new report format is intended to provide interested
parties with an in -depth view of the City portfolio in
its aggregate, encompassing portfolio risk
characteristics, compliance, performance relative to
pertinent benchmarks and portfolio accounting. We
hope you will find the new format comprehensive,
transparent and informative.
The new Treasury Report can be found at:
www.newportbeachca.gov /treasury.
Newport Brach 14).
New Outside Auditor Selected
The City went to bid for auditing services for the
fiscal year ending June 30, 2011. Diehl, Evans &
Company was selected to be the successor City
Auditor for the next four years. Diehl, Evans &
Company, LLP is a local firm located in Irvine that
specializes in auditing services for municipal and
other not for profit clients. They have been in
existence for more than 75 years and serving the
Governmental Sector since 1950.
Quarterly Business Report
Status Updates on Long -term Funding Programs
CalPERS Update
In a March 15, 2011, press release, CaIPERS
announced it would keep the Pension Fund's
assumed annual rate of investment return, also
known as the discount rate, at the current 7.75
percent. This was an important decision for local
governments. While budgets are being cut, pension
costs continue to rise impacting the ability to fund
other priorities. Had the discount rate been
reduced to 7.5 percent, the cost of funding
pensions would have increased substantially. The
estimated cost increase ranged from 1.5 to 5
percent of payroll.
"As pension fund administrators, we want to make
sure CaIPERS remains financially sound over the
long term," said CaIPERS Chief Actuary Alan
Milligan. "The discount rate adopted is reasonable
and achievable, and appropriate for funding the
promised benefits."
The committee made its decision following a
comprehensive review and adjustment of the
Pension Fund's asset allocation and a detailed
actuarial analysis.
Discount Rate Defined - The discount rate
represents what a pension fund believes it can
realistically earn from its investments on an annual
basis when averaged over the course of 20 years or
more. In any given year, investment returns are
likely to be higher or lower than the long -term
assumed rate.
CaIPERS Performance - Over the past 20 years,
including the two recent recession years, CaIPERS
has earned an average annual 7.9 percent rate of
return before deducting administrative and
investment expenses. For the fiscal year that ended
June 30, 2010, CaIPERS earned a 13.3 percent
return.
"Given the current economic environment, we
believe keeping our discount rate unchanged is in
the best interest of our members, employers, and
taxpayers. " said Rob Feckner, CalPERS Board President and
Vice Chair of the Board's Benefits and Program Administration
Committee.
Page 3
OPEB Obligation (Retiree Insurance)
The City pre -funds future retiree medical costs
through the California Employers' Retiree Benefit
Trust ( CERBT), a trust fund irrevocably dedicated to
pre- funding employer liabilities associated with
retiree medical insurance benefits. City
contributions to the CERBT fund and investment
returns earned by the trust will be used to pay
current and future benefit costs of the City.
The CaIPERS Board of Administration sets CERBT
investment policy and strategy and, through
CaIPERS Investment Office staff, manages CERBT
investments. CERBT assets are invested in public
market securities using an asset allocation strategy
approved by the CaIPERS Board.
In March 2011, the CaIPERS Board of
Administration authorized the CERBT program to
offer two new asset classes and two alternative
asset allocation strategies. These asset classes
were added in order to provide improved portfolio
diversification and lower volatility of expected
returns.
Strategy
Discount Rate 7.61% 7.06% 6.36%
Standard Deviation of
Expected Returns 11.73% 9.46% 7.27%
The CaIPERS Board is currently exploring the concept of offering
different asset allocations for the Pension plans, too.
Facilities Financing Plan
The Facilities Financing Plan (FFP) is a long range
planning tool to ensure proper funding for the
timely replacement of all major critical use
facilities. An update of the Facilities Financing Plan
was reviewed during the April 11th Finance
Committee meeting. Based on a recent review of
the facilities included in the plan, Public Works
engineers were able to refine construction
estimates downward by $47 million to reflect more
modest facility sizes and updated construction cost
estimates. The cost reduction efforts made it
possible to advance the estimated replacement
date of key facilities by several years.
Quarterly Business Report
Economic Update
So far, the turmoil in the Middle East and the
devastation in Japan have had a relatively
muted impact on global economic growth.
a
"In an increasingly interconnected world, global
events can have a profound impact on the US
economy and financial markets."
Brian Perry, Chandler Asset Management
While the US economy appears to have gained some momentum, the recovery remains fragile and international
events still have the power to derail the recovery especially if the turmoil spills into large oil producing
countries such as Saudi Arabia and Iran.
Overall, economic reports were mixed and slightly weaker than expected in the month of April. Some
economists have cut estimates for first - quarter growth in recent weeks amid signs that higher oil prices and
other factors, including a lifeless housing market, were weighing on business and consumer confidence. Other
economists say other measures, including a reviving job market, suggest growth will reaccelerate as the year
goes on.
Consumer Prices
Inflation is climbing, in large part due to surging food
and energy prices but the Federal Reserve continues
to believe that higher prices will prove to be transient.
In March, the consumer price index (CPI), a short -
term measure of inflation, increased 2.7% on a year -
over -year basis. However, the Core CPI (CPI less food
and energy), a longer -term measure of inflation,
increased only 1.2% on a year- over -year basis.
Retail Sales
In March, retail sales rose 7.1% on a year- over -year
basis. Consumer spending has rebounded from the
depths of the recession and recent activity has been
promising; however, activity is still far short of the
heights of the previous economic expansion.
Labor Markets
The economy added 216,000 new jobs in March and
244,000 jobs in April. The unemployment rate
declined to 8.8% in March and increased to 9% in April
as more people searched for jobs. Next month's
eagerly awaited report may signal the beginning of a
new trend of greater job growth.
Housing Starts
Single- family housing starts rose 7.7% in March to
422,000 but the housing market remains relatively
weak. Single- family housing declined 11.8% in
February to 375,000, the lowest level since March
2009. Permits for new housing starts rose 11.2% in
March which offers some encouragement for the
months ahead.
Monetary Policy
The Federal Reserve maintains its exceptionally easy
monetary policy, and continues to purchase longer -
dated Treasury securities in an effort to promote
economic growth. The next Fed meeting is June 22,
and market participants will be watching closely for
signs of what the Fed will do following the completion
of its second round of quantitative easing (QE2)
efforts in June.
"The housing market recession is not yet over,
and none of the statistics are indicating any
form of sustained recovery. At most, we have
seen all statistics bounce along their troughs;
at worst, the feared double -dip recession may
be materializing. "Wall Street Journal
Quarterly Business Report
Page 5
While it is tough to live without food and energy, core inflation eliminates products that can have temporary price
shocks (i.e. energy, food products). Core inflation is thus intended to bean indicator and predictor of underlying
long -term inflation.
Historical Unemployment Rates
(Kates are not seasonally a, justed �
14.0%
t �N ewl>ort Beach
72.0 "% o —4— Orange Counts
10.0% —4--California
8.0%
6.0%
4.0%
2.0%
0.0%
2005 2006 2007 2008 2009 2010 2011*
Calendar Yeat. * through March 31 20L
While nationally, the labor market has improved some with the unemployment declining to 8.8 3Kas of March
2017, the California labor market has remained constant at 12.4% The Newport Beach unemployment declined
to 5.7%for the same time period.
CPI & Core CPI Y -O -Y % Change
4.0%
C?I
3"/0
Cure CPI
2.0%
tl
1.0%
d
0.0%
w
d
a
-1.0%
2"/6
3.0°10
While it is tough to live without food and energy, core inflation eliminates products that can have temporary price
shocks (i.e. energy, food products). Core inflation is thus intended to bean indicator and predictor of underlying
long -term inflation.
Historical Unemployment Rates
(Kates are not seasonally a, justed �
14.0%
t �N ewl>ort Beach
72.0 "% o —4— Orange Counts
10.0% —4--California
8.0%
6.0%
4.0%
2.0%
0.0%
2005 2006 2007 2008 2009 2010 2011*
Calendar Yeat. * through March 31 20L
While nationally, the labor market has improved some with the unemployment declining to 8.8 3Kas of March
2017, the California labor market has remained constant at 12.4% The Newport Beach unemployment declined
to 5.7%for the same time period.
Quarterly Business Report
2010 -1 1 Budget Update
2=6
FY
2010-11 Revised
Revenue .- .
FY 2010
Original
3/31/11 YTD
3r QTR
Change from
Revenue
Actuals
Budget
Revenues
Revised Est.
Orig. Bud.
Property Taxes
$ 71,999,679
$ 70,642,840
$ 43,966,859
$ 71,574,069
$ 931,229
Sales Tax
17,440,736
17,374,734
10,377,209
18,074,734
700,000
Property Tax - In Lieu of Sales Tax
4,539,946
6,392,273
3,233,121
6,308,305
(83,968)
Transient Occupancy Tax
11,400,710
11,555,034
8,885,779
12,156,000
600,966
Business Licenses
4,026,614
4,008,800
3,096,500
4,020,000
11,200
Franchises
3,715,946
4,145,000
1,682,406
4,052,164
(92,836)
Community Development
3,835,230
3,852,749
3,528,791
4,319381
466,632
Other
29,956.021
27,154,240
19,622,539
27,154.240
-
Total Revenues
$ 146,914,882
$ 145,140,670
$ 94,393,205
$ 147,658,893
$ 2,533,223
Revenue Summary
Our revenue outlook and estimates have not changed significantly since our December midyear
revision. Revenues are inching their way back upward after bottoming -out in fiscal year 2010. We
anticipate that revenues will surpass budget estimates but at a very modest pace.
FY 2010 -11 Revenues by Source
8% 0711.ru ty Taxes ax w /Prop iaxln 3% Occupancy Ta
''1 Buliding Revenue
• AII01herRevenue
Top 3 Revenues
$120.0
$uo.7 07.z s1os.4 s1os.1 seas
$100.0
$80.0
C • TOT
O
$60.0 • Sales Tax
F • $40,0 Pro erty Tax
$20,0
2008 2009 2010 2011 Proj, 2012 Proj
Fiscal Year
The top three revenue sources including Property Taxes, Sales Taxes
and Transient Occupancy Revenues total nearly 733K of total
General Fund Revenues.
Quarterly Business Report
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
20 Year Assessed Property Value Growth
P n
O P T P T
N V �O o0 O V O W O
T T T T T O N O O O
T T T T T O O O O O O
N N N N N N
For nearly two decades Property Taxes, which represent 48 %of General Revenues,
have provided a steady source of revenue growth for the City.
Assessed Valuation growth exceeded 8% for ten of the past twenty years.
Due to the continued stagnation of the housing market, however property tax
growth is likely to remain low for the foreseeable future.
Page 7
Property Taxes - For 2010-11, property tax revenues are faintly better than our midyear revised estimate
but are still only slightly below the prior year actual. Even though it is perceived to be a good time to buy,
many Americans do not feel secure enough with the economy or cannot get the mortgage financing they
need. As a result home sales activity has been slow and there are no signs of any recovery in process.
Sales and Use Taxes - We believe consumer optimism is still fragile due to high unemployment rates and
short -term inflationary concerns as well as the uncertainty of recent international events. As a result, we
have pulled back modestly from our midyear revised estimate by approximately $175,000 for the sake of
conservatism. Even still, we anticipate Sales Tax receipts to finish 3.65% above prior year's actuals.
Transient Occupancy Tax (TOT) - TOT receipts continue to shine brightest among the City's TOP three
revenue sources and are expected to finish above the 2009 -10 actual by more than 7 %.
Other Revenues - While far less significant than the top three revenue sources, but representing other
community based activity indicators, building permit activity is steadily improving over unimpressive 2009-
10 results. Business license revenue appears to be finishing flat.
Quarterly Business Report
•..-
Expenditure Update
The 2010-11 Budget was initially adopted with a projected $2 million gap between revenues and expenditures.
However, management pledged to balance the budget and not access reserves prior to the close of the fiscal
year. As of March 31, 2011 revenue excesses, estimated at $2.5M, were sufficient to balance the budget in the
near term. Since pension costs will continue to increase sharply for the next several years and remain at that
level for the foreseeable future, management has sought out thoughtful long -term structural changes to
ensure fiscal sustainability to enable a meaningful reinvestment into community infrastructure. Despite
growing pension costs, management is committed to growing the share of resources committed to
infrastructure.
General Fund mmmmmlll
Expenditure Estimates - FY 2010 -11
2.5% 0.7%
■ Salaries 6: Benefits
(no PERS)
26.2% ■ Pension
• Operations Et Maint.
• Facilities Financing
Contribution
• General Fund CIE
Contribution
General Fund
Expenditure Estimates - FY 2013 -14
25.1%
Salaries 8 Benefits
(no PIERS)
• Pension
• OperationsEt
Maint.
• Facilities Fin ancin
Contribution
T' General Fund CIP
At the depth of the recession, the general fund investment in City infrastructure had shrunk to 3.2% of
budget while the pension costs had grown to 12.2% of the budget. By 2013 -14, the combined estimated
annual commitment to General Fund CIP and the Facilities Replacement Plan will grow to 5.7% of General
Fund budget. By 2013-14, pension costs are anticipated to approach nearly 15% of General Fund budget.
FY 2010 -11
FY 2009 -10
FY 11 Original
Amended
Y(D as of
Percent
YTD as of
Percent
Department
Budget
Budget
3/31/2011
Expended
3/31/2010
Expended
City Council
5 1,044,410
$ 1,053,886
$ 854,449
81%
$ 878,629
75%
City Clerk
492,538
493,978
337,277
68%
291,194
74%
City Manager
2,437,018
2,463,169
1,548,705
63%
1,603,179
68%
Human Resources
2,292,046
2,326,746
1,597,290
69%
1,644,298
72%
City Attorney
2,348,842
2,621,628
2,108,846
80%
1,732, 74B
72%
Administrative Svcs
7,775,976
7,729,781
5,114,880
66%
5,748,997
75%
Police
42,823,171
42,958,157
31,225,575
73%
32,704,054
74%
Fire
34,055,183
34,183,820
25,270,947
74%
25,352977
74%
Planning
3,005,540
3,327,073
2,147,194
65%
2,260,032
64%
Building
4,237,603
4,237,602
3, 137,B04
74%
3,365,165
75%
General Services
22,034,946
22,124,232
14,952,019
68%
16,160,711
70%
Library
6,472,808
7,143,338
4,793,355
67%
4,949,664
73%
Recreation
7,590,671
7,661,839
5,375,B36
70%
4,944,75B
69%
Public Works
5,550,535
5,877,960
4,089,150
70%
4,154,348
72%
Electrical
1,307,491
1,336,290
790,143
59%
813,05B
60%
C.I.P.
5,054,497
6,014,783
939,216
16%
5,639,695
47%
OPEB
2,128,000
2,128,000
-
0%
-
0%
Debt Service
780,000
780,000
765,000
98%
-
0%
Total Expenditures
$ 151,431,275
$ 154,462282
$ 105,047,687
68%
$ 112,243,707
1 71%
•..-
Expenditure Update
The 2010-11 Budget was initially adopted with a projected $2 million gap between revenues and expenditures.
However, management pledged to balance the budget and not access reserves prior to the close of the fiscal
year. As of March 31, 2011 revenue excesses, estimated at $2.5M, were sufficient to balance the budget in the
near term. Since pension costs will continue to increase sharply for the next several years and remain at that
level for the foreseeable future, management has sought out thoughtful long -term structural changes to
ensure fiscal sustainability to enable a meaningful reinvestment into community infrastructure. Despite
growing pension costs, management is committed to growing the share of resources committed to
infrastructure.
General Fund mmmmmlll
Expenditure Estimates - FY 2010 -11
2.5% 0.7%
■ Salaries 6: Benefits
(no PERS)
26.2% ■ Pension
• Operations Et Maint.
• Facilities Financing
Contribution
• General Fund CIE
Contribution
General Fund
Expenditure Estimates - FY 2013 -14
25.1%
Salaries 8 Benefits
(no PIERS)
• Pension
• OperationsEt
Maint.
• Facilities Fin ancin
Contribution
T' General Fund CIP
At the depth of the recession, the general fund investment in City infrastructure had shrunk to 3.2% of
budget while the pension costs had grown to 12.2% of the budget. By 2013 -14, the combined estimated
annual commitment to General Fund CIP and the Facilities Replacement Plan will grow to 5.7% of General
Fund budget. By 2013-14, pension costs are anticipated to approach nearly 15% of General Fund budget.
Quarterly Business Report
•..- •
If difficult choices are not made, growing pension costs will continue to absorb a larger portion of the General
Fund budget and other government priorities would get squeezed out in the process including the support and
preservation of City infrastructure.
Thoughtful but deliberate choices were made about staffing levels and business segments within our strategic
capabilities. Many vacant positions have been held unfilled while others were positions that were outsourced
to private industry.
Salaries 8 OT Comparison
Facilities Financing i3 CIP Contributions
Q3 FY 2011
Pension Costs
s+<
$60
$30
$ +Z
• Gen eral CIPs
$40
0
• Facilities Financing Contribution
$25
—
sic
$20
0 $8
$10
c
$15
4s-
$6
2008 2009 20
$10
Ma
• c $4
$5
■ Safe
$2
$.
2006 2007 2008 2009 2010 2011 2012 2013 2014
F,.,'� 11 lea 0
Est. Est. Est. Est.
ti
ro �' ^'
^^
L
Fiscal Year
^�Q,o1e ^�Q�o�e ^pQP1e
do do do
Thoughtful but deliberate choices were made about staffing levels and business segments within our strategic
capabilities. Many vacant positions have been held unfilled while others were positions that were outsourced
to private industry.
■ Overtime
Regular
Salaries
A comparison of salaries and overtime through the third quarter of the last four
years revealed that salaries peaked in 2010 and declined 4.43K ($2.3M) in 2011.
By comparison, overtime increased by $425k during the same period, as might be
expected when staffing is reduced or positions are held vacant.
Salaries 8 OT Comparison
Q3 FY 2011
$70
$60
$50
$40
0
—
$30
$20
$10
2008 2009 20
Fiscal Year
■ Overtime
Regular
Salaries
A comparison of salaries and overtime through the third quarter of the last four
years revealed that salaries peaked in 2010 and declined 4.43K ($2.3M) in 2011.
By comparison, overtime increased by $425k during the same period, as might be
expected when staffing is reduced or positions are held vacant.
Quarterly Business Report
201 1 -12 Budget Update
1. Build on prior years' actions.
2. Adhere to 2010's Fiscal Sustainability Plan.
3. Use the next 18 months to thoughtfully and deliberatively
change the way local government does business.
4. Our city's long -term success depends upon our investment in
infrastructure (streets, parks, facilities).
5. There are things we should not be doing.
6. Pension costs need to be addressed comprehensively and
cooperatively.
7. Public Safety is paramount - but we need to be open to better
ways of delivery public safety services.
Page 10
We have survived the recession, but it was not without hard choices and significant budget reductions.
We have also increased the General Fund Reserves in keeping with the Council approved Fiscal
Sustainability Plan. We have done this during a time when many cities were accessing reserves to balance
their budgets. While the recession is over, the recovery is slow, and certain fixed costs, such as pensions,
will continue to rise. Balancing these factors with our commitment to be the Shining City by the Bay our
City Manager has created a list of 7 core budget principles to move us into FY 2011 -12 and beyond.
V Maintain appropriate cash reserves.
• Manage Facilities Financing Plan.
• Review Revenue Performance.
• Competitive contracting of services and equipment.
• Appropriate cost - recovery targets.
• Ensure fair compensation in partnership with our
employees.
In 2010, the City Council advanced the Fiscal Sustainability Plan as proposed by then Mayor Curry. This is
a 15 -point plan to protect and enhance the City's economic and fiscal health so that the community
continues to thrive. This plan continues to be a core principle to us into the future and a few of the 15
point items as they most apply to budget are shown above.
Quarterly Business Report Page 1 1
Bending the Cost Curve
We do have expenditure issues that need to be addressed. Ongoing costs were projected to increase by
approximately $6 million in FY 2011 -12, this includes pensions, OPEB, negotiated contracts with employees
and vendors, facilities financing contributions and unemployment costs. While only minimally impacted by
State budget cuts, we did need to absorb $175,000 in library funding cuts. As per our budget principles our
long -term success depends on our investment in infrastructure (streets, parks, lighting) and we committed to
funding an additional $2 million for streets and IT infrastructure replacements. Knowing these increases the
City Manager worked with his management team to target expenditure reductions or revenue enhancements of
almost $8 million to offset these increased costs as using General Fund Reserves is against our fiscal
sustainability plan. The dotted line on the graph represents what the City would have needed in Reserves had
our spending not been reduced for fiscal sustainability.
165
155
m 145
co
F 135
125
115
General Fund Revenues Ft Expenditures by Fiscal Year
2006 2007 2008 2009 2010 2011 2012
Actuals Actuals Actuals Actuals Actuals Projected Projected
Fiscal Year
Departmental Adjustments (Increased Revenue Opportunities & Expenditure Reductions)
All departments worked collaboratively with the City Manager to identify structural budgetary savings and
revenue enhancements estimated at almost $8 million for FY 2011 -12. These adjustments include, but are not
limited to: outsourcing parking meter operations and enforcement; reducing approximately 40 full time staff
equivalents (almost half resulting in layoffs); increasing police patrol by moving more officers out of specialty
assignments and into the field; providing more efficient lifeguard services during the low season, increased
revenues for popular OASIS fitness classes and for increased activity in the Community Development
department. The City Manager and his team have balanced the FY 2011 -12 budget and maintained all core City
services, while also funding critical IT and street infrastructure, protecting General Fund reserve levels and fully
funding our facilities financing plan contributions which includes the new Civic Center.
Department FY 2011-12
Reduced
Adjustment Staff Operating Increased
Depart—t Total Reduction Casts Re enues Ober
Aditntstrati a Services $ 210,000
X
X
Coneninity Cew(oPncnt am'"
X
X
X
Clry Council 45,aW
City Attorney 338,881
X
X
city Manage. 171,000
X
X
Fire 1,504,850
X
X
Hu. Resources 63,800
X
Literary 248,752
X
X
MOO (General Fund Only) 1,627,400
X
X
X
Police 1,944,747
X
X
X
Public Works 558;321
X
X
Recreation 265,921
X
X.
5 7,7a2,6e0
Historical Full Time Positions
8l1 833
en
r780 at4
Bn5
is
0
a
740
720
700 —
2006 2007 2008 2009 2010. 2011 2012
Estimated proposed
Fiscal Year
Quarterly Business Report
Revenue Forecast
Page 12
Overall the economy has continued to modestly recover from the Great Recession. We are projecting our
revenues to return to pre- recession levels during FY 2011 -12. The "Top 3" revenues are property taxes, sales
taxes, and TOT taxes. These Top 3 combined are projected to come in approximately $4 million, or 3.8% above
the FY 2010-11 original budget. These top 3 revenues make up approximately 73% of all General Fund revenue
sources. Other significant revenue activity is the community development permit revenues, they are projected
to maintain their healthy 13% increase over the FY 2010 -11 original budget of $3.9 million, this equates to
almost $500,000 of excess revenue projected in both FY 2010 -11 and FY 2011 -12.
Expenditure Forecast
The total General Fund operating budget for FY 2011 -12 is $143.9 million, and includes all ongoing cost
increases for pensions, library takeaways from the State, and increased contributions toward facilities and
infrastructure replacements. These increases, offset with the departmental adjustments, kept the operating
budget to a minimal increase of $1.4 million over the adopted budget for FY 2010-11. This modest increase in
expenditures also provides for a projected increase to General Fund reserves at FY 2011 -12 year -end of more
than $1.5 million, ensuring the city is maintaining the goals outlined in the fiscal sustainability plan.
CONCLUSION
The FY 2011 -12 budget is balanced and is even projecting a modest balance for City Manager Assignments by
year end. This was not without difficult choices and significant work on behalf of the City Manager and all city
departments. The city will continue its multi - pronged approach of looking to enhance revenues, reducing
operating costs without negatively impacting service levels, and focusing on our core values.
2010 -11
Original
Budget
Projected
2010 -11
Year End
Proposed
FY 2011 -12
Budget
GENERAL FUND REVENUES:
PROPERTY TAXES
$ 70,642,840
$ 71,574,069
$ 72,155,615
SALES TAXES
23,767,007
24,383,039
25,088,167
TOTTAXES
11,555,034
12,156,000
12,786,000
ALL OTHER GENERAL FUND REVENUES
39,175,789
39,545,785
39,174,826
PLANNED ADDITIONAL REVENUES /SAVI NG5
2,297,108
-
-
SUBTOTAL GENERAL FUND REVENUES
$147,437,778
$147,658,893
$149,204,608
GENERAL FUND EXPENDITURES:
GENERAL GOVERNMENT
$ 16,390,830
$ 16,165,263
$ 13,420,800
PUBLIC SAFETY
76,878,354
75,828,696
75,560,627
PUBLIC WORKS
28,892,972
28,441,749
29,119,669
COMMUNITY DEVELOPMENT
7,243,143
7,196,664
8,849,881
COMMUNITY SERVICES
14,063,479
13,908,921
15,335,929
OPEB
2,128,000
2,128,000
2,314,000
DEBTSERVICE
780,000
765,000
780,000
CITY MANAGER ASSIGNMENTS
2,163,600
1,823,702
CAPITAL PROJECTS
1,061,000
1,061,000
2,000,000
SUBTOTAL GENERAL FUND EXPENDITURES
$147,437,778
$147,658,893
$149,204,608
BALANCED BUDGET
-
-
-
Revenue Forecast
Page 12
Overall the economy has continued to modestly recover from the Great Recession. We are projecting our
revenues to return to pre- recession levels during FY 2011 -12. The "Top 3" revenues are property taxes, sales
taxes, and TOT taxes. These Top 3 combined are projected to come in approximately $4 million, or 3.8% above
the FY 2010-11 original budget. These top 3 revenues make up approximately 73% of all General Fund revenue
sources. Other significant revenue activity is the community development permit revenues, they are projected
to maintain their healthy 13% increase over the FY 2010 -11 original budget of $3.9 million, this equates to
almost $500,000 of excess revenue projected in both FY 2010 -11 and FY 2011 -12.
Expenditure Forecast
The total General Fund operating budget for FY 2011 -12 is $143.9 million, and includes all ongoing cost
increases for pensions, library takeaways from the State, and increased contributions toward facilities and
infrastructure replacements. These increases, offset with the departmental adjustments, kept the operating
budget to a minimal increase of $1.4 million over the adopted budget for FY 2010-11. This modest increase in
expenditures also provides for a projected increase to General Fund reserves at FY 2011 -12 year -end of more
than $1.5 million, ensuring the city is maintaining the goals outlined in the fiscal sustainability plan.
CONCLUSION
The FY 2011 -12 budget is balanced and is even projecting a modest balance for City Manager Assignments by
year end. This was not without difficult choices and significant work on behalf of the City Manager and all city
departments. The city will continue its multi - pronged approach of looking to enhance revenues, reducing
operating costs without negatively impacting service levels, and focusing on our core values.
PROJECT TRACKING REPORT TABLE OF CONTENTS
Acquisition of Coast Highway PROJECT 1
Banning Ranch
PROJECT 2
City Harbor Fees
PROJECT 3
Civic Center Project
PROJECT 4
Group Homes PROJECT 5
Implement Traffic Management Plan PROJECT 6
Incorporate Public Art Component in new Civic Center PROJECT 7
Irvine Company's North Newport Center Project PROJECT 8
Lido Village Conceptual Planning PROJECT 9
Lower Bay Dredging Project PROJECT 10
Marina Park PROJECT 11
Neighborhood Revitalization Committee Update PROJECT 12
Reduce Fire Hazard in Buck Gully and Morning Canyon PROJECT 13
Restructure Development Services PROJECT 14
Rhine Channel Contaminated Sediment Cleanup PROJECT 15
Sunset Ridge Park PROJECT 16
Tidelands Committee Update PROJECT 17
Transportation Fair Share Fee PROJECT 18
West Newport Beach Facility Planning PROJECT 19
Widen Jamboree Road in the Airport Area PROJECT 20
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PROJECT 1
PROJECT: Acquisition of Coast Highway
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: 2008
Target Completion Date: 2012
Description:
The objective of this project is to provide the right -of -way control so that the City can initiate a
long range planning process to create a Mariner's Mile Traffic, Pedestrian and Parking
Comprehensive Plan. The first step is to acquire ownership of Coast Highway between Jamboree
Road and Santa Ana River and Newport Boulevard between Finley Street and West Channel
Bridge from the State of California Department of Transportation ( Caltrans). The process
involves passing the appropriate legislation, having the State review the facility for ability to
relinquish and its state of repair, providing a report to the City on the facility, development of an
offer for City to take the facility, and the City to choose whether it would accept the offer. There
is no defined schedule for this process and it is expected to be rather lengthy to accomplish.
Funding Source: Sources for future improvements to be determined
Total Funding Required for Project: To be determined
Funding Allocated to Date: None
Amount Spent to Date: None other than staff time
Status to Date:
Section 73 of the Streets and Highways Code allows the California Transportation Commission
to relinquish State Highways through a prescribed process. Caltrans has prepared a Project
Study Report that documents an assessment of the condition of the two segments of State
Highway to be considered for relinquishment and has circulated the report within its
organization. On September 16, 2010, staff met with Caltrans to discuss its tentative findings of
the current condition assessment of the two highway facilities. Caltrans informed staff
Project Tracking Report (January - March 2011)
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PROJECT 1
Acquisition of Coast Highway
found the facilities to be in a goad state of repair and would offer $0 for its relinquishment.
Staff expressed concern with this position and requested Caltrans review /correct various
existing items such as deteriorated traffic signals, broken and /or deteriorated drainage
structures, failed pavement areas, failing slopes, etc., prior to finalizing the report and
determining the value of relinquishment. Caltrans agreed to conduct further review and update
its report. City staff continues to check in on the status with the Caltrans Project Manager very
few weeks. Staff is aware that Caltrans staff have recently conducted additional inspection
work of their facilities as well as cleaned out some drain facilities and preformed slope
maintenance along this section of PCH. Caltrans has recently informed City staff that the
Project Study Report is still being reviewed by the Sacramento headquarters.
It is difficult to forecast a completion schedule as we are working with a State Agency that is
certainly affected to some degree by the State budget crisis and this may be a lower priority
item in their camp. We still need to review and confer with the project report once we receive
it, then work to negotiate the best deal we feel possible. I anticipate this alone will take 6 to 9
months. At this point the City will need to determine if the deal makes sense to move forward
with accepting one or both roadways.
Project Tracking Report (January - March 2011)
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PROJECT 2
PROJECT: Banning Ranch
Department(s): Community Development, Public Works and City Manager's Office
Project Lead: Patrick Alford, Planning Manger
Project Start Date: August 2008
Target Completion Date: January 2013
Description:
The General Plan contemplates two uses for the Banning Ranch: acquisition for open space or a
planned community consisting of retail, hospitality, recreational, open space and residential
uses. Newport Banning Ranch is a 402.3 -acre planned community proposed by Newport Banning
Ranch, LLC, a partnership formed by Aera Energy, Cherokee Investment Partners, and Brooks
Street. The project would contain a maximum of 1,375 dwelling units, 75,000 square feet of
retail commercial, a 75 -room "boutique' hotel, parks and open space. The site is generally bound
to the north by Talbert Nature Preserve /Regional Park (Costa Mesa) and to the south by West
Coast Highway and the Newport Shores Community; to the east by Newport Crest Community,
West Newport Mesa, and Westside Costa Mesa; and to the west by a U.S. Army Corps of
Engineers wetlands restoration area and the Santa Ana River. Approximately 40 acres of the site
are located within the incorporated boundary of the City of Newport Beach; the remainder of the
site is within unincorporated Orange County, but within a 1 foot strip of the City of Newport
Beach.
Funding Source: General Fund (off -set by application fees)
Total Funding Required for Project: $4 million (estimated)
Funding Allocated to Date: $2,746,000
Amount Spent to Date: $2,589,418.20
Status to Date:
The exploration of funding sources for the acquisition of the Banning Ranch is continual, but to
date, no funding sources have been identified.
Project Tracking Report Qanuary - March 2011)
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PROJECT 2
Banning Ranch
Newport Banning Ranch (NBR) submitted applications to the City in August of 2008 for the
development of the property consistent with the General Plan. During the First Quarter of
2011, NBR has finalized their drafts of the proposed Planned Community (PC) text and the
Master Development Plan (MDP). After extensive review by City staff, NBR is finalizing the
Tentative Tract Map (TTM). The target completion date for the PC text, MDP, and TTM is Lune
2011.
Terms of a draft of the Development Agreement (DA) and an Affordable Housing
Implementation Plan (AHIP) are being negotiated with NBR is expected to be finalized by staff
and a City Council Committee by June 2011.
Staff and consultants have been in the process of preparing a Draft Environmental Impact
Report (DEIR) including all necessary technical studies. During the previous reporting period,
the need for additional environmental analysis was identified and this pushed back the
publication date of the DEIR from April 2011 to uJ ly 2011. The additional analysis was needed
because the Community Park was added as a part of the project -level entitlements for the
project; an updated traffic study was needed to reflect methodology directives identified in the
appellate court ruling in Sunnyvale West Neighborhood Association v. City of Sunnyvale City
Council; and revisions to the air quality, air toxics, and greenhouse gas (GHG) emissions
analyses will be made based on the need to update these analyses using the new State Air
Quality Management District's California Emissions Estimator Model (CalEEMod).
Following DEIR 60 -day public comment period, responses to public comments and a draft Final
EIR will be prepared and submitted along with the project for public hearings before the
Planning Commission that are anticipated to begin in the Fall of 2011. The Planning
Commission's recommendation will be forwarded to the City Council for hearing and final
action by the end of 2011. Should the City Council approve the project, an application will be
submitted to the California Coastal Commission (CCC) by Newport Banning Ranch. Processing
by the CCC staff is anticipated to take a minimum of 15 months.
Project Tracking Report Qanuary - March 2011)
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PROJECT 2
Banning Ranch
Project Tracking Report (January - March 2011)
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PROJECT 3
PROJECT: City's Harbor Fees
Department(s): Public Works/ City Manager's Office
Project Lead: Chris Miller, Dave Kiff
Project Start Date: Summer 2010
Target Completion Date: December 2011
Description:
This project consists of updating Harbor Resources' cost of service fees and updating the City's
harbor fees to reflect the fair market value for the use of the Tidelands by the associated user
groups. Fees include permits for moorings, Balboa Yacht Basin slip rates, and commercial pier
leases. These fees contribute to harbor projects such as dredging and the provision of additional
harbor amenities.
Funding Source: Tidelands and General Fund
Total Funding Required for Project: Funding in the amount of $50,000 has been
approved to be used for a consultant to assist the City with plans and negotiations to convert
the harbor's commercial marinas and operations from annual permits to leases. No funds were
expended for the mooring permit or the Balboa Yacht Basin rate portion of the study.
Funding Allocated to Date: A Professional Services Agreement in the amount of
$50,000 was awarded to Allan Kotin and Associates on March 22, 2011.
Amount Spent to Date: The City hired MGT Services to update City -wide cost of services
including harbor related fees. Allan Kotin and Associates have just begun their work and have
not submitted any invoices.
Status to Date:
In the fall of 2010, City Council approved Harbor Resources cost of services fees, with
implementation beginning in April 2011. Revised mooring fees and Balboa Yacht Basin
fees (boat slips, garages, and apartments) were approved by City Council in November
and December 2010 and new rates have been implemented. Allan Kotin and Associates
began work on the commercial lease component in April 2011, and will focus on the
Lido Marina Village property first, with their preliminary findings due in May /June
2011.
Project Tracking Report (January — March 2011)
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PROJECT 4
PROJECT: Civic Center Project
Department(s): Public works
Project Lead: Steve Badum
Project Start Date: April 2010
Target Completion Date: December 2012
Description:
The Civic Center Project includes a City Hall Office Building, one of the city's largest parks (16
acre), a 450 -space parking structure, and an expansion of the Newport Beach Central Library. It
is located on two parcels inland of the Newport Beach Central Library and bordered by Avocado
Avenue and MacArthur Boulevard. The project also includes a community room, new Council
Chambers, a "One Stop' Customer Service Center, dog park, passive wetlands park, a civic green,
and a small cafe to service library and city hall customers.
Funding Source: Bond Proceeds /General Fund
Total Funding Required for Project: $126,000,000 (estimated)
Funding Allocated to Date: $126,000,000*
Amount Spent to Date: $22,179,110 (through 4/30/11)
*includes financing
Status to Date:
The Civic Center Project is on schedule and budget. Soil export, grading, and construction of the
Parking Structure shoring wall are complete. Construction of the foundations for the Parking
Structure, Library addition, and City Hall Office Building are currently underway. The project is
scheduled to be substantially complete during the fall months of 2012 with grand opening
for December 2012.
Project Tracking Report (January - March 2011)
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PROJECT 5
PROJECT: Group Homes
Department(s): Office of the City Attorney; City Manager's Office; Planning
Project Lead: City Attorney and City Manager
Project Start Date: 2007
Target Completion Date: ongoing
Description: Group homes: Implement and defend group home regulations to maintain
the residential character of the City's residential neighborhoods while providing equal access to
housing and accommodating the needs of the disabled.
Funding Source: General Fund and Fund Balance
Total Funding Required for Project: All costs have not been specifically identified
since a great deal of the costs are internal, staff resources from the City Manager's Office, Office
of the City Attorney, Planning, and Code Enforcement.
Funding Allocated to Date: $2.9 million in outside counsel and litigation costs to date
with an additional $50,000 anticipated in this fiscal year and $100,000 next fiscal year.
Amount Spent to Date: $2.9 million on outside counsel plus internal staffing costs and
cost of Hearing Officer in administrative proceedings.
Status to Date:
The ordinance addressing the issue, Ordinance No. 2008 -05, has been adopted and enforced
through all necessary administrative proceedings. We are now at the stage of defending the
ordinance in court and to the U.S. Department of Justice and Department of Housing and Urban
Development and in federal court proceedings. Additionally, we are enforcing the ordinance
and the approvals given under it and through approved Zoning Agreements with specific
operators. As to these issues:
(1) Federal Litigation: The City has prevailed in the federal case at the trial court level. The
matter is now on appeal. This change of status has resulted in a lower estimation projection of
expenses than was shown in the prior Quarterly Business Report and resulted in a lower
request for outside counsel expense in 2011/12 Fiscal Year Budget.
Project Tracking Report (January - March 2011)
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PROJECT 5
Group Homes
(2) Challenge to Morningside Zoning Agreement: We are now defending MORN v. City of
Newport Beach in the Orange County Superior Court. This case is a challenge to the adoption of
the Zoning Agreement that was the vehicle for settling the federal court litigation involving the
City and Morningside Recovery. The defense of this matter is being handled in -house by the
Office of the City Attorney. Its first hearing is scheduled in August of this year.
(3) Enforcement of Group Residential Use Regulations: Efforts are ongoing in the
enforcement of the City's Group Residential Use Regulations, including the enforcement of the
conditions of approval of permitted uses and operating conditions under the two zoning
agreements entered into by the City. These efforts involve substantial resources from the
Community Development Department and its Code Enforcement Division, as well as the Office
of the City Attorney. In this context, we are investigating repeated allegations of violations of
these regulations and investigation into possible unpermitted operations within the City.
(4) Group Homes Mini - Conference: Plans for a "mini- conference' are in process for August,
2011. The conference is being designed to address the current status of the City's Group
Residential Use Regulations and update the regulations now that they have been in force for
over three years and have survived legal challenges at the trial court level.
Project Tracking Report (January - March 2011)
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PROJECT 6
PROJECT: Implement Traffic Management Plan
Department(s): Public Works
Project Lead: Antony Brine
Project Start Date: January 2007
Target Completion Date: Fall 2013
Description:
This project improves and modernizes 117 traffic signals throughout the City with new
controllers, fiber optic connections, a new Traffic Management Center (TMC) including new
software, hardware and viewing monitors, Closed Circuit Television (CCTV) cameras at selected
intersections to improve system reliability, traffic flow, and to reduce congestion. The traffic
signal modernization program is a multi - phased effort that allows staff to monitor, adjust and
optimize signal timing and operations from the TMC at City Hall. To date, 81 traffic signals have
been upgraded and linked to a new high speed fiber optic backbone, 22 CCTV cameras have been
installed, and a new TMC has been installed. Staff also combined the annual traffic signal
rehabilitation program with the signal modernization work in an effort to incorporate required
maintenance work of existing signal equipment with the new modernization work. Funding
information below only includes estimates for the traffic modernization program.
Funding Source: Transportation and Circulation, Measure M Turnback, Measure M
Competitive
Total Funding Required for Project: $6,500,000
Funding Allocated to Date: $5,000,000 (excludes Phases 6 and 8)
Amount Spent to Date: $4,191,450
Status to Date:
Phases 1 through 4 and Phase 7 (out of 8 total phases) of the traffic modernization program are
now complete and operational. These phases included work to intersections along the Balboa
Project Tracking Report Qanuary -March 2011)
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PROJECT 6
Implement Traffic Management Plan
Peninsula, Superior Avenue, MacArthur Blvd., Jamboree Road, City owned portions of Coast
Highway, intersections in the Airport area, and along Irvine Avenue. Phase 5 includes 13
intersections and adds 4 more CCTV cameras in the Newport Center area and along portions of
San Joaquin Hills Road. This project is planned to be awarded for construction in June 2011 and
construction is anticipated to be complete in November 2011. Phases 6 and 8 of the traffic
signal modernization program are planned to begin design by summer 2012. Phases 6 and 8
include improvements to Newport Coast Drive, San Miguel Drive, Bonita Canyon Drive, and
portions of San Joaquin Hills Road.
Project Tracking Report Qanuary -March 2011)
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PHASE 5 PLANNED CONSTRUCTION 6/2011 (12 SIGNALS)
PHASE 6 FUTURE (17 SIGNALS)
PHASE 8 FUTURE (11 SIGNALS)
PHASES 1 - 4 & 7 CCTV CAMERAS COMPLETED (22 CAMERAS)
PHASE 5 CCTV CAMERAS (3 CAMERAS)
PHASE 6 FUTURE CCTV CAMERAS (4 CAMERAS)
PHASE 8 FUTURE CCTV CAMERAS (2 CAMERAS)
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PROJECT 7
PROJECT: Incorporate a Public Art Component in new Civic Center
Department(s): Public Works and Library Services
Project bead: Steve Badum and Cynthia Cowell
Project Start Date:
Target Completion Date: December 2012
Description:
The City Council supports Community Enhancements to increase opportunities for recreational
and arts enjoyments, provide for essential facilities and facilitate sound land use decisions. The
objective is this project is to incorporate public art as part of the new Civic Center project.
Funding Source: Civic Center Bond Proceeds and Private Contributions
Total Funding Required for Project: to be determined
Funding Allocated to Date: None
Amount Spent to Date: None
Status to Date:
A memorandum of understanding has been executed with the Orange County Museum of the
Arts for the acquisition and installation of art work as part of the Civic Center project.
Additional art will be acquired and installed when construction of the buildings and park is
completed. The Civic Center Park design incorporates willow structures by Patrick Dougherty
and animal sculptures in the various meadows. The Arts Commission received a request
from the Orange County Museum of Art to put forth a financial contribution for an initial public
art installation at the Civic Center. The topic was discussed at a Newport Beach Arts
Foundation meeting and the group pledged to raise $15,000 for this purpose. The work of
public artist Siah Armajani is being considered for an initial installation.
This completes the reporting for this project as the incorporation of public art at the Civic
Center is now a part of the Civic Center project.
Project Tracking Report (January - March 2011)
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PROJECT 8
PROJECT: Irvine Company's North Newport Center Project
Department(s): Community Development
Project Lead: Patrick Alford, Planning Manager
Project Start Date: March 2011
Target Completion Date: June 2011
Description:
A 20 -story office tower containing approximately 400,000 square -feet of floor area. The project
includes the demolition of a portion of an existing parking structure and the construction of a
new, 8 -level parking structure (4 levels below grade and 4 levels above grade).
Funding Source: General Fund (off -set by application fees)
Total Funding Required for Project: Funded through budgeted staff resources,
building permit and application fees
Funding Allocated to Date: Existing budgeted resources
Amount Spent to Date: unknown
Status to Date:
During the First Quarter of 2011, the Planning Division has reviewed and found the project to
be in compliance with the North Newport Center Planned Community Development Plan and
Design Regulations. This included the review of a shadow analysis, which showed that the
office tower will not add shade to the residential areas north of San Joaquin Hills Road beyond
existing conditions for more than three hours between the hours of 9:00 a.m. and 3:00 p.m. PST,
or for more than four hours between the hours of 9:00 a.m. and 5:00 p.m. PDT. Planning is still
awaiting verification of square footage and Airport Land Commission approval before signing
off on the permit.
The second plan check was submitted to the Building Division on May 2. 2011. Permits for the
entire project are anticipated to be issued in Tune of 2011. Construction is expected to take
between 24 to 30 months to complete.
Project Tracking Report (January - March 2011)
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PROJECT 8
Irvine Company's North Newport Center Project
Project Tracking Report (January - March 2011)
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PROJECT 9
PROJECT: Lido Village Conceptual Planning - Design Guidelines
Department(s): Community Development
Project Lead: James Campbell, Acting Planning Director
Project Start Date: May 2011
Target Completion Date: September 2011
Description:
The preparation of design guidelines for the Lido Village area. The area is generally bounded by
Newport Boulevard, Newport Bay and 32114 Street. The project is the next step in implementing
the January 25, 2011, approval of the Lido Village Concept Plan. The process will consist of a
public /private partnership with Fritz Duda Company and Vornado Partners to jointly fund and
manage the preparation of design guidelines. The process will include several public meetings in
conjunction with the Neighborhood Revitalization Committee.
Funding Source: General Fund (partially off -set by private funds)
Total Funding Required for Project: $165,000 total
Funding Allocated to Date: None - Budget allocation pending
Amount Spent to Date: None
Status to Date:
On January 25, 2011, the City Council approved Alternative 5b (below) as a conceptual plan to
guide future planning efforts. Tim Collins has prepared a proposal to provide project
management services for the preparation of design guidelines as the next step in the process to
implement the conceptual plan. Todd Larner of William Hezmalhalch Architects has provided a
detailed scope of services that includes the preparation of the guidelines, public outreach
sessions and coordination with the City's Neighborhood Revitalization Committee.
The next step is to execute a contract with Tim Collins and staff will be seeking the City
Council's approval of a contract with WHA. Once both contracts are executed, the consultants
start by refining the conceptual plan previously considered by the City Council last January.
Project Tracking Report (January - March 2011)
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PROJECT 9
Lido Village Conceptual Planning - Design Guidelines
WHA will then prepare draft architectural and landscape design guidelines based upon input
from major stakeholders. The draft guidelines will be reviewed by the public at a series of focus
groups and community outreach sessions. The overall effort will be coordinated with the
Neighborhood Revitalization Committee. Adoption of the final design guidelines is tentatively
scheduled for September of 2011.
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ALTERNATIVE 56
Project Tracking Report (January - March 2011)
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PROJECT 10
PROJECT: Lower Bay Dredging Project
Department(s): Public works
Project Lead: Chris Miller
Project Start Date: 2011
Target Completion Date: 2012
Description:
The project initially included dredging approximately 1.2 million cubic yards in the main
navigational channels of the Lower Bay by the federal government. Due to federal budget
constraints, the Army Corps of Engineers will initiate a smaller project to dredge approximately
100,000 to 200,000 cubic yards of material in the critical areas in September 2011. Most of the
sediment is suitable for ocean disposal at the off -shore site "LA -3 ", with some of the remaining
material to be disposed at an alternate, approved location such as the Port of Long Beach
(POLB), pending POLB's approval.
Funding Source: Federal Funds, Tidelands
Total Funding Required for Project: -$2.2M
Funding Allocated to Date: $400,000 (0 &M Tidelands); $100,000 (CIP); $2.2 million
in federal funds is anticipated but not yet allocated.
Amount Spent to Date: $400,000 (0 &M Tidelands -for sediment testing)
Status to Date:
Staff is coordinating with and assisting the Army Corps of Engineers in designing a dredging
project with a reduced scope given the federal government's funding constraints. Of utmost
importance is locating a disposal site for the 100,000 cubic yards of contaminants. City and
Corps staff will be approaching the Port of Long Beach for assistance. If that option is not
available, the Corps will then dredge as much of the clean, LA -3 compatible material as the
budget will accommodate. The Corps anticipates putting the project to bid in August 2011 and
awarding a contract in September 2011 before the end of the current, federal fiscal year.
Project Tracking Report (January - March 2011)
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PROJECT 11
PROJECT: Marina Park
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: 2006
Target Completion Date: Spring 2014
Description:
The Marina Park site is located on the bay side of Newport Peninsula between 15th and 18th
Streets. The 10.4 acre site is owned by the City and is currently being used for several purposes
including a 57 space mobile home park, Las Arenas and Veterans Memorial Parks, Balboa
Community Center and parking lots, 18th Street Sailing Base and leased space for a Girl Scouts
meeting facility.
The approved Marina Park Concept plan for the property proposes a new marina which includes
a 23 slip visiting vessel marina, a visitor side tie dock and floating docks to support youth and
adult sailing programs and mooring support services; a 11,000 sf Sailing Center building and a
10,500 sf Community Center building; a new park with amenities including tennis courts, half
court basketball courts, tot lot and playground, exercise circuit, walking paths and beach area
and a new Girl Scout house and parking areas.
Funding Source: General Fund - Major Facilities
Total Funding Required for Project: $30,000,000
Funding Allocated to Date: $4,425,000
Amount Spent to Date: $1,455,015
Status to Date:
On November 13, 2007, the City Council approved the Marina Park Concept Plan and directed
staff to prepare the Environmental Impart Report and design documents. The project EIR was
approved and certified by the City Council on May 11, 2010.
Project Tracking Report (January — March 2011)
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PROJECT 11
Marina Park
Upon approval of the EIR, staff and the consultant team prepared and submitted applications to
the State Regional Water Quality Control Board for a 401 permit and US Army Corps of
Engineers' 404 permit. Project approvals and permits from the California Coastal Commission
(CCC) and the State Lands Commission (SLC) are also being sought. As of May 2011, the 401
permit has been approved and the 404 permit has just finished the public review process and is
expected to be Approved -in- Concept in the coming months. However, the 404 permit cannot be
formally issued until the coastal permit is approved.
The critical path item is the California Coastal Commission Permit. Staff submitted the CCC
permit application on October 7, 2010 and received the expected incomplete letter on
November 30, 2010. The application was re- submitted on December 21, 2010 and the City
received its second incomplete application letter on January 19, 2011 informing the City that
the application cannot be accepted until a Tidelands boundary issue is resolved with SLC. Staff
has met several times with CCC staff and requested that they continue to process the project's
application while the City works through the SLC boundary issue. To date, this approach has not
been successful. Staff is still negotiating and working to finalize the necessary Tidelands
Boundary Agreement and Project Approval with the SLC and is pressing to get this item to the
Commission in June or July of this year. Additionally, staff has prepared and requested that the
SLC Executive Director sign and send a letter to the CCC requesting them to accept the City's
completed application and begin processing it while the City works through the SLC process.
Project Tracking Report (January — March 2011)
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PROJECT 12
PROJECT: Neighborhood Revitalization Committee Update
Department(s): City Manager, Public Works, Community Development
Project Lead: Dana Smith, Steve Badum, Kim Brandt
Project Start Date: February 2011
Target Completion Date: TBD (Individual Projects will have Project Tracking Sheets
for the next QBR)
Description:
At the Council's annual retreat in February, six neighborhoods were identified as areas in need of
focused revitalization efforts. Each area was identified to have specific and different needs that
may include one or all of the following: land use planning and visioning, economic development,
code enforcement and nuisance abatement, and infrastructure maintenance or replacement. The
areas chosen for further study are: Lido Marina Village /existing City Hall site, Balboa Village,
Mariner's Mile, Corona del Mar entry at MacArthur, Bristol Road South in Santa Ana Heights, and
West Newport - Balboa Blvd., West Coast Highway. The Council established a three person ad
hoc Neighborhood Advisory Committee (Committee) consisting of Mayor Henn and Council
members Selich and Hill. The Committee will make a recommendation to the full Council as to
the priority of work and budget needs of the six project areas. Each project area, once funded,
will have a council selected Citizen's Advisory Panel (CAP) that will advise staff and the
Committee on revitalization goals and work program. Project Tracking sheets will be prepared
for each Neighborhood Revitalization Project and will include budgets and schedules.
Funding Source: General Fund
Total Funding Required for Project: undetermined at this time
Funding Allocated to Date: $0.00
Amount Spent to Date: approx $ 3,000 staff time and actual costs
Status to Date:
The Committee met twice to hear public input about the relative priority of the project areas.
The Staff prepared a preliminary ranking of projects for the second meeting and based on
Project Tracking Report (January - March 2011)
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PROJECT 12
Neighborhood Revitalization Committee Update
public feedback and direction from the Committee is revising our recommendation. This
involves grouping several project areas together based on cost and type of revitalization effort
needed. The next meeting of the Committee is in early June with a report to Council anticipated
for June 28, 2011. The Committee also asked for applications of interested parties to serve on
the CAPS. Recommendation and selection of CAP members will track with the selection of the
neighborhoods that will be first to begin work.
Project Tracking Report (January - March 2011)
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PROJECT 13
PROJECT: Reduce Fire Hazard in Buck Gully and Morning Canyon
Department(s): Fire
Project Lead: NBFD Fire Marshal Ron Gamble
Project Start Date: Dependent on the final Cal Fire FHSZ Maps due sometime in 2011
Target Completion Date: once the maps are completed and available from the state,
they will be submitted to the City Council. Then scheduling of public hearings on the subject can
take place and the CAL FIRE map can be adopted by the city council. This will become part of the
annual hazard reduction program.
Description:
(CAL FIRE) began a project in 2007 to update the Fire Hazard Severity Zone (FHSZ) Map for all
areas of California.
SB1595 written by Senator Kehoe, the California Legislature found and declared that Wildfires
are extremely costly, not only to property owners and residents but also to local agencies.
Preventive measures are therefore needed to ensure the preservation of the public peace, health,
or safety.
SB 1595 became law in 2008 and the CAL FIRE maps will allow the provisions of this law to be
enforced.
It requires a person who owns, leases, controls, operates, or maintains an occupied dwelling or
structure within a very high fire hazard severity zone to maintain defensible space no greater
than 100 feet from each side of the structure. It will involve removing or reducing vegetative and
non vegetative fuels (wood piles and combustible materials).
Funding Source: unknown
Total Funding Required for Project: unknown
Project Tracking Report (January - March 2011)
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PROJECT 13
Reduce Fire Hazard in Buck Gully and Morning Canyon
Funding Allocated to Date: Currently we have $190,000 budgeted for Fuel
Modification maintenance Account 2330 - 80804. Our city -wide weed abatement and hazard
reduction programs from 2330 - 8080 has $46,114.
Amount Spent to Date: $163,085 from 80804 and $44,564 from 8080
Status to Date:
There are no updates from Sacramento since the last quarterly report. The second revised map
is currently up in Sacramento for final approval and is anticipated to be available "sometime in
2011". All local comments to the draft FHSZ map were provided to Cal Fire/ SFM staff on
December 21st 2010. Cal Fire staff recently told the Orange County Fire Marshals they began their
work in early January and that they plan to also establish a method to make the process more
visible to each city. As soon as they make this happen I will pass the information along.
Please attach a location map if the project is site specific:
Please find the attached CAL Fire Map at the bottom of this page. This is the map that is available
on the CAL Fire Website on the FHSZ map tracker showing Newport Beach. This has not been
updated with local comments and there is no new information posted on this website. Recently a
courtesy letter was sent out regarding Hazard Reduction. This year the letter went out to
Morning Canyon, Newport Coast and Big Canyon Residents. Next year it alternates and will go
out to Upper, Middle and Lower Buck Gully homes and rotates on a two year cycle.
Project Tracking Report (January - March 2011)
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PROJECT 13
Reduce Fire Hazard in Buck Gully and Morning Canyon
DRAFT Fire Hazard Severi
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Project Tracking Report Qanuary - March 2011)
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PROJECT 14
PROJECT: Restructure Development Services
Department(s): City Manager, CDD, & Public Works
Project Lead: Dana Smith
Project Start Date: September 2010
Target Completion Date: September 2011
Description:
The City Manager's office is working to improve coordination and improved customer service in
development services and is making key organizational changes. With the retirements of the
Planning Director and Building Director last year, a plan was developed to consolidate four core
functions into a Community Development Department. An experienced consultant, Joel Fick, was
retained to begin a change management process in both Planning and Building departments that
led to improved processes, better customer service, and a recommendation for an effective
structure to service the Community. The new structure consists of a consolidated Community
Development Department with four divisions: Planning, Building, Code Enforcement and
Administration /GIS. An internal selection of two managerial positions occurred earlier this year
with the appointments of Dan Campagnolo as the Administration /GIS Manager and Matt
Cosylion as the Manager of the Code Enforcement Division.
Funding Source: N/A
Total Funding Required for Project: N/A
Funding Allocated to Date: N/A
Amount Spent to Date: N/A
Status to Date:
Recruitment for the Community Development Department Director began in December of 2010
and after receiving over 120 applicants, the City Manager selected Kim Brandt from
neighboring Costa Mesa to lead the Department. She begins on May 23M. The two remaining
and Deputy Director will be filled by Ms. Brandt this summer.
Project Tracking Report (January- March 2011)
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PROJECT 15
PROJECT: Rhine Channel Contaminated Sediment Cleanup
Department(s): Public Works
Project Lead: Chris Miller
Project Start Date: August 2011
Target Completion Date: December 2011
Description:
The project will remove contaminated sediments to restore and enhance state - designated
impaired beneficial uses of the Rhine Channel, dispose of material in an environmentally
responsible and cost - effective manner, and improve navigation. This project will remove
contaminated sediments from the Rhine Channel in Lower Newport Bay as well as from nearby
areas found unsuitable for unconfined ocean disposal under Regional General Permit 54 issued
by the U.S. Army Corps of Engineers.
Funding Source: Tidelands
Total Funding Required for Project: Approximately $4.6 million
Funding Allocated to Date: $4.6 million (includes contingencies)
Amount Spent to Date: None - Contracts recently awarded.
Status to Date:
On April 12, 2011, Anchor QEA was awarded a contract for construction management which
also includes pre - construction submittals, agency coordination, and sediment and water quality
sampling. Dutra Dredging Company, the low bidder, was awarded a contract by the City Council
on May 10, 2011. A conditional Coastal permit was issued in January 2011 and Water Board
and Corps permits have been issued. Also, the Port of Long Beach's Memorandum of Agreement
with the City was approved by the City Council on March 22, 2011 and executed in April 2011.
The anticipated start date is August 2011 but is dependent on the Port of Long Beach's
schedule. The project should take 5 months and should be complete by December 2011. A
location map is attached.
Project Tracking Report (January - March 2011)
Proposed Debri;
I Offloading Area
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15th Streef Pier
SOURCE: Basemap prepared from City of Newport Beach GIS files.
NOTE: Temporary moorage areas are located throughout Lower
Newport Bay.
kzANCHOR
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LEGEND:
Proposed Project Area
Construction Staging Area
(Lower Castaways)
Pierhead Lines (Approximate)
BAY SHORES
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Sca e in Feet
Figure 2
Proposed Project Area
Rhine Channel Contaminated Sediment Cleanup
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PROJECT 16
PROJECT: Sunset Ridge Park
Department(s): Public Works and Recreation / Senior Services
Project head: Mike Sinacori
Project Start Date: August 2007
Target Completion Date: Winter 2012
Description:
The proposed 13.7 acre Sunset Ridge park is situated on the northern corner of the West Coast
Highway and Superior Avenue in West Newport Beach. Sunset Ridge Park is planned to be an
active park per the city's General Plan with amenities including Pony League baseball field,
soccer fields, parking area, restroom, butterfly garden, shaded viewpoint, walkways, walls, signs,
and fencing.
Funding Source: General Fund and Park -in -lieu
Total Funding Required for Project: $12,000,000*
Funding Allocated to Date: $12,000,000*
Amount Spent to Date: $1,532,800*
* Not including land cost purchase from Caltrans of $5,200,000
Status to Date:
Staff is currently working to obtain all necessary regulatory permits including a Coastal
Development Permit from the California Coast Commission. The park project continues
to advance, although not as fast as originally anticipated due to delays caused by the
Banning Ranch Conservancy (a group attempting to block development of the access
road to property). Two recent actions have removed some obstacles allowing the park
plans to continue forward toward construction. On April 14, 2011, the City received a
favorable decision from the California Coastal Commission on how to remedy non -
permitted vegetation removals by a contractor which occurred prior to the City
acquiring ownership of the park property. The second action occurred on May 5, 2011
Project Tracking Report (January - March 2011)
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PROJECT 16
Sunset Ridge Park
when a lawsuit filed by the Banning Ranch Conservancy in 2010 claiming the project's
Environmental Impart Report was inadequate in several areas was ruled in the City's
favor. Staff can now work more closely with Coastal Commission staff to address any
permit comments and concerns and press to obtain the project's required CCC permit.
Construction of the park and entry road from West Coast Highway could begin in Fall of
2011. Completion is estimated in Winter 2012.
Project Tracking Report (January - March 2011)
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PROJECT 17
PROJECT: Tidelands Committee Update
Department(s): Public Works / City Manager's Office
Project Lead: Chris Miller, Dave Kiff
Project Start Date: March 2011
Target Completion Date: December 2012
Description:
This Council Committee is comprised of three Council Members (Mayor Henn, Gardner
and Selich), and will meet monthly. The goals of the committee are to: 1) Establish long
term visions for the tidelands including the Upper and Lower Bays, beaches and other
components; 2) Study and adopt a Tidelands Infrastructure Master Plan; 3) Research,
consider and recommend appropriate governance structures; 4) Oversee ongoing
execution of the Tidelands Infrastructure Master Plan projects; and 5) Identify and
establish a Citizens Advisory Panel to assist the Committee, encouraging public input
throughout the process.
Funding Source: N/A
Total Funding Required for Project: No funding required.
Funding Allocated to Date: N/A
Amount Spent to Date: N/A
Status to Date:
The Committee's first meeting was in March 2011, and the focus was primarily
administrative in nature (establish regular meeting days /times, review the Committee's
goals, and discuss roles of both the Committee and Citizens Advisory Panel etc...).
During the next quarter, the Committee will establish and refine the Tidelands
Project Tracking Report (January - March 2011)
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PROJECT 17
Tidelands Committee Update
Infrastructure Master Plan, select members of the Citizens Advisory Panel, and review
the City's proposed eelgrass program along with the City's study on the Balboa Island
bulkheads.
Project Tracking Report (January - March 2011)
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PROJECT 18
PROJECT: Transportation Fair Share Fee
Department(s): Community Development, Public Works
Project Lead: Steve Badum, Antony Brine
Project Start Date: Feb 2007
Target Completion Date: Summer 2011
Description:
In 1984, City Council established the Fair Share Traffic Contribution Ordinance to ensure
development contributes its fair share towards improvements included in the City's Master Plan
of Arterial Highways and General Plan Traffic Circulation Element. The ordinance established a
fair and equitable method to distribute costs of the circulation system improvements necessary
to accommodate the traffic volumes generated by development. From time to time, the City
Council has updated this ordinance as costs have risen and whenever the General Plan has been
updated. The City recently updated the General Plan and the Implementation Committee has
been working on an update of the Fair Share fee.
Funding Source: Transportation and Circulation Fund
Total Funding Required for Project: $1oo,000
Funding Allocated to Date: $65,200
Amount Spent to Date: $65,200
Status to Date:
The completion of this Fair Share Traffic fee update project has stalled with various
iterations proposed by the General Plan /LCP Implementation Committee, project
consultants and interested parties such as the Building Industry Association of Orange
County (BIA /OC). The most recent version of the Fair Share fee was reviewed by
GP /LCP committee and the final report, prepared by a consultant, is currently being
reviewed by staff. Staff will present findings to the BIA /OC by summer 2011 and
to return to the City Council in late summer 2011 for further direction.
Project Tracking Report (January — March 2011)
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PROJECT 19
PROJECT: West Newport Beach Facility Planning
Department(s): Public Works, City Manager's Office and Administrative Services
Project Lead: Steve Badum, Dave Kiff, Tracy McCraner
Project Start Date: April 2011
Target Completion Date: On -going
Description:
Most of the City's public buildings and facilities on the west side of the city are reaching
the end of their service life and are in need of major refurbishment or replacement. In
2006, the City developed a comprehensive citywide Facilities Financing Plan as a tool to
identify, forecast and fund the refurbishment and /or replacement of numerous City
owned facilities including police and fire stations, libraries, community and senior
centers, services yards and parks. With the upcoming relocation of City Hall to the new
Civic Center Complex (City Hall Office Building, large park, 450 -space parking structure,
and expansion to the Central Library), discussions have and continue to take place as to
how best to reconstruct the remaining facilities to met current and future community
needs.
Funding Source: General Fund
Total Funding Required for Project: to be determined
Funding Allocated to Date: $0
Amount Spent to Date: $0
Project Tracking Report (January - March 2011)
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PROJECT 19
West Newport Beach Facility Planning
Status to Date:
Since inception of the Facilities Financing Plan in 2006, the Ensign Theater Arts Center,
Corona del Mar Community Youth Center and the Carrol Beak Center have received major
refurbishments, the new OASIS Senior Center has been completed, and the new Civic Center
project is currently under construction. Additionally both the proposed new Sunset Ridge
Park and Marina Park projects have moved through the concept design and environmental
review phases and are currently being processed through State and Federal regulatory and
permitting agencies. In fiscal year 2011/12, staff expects to start the process to build upon
the current efforts to redevelop the existing City Hall site and develop conceptual plans and
alternatives to provide: consolidated maintenance and operations facilities; replacement and
potentially relocated community center facilities and fire stations; replacement of the existing
Lifeguard Headquarters building with smaller, more efficient facilities located at Newport
and Balboa Piers as well as continue discussions regarding the future of the various other City
facilities, particularly those located on the western side of the Newport Bay.
Project Tracking Report (January - March 2011)
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PROJECT 20
PROJECT: Widen Jamboree Road in the Airport Area
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: January 2005
Target Completion Date: June 2012
Description:
This two -phase project involves widening jamboree Road bridge over the SR73 Freeway
by 22 feet to the west (Phase 1); and then widening Jamboree Road at the intersection of
MacArthur Boulevard between Bristol North and Fairchild Road (Phase 2) in an effort to
reduce traffic congestion and delay. The bridge widening project (Phase 1) will create
one additional northbound and southbound thru lane on Jamboree Road between
MacArthur Boulevard and Bristol South. This project required developing a design and
obtaining approval and a permit from Caltrans for this State -owned bridge. Additionally,
the project required negotiations and purchase of three pieces of private property as
well as several OCTA grant funding applications and successful funding award.
The jamboree Road Improvements through the MacArthur intersection (Phase 2) will
provide one additional northbound lane through the intersection as well as an additional
left turn lane from southbound Jamboree Road onto eastbound MacArthur Boulevard.
This project also involves negotiations and voluntary purchase of three pieces of private
property within the City of Irvine for the northbound through lane, as well as several
OCTA grant funding applications and successful funding award.
Funding Source: Transportation and Circulation, IBC Settlement, Measure M Turnback,
and Measure M Competitive
Total Funding Required for Project: $10,217,942.00
Funding Allocated to Date: $10,217,942.00
Amount Spent to Date: $1,647,736.41
Project Tracking Report (January - March 2011)
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PROJECT 20
Widen Jamboree Road in the Airport Area
Status to Date:
The Bridge Widening Project (Phase 1) was awarded for construction by City Council on March
8, 2011. Notice to proceed has been given and submittal of construction documents is
underway. Construction should be completed in June 2012.
The Jamboree Road Improvements project (Phase 2) is currently under design and staff is
concurrently negotiating for the voluntary purchase of three pieces of private property on the
northeast corner of the intersection within the City of Irvine. Staffs objective is to complete the
property acquisition and design by the Summer of 2011 and start construction in late fall 2011.
Construction is expected to last about 6 months.
Project Tracking Report (January - March 2011)
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NEWPORT BEACH QUARTERLY
. BUSINESS REPORT
January - March 2011
a- ,.«till
QUARTERLY FI
REPORT
NANCIAL
City of Newport Beach, Administrative Services Department
www.newportbeachca.gov 949.644.3127
May 24, 2011
Volume 1, Issue 2
INSIDE THIS ISSUE
Executive Summary 1
News and Initiative for the Quarter 2
Status on Long -term Funding Programs
CaIPERS 3
OPEB (Retiree Insurance) 3
Facilities Financing Plan 3
Economic Update 4
2010 -11 Budget Update
Revenue Summary 6
Expenditure Update 8
2011 -12 Budget Update 10
Quarterly Business Report
Executive Summary
We are pleased to submit the second Quarterly Financial Report.
Page 1
To recap the past couple of years, Fiscal Year 2009 -10 was marked by retrenchment as a result of
the Great Recession. Fiscal Year 2010 -11, the last quarter in particular, will be remembered as the
start of our transition from "Good to Great." With revenue growth stagnating and pension costs rising
sharply, the objective of restructuring was to redeploy resources to focus on programs and activities
that support the Council priorities. To this end, much of this quarter was dedicated to analyzing,
costing and vetting plans to restructure the organization to be more strategically focused and
operationally efficient.
While signs of economic recovery still remain mixed, a combination of revenue forecast
improvements and cost reductions are likely to produce a balanced budget in FY 2010 -11. The
budget proposal for Fiscal 2011 -12 as proposed, was built on three core values, identified by the
City Manager and approved by City Council, that make Newport Beach special. These values are:
- A high quality physical environment - shining Cityby the Bay
- Public Safety and how city services and programs reinforce safety, and
- Civic engagement
The 2011 -12 Budget initiates a "rebalancing" of the City's resources emphasizing the need to rebuild
and protect community infrastructure.
The management team continues to focus on the long -term goal of improving our performance
management. The introduction of a Performance Plan also represents initial steps toward program -
based budgeting and refined decision making tools for the City's increasingly scarce resources.
"The development of the City's annual budget takes an enormous amount of
staff time and effort, and this year, especially so, given the tough decisions
that were made to move the organization forward in a new direction. "
Dave Kiff, City Manager
Quarterly Business Report
News and Initiatives for the Quarter
Outsourcing of Parking Meter
Operations and Enforcement
In the spirit of community
reinvestment and efficiency,
Administrative Services negotiated
a contract with Central Parking
Systems (CPS) this quarter,
outsourcing parking meter operations and
enforcement. This was an extremely detailed and
deliberative process, spanning several months. Our
community is now equipped with more than 1,300
modernized single space parking meters accepting
credit cards, and will soon be equipped with 11
multi -space pay stations which will include credit
card and pay by cell options in addition to the
traditional coin option. These meters will be
maintained within 24 hours of breakage/ damage.
The City maintains sole responsibility for all meter
rates /locations /hours and will own all equipment
replaced by Central Parking. The City will also
receive a guaranteed revenue flow equal to our
current net parking meter revenue, with
opportunities for increased revenue estimated to
potentially be $4 million over the life of the 7 -year
contract. CPS and City staff have been performing
significant community outreach to listen to our
businesses' and residents' concerns, questions and
comments to ensure a positive and effective
transition.
Remote Deposit System
Implemented
A new remittance processor
system was put in place this
quarter that eliminates the
need to courier checks to the bank and reduces the
float time of a check from 3 days to 24 hrs. The
remote deposit system will not only process
remittances received in the mail but also processes
over - the - counter payments by walk -up customers.
Page 2
The Check 21 Act came about as a result of the
September 11th tragedy. When all air traffic was
grounded, banks became paralyzed by not having
the ability to physically move paper checks from
bank to bank. Check 21 allowed banks to accept the
digital image of a check as a legal document.
New Treasury Format Introduced
The Finance and Treasury team is pleased to present
the new format of the City's Treasury Report. The
new report format is intended to provide interested
parties with an in -depth view of the City portfolio in
its aggregate, encompassing portfolio risk
characteristics, compliance, performance relative to
pertinent benchmarks and portfolio accounting. We
hope you will find the new format comprehensive,
transparent and informative.
The new Treasury Report can be found at:
www.newportbeachca.gov /treasury.
Newport Brach 14).
New Outside Auditor Selected
The City went to bid for auditing services for the
fiscal year ending June 30, 2011. Diehl, Evans &
Company was selected to be the successor City
Auditor for the next four years. Diehl, Evans &
Company, LLP is a local firm located in Irvine that
specializes in auditing services for municipal and
other not for profit clients. They have been in
existence for more than 75 years and serving the
Governmental Sector since 1950.
Quarterly Business Report
Status Updates on Long -term Funding Programs
CalPERS Update
In a March 15, 2011, press release, CaIPERS
announced it would keep the Pension Fund's
assumed annual rate of investment return, also
known as the discount rate, at the current 7.75
percent. This was an important decision for local
governments. While budgets are being cut, pension
costs continue to rise impacting the ability to fund
other priorities. Had the discount rate been
reduced to 7.5 percent, the cost of funding
pensions would have increased substantially. The
estimated cost increase ranged from 1.5 to 5
percent of payroll.
"As pension fund administrators, we want to make
sure CaIPERS remains financially sound over the
long term," said CaIPERS Chief Actuary Alan
Milligan. "The discount rate adopted is reasonable
and achievable, and appropriate for funding the
promised benefits."
The committee made its decision following a
comprehensive review and adjustment of the
Pension Fund's asset allocation and a detailed
actuarial analysis.
Discount Rate Defined - The discount rate
represents what a pension fund believes it can
realistically earn from its investments on an annual
basis when averaged over the course of 20 years or
more. In any given year, investment returns are
likely to be higher or lower than the long -term
assumed rate.
CaIPERS Performance - Over the past 20 years,
including the two recent recession years, CaIPERS
has earned an average annual 7.9 percent rate of
return before deducting administrative and
investment expenses. For the fiscal year that ended
June 30, 2010, CaIPERS earned a 13.3 percent
return.
"Given the current economic environment, we
believe keeping our discount rate unchanged is in
the best interest of our members, employers, and
taxpayers. " said Rob Feckner, CalPERS Board President and
Vice Chair of the Board's Benefits and Program Administration
Committee.
Page 3
OPEB Obligation (Retiree Insurance)
The City pre -funds future retiree medical costs
through the California Employers' Retiree Benefit
Trust ( CERBT), a trust fund irrevocably dedicated to
pre- funding employer liabilities associated with
retiree medical insurance benefits. City
contributions to the CERBT fund and investment
returns earned by the trust will be used to pay
current and future benefit costs of the City.
The CaIPERS Board of Administration sets CERBT
investment policy and strategy and, through
CaIPERS Investment Office staff, manages CERBT
investments. CERBT assets are invested in public
market securities using an asset allocation strategy
approved by the CaIPERS Board.
In March 2011, the CaIPERS Board of
Administration authorized the CERBT program to
offer two new asset classes and two alternative
asset allocation strategies. These asset classes
were added in order to provide improved portfolio
diversification and lower volatility of expected
returns.
Strategy
Discount Rate 7.61% 7.06% 6.36%
Standard Deviation of
Expected Returns 11.73% 9.46% 7.27%
The CaIPERS Board is currently exploring the concept of offering
different asset allocations for the Pension plans, too.
Facilities Financing Plan
The Facilities Financing Plan (FFP) is a long range
planning tool to ensure proper funding for the
timely replacement of all major critical use
facilities. An update of the Facilities Financing Plan
was reviewed during the April 11th Finance
Committee meeting. Based on a recent review of
the facilities included in the plan, Public Works
engineers were able to refine construction
estimates downward by $47 million to reflect more
modest facility sizes and updated construction cost
estimates. The cost reduction efforts made it
possible to advance the estimated replacement
date of key facilities by several years.
Quarterly Business Report
Economic Update
So far, the turmoil in the Middle East and the
devastation in Japan have had a relatively
muted impact on global economic growth.
a
"In an increasingly interconnected world, global
events can have a profound impact on the US
economy and financial markets."
Brian Perry, Chandler Asset Management
While the US economy appears to have gained some momentum, the recovery remains fragile and international
events still have the power to derail the recovery especially if the turmoil spills into large oil producing
countries such as Saudi Arabia and Iran.
Overall, economic reports were mixed and slightly weaker than expected in the month of April. Some
economists have cut estimates for first - quarter growth in recent weeks amid signs that higher oil prices and
other factors, including a lifeless housing market, were weighing on business and consumer confidence. Other
economists say other measures, including a reviving job market, suggest growth will reaccelerate as the year
goes on.
Consumer Prices
Inflation is climbing, in large part due to surging food
and energy prices but the Federal Reserve continues
to believe that higher prices will prove to be transient.
In March, the consumer price index (CPI), a short -
term measure of inflation, increased 2.7% on a year -
over -year basis. However, the Core CPI (CPI less food
and energy), a longer -term measure of inflation,
increased only 1.2% on a year- over -year basis.
Retail Sales
In March, retail sales rose 7.1% on a year- over -year
basis. Consumer spending has rebounded from the
depths of the recession and recent activity has been
promising; however, activity is still far short of the
heights of the previous economic expansion.
Labor Markets
The economy added 216,000 new jobs in March and
244,000 jobs in April. The unemployment rate
declined to 8.8% in March and increased to 9% in April
as more people searched for jobs. Next month's
eagerly awaited report may signal the beginning of a
new trend of greater job growth.
Housing Starts
Single- family housing starts rose 7.7% in March to
422,000 but the housing market remains relatively
weak. Single- family housing declined 11.8% in
February to 375,000, the lowest level since March
2009. Permits for new housing starts rose 11.2% in
March which offers some encouragement for the
months ahead.
Monetary Policy
The Federal Reserve maintains its exceptionally easy
monetary policy, and continues to purchase longer -
dated Treasury securities in an effort to promote
economic growth. The next Fed meeting is June 22,
and market participants will be watching closely for
signs of what the Fed will do following the completion
of its second round of quantitative easing (QE2)
efforts in June.
"The housing market recession is not yet over,
and none of the statistics are indicating any
form of sustained recovery. At most, we have
seen all statistics bounce along their troughs;
at worst, the feared double -dip recession may
be materializing. "Wall Street Journal
Quarterly Business Report
Page 5
While it is tough to live without food and energy, core inflation eliminates products that can have temporary price
shocks (i.e. energy, food products). Core inflation is thus intended to bean indicator and predictor of underlying
long -term inflation.
Historical Unemployment Rates
(Kates are not seasonally a, justed �
14.0%
t �N ewl>ort Beach
72.0 "% o —4— Orange Counts
10.0% —4--California
8.0%
6.0%
4.0%
2.0%
0.0%
2005 2006 2007 2008 2009 2010 2011*
Calendar Yeat. * through March 31 20L
While nationally, the labor market has improved some with the unemployment declining to 8.8 3Kas of March
2017, the California labor market has remained constant at 12.4% The Newport Beach unemployment declined
to 5.7%for the same time period.
CPI & Core CPI Y -O -Y % Change
4.0%
C?I
3"/0
Cure CPI
2.0%
tl
1.0%
d
0.0%
w
d
a
-1.0%
2"/6
3.0°10
While it is tough to live without food and energy, core inflation eliminates products that can have temporary price
shocks (i.e. energy, food products). Core inflation is thus intended to bean indicator and predictor of underlying
long -term inflation.
Historical Unemployment Rates
(Kates are not seasonally a, justed �
14.0%
t �N ewl>ort Beach
72.0 "% o —4— Orange Counts
10.0% —4--California
8.0%
6.0%
4.0%
2.0%
0.0%
2005 2006 2007 2008 2009 2010 2011*
Calendar Yeat. * through March 31 20L
While nationally, the labor market has improved some with the unemployment declining to 8.8 3Kas of March
2017, the California labor market has remained constant at 12.4% The Newport Beach unemployment declined
to 5.7%for the same time period.
Quarterly Business Report
2010 -1 1 Budget Update
2=6
FY
2010-11 Revised
Revenue .- .
FY 2010
Original
3/31/11 YTD
3r QTR
Change from
Revenue
Actuals
Budget
Revenues
Revised Est.
Orig. Bud.
Property Taxes
$ 71,999,679
$ 70,642,840
$ 43,966,859
$ 71,574,069
$ 931,229
Sales Tax
17,440,736
17,374,734
10,377,209
18,074,734
700,000
Property Tax - In Lieu of Sales Tax
4,539,946
6,392,273
3,233,121
6,308,305
(83,968)
Transient Occupancy Tax
11,400,710
11,555,034
8,885,779
12,156,000
600,966
Business Licenses
4,026,614
4,008,800
3,096,500
4,020,000
11,200
Franchises
3,715,946
4,145,000
1,682,406
4,052,164
(92,836)
Community Development
3,835,230
3,852,749
3,528,791
4,319381
466,632
Other
29,956.021
27,154,240
19,622,539
27,154.240
-
Total Revenues
$ 146,914,882
$ 145,140,670
$ 94,393,205
$ 147,658,893
$ 2,533,223
Revenue Summary
Our revenue outlook and estimates have not changed significantly since our December midyear
revision. Revenues are inching their way back upward after bottoming -out in fiscal year 2010. We
anticipate that revenues will surpass budget estimates but at a very modest pace.
FY 2010 -11 Revenues by Source
8% 0711.ru ty Taxes ax w /Prop iaxln 3% Occupancy Ta
''1 Buliding Revenue
• AII01herRevenue
Top 3 Revenues
$120.0
$uo.7 07.z s1os.4 s1os.1 seas
$100.0
$80.0
C • TOT
O
$60.0 • Sales Tax
F • $40,0 Pro erty Tax
$20,0
2008 2009 2010 2011 Proj, 2012 Proj
Fiscal Year
The top three revenue sources including Property Taxes, Sales Taxes
and Transient Occupancy Revenues total nearly 733K of total
General Fund Revenues.
Quarterly Business Report
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
20 Year Assessed Property Value Growth
P n
O P T P T
N V �O o0 O V O W O
T T T T T O N O O O
T T T T T O O O O O O
N N N N N N
For nearly two decades Property Taxes, which represent 48 %of General Revenues,
have provided a steady source of revenue growth for the City.
Assessed Valuation growth exceeded 8% for ten of the past twenty years.
Due to the continued stagnation of the housing market, however property tax
growth is likely to remain low for the foreseeable future.
Page 7
Property Taxes - For 2010-11, property tax revenues are faintly better than our midyear revised estimate
but are still only slightly below the prior year actual. Even though it is perceived to be a good time to buy,
many Americans do not feel secure enough with the economy or cannot get the mortgage financing they
need. As a result home sales activity has been slow and there are no signs of any recovery in process.
Sales and Use Taxes - We believe consumer optimism is still fragile due to high unemployment rates and
short -term inflationary concerns as well as the uncertainty of recent international events. As a result, we
have pulled back modestly from our midyear revised estimate by approximately $175,000 for the sake of
conservatism. Even still, we anticipate Sales Tax receipts to finish 3.65% above prior year's actuals.
Transient Occupancy Tax (TOT) - TOT receipts continue to shine brightest among the City's TOP three
revenue sources and are expected to finish above the 2009 -10 actual by more than 7 %.
Other Revenues - While far less significant than the top three revenue sources, but representing other
community based activity indicators, building permit activity is steadily improving over unimpressive 2009-
10 results. Business license revenue appears to be finishing flat.
Quarterly Business Report
•..-
Expenditure Update
The 2010-11 Budget was initially adopted with a projected $2 million gap between revenues and expenditures.
However, management pledged to balance the budget and not access reserves prior to the close of the fiscal
year. As of March 31, 2011 revenue excesses, estimated at $2.5M, were sufficient to balance the budget in the
near term. Since pension costs will continue to increase sharply for the next several years and remain at that
level for the foreseeable future, management has sought out thoughtful long -term structural changes to
ensure fiscal sustainability to enable a meaningful reinvestment into community infrastructure. Despite
growing pension costs, management is committed to growing the share of resources committed to
infrastructure.
General Fund mmmmmlll
Expenditure Estimates - FY 2010 -11
2.5% 0.7%
■ Salaries 6: Benefits
(no PERS)
26.2% ■ Pension
• Operations Et Maint.
• Facilities Financing
Contribution
• General Fund CIE
Contribution
General Fund
Expenditure Estimates - FY 2013 -14
25.1%
Salaries 8 Benefits
(no PIERS)
• Pension
• OperationsEt
Maint.
• Facilities Fin ancin
Contribution
T' General Fund CIP
At the depth of the recession, the general fund investment in City infrastructure had shrunk to 3.2% of
budget while the pension costs had grown to 12.2% of the budget. By 2013 -14, the combined estimated
annual commitment to General Fund CIP and the Facilities Replacement Plan will grow to 5.7% of General
Fund budget. By 2013-14, pension costs are anticipated to approach nearly 15% of General Fund budget.
FY 2010 -11
FY 2009 -10
FY 11 Original
Amended
Y(D as of
Percent
YTD as of
Percent
Department
Budget
Budget
3/31/2011
Expended
3/31/2010
Expended
City Council
5 1,044,410
$ 1,053,886
$ 854,449
81%
$ 878,629
75%
City Clerk
492,538
493,978
337,277
68%
291,194
74%
City Manager
2,437,018
2,463,169
1,548,705
63%
1,603,179
68%
Human Resources
2,292,046
2,326,746
1,597,290
69%
1,644,298
72%
City Attorney
2,348,842
2,621,628
2,108,846
80%
1,732, 74B
72%
Administrative Svcs
7,775,976
7,729,781
5,114,880
66%
5,748,997
75%
Police
42,823,171
42,958,157
31,225,575
73%
32,704,054
74%
Fire
34,055,183
34,183,820
25,270,947
74%
25,352977
74%
Planning
3,005,540
3,327,073
2,147,194
65%
2,260,032
64%
Building
4,237,603
4,237,602
3, 137,B04
74%
3,365,165
75%
General Services
22,034,946
22,124,232
14,952,019
68%
16,160,711
70%
Library
6,472,808
7,143,338
4,793,355
67%
4,949,664
73%
Recreation
7,590,671
7,661,839
5,375,B36
70%
4,944,75B
69%
Public Works
5,550,535
5,877,960
4,089,150
70%
4,154,348
72%
Electrical
1,307,491
1,336,290
790,143
59%
813,05B
60%
C.I.P.
5,054,497
6,014,783
939,216
16%
5,639,695
47%
OPEB
2,128,000
2,128,000
-
0%
-
0%
Debt Service
780,000
780,000
765,000
98%
-
0%
Total Expenditures
$ 151,431,275
$ 154,462282
$ 105,047,687
68%
$ 112,243,707
1 71%
•..-
Expenditure Update
The 2010-11 Budget was initially adopted with a projected $2 million gap between revenues and expenditures.
However, management pledged to balance the budget and not access reserves prior to the close of the fiscal
year. As of March 31, 2011 revenue excesses, estimated at $2.5M, were sufficient to balance the budget in the
near term. Since pension costs will continue to increase sharply for the next several years and remain at that
level for the foreseeable future, management has sought out thoughtful long -term structural changes to
ensure fiscal sustainability to enable a meaningful reinvestment into community infrastructure. Despite
growing pension costs, management is committed to growing the share of resources committed to
infrastructure.
General Fund mmmmmlll
Expenditure Estimates - FY 2010 -11
2.5% 0.7%
■ Salaries 6: Benefits
(no PERS)
26.2% ■ Pension
• Operations Et Maint.
• Facilities Financing
Contribution
• General Fund CIE
Contribution
General Fund
Expenditure Estimates - FY 2013 -14
25.1%
Salaries 8 Benefits
(no PIERS)
• Pension
• OperationsEt
Maint.
• Facilities Fin ancin
Contribution
T' General Fund CIP
At the depth of the recession, the general fund investment in City infrastructure had shrunk to 3.2% of
budget while the pension costs had grown to 12.2% of the budget. By 2013 -14, the combined estimated
annual commitment to General Fund CIP and the Facilities Replacement Plan will grow to 5.7% of General
Fund budget. By 2013-14, pension costs are anticipated to approach nearly 15% of General Fund budget.
Quarterly Business Report
•..- •
If difficult choices are not made, growing pension costs will continue to absorb a larger portion of the General
Fund budget and other government priorities would get squeezed out in the process including the support and
preservation of City infrastructure.
Thoughtful but deliberate choices were made about staffing levels and business segments within our strategic
capabilities. Many vacant positions have been held unfilled while others were positions that were outsourced
to private industry.
Salaries 8 OT Comparison
Facilities Financing i3 CIP Contributions
Q3 FY 2011
Pension Costs
s+<
$60
$30
$ +Z
• Gen eral CIPs
$40
0
• Facilities Financing Contribution
$25
—
sic
$20
0 $8
$10
c
$15
4s-
$6
2008 2009 20
$10
Ma
• c $4
$5
■ Safe
$2
$.
2006 2007 2008 2009 2010 2011 2012 2013 2014
F,.,'� 11 lea 0
Est. Est. Est. Est.
ti
ro �' ^'
^^
L
Fiscal Year
^�Q,o1e ^�Q�o�e ^pQP1e
do do do
Thoughtful but deliberate choices were made about staffing levels and business segments within our strategic
capabilities. Many vacant positions have been held unfilled while others were positions that were outsourced
to private industry.
■ Overtime
Regular
Salaries
A comparison of salaries and overtime through the third quarter of the last four
years revealed that salaries peaked in 2010 and declined 4.43K ($2.3M) in 2011.
By comparison, overtime increased by $425k during the same period, as might be
expected when staffing is reduced or positions are held vacant.
Salaries 8 OT Comparison
Q3 FY 2011
$70
$60
$50
$40
0
—
$30
$20
$10
2008 2009 20
Fiscal Year
■ Overtime
Regular
Salaries
A comparison of salaries and overtime through the third quarter of the last four
years revealed that salaries peaked in 2010 and declined 4.43K ($2.3M) in 2011.
By comparison, overtime increased by $425k during the same period, as might be
expected when staffing is reduced or positions are held vacant.
Quarterly Business Report
201 1 -12 Budget Update
1. Build on prior years' actions.
2. Adhere to 2010's Fiscal Sustainability Plan.
3. Use the next 18 months to thoughtfully and deliberatively
change the way local government does business.
4. Our city's long -term success depends upon our investment in
infrastructure (streets, parks, facilities).
5. There are things we should not be doing.
6. Pension costs need to be addressed comprehensively and
cooperatively.
7. Public Safety is paramount - but we need to be open to better
ways of delivery public safety services.
Page 10
We have survived the recession, but it was not without hard choices and significant budget reductions.
We have also increased the General Fund Reserves in keeping with the Council approved Fiscal
Sustainability Plan. We have done this during a time when many cities were accessing reserves to balance
their budgets. While the recession is over, the recovery is slow, and certain fixed costs, such as pensions,
will continue to rise. Balancing these factors with our commitment to be the Shining City by the Bay our
City Manager has created a list of 7 core budget principles to move us into FY 2011 -12 and beyond.
V Maintain appropriate cash reserves.
• Manage Facilities Financing Plan.
• Review Revenue Performance.
• Competitive contracting of services and equipment.
• Appropriate cost - recovery targets.
• Ensure fair compensation in partnership with our
employees.
In 2010, the City Council advanced the Fiscal Sustainability Plan as proposed by then Mayor Curry. This is
a 15 -point plan to protect and enhance the City's economic and fiscal health so that the community
continues to thrive. This plan continues to be a core principle to us into the future and a few of the 15
point items as they most apply to budget are shown above.
Quarterly Business Report Page 1 1
Bending the Cost Curve
We do have expenditure issues that need to be addressed. Ongoing costs were projected to increase by
approximately $6 million in FY 2011 -12, this includes pensions, OPEB, negotiated contracts with employees
and vendors, facilities financing contributions and unemployment costs. While only minimally impacted by
State budget cuts, we did need to absorb $175,000 in library funding cuts. As per our budget principles our
long -term success depends on our investment in infrastructure (streets, parks, lighting) and we committed to
funding an additional $2 million for streets and IT infrastructure replacements. Knowing these increases the
City Manager worked with his management team to target expenditure reductions or revenue enhancements of
almost $8 million to offset these increased costs as using General Fund Reserves is against our fiscal
sustainability plan. The dotted line on the graph represents what the City would have needed in Reserves had
our spending not been reduced for fiscal sustainability.
165
155
m 145
co
F 135
125
115
General Fund Revenues Ft Expenditures by Fiscal Year
2006 2007 2008 2009 2010 2011 2012
Actuals Actuals Actuals Actuals Actuals Projected Projected
Fiscal Year
Departmental Adjustments (Increased Revenue Opportunities & Expenditure Reductions)
All departments worked collaboratively with the City Manager to identify structural budgetary savings and
revenue enhancements estimated at almost $8 million for FY 2011 -12. These adjustments include, but are not
limited to: outsourcing parking meter operations and enforcement; reducing approximately 40 full time staff
equivalents (almost half resulting in layoffs); increasing police patrol by moving more officers out of specialty
assignments and into the field; providing more efficient lifeguard services during the low season, increased
revenues for popular OASIS fitness classes and for increased activity in the Community Development
department. The City Manager and his team have balanced the FY 2011 -12 budget and maintained all core City
services, while also funding critical IT and street infrastructure, protecting General Fund reserve levels and fully
funding our facilities financing plan contributions which includes the new Civic Center.
Department FY 2011-12
Reduced
Adjustment Staff Operating Increased
Depart—t Total Reduction Casts Re enues Ober
Aditntstrati a Services $ 210,000
X
X
Coneninity Cew(oPncnt am'"
X
X
X
Clry Council 45,aW
City Attorney 338,881
X
X
city Manage. 171,000
X
X
Fire 1,504,850
X
X
Hu. Resources 63,800
X
Literary 248,752
X
X
MOO (General Fund Only) 1,627,400
X
X
X
Police 1,944,747
X
X
X
Public Works 558;321
X
X
Recreation 265,921
X
X.
5 7,7a2,6e0
Historical Full Time Positions
8l1 833
en
r780 at4
Bn5
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0
a
740
720
700 —
2006 2007 2008 2009 2010. 2011 2012
Estimated proposed
Fiscal Year
Quarterly Business Report
Revenue Forecast
Page 12
Overall the economy has continued to modestly recover from the Great Recession. We are projecting our
revenues to return to pre- recession levels during FY 2011 -12. The "Top 3" revenues are property taxes, sales
taxes, and TOT taxes. These Top 3 combined are projected to come in approximately $4 million, or 3.8% above
the FY 2010-11 original budget. These top 3 revenues make up approximately 73% of all General Fund revenue
sources. Other significant revenue activity is the community development permit revenues, they are projected
to maintain their healthy 13% increase over the FY 2010 -11 original budget of $3.9 million, this equates to
almost $500,000 of excess revenue projected in both FY 2010 -11 and FY 2011 -12.
Expenditure Forecast
The total General Fund operating budget for FY 2011 -12 is $143.9 million, and includes all ongoing cost
increases for pensions, library takeaways from the State, and increased contributions toward facilities and
infrastructure replacements. These increases, offset with the departmental adjustments, kept the operating
budget to a minimal increase of $1.4 million over the adopted budget for FY 2010-11. This modest increase in
expenditures also provides for a projected increase to General Fund reserves at FY 2011 -12 year -end of more
than $1.5 million, ensuring the city is maintaining the goals outlined in the fiscal sustainability plan.
CONCLUSION
The FY 2011 -12 budget is balanced and is even projecting a modest balance for City Manager Assignments by
year end. This was not without difficult choices and significant work on behalf of the City Manager and all city
departments. The city will continue its multi - pronged approach of looking to enhance revenues, reducing
operating costs without negatively impacting service levels, and focusing on our core values.
2010 -11
Original
Budget
Projected
2010 -11
Year End
Proposed
FY 2011 -12
Budget
GENERAL FUND REVENUES:
PROPERTY TAXES
$ 70,642,840
$ 71,574,069
$ 72,155,615
SALES TAXES
23,767,007
24,383,039
25,088,167
TOTTAXES
11,555,034
12,156,000
12,786,000
ALL OTHER GENERAL FUND REVENUES
39,175,789
39,545,785
39,174,826
PLANNED ADDITIONAL REVENUES /SAVI NG5
2,297,108
-
-
SUBTOTAL GENERAL FUND REVENUES
$147,437,778
$147,658,893
$149,204,608
GENERAL FUND EXPENDITURES:
GENERAL GOVERNMENT
$ 16,390,830
$ 16,165,263
$ 13,420,800
PUBLIC SAFETY
76,878,354
75,828,696
75,560,627
PUBLIC WORKS
28,892,972
28,441,749
29,119,669
COMMUNITY DEVELOPMENT
7,243,143
7,196,664
8,849,881
COMMUNITY SERVICES
14,063,479
13,908,921
15,335,929
OPEB
2,128,000
2,128,000
2,314,000
DEBTSERVICE
780,000
765,000
780,000
CITY MANAGER ASSIGNMENTS
2,163,600
1,823,702
CAPITAL PROJECTS
1,061,000
1,061,000
2,000,000
SUBTOTAL GENERAL FUND EXPENDITURES
$147,437,778
$147,658,893
$149,204,608
BALANCED BUDGET
-
-
-
Revenue Forecast
Page 12
Overall the economy has continued to modestly recover from the Great Recession. We are projecting our
revenues to return to pre- recession levels during FY 2011 -12. The "Top 3" revenues are property taxes, sales
taxes, and TOT taxes. These Top 3 combined are projected to come in approximately $4 million, or 3.8% above
the FY 2010-11 original budget. These top 3 revenues make up approximately 73% of all General Fund revenue
sources. Other significant revenue activity is the community development permit revenues, they are projected
to maintain their healthy 13% increase over the FY 2010 -11 original budget of $3.9 million, this equates to
almost $500,000 of excess revenue projected in both FY 2010 -11 and FY 2011 -12.
Expenditure Forecast
The total General Fund operating budget for FY 2011 -12 is $143.9 million, and includes all ongoing cost
increases for pensions, library takeaways from the State, and increased contributions toward facilities and
infrastructure replacements. These increases, offset with the departmental adjustments, kept the operating
budget to a minimal increase of $1.4 million over the adopted budget for FY 2010-11. This modest increase in
expenditures also provides for a projected increase to General Fund reserves at FY 2011 -12 year -end of more
than $1.5 million, ensuring the city is maintaining the goals outlined in the fiscal sustainability plan.
CONCLUSION
The FY 2011 -12 budget is balanced and is even projecting a modest balance for City Manager Assignments by
year end. This was not without difficult choices and significant work on behalf of the City Manager and all city
departments. The city will continue its multi - pronged approach of looking to enhance revenues, reducing
operating costs without negatively impacting service levels, and focusing on our core values.
PROJECT TRACKING REPORT TABLE OF CONTENTS
Acquisition of Coast Highway PROJECT 1
Banning Ranch
PROJECT 2
City Harbor Fees
PROJECT 3
Civic Center Project
PROJECT 4
Group Homes PROJECT 5
Implement Traffic Management Plan PROJECT 6
Incorporate Public Art Component in new Civic Center PROJECT 7
Irvine Company's North Newport Center Project PROJECT 8
Lido Village Conceptual Planning PROJECT 9
Lower Bay Dredging Project PROJECT 10
Marina Park PROJECT 11
Neighborhood Revitalization Committee Update PROJECT 12
Reduce Fire Hazard in Buck Gully and Morning Canyon PROJECT 13
Restructure Development Services PROJECT 14
Rhine Channel Contaminated Sediment Cleanup PROJECT 15
Sunset Ridge Park PROJECT 16
Tidelands Committee Update PROJECT 17
Transportation Fair Share Fee PROJECT 18
West Newport Beach Facility Planning PROJECT 19
Widen Jamboree Road in the Airport Area PROJECT 20
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PROJECT 1
PROJECT: Acquisition of Coast Highway
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: 2008
Target Completion Date: 2012
Description:
The objective of this project is to provide the right -of -way control so that the City can initiate a
long range planning process to create a Mariner's Mile Traffic, Pedestrian and Parking
Comprehensive Plan. The first step is to acquire ownership of Coast Highway between Jamboree
Road and Santa Ana River and Newport Boulevard between Finley Street and West Channel
Bridge from the State of California Department of Transportation ( Caltrans). The process
involves passing the appropriate legislation, having the State review the facility for ability to
relinquish and its state of repair, providing a report to the City on the facility, development of an
offer for City to take the facility, and the City to choose whether it would accept the offer. There
is no defined schedule for this process and it is expected to be rather lengthy to accomplish.
Funding Source: Sources for future improvements to be determined
Total Funding Required for Project: To be determined
Funding Allocated to Date: None
Amount Spent to Date: None other than staff time
Status to Date:
Section 73 of the Streets and Highways Code allows the California Transportation Commission
to relinquish State Highways through a prescribed process. Caltrans has prepared a Project
Study Report that documents an assessment of the condition of the two segments of State
Highway to be considered for relinquishment and has circulated the report within its
organization. On September 16, 2010, staff met with Caltrans to discuss its tentative findings of
the current condition assessment of the two highway facilities. Caltrans informed staff
Project Tracking Report (January - March 2011)
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PROJECT 1
Acquisition of Coast Highway
found the facilities to be in a goad state of repair and would offer $0 for its relinquishment.
Staff expressed concern with this position and requested Caltrans review /correct various
existing items such as deteriorated traffic signals, broken and /or deteriorated drainage
structures, failed pavement areas, failing slopes, etc., prior to finalizing the report and
determining the value of relinquishment. Caltrans agreed to conduct further review and update
its report. City staff continues to check in on the status with the Caltrans Project Manager very
few weeks. Staff is aware that Caltrans staff have recently conducted additional inspection
work of their facilities as well as cleaned out some drain facilities and preformed slope
maintenance along this section of PCH. Caltrans has recently informed City staff that the
Project Study Report is still being reviewed by the Sacramento headquarters.
It is difficult to forecast a completion schedule as we are working with a State Agency that is
certainly affected to some degree by the State budget crisis and this may be a lower priority
item in their camp. We still need to review and confer with the project report once we receive
it, then work to negotiate the best deal we feel possible. I anticipate this alone will take 6 to 9
months. At this point the City will need to determine if the deal makes sense to move forward
with accepting one or both roadways.
Project Tracking Report (January - March 2011)
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PROJECT 2
PROJECT: Banning Ranch
Department(s): Community Development, Public Works and City Manager's Office
Project Lead: Patrick Alford, Planning Manger
Project Start Date: August 2008
Target Completion Date: January 2013
Description:
The General Plan contemplates two uses for the Banning Ranch: acquisition for open space or a
planned community consisting of retail, hospitality, recreational, open space and residential
uses. Newport Banning Ranch is a 402.3 -acre planned community proposed by Newport Banning
Ranch, LLC, a partnership formed by Aera Energy, Cherokee Investment Partners, and Brooks
Street. The project would contain a maximum of 1,375 dwelling units, 75,000 square feet of
retail commercial, a 75 -room "boutique' hotel, parks and open space. The site is generally bound
to the north by Talbert Nature Preserve /Regional Park (Costa Mesa) and to the south by West
Coast Highway and the Newport Shores Community; to the east by Newport Crest Community,
West Newport Mesa, and Westside Costa Mesa; and to the west by a U.S. Army Corps of
Engineers wetlands restoration area and the Santa Ana River. Approximately 40 acres of the site
are located within the incorporated boundary of the City of Newport Beach; the remainder of the
site is within unincorporated Orange County, but within a 1 foot strip of the City of Newport
Beach.
Funding Source: General Fund (off -set by application fees)
Total Funding Required for Project: $4 million (estimated)
Funding Allocated to Date: $2,746,000
Amount Spent to Date: $2,589,418.20
Status to Date:
The exploration of funding sources for the acquisition of the Banning Ranch is continual, but to
date, no funding sources have been identified.
Project Tracking Report Qanuary - March 2011)
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PROJECT 2
Banning Ranch
Newport Banning Ranch (NBR) submitted applications to the City in August of 2008 for the
development of the property consistent with the General Plan. During the First Quarter of
2011, NBR has finalized their drafts of the proposed Planned Community (PC) text and the
Master Development Plan (MDP). After extensive review by City staff, NBR is finalizing the
Tentative Tract Map (TTM). The target completion date for the PC text, MDP, and TTM is Lune
2011.
Terms of a draft of the Development Agreement (DA) and an Affordable Housing
Implementation Plan (AHIP) are being negotiated with NBR is expected to be finalized by staff
and a City Council Committee by June 2011.
Staff and consultants have been in the process of preparing a Draft Environmental Impact
Report (DEIR) including all necessary technical studies. During the previous reporting period,
the need for additional environmental analysis was identified and this pushed back the
publication date of the DEIR from April 2011 to uJ ly 2011. The additional analysis was needed
because the Community Park was added as a part of the project -level entitlements for the
project; an updated traffic study was needed to reflect methodology directives identified in the
appellate court ruling in Sunnyvale West Neighborhood Association v. City of Sunnyvale City
Council; and revisions to the air quality, air toxics, and greenhouse gas (GHG) emissions
analyses will be made based on the need to update these analyses using the new State Air
Quality Management District's California Emissions Estimator Model (CalEEMod).
Following DEIR 60 -day public comment period, responses to public comments and a draft Final
EIR will be prepared and submitted along with the project for public hearings before the
Planning Commission that are anticipated to begin in the Fall of 2011. The Planning
Commission's recommendation will be forwarded to the City Council for hearing and final
action by the end of 2011. Should the City Council approve the project, an application will be
submitted to the California Coastal Commission (CCC) by Newport Banning Ranch. Processing
by the CCC staff is anticipated to take a minimum of 15 months.
Project Tracking Report Qanuary - March 2011)
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Project Tracking Report (January - March 2011)
PROJECT 2
Banning Ranch
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PROJECT 3
PROJECT: City's Harbor Fees
Department(s): Public Works/ City Manager's Office
Project Lead: Chris Miller, Dave Kiff
Project Start Date: Summer 2010
Target Completion Date: December 2011
Description:
This project consists of updating Harbor Resources' cost of service fees and updating the City's
harbor fees to reflect the fair market value for the use of the Tidelands by the associated user
groups. Fees include permits for moorings, Balboa Yacht Basin slip rates, and commercial pier
leases. These fees contribute to harbor projects such as dredging and the provision of additional
harbor amenities.
Funding Source: Tidelands and General Fund
Total Funding Required for Project: Funding in the amount of $50,000 has been
approved to be used for a consultant to assist the City with plans and negotiations to convert
the harbor's commercial marinas and operations from annual permits to leases. No funds were
expended for the mooring permit or the Balboa Yacht Basin rate portion of the study.
Funding Allocated to Date: A Professional Services Agreement in the amount of
$50,000 was awarded to Allan Kotin and Associates on March 22, 2011.
Amount Spent to Date: The City hired MGT Services to update City -wide cost of services
including harbor related fees. Allan Kotin and Associates have just begun their work and have
not submitted any invoices.
Status to Date:
In the fall of 2010, City Council approved Harbor Resources cost of services fees, with
implementation beginning in April 2011. Revised mooring fees and Balboa Yacht Basin
fees (boat slips, garages, and apartments) were approved by City Council in November
and December 2010 and new rates have been implemented. Allan Kotin and Associates
began work on the commercial lease component in April 2011, and will focus on the
Lido Marina Village property first, with their preliminary findings due in May /June
2011.
Project Tracking Report (January — March 2011)
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PROJECT 4
PROJECT: Civic Center Project
Department(s): Public works
Project Lead: Steve Badum
Project Start Date: April 2010
Target Completion Date: December 2012
Description:
The Civic Center Project includes a City Hall Office Building, one of the city's largest parks (16
acre), a 450 -space parking structure, and an expansion of the Newport Beach Central Library. It
is located on two parcels inland of the Newport Beach Central Library and bordered by Avocado
Avenue and MacArthur Boulevard. The project also includes a community room, new Council
Chambers, a "One Stop' Customer Service Center, dog park, passive wetlands park, a civic green,
and a small cafe to service library and city hall customers.
Funding Source: Bond Proceeds /General Fund
Total Funding Required for Project: $126,000,000 (estimated)
Funding Allocated to Date: $126,000,000*
Amount Spent to Date: $22,179,110 (through 4/30/11)
*includes financing
Status to Date:
The Civic Center Project is on schedule and budget. Soil export, grading, and construction of the
Parking Structure shoring wall are complete. Construction of the foundations for the Parking
Structure, Library addition, and City Hall Office Building are currently underway. The project is
scheduled to be substantially complete during the fall months of 2012 with grand opening
for December 2012.
Project Tracking Report (January - March 2011)
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PROJECT 5
PROJECT: Group Homes
Department(s): Office of the City Attorney; City Manager's Office; Planning
Project Lead: City Attorney and City Manager
Project Start Date: 2007
Target Completion Date: ongoing
Description: Group homes: Implement and defend group home regulations to maintain
the residential character of the City's residential neighborhoods while providing equal access to
housing and accommodating the needs of the disabled.
Funding Source: General Fund and Fund Balance
Total Funding Required for Project: All costs have not been specifically identified
since a great deal of the costs are internal, staff resources from the City Manager's Office, Office
of the City Attorney, Planning, and Code Enforcement.
Funding Allocated to Date: $2.9 million in outside counsel and litigation costs to date
with an additional $50,000 anticipated in this fiscal year and $100,000 next fiscal year.
Amount Spent to Date: $2.9 million on outside counsel plus internal staffing costs and
cost of Hearing Officer in administrative proceedings.
Status to Date:
The ordinance addressing the issue, Ordinance No. 2008 -05, has been adopted and enforced
through all necessary administrative proceedings. We are now at the stage of defending the
ordinance in court and to the U.S. Department of Justice and Department of Housing and Urban
Development and in federal court proceedings. Additionally, we are enforcing the ordinance
and the approvals given under it and through approved Zoning Agreements with specific
operators. As to these issues:
(1) Federal Litigation: The City has prevailed in the federal case at the trial court level. The
matter is now on appeal. This change of status has resulted in a lower estimation projection of
expenses than was shown in the prior Quarterly Business Report and resulted in a lower
request for outside counsel expense in 2011/12 Fiscal Year Budget.
Project Tracking Report (January - March 2011)
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PROJECT 5
Group Homes
(2) Challenge to Morningside Zoning Agreement: We are now defending MORN v. City of
Newport Beach in the Orange County Superior Court. This case is a challenge to the adoption of
the Zoning Agreement that was the vehicle for settling the federal court litigation involving the
City and Morningside Recovery. The defense of this matter is being handled in -house by the
Office of the City Attorney. Its first hearing is scheduled in August of this year.
(3) Enforcement of Group Residential Use Regulations: Efforts are ongoing in the
enforcement of the City's Group Residential Use Regulations, including the enforcement of the
conditions of approval of permitted uses and operating conditions under the two zoning
agreements entered into by the City. These efforts involve substantial resources from the
Community Development Department and its Code Enforcement Division, as well as the Office
of the City Attorney. In this context, we are investigating repeated allegations of violations of
these regulations and investigation into possible unpermitted operations within the City.
(4) Group Homes Mini - Conference: Plans for a "mini- conference' are in process for August,
2011. The conference is being designed to address the current status of the City's Group
Residential Use Regulations and update the regulations now that they have been in force for
over three years and have survived legal challenges at the trial court level.
Project Tracking Report (January - March 2011)
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PROJECT 6
PROJECT: Implement Traffic Management Plan
Department(s): Public Works
Project Lead: Antony Brine
Project Start Date: January 2007
Target Completion Date: Fall 2013
Description:
This project improves and modernizes 117 traffic signals throughout the City with new
controllers, fiber optic connections, a new Traffic Management Center (TMC) including new
software, hardware and viewing monitors, Closed Circuit Television (CCTV) cameras at selected
intersections to improve system reliability, traffic flow, and to reduce congestion. The traffic
signal modernization program is a multi - phased effort that allows staff to monitor, adjust and
optimize signal timing and operations from the TMC at City Hall. To date, 81 traffic signals have
been upgraded and linked to a new high speed fiber optic backbone, 22 CCTV cameras have been
installed, and a new TMC has been installed. Staff also combined the annual traffic signal
rehabilitation program with the signal modernization work in an effort to incorporate required
maintenance work of existing signal equipment with the new modernization work. Funding
information below only includes estimates for the traffic modernization program.
Funding Source: Transportation and Circulation, Measure M Turnback, Measure M
Competitive
Total Funding Required for Project: $6,500,000
Funding Allocated to Date: $5,000,000 (excludes Phases 6 and 8)
Amount Spent to Date: $4,191,450
Status to Date:
Phases 1 through 4 and Phase 7 (out of 8 total phases) of the traffic modernization program are
now complete and operational. These phases included work to intersections along the Balboa
Project Tracking Report Qanuary -March 2011)
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PROJECT 6
Implement Traffic Management Plan
Peninsula, Superior Avenue, MacArthur Blvd., Jamboree Road, City owned portions of Coast
Highway, intersections in the Airport area, and along Irvine Avenue. Phase 5 includes 13
intersections and adds 4 more CCTV cameras in the Newport Center area and along portions of
San Joaquin Hills Road. This project is planned to be awarded for construction in June 2011 and
construction is anticipated to be complete in November 2011. Phases 6 and 8 of the traffic
signal modernization program are planned to begin design by summer 2012. Phases 6 and 8
include improvements to Newport Coast Drive, San Miguel Drive, Bonita Canyon Drive, and
portions of San Joaquin Hills Road.
Project Tracking Report Qanuary -March 2011)
Page 2
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PHASES I -4 & 7 COMPLETED (79 SIGNALS)
PHASE 5 PLANNED CONSTRUCTION 612011 (12 SIGNALS)
PHASE 6 FUTURE (17 SIGNALS)
PHASE S FUTURE (11 SIGNALS)
X41 PHASES I -4& 7 CCTV CAMERAS COMPLETED (22 CAMERAS)
PHASE 5 CCTV CAMERAS (3 CAMERAS)
PHASE 6 FUTURE CCTV CAMERAS (4 CAMERAS)
Wil PHASE S FUTURE CCTV CAMERAS (2 CAMERAS)
. COMMUMCATIONHUR
PROJECT 6
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PROJECT 7
PROJECT: Incorporate a Public Art Component in new Civic Center
Department(s): Public Works and Library Services
Project bead: Steve Badum and Cynthia Cowell
Project Start Date:
Target Completion Date: December 2012
Description:
The City Council supports Community Enhancements to increase opportunities for recreational
and arts enjoyments, provide for essential facilities and facilitate sound land use decisions. The
objective is this project is to incorporate public art as part of the new Civic Center project.
Funding Source: Civic Center Bond Proceeds and Private Contributions
Total Funding Required for Project: to be determined
Funding Allocated to Date: None
Amount Spent to Date: None
Status to Date:
A memorandum of understanding has been executed with the Orange County Museum of the
Arts for the acquisition and installation of art work as part of the Civic Center project.
Additional art will be acquired and installed when construction of the buildings and park is
completed. The Civic Center Park design incorporates willow structures by Patrick Dougherty
and animal sculptures in the various meadows. The Arts Commission received a request
from the Orange County Museum of Art to put forth a financial contribution for an initial public
art installation at the Civic Center. The topic was discussed at a Newport Beach Arts
Foundation meeting and the group pledged to raise $15,000 for this purpose. The work of
public artist Siah Armajani is being considered for an initial installation.
This completes the reporting for this project as the incorporation of public art at the Civic
Center is now a part of the Civic Center project.
Project Tracking Report (January - March 2011)
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PROJECT 8
PROJECT: Irvine Company's North Newport Center Project
Department(s): Community Development
Project Lead: Patrick Alford, Planning Manager
Project Start Date: March 2011
Target Completion Date: June 2011
Description:
A 20 -story office tower containing approximately 400,000 square -feet of floor area. The project
includes the demolition of a portion of an existing parking structure and the construction of a
new, 8 -level parking structure (4 levels below grade and 4 levels above grade).
Funding Source: General Fund (off -set by application fees)
Total Funding Required for Project: Funded through budgeted staff resources,
building permit and application fees
Funding Allocated to Date: Existing budgeted resources
Amount Spent to Date: unknown
Status to Date:
During the First Quarter of 2011, the Planning Division has reviewed and found the project to
be in compliance with the North Newport Center Planned Community Development Plan and
Design Regulations. This included the review of a shadow analysis, which showed that the
office tower will not add shade to the residential areas north of San Joaquin Hills Road beyond
existing conditions for more than three hours between the hours of 9:00 a.m. and 3:00 p.m. PST,
or for more than four hours between the hours of 9:00 a.m. and 5:00 p.m. PDT. Planning is still
awaiting verification of square footage and Airport Land Commission approval before signing
off on the permit.
The second plan check was submitted to the Building Division on May 2. 2011. Permits for the
entire project are anticipated to be issued in Tune of 2011. Construction is expected to take
between 24 to 30 months to complete.
Project Tracking Report (January - March 2011)
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Project Tracking Report (January -March 2011)
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PROJECT 9
PROJECT: Lido Village Conceptual Planning - Design Guidelines
Department(s): Community Development
Project Lead: James Campbell, Acting Planning Director
Project Start Date: May 2011
Target Completion Date: September 2011
Description:
The preparation of design guidelines for the Lido Village area. The area is generally bounded by
Newport Boulevard, Newport Bay and 32114 Street. The project is the next step in implementing
the January 25, 2011, approval of the Lido Village Concept Plan. The process will consist of a
public /private partnership with Fritz Duda Company and Vornado Partners to jointly fund and
manage the preparation of design guidelines. The process will include several public meetings in
conjunction with the Neighborhood Revitalization Committee.
Funding Source: General Fund (partially off -set by private funds)
Total Funding Required for Project: $165,000 total
Funding Allocated to Date: None - Budget allocation pending
Amount Spent to Date: None
Status to Date:
On January 25, 2011, the City Council approved Alternative 5b (below) as a conceptual plan to
guide future planning efforts. Tim Collins has prepared a proposal to provide project
management services for the preparation of design guidelines as the next step in the process to
implement the conceptual plan. Todd Larner of William Hezmalhalch Architects has provided a
detailed scope of services that includes the preparation of the guidelines, public outreach
sessions and coordination with the City's Neighborhood Revitalization Committee.
The next step is to execute a contract with Tim Collins and staff will be seeking the City
Council's approval of a contract with WHA. Once both contracts are executed, the consultants
start by refining the conceptual plan previously considered by the City Council last January.
Project Tracking Report (January - March 2011)
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Lido Village Conceptual Planning - Design Guidelines
WHA will then prepare draft architectural and landscape design guidelines based upon input
from major stakeholders. The draft guidelines will be reviewed by the public at a series of focus
groups and community outreach sessions. The overall effort will be coordinated with the
Neighborhood Revitalization Committee. Adoption of the final design guidelines is tentatively
scheduled for September of 2011.
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Project Tracking Report (January - March 2011)
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PROJECT 10
PROJECT: Lower Bay Dredging Project
Department(s): Public works
Project Lead: Chris Miller
Project Start Date: 2011
Target Completion Date: 2012
Description:
The project initially included dredging approximately 1.2 million cubic yards in the main
navigational channels of the Lower Bay by the federal government. Due to federal budget
constraints, the Army Corps of Engineers will initiate a smaller project to dredge approximately
100,000 to 200,000 cubic yards of material in the critical areas in September 2011. Most of the
sediment is suitable for ocean disposal at the off -shore site "LA -3 ", with some of the remaining
material to be disposed at an alternate, approved location such as the Port of Long Beach
(POLB), pending POLB's approval.
Funding Source: Federal Funds, Tidelands
Total Funding Required for Project: -$2.2M
Funding Allocated to Date: $400,000 (0 &M Tidelands); $100,000 (CIP); $2.2 million
in federal funds is anticipated but not yet allocated.
Amount Spent to Date: $400,000 (0 &M Tidelands -for sediment testing)
Status to Date:
Staff is coordinating with and assisting the Army Corps of Engineers in designing a dredging
project with a reduced scope given the federal government's funding constraints. Of utmost
importance is locating a disposal site for the 100,000 cubic yards of contaminants. City and
Corps staff will be approaching the Port of Long Beach for assistance. If that option is not
available, the Corps will then dredge as much of the clean, LA -3 compatible material as the
budget will accommodate. The Corps anticipates putting the project to bid in August 2011 and
awarding a contract in September 2011 before the end of the current, federal fiscal year.
Project Tracking Report (January - March 2011)
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PROJECT 11
PROJECT: Marina Park
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: 2006
Target Completion Date: Spring 2014
Description:
The Marina Park site is located on the bay side of Newport Peninsula between 15th and 18th
Streets. The 10.4 acre site is owned by the City and is currently being used for several purposes
including a 57 space mobile home park, Las Arenas and Veterans Memorial Parks, Balboa
Community Center and parking lots, 18th Street Sailing Base and leased space for a Girl Scouts
meeting facility.
The approved Marina Park Concept plan for the property proposes a new marina which includes
a 23 slip visiting vessel marina, a visitor side tie dock and floating docks to support youth and
adult sailing programs and mooring support services; a 11,000 sf Sailing Center building and a
10,500 sf Community Center building; a new park with amenities including tennis courts, half
court basketball courts, tot lot and playground, exercise circuit, walking paths and beach area
and a new Girl Scout house and parking areas.
Funding Source: General Fund - Major Facilities
Total Funding Required for Project: $30,000,000
Funding Allocated to Date: $4,425,000
Amount Spent to Date: $1,455,015
Status to Date:
On November 13, 2007, the City Council approved the Marina Park Concept Plan and directed
staff to prepare the Environmental Impart Report and design documents. The project EIR was
approved and certified by the City Council on May 11, 2010.
Project Tracking Report (January — March 2011)
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PROJECT 11
Marina Park
Upon approval of the EIR, staff and the consultant team prepared and submitted applications to
the State Regional Water Quality Control Board for a 401 permit and US Army Corps of
Engineers' 404 permit. Project approvals and permits from the California Coastal Commission
(CCC) and the State Lands Commission (SLC) are also being sought. As of May 2011, the 401
permit has been approved and the 404 permit has just finished the public review process and is
expected to be Approved -in- Concept in the coming months. However, the 404 permit cannot be
formally issued until the coastal permit is approved.
The critical path item is the California Coastal Commission Permit. Staff submitted the CCC
permit application on October 7, 2010 and received the expected incomplete letter on
November 30, 2010. The application was re- submitted on December 21, 2010 and the City
received its second incomplete application letter on January 19, 2011 informing the City that
the application cannot be accepted until a Tidelands boundary issue is resolved with SLC. Staff
has met several times with CCC staff and requested that they continue to process the project's
application while the City works through the SLC boundary issue. To date, this approach has not
been successful. Staff is still negotiating and working to finalize the necessary Tidelands
Boundary Agreement and Project Approval with the SLC and is pressing to get this item to the
Commission in June or July of this year. Additionally, staff has prepared and requested that the
SLC Executive Director sign and send a letter to the CCC requesting them to accept the City's
completed application and begin processing it while the City works through the SLC process.
Project Tracking Report (January — March 2011)
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PROJECT 12
PROJECT: Neighborhood Revitalization Committee Update
Department(s): City Manager, Public Works, Community Development
Project Lead: Dana Smith, Steve Badum, Kim Brandt
Project Start Date: February 2011
Target Completion Date: TBD (Individual Projects will have Project Tracking Sheets
for the next QBR)
Description:
At the Council's annual retreat in February, six neighborhoods were identified as areas in need of
focused revitalization efforts. Each area was identified to have specific and different needs that
may include one or all of the following: land use planning and visioning, economic development,
code enforcement and nuisance abatement, and infrastructure maintenance or replacement. The
areas chosen for further study are: Lido Marina Village /existing City Hall site, Balboa Village,
Mariner's Mile, Corona del Mar entry at MacArthur, Bristol Road South in Santa Ana Heights, and
West Newport - Balboa Blvd., West Coast Highway. The Council established a three person ad
hoc Neighborhood Advisory Committee (Committee) consisting of Mayor Henn and Council
members Selich and Hill. The Committee will make a recommendation to the full Council as to
the priority of work and budget needs of the six project areas. Each project area, once funded,
will have a council selected Citizen's Advisory Panel (CAP) that will advise staff and the
Committee on revitalization goals and work program. Project Tracking sheets will be prepared
for each Neighborhood Revitalization Project and will include budgets and schedules.
Funding Source: General Fund
Total Funding Required for Project: undetermined at this time
Funding Allocated to Date: $0.00
Amount Spent to Date: approx $ 3,000 staff time and actual costs
Status to Date:
The Committee met twice to hear public input about the relative priority of the project areas.
The Staff prepared a preliminary ranking of projects for the second meeting and based on
Project Tracking Report (January - March 2011)
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PROJECT 12
Neighborhood Revitalization Committee Update
public feedback and direction from the Committee is revising our recommendation. This
involves grouping several project areas together based on cost and type of revitalization effort
needed. The next meeting of the Committee is in early June with a report to Council anticipated
for June 28, 2011. The Committee also asked for applications of interested parties to serve on
the CAPS. Recommendation and selection of CAP members will track with the selection of the
neighborhoods that will be first to begin work.
Project Tracking Report (January - March 2011)
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PROJECT 13
PROJECT: Reduce Fire Hazard in Buck Gully and Morning Canyon
Department(s): Fire
Project Lead: NBFD Fire Marshal Ron Gamble
Project Start Date: Dependent on the final Cal Fire FHSZ Maps due sometime in 2011
Target Completion Date: once the maps are completed and available from the state,
they will be submitted to the City Council. Then scheduling of public hearings on the subject can
take place and the CAL FIRE map can be adopted by the city council. This will become part of the
annual hazard reduction program.
Description:
(CAL FIRE) began a project in 2007 to update the Fire Hazard Severity Zone (FHSZ) Map for all
areas of California.
SB1595 written by Senator Kehoe, the California Legislature found and declared that Wildfires
are extremely costly, not only to property owners and residents but also to local agencies.
Preventive measures are therefore needed to ensure the preservation of the public peace, health,
or safety.
SB 1595 became law in 2008 and the CAL FIRE maps will allow the provisions of this law to be
enforced.
It requires a person who owns, leases, controls, operates, or maintains an occupied dwelling or
structure within a very high fire hazard severity zone to maintain defensible space no greater
than 100 feet from each side of the structure. It will involve removing or reducing vegetative and
non vegetative fuels (wood piles and combustible materials).
Funding Source: unknown
Total Funding Required for Project: unknown
Project Tracking Report (January - March 2011)
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PROJECT 13
Reduce Fire Hazard in Buck Gully and Morning Canyon
Funding Allocated to Date: Currently we have $190,000 budgeted for Fuel
Modification maintenance Account 2330 - 80804. Our city -wide weed abatement and hazard
reduction programs from 2330 - 8080 has $46,114.
Amount Spent to Date: $163,085 from 80804 and $44,564 from 8080
Status to Date:
There are no updates from Sacramento since the last quarterly report. The second revised map
is currently up in Sacramento for final approval and is anticipated to be available "sometime in
2011". All local comments to the draft FHSZ map were provided to Cal Fire/ SFM staff on
December 21st 2010. Cal Fire staff recently told the Orange County Fire Marshals they began their
work in early January and that they plan to also establish a method to make the process more
visible to each city. As soon as they make this happen I will pass the information along.
Please attach a location map if the project is site specific:
Please find the attached CAL Fire Map at the bottom of this page. This is the map that is available
on the CAL Fire Website on the FHSZ map tracker showing Newport Beach. This has not been
updated with local comments and there is no new information posted on this website. Recently a
courtesy letter was sent out regarding Hazard Reduction. This year the letter went out to
Morning Canyon, Newport Coast and Big Canyon Residents. Next year it alternates and will go
out to Upper, Middle and Lower Buck Gully homes and rotates on a two year cycle.
Project Tracking Report (January - March 2011)
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PROJECT 13
Reduce Fire Hazard in Buck Gully and Morning Canyon
DRAFT Fire Hazard Severity Zones in LRA
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Project Tracking Report Qanuary - March 2011)
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PROJECT 14
PROJECT: Restructure Development Services
Department(s): City Manager, CDD, & Public Works
Project Lead: Dana Smith
Project Start Date: September 2010
Target Completion Date: September 2011
Description:
The City Manager's office is working to improve coordination and improved customer service in
development services and is making key organizational changes. With the retirements of the
Planning Director and Building Director last year, a plan was developed to consolidate four core
functions into a Community Development Department. An experienced consultant, Joel Fick, was
retained to begin a change management process in both Planning and Building departments that
led to improved processes, better customer service, and a recommendation for an effective
structure to service the Community. The new structure consists of a consolidated Community
Development Department with four divisions: Planning, Building, Code Enforcement and
Administration /GIS. An internal selection of two managerial positions occurred earlier this year
with the appointments of Dan Campagnolo as the Administration /GIS Manager and Matt
Cosylion as the Manager of the Code Enforcement Division.
Funding Source: N/A
Total Funding Required for Project: N/A
Funding Allocated to Date: N/A
Amount Spent to Date: N/A
Status to Date:
Recruitment for the Community Development Department Director began in December of 2010
and after receiving over 120 applicants, the City Manager selected Kim Brandt from
neighboring Costa Mesa to lead the Department. She begins on May 23M. The two remaining
and Deputy Director will be filled by Ms. Brandt this summer.
Project Tracking Report (January- March 2011)
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PROJECT 15
PROJECT: Rhine Channel Contaminated Sediment Cleanup
Department(s): Public Works
Project Lead: Chris Miller
Project Start Date: August 2011
Target Completion Date: December 2011
Description:
The project will remove contaminated sediments to restore and enhance state - designated
impaired beneficial uses of the Rhine Channel, dispose of material in an environmentally
responsible and cost - effective manner, and improve navigation. This project will remove
contaminated sediments from the Rhine Channel in Lower Newport Bay as well as from nearby
areas found unsuitable for unconfined ocean disposal under Regional General Permit 54 issued
by the U.S. Army Corps of Engineers.
Funding Source: Tidelands
Total Funding Required for Project: Approximately $4.6 million
Funding Allocated to Date: $4.6 million (includes contingencies)
Amount Spent to Date: None - Contracts recently awarded.
Status to Date:
On April 12, 2011, Anchor QEA was awarded a contract for construction management which
also includes pre - construction submittals, agency coordination, and sediment and water quality
sampling. Dutra Dredging Company, the low bidder, was awarded a contract by the City Council
on May 10, 2011. A conditional Coastal permit was issued in January 2011 and Water Board
and Corps permits have been issued. Also, the Port of Long Beach's Memorandum of Agreement
with the City was approved by the City Council on March 22, 2011 and executed in April 2011.
The anticipated start date is August 2011 but is dependent on the Port of Long Beach's
schedule. The project should take 5 months and should be complete by December 2011. A
location map is attached.
Project Tracking Report (January - March 2011)
PROJECT 15
SOURCE: Basemap prepared from City of Newport Beach GIS files.
NOTE: Temporary moorage areas are located throughout Lower
Newport Bay.
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Pierhead Lines (Approximate)
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Proposed Project Area
Rhine Channel Contaminated Sediment Cleanup
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PROJECT 16
PROJECT: Sunset Ridge Park
Department(s): Public Works and Recreation / Senior Services
Project head: Mike Sinacori
Project Start Date: August 2007
Target Completion Date: Winter 2012
Description:
The proposed 13.7 acre Sunset Ridge park is situated on the northern corner of the West Coast
Highway and Superior Avenue in West Newport Beach. Sunset Ridge Park is planned to be an
active park per the city's General Plan with amenities including Pony League baseball field,
soccer fields, parking area, restroom, butterfly garden, shaded viewpoint, walkways, walls, signs,
and fencing.
Funding Source: General Fund and Park -in -lieu
Total Funding Required for Project: $12,000,000*
Funding Allocated to Date: $12,000,000*
Amount Spent to Date: $1,532,800*
* Not including land cost purchase from Caltrans of $5,200,000
Status to Date:
Staff is currently working to obtain all necessary regulatory permits including a Coastal
Development Permit from the California Coast Commission. The park project continues
to advance, although not as fast as originally anticipated due to delays caused by the
Banning Ranch Conservancy (a group attempting to block development of the access
road to property). Two recent actions have removed some obstacles allowing the park
plans to continue forward toward construction. On April 14, 2011, the City received a
favorable decision from the California Coastal Commission on how to remedy non -
permitted vegetation removals by a contractor which occurred prior to the City
acquiring ownership of the park property. The second action occurred on May 5, 2011
Project Tracking Report (January - March 2011)
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PROJECT 16
Sunset Ridge Park
when a lawsuit filed by the Banning Ranch Conservancy in 2010 claiming the project's
Environmental Impart Report was inadequate in several areas was ruled in the City's
favor. Staff can now work more closely with Coastal Commission staff to address any
permit comments and concerns and press to obtain the project's required CCC permit.
Construction of the park and entry road from West Coast Highway could begin in Fall of
2011. Completion is estimated in Winter 2012.
Project Tracking Report (January - March 2011)
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PROJECT 17
PROJECT: Tidelands Committee Update
Department(s): Public Works / City Manager's Office
Project Lead: Chris Miller, Dave Kiff
Project Start Date: March 2011
Target Completion Date: December 2012
Description:
This Council Committee is comprised of three Council Members (Mayor Henn, Gardner
and Selich), and will meet monthly. The goals of the committee are to: 1) Establish long
term visions for the tidelands including the Upper and Lower Bays, beaches and other
components; 2) Study and adopt a Tidelands Infrastructure Master Plan; 3) Research,
consider and recommend appropriate governance structures; 4) Oversee ongoing
execution of the Tidelands Infrastructure Master Plan projects; and 5) Identify and
establish a Citizens Advisory Panel to assist the Committee, encouraging public input
throughout the process.
Funding Source: N/A
Total Funding Required for Project: No funding required.
Funding Allocated to Date: N/A
Amount Spent to Date: N/A
Status to Date:
The Committee's first meeting was in March 2011, and the focus was primarily
administrative in nature (establish regular meeting days /times, review the Committee's
goals, and discuss roles of both the Committee and Citizens Advisory Panel etc...).
During the next quarter, the Committee will establish and refine the Tidelands
Project Tracking Report (January - March 2011)
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PROJECT 17
Tidelands Committee Update
Infrastructure Master Plan, select members of the Citizens Advisory Panel, and review
the City's proposed eelgrass program along with the City's study on the Balboa Island
bulkheads.
Project Tracking Report (January - March 2011)
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PROJECT 18
PROJECT: Transportation Fair Share Fee
Department(s): Community Development, Public Works
Project Lead: Steve Badum, Antony Brine
Project Start Date: Feb 2007
Target Completion Date: Summer 2011
Description:
In 1984, City Council established the Fair Share Traffic Contribution Ordinance to ensure
development contributes its fair share towards improvements included in the City's Master Plan
of Arterial Highways and General Plan Traffic Circulation Element. The ordinance established a
fair and equitable method to distribute costs of the circulation system improvements necessary
to accommodate the traffic volumes generated by development. From time to time, the City
Council has updated this ordinance as costs have risen and whenever the General Plan has been
updated. The City recently updated the General Plan and the Implementation Committee has
been working on an update of the Fair Share fee.
Funding Source: Transportation and Circulation Fund
Total Funding Required for Project: $1oo,000
Funding Allocated to Date: $65,200
Amount Spent to Date: $65,200
Status to Date:
The completion of this Fair Share Traffic fee update project has stalled with various
iterations proposed by the General Plan /LCP Implementation Committee, project
consultants and interested parties such as the Building Industry Association of Orange
County (BIA /OC). The most recent version of the Fair Share fee was reviewed by
GP /LCP committee and the final report, prepared by a consultant, is currently being
reviewed by staff. Staff will present findings to the BIA /OC by summer 2011 and
to return to the City Council in late summer 2011 for further direction.
Project Tracking Report (January — March 2011)
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PROJECT 19
PROJECT: West Newport Beach Facility Planning
Department(s): Public Works, City Manager's Office and Administrative Services
Project Lead: Steve Badum, Dave Kiff, Tracy McCraner
Project Start Date: April 2011
Target Completion Date: On -going
Description:
Most of the City's public buildings and facilities on the west side of the city are reaching
the end of their service life and are in need of major refurbishment or replacement. In
2006, the City developed a comprehensive citywide Facilities Financing Plan as a tool to
identify, forecast and fund the refurbishment and /or replacement of numerous City
owned facilities including police and fire stations, libraries, community and senior
centers, services yards and parks. With the upcoming relocation of City Hall to the new
Civic Center Complex (City Hall Office Building, large park, 450 -space parking structure,
and expansion to the Central Library), discussions have and continue to take place as to
how best to reconstruct the remaining facilities to met current and future community
needs.
Funding Source: General Fund
Total Funding Required for Project: to be determined
Funding Allocated to Date: $0
Amount Spent to Date: $0
Project Tracking Report (January - March 2011)
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PROJECT 19
West Newport Beach Facility Planning
Status to Date:
Since inception of the Facilities Financing Plan in 2006, the Ensign Theater Arts Center,
Corona del Mar Community Youth Center and the Carrol Beak Center have received major
refurbishments, the new OASIS Senior Center has been completed, and the new Civic Center
project is currently under construction. Additionally both the proposed new Sunset Ridge
Park and Marina Park projects have moved through the concept design and environmental
review phases and are currently being processed through State and Federal regulatory and
permitting agencies. In fiscal year 2011/12, staff expects to start the process to build upon
the current efforts to redevelop the existing City Hall site and develop conceptual plans and
alternatives to provide: consolidated maintenance and operations facilities; replacement and
potentially relocated community center facilities and fire stations; replacement of the existing
Lifeguard Headquarters building with smaller, more efficient facilities located at Newport
and Balboa Piers as well as continue discussions regarding the future of the various other City
facilities, particularly those located on the western side of the Newport Bay.
Project Tracking Report (January - March 2011)
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PROJECT 20
PROJECT: Widen Jamboree Road in the Airport Area
Department(s): Public Works
Project Lead: Dave Webb
Project Start Date: January 2005
Target Completion Date: June 2012
Description:
This two -phase project involves widening jamboree Road bridge over the SR73 Freeway
by 22 feet to the west (Phase 1); and then widening Jamboree Road at the intersection of
MacArthur Boulevard between Bristol North and Fairchild Road (Phase 2) in an effort to
reduce traffic congestion and delay. The bridge widening project (Phase 1) will create
one additional northbound and southbound thru lane on Jamboree Road between
MacArthur Boulevard and Bristol South. This project required developing a design and
obtaining approval and a permit from Caltrans for this State -owned bridge. Additionally,
the project required negotiations and purchase of three pieces of private property as
well as several OCTA grant funding applications and successful funding award.
The jamboree Road Improvements through the MacArthur intersection (Phase 2) will
provide one additional northbound lane through the intersection as well as an additional
left turn lane from southbound Jamboree Road onto eastbound MacArthur Boulevard.
This project also involves negotiations and voluntary purchase of three pieces of private
property within the City of Irvine for the northbound through lane, as well as several
OCTA grant funding applications and successful funding award.
Funding Source: Transportation and Circulation, IBC Settlement, Measure M Turnback,
and Measure M Competitive
Total Funding Required for Project: $10,217,942.00
Funding Allocated to Date: $10,217,942.00
Amount Spent to Date: $1,647,736.41
Project Tracking Report (January - March 2011)
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PROJECT 20
Widen Jamboree Road in the Airport Area
Status to Date:
The Bridge Widening Project (Phase 1) was awarded for construction by City Council on March
8, 2011. Notice to proceed has been given and submittal of construction documents is
underway. Construction should be completed in June 2012.
The Jamboree Road Improvements project (Phase 2) is currently under design and staff is
concurrently negotiating for the voluntary purchase of three pieces of private property on the
northeast corner of the intersection within the City of Irvine. Staffs objective is to complete the
property acquisition and design by the Summer of 2011 and start construction in late fall 2011.
Construction is expected to last about 6 months.
Project Tracking Report (January - March 2011)
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