HomeMy WebLinkAboutFinance Committee Agenda Packet - May 11, 2023CITY OF NEWPORT BEACH
FINANCE COMMITTEE AGENDA - Final
Community Room - 100 Civic Center Drive
Thursday, May 11, 2023 - 3:00 PM
Finance Committee Members:
Will O'Neill, Chair
Noah Blom, Mayor
Joe Stapleton, Council Member
Allan Cashion, Committee Member
William Collopy, Committee Member
Keith Curry, Committee Member
Nancy Scarbrough, Committee Member
Staff Members:
Grace K. Leung, City Manager
Jason Al-Imam, Finance Director/Treasurer
Michael Gomez, Deputy Finance Director
Brittany Cleberg, Administrative Assistant
NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT
Any presentation requiring the use of the City of Newport Beach’s equipment must be submitted to the Finance
Director/Treasurer 24 hours prior to the scheduled Finance Committee meeting.
NOTICE REGARDING PUBLIC PARTICIPATION
Questions and comments may also be submitted in writing for the Finance Committee’s consideration by sending them
to Jason Al-Imam, Finance Director/Treasurer, at jalimam@newportbeachca.gov. To give the Finance Committee
adequate time to review your questions and comments, please submit your written comments by no later than 5 p.m.
the day prior to the Finance Committee meeting. All correspondence will be made part of the record.
NOTICE TO THE PUBLIC
The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that
the Finance Committee agenda be posted at least seventy two (72) hours in advance of each regular meeting and that
the public be allowed to comment on agenda items before the Committee and items not on the agenda but are within
the subject matter jurisdiction of the Finance Committee. The Chair may limit public comments to a reasonable amount
of time, generally three (3) minutes per person.
It is the intention of the City of Newport Beach to comply with the Americans with Disabilities Act (“ADA”) in all respects.
If, as an attendee or a participant at this meeting, you will need special assistance beyond what is normally provided, the
City of Newport Beach will attempt to accommodate you in every reasonable manner. If requested, this agenda will be
made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in
implementation thereof. Please contact the City Clerk’s Office at least forty-eight (48) hours prior to the meeting to
inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3127 or
jalimam@newportbeachca.gov.
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May 11, 2023
Page 2
Finance Committee Meeting
I.CALL MEETING TO ORDER
II.ROLL CALL
III.PUBLIC COMMENTS
Public comments are invited on agenda and non-agenda items generally considered to be
within the subject matter jurisdiction of the Finance Committee. Speakers must limit comments
to three (3) minutes. Before speaking, we invite, but do not require, you to state your name for
the record. The Finance Committee has the discretion to extend or shorten the speakers’ time
limit on agenda or non-agenda items, provided the time limit adjustment is applied equally to all
speakers. As a courtesy, please turn cell phones off or set them in the silent mode.
IV.CURRENT BUSINESS
REVIEW OF FINANCE COMMITTEE AUTHORIZING RESOLUTIONA.
Summary:
Best practice is to periodically review the purpose and responsibilities of the
Finance Committee. This item provides a forum to discuss the responsibilities
established by the City Council to ensure Finance Committee responsibilities are in
alignment with the actual responsibilities the Committee takes to fulfill its charge.
Recommended Action:
Review and discuss the Finance Committee’s responsibilities set forth in the City
Council’s authorizing resolution 2018-71 compared to actual responsibilities the
Committee takes to fulfill its charge and provide any recommendations for
consideration by the City Manager and City Council.
STAFF REPORT
ATTACHMENT A
THIRD QUARTER BUDGET UPDATEB.
Summary:
Staff will provide a presentation regarding the year-to-date and projected Fiscal Year
2022-23 budget performance through March 31, 2023.
Recommended Action:
Receive and file.
STAFF REPORT
STAFF PRESENTATION
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May 11, 2023
Page 3
Finance Committee Meeting
FOLLOW-UP DISCUSSION OF PROPOSED FISCAL YEAR 2023-24 BUDGETC.
Summary:
Staff will provide the Committee with a copy of the Fiscal Year 2023-24
proposed budget document. Should the Committee wish to continue April's
discussion of the Fiscal Year 2023-24 budget, this is also an opportunity to do so.
Recommended Action:
Receive and file.
ATTACHMENT A
STAFF PRESENTATION
UTILITY RATE PRIMERD.
Summary:
A rate study has commenced for the Water and Wastewater Utilities, which is
expected to be brought forward to the Committee on May 25, 2023. On May 11,
2023, Utilities Director Mark Vukojevic will provide the Finance Committee with an
overview of the history of utilities rates, which will include but is not limited to a review
of how rates are set, fixed versus variable costs, inflation, water conservation and
reserve policies.
Recommended Action:
Receive and file.
STAFF PRESENTATION
WORK PLAN REVIEWE.
Summary:
Staff will report on the upcoming Finance Committee items.
Recommended Action:
Receive and file.
ATTACHMENT A
V.ADJOURNMENT
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CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 4A May 11, 2023
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department Jason Al-Imam, Finance Director/Treasurer 949-644-3123, jalimam@newportbeachca.gov
SUBJECT: REVIEW OF FINANCE COMMITTEE AUTHORIZING RESOLUTION
SUMMARY: Best practice is to periodically review the purpose and responsibilities of the Finance Committee. This report provides a forum to discuss the responsibilities established by the
City Council to ensure Finance Committee responsibilities are in alignment with the actual responsibilities the Committee takes to fulfill its charge. RECOMMENDED ACTION:
Review and discuss the Finance Committee’s responsibilities set forth in the City Council’s authorizing resolution 2018-71 compared to actual responsibilities the Committee takes to fulfill its charge, and provide any recommendations for consideration by the City Manager and City Council. DISCUSSION: The Finance Committee was established by City Council resolution on December 12, 1994. The authorizing resolution has been amended periodically and was last amended on September 25, 2018.
At the May 26, 2022, Finance Committee meeting there was public comment regarding the Finance Committee’s authorizing resolution, and at the September 15, 2022 Finance Committee staff were asked to bring back to the Finance Committee a discussion regarding the authorizing resolution.
The following table summarizes the purpose and responsibilities of the Finance Committee and related actions/examples to each purpose and responsibility.
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Review of Finance Committee Enabling Resolution May 11, 2023 Page 2 Purpose and Responsibility Related Action/Example
Review and monitor events and issues
which may affect the financial status of the City
• Reports
o Quarterly budget report and updates o Annual investment update Make recommendation to the City Council regarding amendment and budgetary policies
• As needed o Council Policy F-14
In accordance with Sections 504 and 1101 of the City Charter, review the City Manager’s proposed operating budget and
give recommendations to the City Manager. Any changes the Committee recommends to the City Manager’s Budget shall be provided in writing to the City Council along with the City Manager’s
presented budget
• Reports o Capital Improvement Program
Update
o Internal Service Fund Review
o Revenue Projections o Expenditure Projections
Recommend approval of the final City
Manager’s operating budget (excluding
the budget checklist)
• Reports
o Proposed Budget Overview
o Follow-Up Proposed Budget Discussion o Committee Recommendation to
Council for Budget
Recommend for Council approval goals designed to maximize the City’s revenues
consistent with existing taxation structures and inter-governmental funding opportunities, fee generation consistent with market rate charges for City provided services and market rate fees for
utilization of City owned assets. Recommend to Council major initiatives to accomplish identified goals
• Reports
o Revenue Projections
o Fee Study Update
Recommend for Council approval goals designed to minimize the City’s cost to provide core services and required activities, consistent with the desired
service level for residents and other
internal and external customers. Recommend to Council major initiatives to accomplish identified goals
• Reports o CalPERS UAL update o Department operation
review (Harbor, Police)
5
Review of Finance Committee Enabling Resolution May 11, 2023 Page 3 Purpose and Responsibility Related Action/Example
After approval of the Capital Improvement Program by the City Council, identify, review and recommend to City Manager
the most advantageous methods to fund the City Council’s approved Facilities Financing Plan
• Reports o Facilities Financial Plan and
Harbor & Beaches Master Plan
Identify, review and annually recommend to Council the most advantageous methods to fund the City’s long term compensation and benefits program
liabilities
• Reports o Long Range Financial Forecast Update
o OPEB Actuarial Valuation
Update
o CalPERS Update
Review and Recommend to Council policies related to the setting of funding goals for reserves, and review on-going progress related thereto
• Reports
o Quarterly budget report and update (GF contingency) o FFP update
o HBMP update
o Internal service fund update
Review the structure and documentation
of any proposed debt financing to assess the risk associated with such proposed debt usage
• As needed for General Fund debt issuance
Conduct audit conference meeting(s) with the auditors to provide independent review and oversight of the City of Newport Beach’s financial reporting processes,
framework of internal control and to provide a forum in which auditors can candidly discuss concerns in the absence of staff
• Reports o Financial Statement Audit Results and Communication
o Financial Statement Auditor’s Communication with Finance Committee acting as the City’s Audit Committee
Monitor, and review activities related to Investment Guidelines for City Reserve and investment funds
• Reports o Review Investment Portfolio
Strategy and Benchmark
o Review Investment Policy
Make recommendations to the City
Council in any aspect of the financial affairs of the City
• As needed and incorporated in
budget, and fees reports
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Review of Finance Committee Enabling Resolution May 11, 2023 Page 4 Prepared and Submitted by: /s/ Michael Gomez
_____________________________
Michael Gomez Deputy Finance Director
ATTACHMENT: Attachment A – City Council Resolution No. 2018-71
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ATTACHMENT A
CITY COUNCIL RESOLUTION NO. 2018-71
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RESOLUTION NO. 2018-71
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AMENDING VARIOUS
RESPONSIBILITIES OF THE FINANCE COMMITTEE
WHEREAS, the City Council of the City of Newport Beach ("City") has a long and
established history of being good guardians and stewards of the public's money;
WHEREAS, appropriations, expenditures and other budgetary matters are a
primary concern of the City Council;
WHEREAS, the City Council has adopted various policies regarding financial
matters,
WHEREAS, the City Council has adopted policies regarding income property and
annexations, which may have an impact on the City's finances;
WHEREAS, on December 12, 1994, the City Council adopted Resolution No. 94-
110 establishing the Finance Committee, whose duties and responsibilities have been
amended throughout the years to further protect and safe guard the public's money,
WHEREAS, the existing Finance Committee is composed of three City Council
Members and four citizen appointees charged with a variety of tasks, including, but not
limited to: reviewing and monitoring events and issues which may affect the financial
status of the City; and making recommendations to the City Council regarding
amendments to financial and budgetary policies; and
WHEREAS, the City desires to amend various Finance Committee responsibilities
as described in this resolution in alignment with the actual responsibilities the Finance
Committee undertakes to fulfill its charge.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows..
Section 1: The City Council hereby amends the Finance Committee as described
in Attachment 'A" which is attached hereto and incorporated herein by reference.
Section 2: The City Council hereby repeals all prior resolutions, or parts thereof,
related to the Finance Committee that are in conflict with this resolution.
Section 3: If any section, subsection, sentence, clause or phrase of this
resolution is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The City
Council hereby declares that it would have passed this resolution and each section,
subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
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Resolution No. 2018-71
Page 2 of 2
Section 4: The recitals provided in this resolution are true and correct and are
incorporated into the substantive portion of this resolution.
Section 5: The City Council find the adoption of this resolution and the
amendment of the Finance Committee is not subject to the California Environmental
Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a
direct or reasonably foreseeable indirect physical change in the environment) and
15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
Section 6: This resolution shall take effect immediately upon its adoption by the
City Council, and the City Clerk shall certify the vote adopting this resolution.
ADOPTED this 25th day of September, 2018.
ATTEST:
c
2a
Leilani I. Brown
City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Aaro C arp
City Attorney
F,
V
c
ORN1PP
Marshall "Duffy" Duffield
Mayor
Attachment A: Amended Finance Committee Description
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FINANCE
COMMITTEE
AUTHORIZATION: Established by Resolution No. 94-110 adopted on
December 12, 1994. Modified by Resolution No. 96-100
adopted on December 9, 1996. Disbanded by Resolution
No. 98-32 adopted on May 11, 1998. Re-established by
Resolution No. 2000-103 adopted on December 12, 2000.
Duties and membership amended by Resolution No. 2007-
21 adopted on April 10, 2007. Purpose and responsibilities
amended by Resolution No. 2013-32 adopted on April 9,
2013. Membership, qualifications and term of members,
and purpose and responsibilities amended by
Resolution No. 2015-5 adopted on January 13, 2015.
Administrative practices amended by Resolution No. 2015-
40 adopted on May 26, 2015. Term of citizen appointees
amended by Resolution No. 2017-58 adopted on
September 12, 2017. Various other changes amended by
Resolution No. 2018-70 adopted on September 25, 2018.
MEMBERSHIP: Seven (7) total. Three (3) Council Members appointed by
the Mayor subject to full City Council approval. Four (4)
citizen members appointed by the Council Members not on
the Committee subject to approval of the full City Council
Citizen Appointees"). Citizen Appointees have equal
voting status. The Mayor shall appoint the chairperson
subject to confirmation of the full City Council.
Staff support shall be provided primarily by the City
Manager and the Finance Director and by other staff as
necessary.
Meetings shall be held as required by the business needs
of the Finance Committee in the City Council Chambers or
such other locations as allowed by the Ralph M. Brown Act,
on weeknights or weekdays (M -Th) at a time that is
convenient for the Finance Committee and the public to
TERM OF
encourage public participation.
COUNCIL
MEMBERS: Indefinite pending City Council action.
TERM OF CITIZEN
APPOINTEES: Appointed annually on a fiscal year (July 1 to June 30)
basis. Citizen Appointees shall serve for a one-year term or
until their successor is appointed and qualified.
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QUALIFICATIONS OF
CITIZEN
APPOINTEES: 1. Must be a resident of the City of Newport Beach.
2. Must be a registered voter in the City of Newport
Beach.
3. Must be appointed by a City Council Member.
4. Recommended, but not required, that the
appointee be a CPA, CFA or Business/Finance
major or other such designation as may be
appropriate.
PURPOSE &
RESPONSIBILITIES: A. Review and monitor events and issues which may
affectthe financial status of the City;
B. Make recommendations to the City Council
regarding amendments to financial and budgetary
policies;
C. In accordance with Sections 504 & 1101 of the
City Charter, review the City Manager's proposed
operating budget and give recommendations to
the City Manager. Any changes the Committee
recommends to the City Manager's Budget shall be
provided in writing to the City Council along with
the City Manager's presented budget;
D. Recommend approval of the final City Manager's
operating budget (excluding the budget checklist);
E. Recommend for Council approval goals designed
to maximize the City's revenues consistent with
existing taxation structures and
inter -governmental funding opportunities, fee
generation consistent with market rate charges for
City provided services and market rate fees for
utilization of City owned assets. Recommend to
Council major initiatives to accomplish identified
goals;
F. Recommend for Council approval goals designed
to minimize the City's cost to provide
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core services and required activities, consistent
with the desired service level for residents and
other internal and external customers.
Recommend to Council major initiatives to
accomplish identified goals;
G. After approval of the Capital Improvement
Program by the City Council, identify, review and
recommend to City Manager the most
advantageous methods to fund the City Council's
approved Facilities Financing Plan;
H. Identify, review and annually recommend to Council
the most advantageous methods to fund the City's
long term compensation and benefit program
liabilities;
Review and recommend to Council policies related
to the setting of funding goals for reserves, and
review on-going progress related thereto;
J. Review the structure and documentation of any
proposed debt financing to assess the risk
associated with such proposed debt usage;
K. Conduct audit conference meeting(s) with the
auditors to provide independent review and
oversight of the City of Newport Beach's financial
reporting processes, framework of internal control
and to provide a forum in which auditors can
candidly discuss concerns in the absence of staff;
L. Monitor, and review activities related to Investment
Guidelines for City Reserve and investment funds,-
and
unds;
and
M. Make recommendations to the City Council in any
aspect of the financial affairs of the City.
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STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss.
CITY OF NEWPORT BEACH }
I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the
whole number of members of the City Council is seven; the foregoing resolution, being Resolution
No. 2018-71 was duly introduced before and adopted by the City Council of said City at a regular meeting
of said Council held on the 251h day of September, 2018; and the same was so passed and adopted by the
following vote, to wit:
AYES: Council Member Diane Dixon, Council Member Jeff Herdman, Council Member Kevin
Muldoon, Council Member Scott Peotter, Mayor Pro Tem Will O'Neill
NAYS: None
ABSENT: Council Member Brad Avery, Mayor Duffy Duffield
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of
said City this 26th day of September, 2018.
Leilani I. Brown
City Clerk
Newport Beach, California
dK
1 F0,
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CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 4B May 11, 2023
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department Jason Al-Imam, Finance Director / Treasurer 949-644-3126, jalimam@newportbeachca.gov
SUBJECT: THIRD QUARTER BUDGET UPDATE
SUMMARY:
The Finance Department prepares quarterly financial reports to review the status of revenues and expenditures for the City’s General Fund and to monitor budgetary trends in other City funds. This report contains information on revenues, expenditures, and
estimated fund balance for the third quarter of Fiscal Year 2022-23.
The third quarter financial report for Fiscal Year 2022-23 provides an analysis of the financial activity of the City from the months of July 2022 through March 2023, and projected amounts for the remainder of the fiscal year. Based on information available at the end of the third quarter, a $15.8 million operating surplus for the General Fund is
projected for Fiscal Year 2022-23, which is net of non-operating activity that includes one-time transfers out of the General Fund to the Facilities Financing Plan (FFP) Fund and General Fund Capital Improvement Program (CIP). Approximately $8 million of the budget surplus is expected to be utilized to set-aside funds for the Contingency Reserve (pursuant to City Council Policy F-2), and to replenish the FFP and General Fund CIP
Fund for amounts attributable to the Dove Street Property Purchase. RECOMMENDED ACTION: Review and discuss this report and provide any recommendations for consideration by
the City Manager and City Council. DISCUSSION: Economic Overview The City’s assessed property values continue to increase providing a strong revenue base for the City. Recent trends in inflation and the inverted Treasury yield curves have
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Third Quarter Budget Update May 11, 2023 Page 2
caused concern in the broader economy and financial markets, however, the City is well-positioned to weather any short-term increase in inflation thanks to the related increase in many of the City’s revenues such as sales tax and transient occupancy tax as prices increase. Additionally, the City is well-positioned to withstand the impacts of a potential
recession and is expected to maintain long-term fiscal sustainability.
General Fund Revenues
Overall General Fund revenue growth has outpaced projections that were incorporated into the adopted Fiscal Year 2022-23 budget. The following table summarizes the changes to projected General Fund revenues versus the amounts previously projected for the second quarter. Details follow highlighting the
reasons for the material variances. Fiscal Year 2022-23 Projected General Fund Revenues*
* Based on preliminary month-end close data available as of March 31, 2023.
Property Tax - Property taxes are the City’s single largest General Fund revenue and represent approximately 50% of all General Fund revenues. As these revenues are
primarily dependent on the assessed valuation established in January of 2022, there is
typically very little variance seen from the original budget as the year progresses. Projections for Fiscal Year 2022-23 property tax revenues from the City’s property tax consultant reflect a 7.6% increase in assessed values in the year ahead. This strong growth is a result of the CPI factor returning to the maximum 2.0% allowed and adding
$1.2 billion to the assessed valuation, as well as continued strong property sales activity
and price appreciation adding $5.0 billion to the assessed valuation. The City’s total
A B C = B-A D = C/A
Revenues by Category
Revised
Budget
Previously
Projected for
Q2
Currently
Projected for
Q3 Variance
%
Variance
Property Taxes 131,403,081 133,467,331 133,467,331 - 0%
Sales Tax 46,526,493 49,004,223 48,401,417 (602,806) -1%
Transient Occupancy Tax 27,788,728 28,908,841 30,292,123 1,383,282 5%
Other Taxes 12,174,567 12,174,567 12,174,567 - 0%
Service Fees & Charges 23,228,086 23,228,086 23,228,086 - 0%
Parking Revenue 6,417,259 6,976,357 6,976,357 - 0%
Licenses and Permits 5,870,375 5,870,375 5,870,375 - 0%
Property Income 6,093,309 6,828,626 6,828,626 - 0%
Fines & Penalties 3,870,567 3,870,567 3,870,567 - 0%
Intergovernmental 3,100,151 2,959,723 3,100,151 140,428 5%
Investment Earnings 1,300,000 1,300,000 1,300,000 - 0%
Misc Revenues 917,669 893,691 2,941,824 2,048,133 229%
Operating Transfers In 17,300,724 17,300,724 17,348,716 47,992 0%
Total Revenues 285,991,010 292,783,112 295,800,140 3,017,028 1%
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Third Quarter Budget Update May 11, 2023 Page 3
assessed valuation for Fiscal Year 2022-23 is now projected to grow from $66.2 billion to $71.2 billion. There is no update to the projection for Property Tax than what was reported in the prior quarter.
Sales Tax - The second largest funding source for the General Fund is sales tax revenue,
making up more than 15% of General Fund revenues. The City’s sales tax base is largely generated from four industry categories – autos and transportation, general consumer goods, restaurants/hotels, and State & County Pools. The second quarter budget update reflected a $2.5 million increase in the amount projected over the adopted budget. The
third quarter budget update reflects a $0.6 million decrease in sales tax revenue compared to the amount that what previously projected during the second quarter budget. The decrease in the sales tax forecast for Fiscal Year 2022-23 is in light of sales tax data received from the State in March 2023 for the quarter ending December 31, 2022, which was 2% higher than the same quarter a year ago on an adjusted basis. In comparison,
sales tax revenue for the July 2022 through September 2022 period was 10% higher than the same quarter a year ago. Sales tax revenue for the period ending December 2022 was considerably lower than expected, which appears to be a sign that the economy is slowing more quickly than anticipated. Notable categories that are experiencing a slow down in growth are autos and transportation as well as retail and county pools. Retail
stores are reporting lower sales, as consumers redirect their spending towards travel, leisure, and entertainment. Allocations from the countywide-use tax pool also declined as online retailers shifted the fulfillment of some of their internet orders from out-of-state to in-state fulfillment centers or to brick-and-mortar retail locations.
Transient Occupancy Tax –TOT was budgeted at $28 million for the current fiscal year, which was based on a projected growth rate of 9%. However, TOT revenue for Fiscal Year 2021-22 ended at $27 million, which was $1 million higher than previously projected and surpassed the pre-pandemic level. Therefore, the projection for the current year is boosted by the prior year coming in $1 million higher. Furthermore, the second quarter
budget update reflected a $1.1 million increase that increased the current year projection to $28.9 million, which was based on record high TOT receipts through December 2022. While occupancy levels have not returned to pre-pandemic levels, the increase in higher room rates has more than offset the lag in occupancy.
The third quarter budget update shows an expected increase of $1.4 million over the second quarter forecast, or $2.5 million over the revised budget, due largely to strong short-term lodging businesses, which increases the current year projection to $30.3 million.
The Fashion Island Hotel remains closed but is expected to reopen in the Summer of 2023 following a sale and renovation as the Pendry Newport Beach. Since the timing of the Pendry’s opening is uncertain, revenue from the Pendry is not included in the projection for the current year. These reopening’s, combined with the expected return of more business travelers, are anticipated to have additional positive impact on the City’s
TOT revenues in the years ahead.
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Third Quarter Budget Update May 11, 2023 Page 4
All Other Revenue – This category includes all other revenue sources other than the top three (property tax, sales tax, and TOT). All Other Revenue is made up of the following:
• Other Taxes – real property transfer taxes, business license taxes, marine charter taxes, and franchise fees.
• Service Fees and Charges – plan check fees, recreation classes, emergency
medical services fees, and numerous other cost-of-service fees.
• Parking Revenue – all General Fund related metered parking fees that are assessed throughout the various parking zones of the City.
• Licenses and Permits – fees charged to process building related permits, street
closure permits, dog licenses, and police tow franchise fees.
• Property Income – City owned and managed income producing properties, long-term ground leases to concessions, restaurants, hotels and other businesses and
organizations, and rental of City facilities to the public.
• Fines and Penalties – parking citation fines collected by the City, administrative citation fines, fines remitted to the City from the County for vehicle code violations, and false alarm penalties.
• Intergovernmental Revenues – federal, state, and local grant revenues, which includes, but is not limited to, the City’s portion of the ½ cent sales tax revenue paid to the County for public safety, state mandate reimbursements, reimbursement for strike teams sent to assist with fires, and revenue sharing with
the County of Orange under the Waste Disposal Agreement (WDA).
• Investment Earnings – revenue generated from the investment of City funds.
• Miscellaneous Revenues – restricted revenue, damage to City property, bad debt,
donations and contributions, non-operating revenues such as proceeds from the sale of materials and equipment, and other miscellaneous revenues.
• Operating Transfers In – Operating Transfers In reflect regular ongoing transfers into the General Fund from other funds. For Fiscal Year 2022-23, this includes the
transfer from the Tidelands Fund for the expenses related to the Cost Allocation
Plan. The Intergovernmental category has a variance compared to the second quarter update due to budget amendments that Council approved in the third quarter for various grants
and donations.
The City received a settlement payment in the amount of $2,024,155 from a class action lawsuit between the City of Long Beach and Monsanto regarding polychlorinated biphenyls (“PCBs”) contamination. It is proposed that $1,000,000 of this one-time revenue
be used to fund a one-time project, 23P13 - Civic Center Park Improvements,
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Third Quarter Budget Update May 11, 2023 Page 5
Transportation Center Pickleball (as described in more detail later in this report), which is consistent with City Council Policy F-4 whereby it is recommended that one-time revenue sources be used to fund one-time projects whenever possible.
Transfers in has been increased by $48,000 to account for a transfer from the Special
Revenue fund where Public, Educational, and Governmental Access Support (PEG) Fees are collected to be appropriated for an equipment purchase. General Fund Expenditures
The Fiscal Year 2022-23 General Fund revised expenditure budget totals $288 million, including transfers. Spending trends in Fiscal Year 2022-23 are generally consistent with prior years and therefore budget savings are anticipated. Total expenditure savings of $5.7 million are projected at this time due to savings from vacancies and other operating categories, offset by expense overages that are addressed in a Budget Amendment that
will accompany this report to the City Council and are explained in this report. The table below summarizes the revised expenditure budget for Fiscal Year 2022-23, as well as projected expenditure savings by budget category. Details follow highlighting the reasons for the material variances.
Fiscal Year 2022-23 Projected General Fund Expenditures *
* Based on preliminary month-end close data available as of March 31, 2023.
Significant expenditure budget variances are as follows:
A B C = A-B D = C/A
Expenditures by
Category
Revised
Budget
Previously
Projected for
Q2
Currently
Projected for
Q3
Variance from
Q2 to Q3
%
Variance
Salary & Benefits $170,032,465 $164,790,055 164,298,495$ $5,733,971 3.4%
Contract Services 30,013,806 30,006,006 29,581,872 431,935 1.4%
Grant Operating 1,083,878 878,633 1,083,878 - 0.0%
Utilities 3,837,745 4,104,969 4,004,358 (166,613) -4.3%
Supplies & Materials 4,768,954 4,697,570 4,247,705 521,249 10.9%
Maintenance & Repair 14,442,504 14,445,304 14,369,029 73,475 0.5%
Travel & Training 843,049 843,049 726,267 116,782 13.9%
General Expenses 2,275,465 2,280,465 2,275,465 - 0.0%
Internal Svc Charge 28,190,206 28,190,206 28,190,206 - 0.0%
Risk Management 255,915 255,915 255,915 - 0.0%
Capital Expenditures 1,557,547 1,497,547 1,605,539 (47,992) -3.1%
Operating Transfers Out 30,687,817 30,687,817 31,687,817 (1,000,000) -3.3%
Total Expenditures $287,989,351 $282,677,537 282,326,545$ $5,662,806 2.0%
19
Third Quarter Budget Update May 11, 2023 Page 6
• The revised salary and benefits budget totals $170.0 million, an increase of $6.5 million over the adopted budget. The increase is primarily due to the appropriation of $5.0 million from the Fiscal Year 2022-23 structural budget surplus as an
additional discretionary payment to CalPERS to further reduce the City’s unfunded
pension liability. The remaining $1.5 million relates to recently approved contracts with the majority of the City’s employee associations. The City does not budget for unknown labor costs, which requires mid-year appropriations for negotiated salary and benefit increases in the year in which new labor contracts are
negotiated. An analysis of year-to-date savings from vacant positions has resulted
in a projected salary and benefit savings of $5.7 million dollars, or an additional $500,000 than what was projected in the second quarter update.
• The revised budget for contract services totals $30 million, an increase of $3.1 million over the adopted budget, largely due to carryovers from the prior year. Analysis of year to date spending and encumbrances show a projected savings of $432,000 in this category.
• The utilities budget was increased in Fiscal Year 2022-23 by $830,000 over the Fiscal Year 2021-22 adopted budget, however, additional overages are now apparent. Staff is evaluating this issue and will be making adjustments in the Fiscal Year 2023-24 budget to address it. As budget savings in other expenditure
categories are anticipated to fully offset the projected $166,600 overage, staff is not recommending a further adjustment to the utilities budget at this time.
• Savings are anticipated in various other operational categories such as supplies &
materials, maintenance & repair, and travel and training. An analysis was done for
each department and total savings for these categories is projected to total $711,000. Additionally, $20,000 in training budgets is proposed to be transferred to the Special Revenue Fund where the revenues associated with accessibility inspection training and compliance are collected.
• An additional transfer out of $1 million is proposed in order to fund project 23P13 - Civic Center Park Improvements, Transportation Center Pickleball. This project includes the planning, permitting, design and construction of pickleball courts on a
portion of the Orange County Transportation Authority's transportation center. Improvements include sidewalk modifications along Avocado Avenue. Planning and design will be completed by a consultant and construction performed by a private contractor. A budget amendment will be attached to this report when it is presented to the City Council to reflect this request.
• A budget amendment is proposed to appropriate approximately $48,000 in PEG Fee funds to purchase essential equipment for Newport Beach Television (NBTV) in order to prevent service interruptions caused by failing equipment.
20
Third Quarter Budget Update May 11, 2023 Page 7
General Fund Sources, Uses, and Projected Surplus The City continues to be in excellent financial health. Conservative budgeting and sound financial policies have resulted in a trend of General Fund operating surpluses and strong reserve levels for several years. The City is well positioned to continue delivering a high
level of service to the community while targeting surplus resources to key priorities each
year. Staff currently projects that unrestricted General Fund resources will total $15.8 million at the end of Fiscal Year 2022-23. The table below illustrates the prior year sources and uses of funds, current year activity
and the projected year-end results. Fiscal Year 2022-23 Projected General Sources, Uses, and Budget Surplus
As reflected in the table above, a $15.8 million operating surplus for the General Fund is
projected for Fiscal Year 2022-23, which is net of non-operating activity that includes one-time transfers out of the General Fund to the FFP and General Fund CIP. Approximately $8 million of the budget surplus is expected to be utilized to set-aside funds for the Contingency Reserve (pursuant to City Council Policy F-2), and to replenish the FFP and General Fund CIP Fund for amounts attributable to the Dove Street Property Purchase.
Transfers There are multiple operating and non-operating transfers in and out of the General Fund for Fiscal Year 2022-23. Included in the operating transfers in is the full amount of the cost allocations as a transfer from the Tidelands Fund, and included in the operating
transfers out is the General Fund’s contributions to the Capital Improvement Fund,
A B C=B-A D=C/A
FY 2022-23 FY 2022-23 Variance % Variance
Adopted Projected
BEGINNING UNRESTRICTED FUND BALANCE 24,093,441$ 24,093,441$ -$ 0.0%
OPERATING RESOURCES:
Operating Revenues 265,030,502 278,451,424 13,420,922 5.1%
Prior Year Resources Carried Forward - 4,429,573 4,429,573 ---
Transfers In from Other Funds 17,300,724 17,348,716 47,992 0.3%
Repayment of Advances 1,250,000 1,250,000 - 0.0%
TOTAL OPERATING RESOURCES 283,581,226 301,479,713 17,898,487 6.3%
OPERATING USES:
Operating Expenditures 244,520,405 250,638,728 6,118,323 2.5%
Transfers Out 30,687,817 31,687,817 1,000,000 3.3%
TOTAL OPERATING USES 275,208,222 282,326,545 7,118,323 2.6%
NET OPERATING SURPLUS 8,373,004$ 19,153,168$ 10,780,164$ 128.7%
NON-OPERATING RESOURCES & USES
Non-Operating Transfers Out (909,452) (27,457,903) (26,548,451) 2919.2%
NON-OPERATING RESOURCES & USES (909,452)$ (27,457,903)$ (26,548,451)$ 2919.2%
ENDING UNRESTRICTED FUND BALANCE 31,556,994$ 15,788,707$ (15,768,287)$ -50.0%
Category
21
Third Quarter Budget Update May 11, 2023 Page 8
Tidelands Capital Fund, Facilities Financing Planning Fund, Facilities Maintenance Fund, and the Tidelands operating subsidy. Included in the non-operating transfers in is the advance repayment from the Tidelands Capital Fund, which was utilized for dredging within the City’s Tidelands. Included in the non-operating transfers out is the transfer of
the prior year surplus to the Police Facility Fund for the purchase of a property on Dove
Street, utilization of the Fiscal Year 2022-23 structural surplus which transferred funds to the Capital Improvement Fund, and the Facilities Financing Planning Fund, as well as one time program enhancements included in the adopted budget.
The purchase of the property on Dove Street for the future site of the Police Department Headquarters was initially projected to total $30,775,000 however after further negotiations and the closing of escrow, the actual amount for the purchase is projected to be approximately $1.75 million less. These savings will be reflected in the General Fund at year end when the General Fund is expected to reimburse the General Fund CIP
and FFP for their contributions to the purchase. Other Major Funds New state requirements and increased demand for oil well maintenance have caused the maintenance and repair in the Tidelands fund to exceed the budget. It is anticipated that
the account will need an additional $500,000 in the current fiscal year. This is offset fully by higher than budgeted revenues for the sale of oil and results in no net impact to the fund. A budget amendment will accompany the report to the City Council increasing both revenues and expenditures in the tidelands fund.
Staff have evaluated the fiscal condition of the City’s other major operating funds (Water, and Wastewater). An analysis of the budget performance for these funds indicates that no budget adjustments are necessary and variances between budgeted and actual amounts are within reason.
Conclusion Staff recommends that the Finance Committee review and discuss this report and provide any recommendations for City Manager and City Council consideration prior to the May 23rd City Council meeting, at which time this report will be presented.
Prepared and Submitted by: /s/ Shelby Burguan ____________________________
Shelby Burguan Budget Manager
22
ITEM NO. 4B1 THIRD QUARTER BUDGET
UPDATE
ATTACHMENT A
STAFF PRESENTATION – ADDITIONAL MATERIALS RECEIVED
23
INTENTIONALLY BLANK PAGE
2022-23
Third Quarter Financial Report
Finance
Committee
May 11, 2023
Item No. 4B1
Third Quarter Budget Update
Additional Materials ReceivedMay11,2023
24
City of Newport Beach –Finance Department 2
Projected General Fund Revenues
Revised Budget $ 285.9 million
Second Quarter Projection $ 292.8 million
Third Quarter Projection $ 295.8 million
•$3 million of projected positive variance
since Q2
•Revised estimates for Sales Tax, Transient
Occupancy Tax, Miscellaneous Revenues,
grants, and transfers in make up the
updated projection.
$-
$50
$100
$150
$200
$250
$300
Adopted Revised Projected
Mi
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l
i
o
n
s
Property Tax Sales Tax TOT Other
25
City of Newport Beach –Finance Department 3
Property Tax
•Represents approximately 50% of
General Fund revenues
•On track to exceed the adopted
budget based on strong assessed
value growth reflected in the final tax
roll
•No adjustment from Q2
•Represents 7.3% growth over prior
year
$108
$113
$119
$124
$133
$80
$90
$100
$110
$120
$130
$140
FY 2018-19Actual FY 2019-20Actual FY 2020-21Actual FY 2021-22Actual FY 2022-23Projected
Mi
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s
26
City of Newport Beach –Finance Department 4
Sales Tax
•Projection lowered by $600,000 from Q2
•Represents 4.8% growth over prior year
•Major categories for the City include:
Autos & Transportation
General Consumer Goods
Restaurants & Hotels
State & County Pools
•Slow down in growth in Autos &
Transportation, Retail, and County Pools
•Growth expected to continue, but at a
slower pace
$39
$36
$39
$46
$48
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
$50
FY 2018-19Actual FY 2019-20Actual FY 2020-21Actual FY 2021-22Actual FY 2022-23Projected
Mi
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s
27
City of Newport Beach –Finance Department 5
Transient Occupancy Tax
•Transient occupancy tax projection is
$2.5 million higher than the revised
budget, or $1.4 million higher than Q2
projection
•Revenue from short-term lodging is at a
record high, and accounts for most of the
increase in the projected revenue
•Room rates are offsetting occupancy
rates which are still lagging post
pandemic
•Revenue from the Pendry is not included
in the projection
$25
$21
$17
$27
$30
$10
$15
$20
$25
$30
$35
FY 2018-19Actual FY 2019-20Actual FY 2020-21Actual FY 2021-22Actual FY 2022-23Projected
Mi
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n
s
28
City of Newport Beach –Finance Department 6
Other General Fund Revenues
•$2 million received for settlement payment from class action
lawsuit
•$1 million recommended to be allocated to one-time CIP
project -Civic Center Park Improvements, Transportation
Center Pickleball
•$140,000 adjustment to intergovernmental revenues
•$50,000 transfer in from PEG Fee fund for purchase of
equipment
29
City of Newport Beach –Finance Department 7
Projected General Fund Expenditures
Revised Budget $ 288.0 million
Second Quarter Projection $ 282.7 million
Third Quarter Projection $ 282.3 million
•Budget savings of $5.7 million projected offset by proposed budget amendments to
be included with the City Council staff report to appropriate:
•$50,000 for NBTV Equipment (transfer in from PEG Fund)
•$1 million for Civic Center Park Improvements, Transportation Center Pickleball
30
City of Newport Beach –Finance Department 8
General Fund Sources and Uses
•$15.8 million projected surplus
•Q2 reported that $10 million from
surplus would be used for contingency
reserve set aside and repayment of
FFP & GF CIP for Dove Street property
purchase.
•After negotiations, approximately $1.75
million in savings on the property
purchase are expected reducing use of
reserve to $8 million
•Remaining reserve balance to be used
in accordance with Council Policy F-5
when the Q4 report is presented
A B
FY 2022-23 FY 2022-23
Adopted Projected
BEGINNING UNRESTRICTED FUND BALANCE 24,093,441$ 24,093,441$
OPERATING RESOURCES:
Operating Revenues 265,030,502 278,451,424
Prior Year Resources Carried Forward - 4,429,573
Transfers In from Other Funds 17,300,724 17,348,716
Repayment of Advances 1,250,000 1,250,000
TOTAL OPERATING RESOURCES 283,581,226 301,479,713
OPERATING USES:
Operating Expenditures 244,520,405 250,638,728
Transfers Out 30,687,817 31,687,817
TOTAL OPERATING USES 275,208,222 282,326,545
NET OPERATING SURPLUS 8,373,004$ 19,153,168$
NON-OPERATING RESOURCES & USES
Non-Operating Transfers Out (909,452) (27,457,903)
NON-OPERATING RESOURCES & USES (909,452)$ (27,457,903)$
ENDING UNRESTRICTED FUND BALANCE 31,556,994$ 15,788,707$
Category
31
City of Newport Beach –Finance Department 9
Recommended Action
Staff recommends that the Finance Committee:
•Review and discuss this report
•Provide any recommendations for consideration by
the City Manager and the City Council
32
City of Newport Beach –Finance Department 10
Questions?
33
ITEM NO. 4C FOLLOW-UP DISCUSSION OF
PROPOSED FISCAL YEAR 2023-24 BUDGET
ATTACHMENT A
LINK TO PROPOSED BUDGET: https://ecms.newportbeachca.gov/WEB/DocView.aspx?id=2871652&dbid=0&repo=CNB
34
INTENTIONALLY BLANK PAGE
ITEM NO. 4C1 FOLLOW-UP DISCUSSION OF
PROPOSED FISCAL YEAR 2023-24 BUDGET
ATTACHMENT B
STAFF PRESENTATION – ADDITIONAL MATERIALS RECEIVED
35
INTENTIONALLY BLANK PAGE
FY 2023-24 Proposed Budget
Additional Information Finance
Committee
Meeting
May 11, 2023
Item No. 4C1
Follow-Up Discussion of Proposed
Fiscal Year 2023-24 Budget
Additional Materials Received
May 11, 2023
36
City of Newport Beach –Finance Department 2
Proposed Budget –Additional Information
Included in the Proposed Budget but not highlighted in the last presentation:
o Conversion of an Animal Control Officer to a Senior Animal Control Officer
o Conversion of a Part-time Community Services Officer to a Full-time
Community Services Officer
These changes are necessary with the opening of the new Animal Shelter.
This item provides cost savings as previously budgeted lease payments at the
old shelter more than offset the cost of the position conversions.
This item was not highlighted as a new change to the budget as it was previously
slated to go to Council prior to the budget being presented.
37
City of Newport Beach –Finance Department 3
Changes to Proposed Budget
General Fund
Personnel Changes:
•City Manager –Conversion of Deputy City Manager to Assistant City Manager
•CDD –add Management Assistant to Real Property division
Transfer adjustment:
•Transfer out to FFP increased to match 3% of General Fund revenues
Other Funds
Proposed CIP Adjustment:
•CIP as presented in April totaled $29,043,000
•Final Proposed CIP totals $29,375,044
38
City of Newport Beach –Finance Department 4
Revised General Fund Sources and Uses
•Revisions described on the prior slide total
$653,000 additions to the expenditure
budget.
•The structural budget surplus has been
reduced by the same amount from $12
million to $11.4 million
•$5 million is recommended to be allocated
to the CalPERS UAL payment, increasing
total FY2023-24 contribution from $40
million to $45 million
•Projected budget surplus of $6.4 million,
after the additional $5 million appropriation
allocated to the CalPERS UAL payment.
A B C=B-A
FY 2023-24 FY 2023-24 Variance
Proposed Revised
OPERATING RESOURCES:
Operating Revenues 285,037,737 285,037,737 -
Transfers In from Other Funds 19,020,967 19,020,967 -
Repayment of Advances 1,250,000 1,250,000 -
TOTAL OPERATING RESOURCES 305,308,704 305,308,704 -
OPERATING USES:
Operating Expenditures 259,223,396 259,428,214 204,818
Transfers Out 34,040,955 34,489,271 448,316
TOTAL OPERATING USES 293,264,351 293,917,485 653,134
NET OPERATING SURPLUS 12,044,353$ 11,391,219$ (653,134)$
Category
39
City of Newport Beach –Finance Department 5
Request Finance Committee Action
•Endorse or modify the City Manager’s Proposed Budget for Fiscal
Year 2023-24
•Make recommendations for the use of surplus funds
40
INTENTIONALLY BLANK PAGE
ITEM NO. 4D UTILITY RATE PRIMER
ATTACHMENT A
STAFF PRESENTATION
41
INTENTIONALLY BLANK PAGE
2023 Water & Wastewater Rate StudyPrimer
Finance CommitteeMay 11, 2023
Utilities Department 42
Executive Summary:
•Water and wastewater is a 24/7 community service, asset, and commodity
•Water/wastewater is critical to public health and the environment
•The systems operate as independent enterprise funds
•Current and future capital improvement projects are necessary
•Operational & Capital costs continue to go up
•Buying water, construction, materials, equipment, insurance, conservation, regulatory compliance
•The value of water and wastewater are seemingly undervalued
•Rate increases will be needed to keep up with inflation
Utilities Department 2023 Rate Studies 43
Utilities Department 2023 Rate Studies 44
•203 miles of sewer pipe
•120 miles of sewer laterals
•Plus 5,000 manholes
•21 pump stations
•5 miles of force mains
Utilities Department 2023 Rate Studies 45
Enterprise Funds:
•Best Practice
•Segregated fund
•Similar intent to a private business enterprise
•Can only be spent for the specific purpose of water
•Separate accounting and financial reporting
•Not a part of the General Fund
Utilities Department 2023 Rate Studies
=
46
Rate Study at a Glance
Rate Setting Framework
•Financial goals and policies
•Pricing objectives
Financial Plan
•Evaluation of CIP and financing options
•Cash flow analysis for financial sufficiency
Cost of Service & Rate Design
•Cost allocations
•Rate design
̶Rate calculations
̶Customer impact analyses
Final Rate Adoption
•Report
•Public Hearing
6
2023 Rate StudiesUtilities Department 47
BALANCING COMPETING
PRICING OBJECTIVES
Customer Understanding
Equity
Conservation
Affordability
Defensibility
Administrative Ease
Financial Stability
Revenue Stability
2023 Rate StudiesUtilities Department 48
Common Pricing Objectives:
Enhance revenue stability while maintaining affordability and communicating intention of conservation
Conservation
•Reducing total annual demand
•Reducing water waste
•Reducing peak demand
•Reducing outdoor water usage
Funding Mechanism
•Enhancing revenue stability
•Ensuring financial sufficiency
•Providing funding mechanisms for alternative water supply, conservation program
Affordability
•Minimizing customer impacts
•Maintaining low average customer bills
•Crafting rates that provide affordable water for essential uses
Equity and Allocation Methodologies
•Allocating water supply equitably
•Providing a drought management tool
•Allocating capital costs equitably
•Complying with government regulations and guidelines
Administration
•Allowing cost-effective administration
•Allowing easy implementation
•Enhancing customer understanding
From Water and Wastewater Finance and Pricing: The Changing Landscape, 4th Edition
2023 Rate StudiesUtilities Department 49
Water & Wastewater System Cost Structure
FIXED
•Does not vary with production
•Salaries, maintenance,
equipment, insurance
construction, etc.
VARIABLE
•Varies with water
production
•Wholesale water cost, electricity, chemicals, etc.
2023 Rate StudiesUtilities Department 50
Water Reserves Goal
•O&M Reserve –for Operating Cash Flow
•33% of operating expenses (or 4 months of expenses)
•Capital Reserve –for Capital Working Capital
•75% of average annual CIP
•Rate Stabilization Reserve –i.e. drought reserve -for
unexpected water demand reduction or unexpected water supply
cost increases, emergencies, and non-budgeted CIP capital
projects, causing net revenue loss for the Water Fund
•1 year at 30%, or 3 years at 10%
•$3 million
10
2023 Rate StudiesUtilities Department 51
Wastewater Reserves Goal
•O&M Reserve –for Operating Cash Flow
•25% of operating expenses (or 3 months of expenses)
•Capital Reserve –for Capital Working Capital
•25% of operating expenses
•Fund emergency pipeline replacements or accelerated projects
•Fund one pump station replacement
11
2023 Rate StudiesUtilities Department 52
Rates History
•Water –studied in 2009 and 2019
•Rate increases: 2010, 2011, 2012, 2013, & 2014
2020, 2021, 2022, 2023, & 2024
•Wastewater –studied in 2004 and 2015, & 2017
•Rate increases: 1996, 2004, 2005
2018, 2019, 2020, 2021, & 2022
12
2023 Rate StudiesUtilities Department 53
Next Steps
•Finance Committee meeting May 25, 2023
•Financial Review
•Discussion/recommendation of proposed rates
•Community outreach
•City Council
•Public Notice and Public Hearing
•Proposed Rates Effective, January 2024
2023 Rate StudiesUtilities Department 54
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ITEM NO. 4E WORK PLAN REVIEW
ATTACHMENT A
55
INTENTIONALLY BLANK PAGE
5/11/23
Scheduled Date Agenda Title Report Type Agenda Description
Thursday, May 11, 2023
Third Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected Fiscal
Year 2022-23 budget performance through March 31, 2023.
Follow-Up Discussion of Proposed FY 2023-24 Budget Discussion
Staff will provide the Committee with a copy of the Fiscal Year 2023-24
proposed budget document. Should the Committee wish to continue April's
discussion of the Fiscal Year 2023-24 budget, this is also an opportunity to do
so.
New Item Review of Finance Committee Authorizing Resolution Discussion
Best practice is to periodically review the purpose and responsibilities of the
Finance Committee. This item provides a forum to discuss the responsibilities
established by the City Council to ensure Finance Committee responsibilities are in alignment with the actual responsibilities the Committee takes to fulfill its charge.
Utility Rate Primer Presentation
A rate study has commenced for the Water and Wastewater Utilities, which is expected to be brought forward to the Committee on May 25, 2023. On May 11, 2023, Utilities Director Mark Vukojevic will provide the Finance Committee with an overview of the history of utilities rates, which will include but is not limited to a review of how rates are set, fixed versus variable costs, inflation, water
conservation and reserve policies.
Workplan Review Receive and File Staff will report on the upcoming Finance Committee items.
Tuesday, May 23, 2023 Joint City Council and Finance Committee Study Session Presentation Staff will present the FY 2023-24 proposed budget to the City Council and Finance Committee.
Thursday, May 25, 2023 Financial Statement Auditor's Communication with the Finance Committee acting as the City's Audit Committee Presentation
The City's external auditors, Davis Farr LLP, will provide an overview presentation regarding the audit process and request feedback from the Committee regarding any information that may assist them in their audit of the City's financial statements.
Internal Audit Program Reports Presentation Presentation of reports, findings, and recommendations from the FY 2022-23
audit program.
Committee Recommendation to Council for the FY 2023-24 Budget Discussion Discussion of the Study Session earlier in the week and formulation of any recommendations to be presented to the City Council at the budget public hearing in June.
Workplan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, September 14, 2023
Annual Review of Investment Performance Presentation
The City's investment advisor, Chandler Asset Management, will report on the
performance of the City's investment portfolio for the fiscal year ending June 30, 2023.
Newport Beach Finance Committee Work Plan
June 2023
Committee Recess
Committee Recess
July 2023
May 2023
August 2023
September 2023
Committee Recess
1
56
5/11/23
Scheduled Date Agenda Title Report Type Agenda Description
Newport Beach Finance Committee Work Plan
Annual Review of Investment Policy Presentation Staff will provide a presentation regarding any changes proposed to the City's Investment Policy by staff or the City's investment advisor prior to the Investment Policy being approved by the City Council.
Internal Audit Program Update Presentation Bi-monthly progress update on the internal audit program.
Budget Amendments for Quarter Ending June 30, 2023 Receive and File Staff will report on the budget amendments from the prior quarter.
Workplan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, October 12, 2023
Budget Amendments for Quarter Ending September 30, 2023 Receive and File Staff will report on the budget amendments from the prior quarter.
OPEB Actuarial Valuation Report Update Presentation Staff will provide the Committee with an overview of the Fiscal Year 2022-23 actuarial valuation report prepared by the City's actuary.
Workplan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, November 16, 2023
Rescheduled from October Year-End Budget Results and Surplus Allocation Presentation Staff will provide a presentation regarding the year-end budget results for FY 2022-23 and recommendations for allocation of any year-end budget surplus.
First Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected FY 2023-24 budget performance.
CalPERS Update Presentation Staff will provide the Committee with an overview of the data from the latest actuarial reports from CalPERS as well as their impact on prior projections of the paydown of the City's unfunded pension liability.
Long Range Financial Forecast (LRFF) Update Presentation Staff will brief the Committee regarding the results of the updated LRFF analysis.
October 2023
November 2023
December 2023
Committee Recess
2
57