HomeMy WebLinkAboutFiscal Year 2022-23 Financial SatementC I T Y OF NEWPOR T BEACH
CA L I FORN I A
FISCAL YEAR ENDED
JUNE 30, 2023
ANNUAL
COMPREHENSIVE
FINANCIAL REPORT
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2023
Prepared by the Finance Department
Jason Al-Imam, Finance Director/Treasurer
The City of Newport Beach was incorporated September 1, 1906
The present City Seal was adopted July 22,1957
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INTRODUCTORY SECTION
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CITY OF NEWPORT BEACH
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
TABLE OF CONTENTS
INTRODUCTORY SECTION
(Unaudited)
Table of Contents ....................................................................................................................... 1
Letter of Transmittal ................................................................................................................... 5
GFOA Certificate of Achievement for Excellence in Financial Reporting ................................ 19
List of City Officials .................................................................................................................. 20
Organization Chart ................................................................................................................... 21
FINANCIAL SECTION
Independent Auditor's Report............................................................................................ 25
Management’s Discussion and Analysis .......................................................................... 31
(Required Supplementary Information)
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position ............................................................................................... 53
Statement of Activities ..................................................................................................... 54
Fund Financial Statements:
Governmental Funds:
Balance Sheet .............................................................................................................. 60
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Position....................................................................................... 63
Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 64
Reconciliation of Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities .............. 66
Proprietary Funds:
Statement of Net Position............................................................................................. 70
Statement of Revenues, Expenses and Changes in Net Position ............................... 71
Statement of Cash Flows ............................................................................................. 72
Fiduciary Funds:
Statement of Fiduciary Net Position ............................................................................. 76
Statement of Changes in Fiduciary Net Position .......................................................... 77
Notes to the Financial Statements ..................................................................................... 81
Required Supplementary Information
Defined Benefit Plan For Miscellaneous Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 142
Schedule of Contributions ............................................................................................. 144
Defined Benefit Plan For Safety Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 146
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Schedule of Contributions ............................................................................................. 148
Post-Employment Health Care Benefits (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios ............................ 150
Schedule of Contributions ............................................................................................. 152
Budgetary Comparison Statements:
General Fund ............................................................................................................... 153
Tide and Submerged Land – Operating Fund ............................................................... 155
Tide and Submerged Land – Harbor Capital Fund ....................................................... 156
Notes to Required Supplementary Information ................................................................ 157
Supplementary Schedules
Other Governmental Funds:
Combining Balance Sheet ............................................................................................. 164
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .............................................................................................................. 171
Budgetary Comparison Schedules:
State Gas Tax Fund ...................................................................................................... 178
SB1 Gas Tax RMRA Fund ............................................................................................ 179
Asset Forfeiture Fund ................................................................................................... 180
OTS DUI Grant Fund .................................................................................................... 181
Circulation and Transportation Fund ............................................................................. 182
Building Excise Tax Fund .............................................................................................. 183
Community Development Block Grant Fund ................................................................. 184
Air Quality Management District Fund .......................................................................... 185
Environmental Liability Fund ......................................................................................... 186
Supplemental Law Enforcement Services Fund ........................................................... 187
Opioid Remediation Fund ............................................................................................. 188
Contributions Fund ........................................................................................................ 189
FIIN Fund ...................................................................................................................... 190
Restricted Programs Fund ............................................................................................ 191
Measure M Fund ........................................................................................................... 192
Oceanfront Encroachment Fund ................................................................................... 193
American Rescue Plan Act Fund .................................................................................. 194
PEG Fees Fund ............................................................................................................ 195
Internal Service Funds:
Combining Statement of Net Position ........................................................................... 200
Combining Statement of Revenues, Expenses and Changes in Net Position .............. 201
Combining Statement of Cash Flows ............................................................................ 202
Fiduciary Funds:
Combining Statement of Fiduciary Net Position ............................................................ 206
Combining Statement of Changes in Fiduciary Net Position......................................... 207
STATISTICAL SECTION
(Unaudited)
Financial Trends:
Net Position by Component ................................................................................................ 212
Changes in Net Position ...................................................................................................... 214
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Fund Balances of Governmental Funds .............................................................................. 216
Changes in Fund Balance of Governmental Funds ............................................................ 218
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property ..................................... 222
Property Tax Rates, Direct and Overlapping Governments ................................................ 223
Principal Property Taxpayers .............................................................................................. 224
Property Tax Levies & Collections ...................................................................................... 225
Debt Capacity:
Ratios of Outstanding Debt by Type ................................................................................... 229
Ratios of General Bonded Debt .......................................................................................... 230
Schedule of Direct and Overlapping Debt ........................................................................... 231
Computation of Legal Debt Margin ..................................................................................... 232
Demographic and Economic Information:
Demographic and Economic Statistics ................................................................................ 236
Principal Employers ............................................................................................................ 237
Operating Information:
Full-Time City Employees by Function ................................................................................ 241
Operating Indicators by Function ........................................................................................ 242
Capital Asset Statistics by Function .................................................................................... 244
Water Sold by Customer Type ............................................................................................ 246
Utility Rates ......................................................................................................................... 247
Major Water Customers ...................................................................................................... 248
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Finance Department
CITY OF NEWPORT BEACH
100 Civic Center Drive
Newport Beach, California 92660
949 644‐3127 | 949 644‐3339 FAX
newportbeachca.gov/finance
December 27, 2023
Honorable Mayor, Members of the City Council,
and Residents of the City of Newport Beach, California
The City Charter and California state law require that the City of Newport Beach (City)
issue a complete set of financial statements annually and that an independent firm of
certified public accountants audit this report in conformance with generally accepted
auditing standards (GAAS). The Annual Comprehensive Financial Report (ACFR) of the
City of Newport Beach for the year ended June 30, 2023 is hereby submitted.
The ACFR was prepared in conformance with generally accepted accounting principles
(GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). This
report consists of City management’s representations concerning the finances of the City
of Newport Beach. Responsibility for the accuracy and completeness of the data
presented rests with the City. Management of the City is also responsible for establishing
and maintaining an internal control structure designed to ensure that the assets of the
government are protected from loss, theft, or misuse, and to ensure that adequate
accounting data is compiled to allow for the preparation of financial statements in
conformity with generally accepted accounting principles. The internal control structure
is designed to provide reasonable, but not absolute, assurance that these objectives are
met. The concept of reasonable assurance recognizes that: (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the valuation of costs and
benefits requires estimates and judgments by management. We believe the information
presented in this report is complete and accurate in all material respects, and that it is
reported in a manner designed to fairly present the financial position and results of
operations of the various activities of the City of Newport Beach.
The City of Newport Beach’s financial statements have been audited by DavisFarr LLP,
a firm of licensed certified public accountants. The goal of the audit was to provide
reasonable assurance that the financial statements of the City of Newport Beach for the
Fiscal Year (FY) ended June 30, 2023 are free of material misstatement. The
independent audit involved examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; assessing the accounting principles used and
significant estimates made by management; and evaluating the overall financial
statement presentation. The independent auditor concluded, based on the audit, that
there was a reasonable basis for rendering an unmodified opinion that the City of Newport
Beach’s financial statements for the year ended June 30, 2023 are fairly presented in
5
conformity with GAAP. The independent auditor’s report is presented as the first
component of the financial section of this report.
A narrative introduction, overview, and analysis accompany the basic financial statements
in the form of the Management’s Discussion and Analysis (MD&A). The letter of
transmittal is designed to complement the MD&A and should be read in conjunction with
it. The City of Newport Beach MD&A can be found immediately following the report of the
independent auditors and will provide further information regarding the format and content
of this report.
PROFILE OF THE CITY
Newport Beach is a community located in the coastal center of Orange County, in the
heart of Southern California, with Los Angeles County to the north and San Diego County
to the south. There are currently 34 cities within the county. In terms of population,
Orange County is the third largest county in California trailing Los Angeles and San Diego.
It is the sixth largest county in the nation.
The general vicinity of Newport Beach and Orange County relative to the counties of Los
Angeles, San Bernardino, Riverside, and San Diego is illustrated on the map below:
6
Newport Beach surrounds Newport Bay, well known for its picturesque islands and one
of the greatest recreational harbors in the world, accommodating about 9,000 recreational
and sports charter boats docked within its 21-square-mile harbor. The bay and the ten
miles of ocean beach offer outstanding fishing, swimming, surfing, and aquatic sports
activities. The City has a permanent population of 83,411, which typically grows to well
over 100,000 during the summer months, including 20,000 to 100,000 or more tourists
daily. There are fine residential areas, modern shopping facilities, and a quality school
system. The University of California, Irvine, is located immediately adjacent to the city,
and several other colleges are within a 30-mile radius.
The following map illustrates the communities within Newport Beach; the upper bay, the
recreational harbor, and beachfront topography; and the city’s location relative to the
bordering cities of Costa Mesa to the north, Irvine to the east, and Laguna Beach to the
south.
Newport Beach was incorporated on September 1, 1906. The City Charter was originally
adopted in 1954 but has been updated and amended over time. The City is governed by
seven Council Members, and operates under a Council-Manager form of government.
Council Members are elected by district but voted on by the population as a whole, and
serve four-year staggered terms. The Mayor is selected by the City Council from among
its membership and serves a one-year term. The City Council is responsible for, among
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other things, policy-making, passing local ordinances, adopting the budget, appointing
committees, and hiring the City Manager, City Attorney, and City Clerk. The City Manager
is responsible for carrying out the policies and ordinances of the City Council, for
overseeing the day-to-day operations of the City, and for appointing heads of
departments.
The City of Newport Beach is a full service city providing its residents and visitors with the
following functional services: general governance, legal, financial, information
technology, and administrative management; police, fire, paramedic, lifeguard, and
emergency medical transport services; engineering, construction, and maintenance of
public facilities, public streets, beaches, and parks; planning, zoning, and economic
development services; building inspection, plan check, and code enforcement services;
libraries and cultural and arts services; recreation and senior services; and water,
wastewater, and street light utility services. The City provides water and wastewater
service to most areas within the city limits, but it does not provide gas, cable television,
electrical, or other utility services. Public elementary and secondary education is provided
by the Newport-Mesa Unified School District and the Laguna Beach Unified School
District.
Component Unit: The City’s financial statements present the financial activity of the City
of Newport Beach (the primary government) and the Newport Beach Public Facilities
Corporation (a component unit of the City). The Corporation is blended into the City’s
financial statements because of its operational and financial relationship with the City.
Even though it is a legally separate organization, City of Newport Beach elected officials
are accountable for fiscal matters of the Corporation. Additional information about the
Newport Beach Public Facilities Corporation and the reporting entity in general can be
found in Note (1a) of the Notes to the Financial Statements.
DEMOGRAPHICS
Reflective of a mature community, vacant land has become increasingly scarce and the
city is relatively built-out. Currently at 83,411, the population has been very stable as
indicated by the following chart.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Fiscal Year
Population
8
The effective buying income and median household income are generally higher in
Newport Beach than in other areas of the State and the U.S. overall. As illustrated by the
table below, Newport Beach’s median household income is nearly twice that of the U.S.
median household income.
The leading industries here are professional, scientific, health care, finance, insurance,
legal, and travel/tourism. Unemployment in the City increased to 3.4% as of October
2023 which is consistent with the statewide economy as jobs grew at a slower rate than
the previous year due to post-pandemic hiring cooling; however, the City’s unemployment
rate is still lower compared to the state’s 4.8%, and the county’s 3.7%, as illustrated in
the following chart.
More detailed information concerning the City’s demographics and statistics are
contained within the Statistical Section of this report.
LOCAL ECONOMY
Despite the Federal Reserve raising the federal funds rate by over five percentage points
over the past two years to combat high inflation, the underlying local economy continues
to remain strong in Newport Beach. Sales tax revenue was up 6.8% in Newport Beach
from July 2022 through December 2022. However, sales tax revenue was down 5.4%
from January 2023 through June 2023, which is consistent with sales tax results across
the State of California. The decrease in sales tax revenue is largely due to a shift in
consumer spending from taxable goods, such as new car sales, to nontaxable items, such
as travel, leisure, and entertainment. For example, sales from autos and transportation
were down 5.5% over the prior year whereas sales from restaurants and hotels were up
City of Newport Beach $127,353
Orange County 106,209
California 91,551
USA 74,755
2022 Median Household Income
Calendar Year
Historical Unemployment Rates
(Rates are not seasonally adjusted)
Newport Beach
Orange County
California
* through October 31, 2023
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6.2% over the same period. Overall, sales tax revenue was up 0.8% for Fiscal Year 2022-
23 and is projected to dip slightly in Fiscal Year 2023-24. Nonetheless, the fiscal outlook
remains bright largely due to property tax revenue, representing approximately 50% of all
General Fund revenues, which continues to remain strong due to continued demand for
coastal property.
TOP THREE REVENUE SOURCES
Most General Fund revenue categories performed at or higher than their budgeted levels
for the fiscal year due to more favorable economic conditions than anticipated when the
budget was developed in April 2022. Actual revenues were $14.1 million or 5.2% higher
than final anticipated estimates. As discussed in more detail below, the primary positive
variances were in property tax and transient occupancy taxes.
The top three individual revenue sources, Property Taxes, Sales Taxes and Transient
Occupancy Taxes (TOT), represent 75.5% of all General Fund revenues. Tax revenues
in total, including business licenses, franchise fees, and other taxes represent 79.1% of
all General Fund revenues, while only 20.9% is generated from other revenue sources.
Property Taxes
Unlike many cities, property taxes, not sales taxes, are the number one source of revenue
for the City of Newport Beach, representing almost half (48.6%) of all General Fund
revenues. Due to the limited supply of scenic coastal property and the unique access to
Newport Bay, the Newport Beach community has developed into affluent residential
neighborhoods and high-end commercial districts. Consistent and vigorous demand for
coastal property has allowed the City to enjoy long-term growth trends with its number
one revenue source. Property tax revenues for Fiscal Year 2022-23 came in $9.9 million
or 7.7% higher than the prior year due to an increase in assessed property values related
to the annual inflation adjustment that is allowed under Proposition 13 and due to changes
49%
16%
11%
3%
21%
General Fund Revenues
Property Taxes
Sales Taxes
Sales Tax In Lieu
Transient Occupancy Taxes
Other Taxes
All Other Sources
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in ownership and new construction, which was partially offset by a $1.9 million decrease
in property transfer tax revenue as home sales slowed during the fiscal year due to higher
interest rates.
Detached single-family residential property values decreased 1.9% in 2023 as home
sales slowed due to higher interest rates, as illustrated in the following table.
Nonetheless, Newport Beach’s estimated median price for a detached single-family
residence is currently $3.6 million, which far exceeds the countywide estimated median
value of $1.2 million. Higher assessed values are projected to continue due to strong
demand, which is expected to support continued growth in future property tax revenues.
After Californians passed Proposition 13 in 1978, assessed property value is reassessed
to market value only when the property changes ownership. Otherwise, the assessed
value (AV) grows by no more than two percent per year. This practice creates a constant
lag and buffer between assessed and market values, effectively insulating the tax base
from more market volatility.
While property tax growth rates fell sharply during the Great Recession, the City has
experienced positive AV growth during each of the past 29 years (see chart below with
the past 15 years of AV growth demonstrated). This positive growth occurred while many
other cities experienced decreases in their AV during 2008 through 2011. Note that while
growth slowed, the assessed value never declined throughout the recession.
Calendar Median Median %
Year Sales Price Change
2014 962 1,894,500$ 5.25%
2015 1,023 1,975,000$ 4.25%
2016 1,064 2,150,000$ 8.86%
2017 1,114 2,400,000$ 11.63%
2018 952 2,517,000$ 4.88%
2019 949 2,435,000$ -3.26%
2020 1,142 2,587,500$ 6.26%
2021 1,405 3,200,000$ 23.67%
2022 827 3,715,000$ 16.09%
2023*508 3,645,000$ -1.88%
Source: HdL Coren & Cone
*Data through September 2023
CITY OF NEWPORT BEACH
Detached Single Family Residential Full Value Sales
Median Price
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Value changes in Newport Beach show continued appreciation in property values in
Fiscal Year 2022-23. Over the past 10 years, assessed valuation increased an average
of 6.0% per year and 5.8% over a twenty-year period. Newport Beach’s assessed
property values increased 7.1%, with a local assessed value of $71.3 billion for Fiscal
Year 2022-23.
Sales Tax
The second largest funding source for the General Fund is sales tax revenue, making up
about 16.3% of General Fund revenues. The City’s sales tax base is largely generated
from three industry categories – autos and transportation, general consumer goods, and
restaurants/hotels. Most of these industries are also heavily impacted by tourism.
As previously discussed, sales tax revenue was up 6.8% from July 2022 through
December 2022. However, sales tax revenue was down 5.4% from January 2023 through
June 2023, which is consistent with sales tax results across the State of California. The
decrease in sales tax revenue is largely due to a shift in consumer spending from taxable
goods, such as new car sales, to nontaxable items, such as travel, leisure, and
entertainment. For example, sales from autos and transportation (the City’s largest source
of sales tax revenue) were down 5.5% over the prior year and is projected to remain down
next year due to a softening of demand for new vehicles, which is largely related to higher
interest rates. Conversely, sales from restaurants and hotels were up 6.2% over the prior
year and is projected to be higher next year as patrons continue to allocate a significant
portion of their household food budget to dining out. Sales tax revenue was up 0.8% for
Fiscal Year 2022-23 and is projected to dip slightly in Fiscal Year 2023-24.
Transient Occupancy Tax (TOT)
TOT accrues to the City at a rate of 10% of room charges with 18% of this collection going
to the local destination marketing organization (Visit Newport Beach) to promote Newport
Beach as a tourist destination. The City distinguishes its transient occupancy taxpayers
1.8%
7.1%
0.2%1.0%2.9%5.2%5.7%
5.9%6.5%6.6%
7.3%5.3%
6.4%
$-
$10,000,000,000
$20,000,000,000
$30,000,000,000
$40,000,000,000
$50,000,000,000
$60,000,000,000
$70,000,000,000
$80,000,000,000
20
0
9
-
1
0
20
1
0
-
1
1
20
1
1
-
1
2
20
1
2
-
1
3
20
1
3
-
1
4
20
1
4
-
1
5
20
1
5
-
1
6
20
1
6
-
1
7
20
1
7
-
1
8
20
1
8
-
1
9
20
1
9
-
2
0
20
2
0
-
2
1
20
2
1
-
2
2
20
2
2
-
2
3
20
2
3
-
2
4
Total Assessed Property Value Growth
4.5%4.8%
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in two broad property type categories, commercial and residential property. The
commercial category is composed of approximately 21 hotels and resorts and accounts
for approximately 73% of TOT revenues. The residential category is made up of
approximately 1,550 vacation rentals representing 27% of TOT revenue. TOT revenue
from short-term residential stays has nearly doubled since 2019-20, whereas hotel TOT
revenue increased 32% over the same period as reflected in the following chart.
In calendar year 2019, hotel occupancy rates remained in the eighties during the summer
and was generally in the seventies throughout the remainder of the year. The following
chart shows that while hotel occupancy rates have not yet fully recovered from pre-
pandemic highs there has been significant improvement in hotel occupancy. In addition,
increases in average daily room rates have augmented hotel TOT revenues.
LONG TERM FINANCIAL PLANNING
The City continues to be in excellent financial health due to its strong underlying tax base,
disciplined fiscal decisions, and stable governance. Conservative budgeting and sound
financial policies have resulted in a trend of General Fund operating surpluses and strong
reserve levels. The City annually completes a Long-Range Financial Forecast covering
the next 20 years pursuant to City Council Policy F-3 – Budget Adoption and
Administration. That forecast shows positive General Fund results in each of the next 20
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years and does not indicate any long-term financial trends of concern. The City’s long-
term financial planning has been guided by its strong financial policies, prudent budgeting
decisions, and proactive planning in such critical areas as facilities replacement and
pensions. These policies are regularly evaluated and updated as conditions and needs
change.
Financial Policies
The City Council has adopted prudent fiscal policies concerning its investments, reserves,
budget administration, revenue initiatives, competitive contracting, facility replacement
planning, and more. The budget surplus utilization policy directs the use of surplus funds
resulting from unrestricted General Fund annual revenues exceeding total actual
expenditures, encumbrances, and commitments for that year. Roughly fifty percent of the
budget surplus is used to address long-term obligations such as pension liabilities, other
post-employment benefits, bonded debt, lease obligations, and other long-term needs.
The remaining surplus is used to address one-time infrastructure or neighborhood capital
improvements, guided by a philosophy that these expenditures improve the community’s
safety, aesthetics, transportation, or quality of life. The City’s debt policy establishes
criteria for the issuance of debt and assures that the amount of any debt is affordable and
cost effective. The City’s debt policy was recognized by the California Debt and
Investment Advisory Commission as one of only 14 counties and cities in California
whose policies have 20 or more debt management best practice elements. The City’s
debt and other financial policies can be found on the City’s website in the City Council
section under City Government at:
www.newportbeachca.gov/policies
Annual Budget
The annual budget serves as the foundation for the City of Newport Beach’s financial
planning and control and allows the City Council to prioritize City expenditures so that
they are aligned with core community values. Per current policy, appropriations for
operating expenditures are balanced in relation to current revenue sources and do not
rely on one-time revenue sources or reserves. When significant uncertainty exists
concerning revenue volatility or threatening/pending obligations, the City Council and City
Manager reserve the right to impose any special fiscal control measures, including
personnel hiring freezes, and other spending controls, as was the case in FY 2019-20
and in the development of the FY 2020-21 budget. As a result of early retirement plans,
attrition, outsourcing, and lay-offs implemented in the years following the onset of the
Great Recession, the full-time work force was reduced by approximately 4% between FY
2012-13 and FY 2016-17 as depicted in the chart below. In the years since, thoughtful
additions to the City’s workforce have been implemented with a continued focus on fiscal
discipline and maintaining balanced budgets.
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The City has traditionally taken a conservative approach to forecasting revenues, often
assuming only modest growth. This fiscal conservatism has created a stable financial
base. As a result, even in a downturn, the City of Newport Beach is able to maintain its
services at a high level, while reducing expenses to accommodate reduced revenues.
The City’s fiscal discipline has allowed it to prepare balanced budgets and to save, both
during prosperous and difficult economic periods. As the economy continues to improve,
these trends are likely to continue.
The City Council may authorize the use of contingency reserves during emergency
situations as set forth by the Council Reserve Policy. Current policy requires that the
contingency reserve equal 25 percent of the General Fund annual “Operating Budget.”
Credit rating agencies consider a high level of available “fund balance” to be a credit
strength. In 2023, Moody’s rating agency reaffirmed the City’s AAA credit rating noting
the City’s extensive tax base, a very strong wealth and income profile, and a robust
financial position. It also noted the well-controlled expenditure framework coupled with a
very solid level of budget management. Additionally, FitchRatings rating agency also
reaffirmed the City’s AAA credit rating noting the City’s consistent tax base and well-
controlled expenditure framework coupled with conservative financial management would
enable the City to maintain financial stability and solid reserves in a potential moderate
economic downturn. The City has also employed an aggressive strategy to paydown its
unfunded pension liability. The City has committed to a pension paydown plan that
requires $45 million in annual contributions towards its unfunded pension liability, which
is $15 million more than the amount required to be paid, as further described in the
Pension section below. This paydown strategy is anticipated to result in eliminating the
City’s pension liability in 2032.
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Facilities Financial Plan (FFP) Commitment & Major Construction Initiatives
The City’s FFP is a comprehensive master facilities replacement schedule that projects
the timing of construction of facility projects; projects the schedule of any planned debt
issuance; includes all relevant revenue sources and expenditures on a yearly, project-by-
project basis; and determines the long-term “level funding” annual budget commitment
that is required to support the program. The FFP was the winner of the prestigious “Helen
Putnam Award – Internal Administration” category from the League of California Cities in
2008.
The City continued its financial commitment to the Facilities Financial Planning Reserve
(FFPR) in FY 2022-23 by allocating resources to debt service, parks and community
centers, the purchase of land and building for a future police station and other small scale
facility rehabilitation projects.
Overall, the FFPR balance is decreasing by $9.4 million from the prior fiscal year.
Beginning Balance 7/1/22 34,171,635$
Sources
Licenses, Permits and Fees 34,309
Transfer In from General Fund 12,924,919
Transfer in Misc FFP Projects 41,272
Investment Income 371,710
Net increase in fair value of investments (161,745)
Total Sources 13,210,465
Uses
Debt Service 1 (8,562,344)
Parks and Community Centers (2,894,345)
Police Facility (3,324,919)
Fire Stations (900,000)
Misc FFP Projects (6,900,000)
Total Uses (22,581,608)
Ending Balance 6/30/23 24,800,492$
1 The transfer is net of the Build America Bonds subsidy, which is
recorded in the Debt Service Fund
Facilities Financial Planning Reserve Fund
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Pensions
As of the actuarial valuation date of June 30, 2022, the City had an Unfunded Accrued
Liability (UAL) of $348 million. The City has taken a number of actions in recent years to
mitigate the impact of rising pension costs including:
Established lower benefit formulas for new hires.
Eliminated the Employer Paid Member Contribution (EPMC).
Through negotiated cost sharing, saw employees contribute 57.5% of the Normal
Cost of the plan, or $10.5 million in Fiscal Year 2022-23.
Adopted a fixed and shorter amortization period for the unfunded liability.
Made Additional Discretionary Payments (ADPs)
Contributed no less than Actuarial Determined Contribution (ADC) each and every
year.
Analyzed the schedule of amortization bases annually in an effort to avoid negative
amortization.
Amortized all gains/losses no longer than a 20-year closed period.
Avoided asset smoothing or “rate phase-in” schedules if possible. Otherwise, the
City’s goal is to not exceed 5 years for any one smoothing cycle.
Established a General Fund Surplus Utilization Policy F-5 to set aside one-half of
any annual budget surplus to fund debts such as the pension liability.
Maintained a contingency reserve to protect against economic recessions and to
avoid negative impacts of asset smoothing and rate phased-in schedules.
Local governments with pensions have a total pension liability, which is the obligation to
pay deferred pension benefits in the future. When the total pension liability is greater than
the pension plan’s assets there is a net pension liability, also known as unfunded pension
liability. As required by GASB 68, the City reports the net pension liability in the
government wide financial statements, as well as in the proprietary fund statements, in
the ACFR – see Note (10) of Notes to the Financial Statements.
The City implemented GASB 75 in fiscal year 2017-18, which requires local governments
offering other post-employment health care benefits (“OPEB”) to report net OPEB liability
in the government wide financial statements, as well as in the proprietary fund statements,
in the ACFR – see Note (11) in the Notes to the Financial Statements. When the total
OPEB liability is greater than the OPEB plan’s assets there is a net OPEB liability, also
known as unfunded OPEB liability.
As with past practice, the City will continue to fund its pension and OPEB obligations at
an amount equal to or greater than the minimum employer contribution rate. The City has
not and will never intentionally short-fund its pension and OPEB obligations. Annually the
City evaluates the cost and benefits of paying down the unfunded pension and OPEB
liabilities on a faster schedule. Currently, the City Council has committed to a fixed $45
million per year contribution toward the unfunded pension liability, which is approximately
$15 million more than is required by CalPERS. Fiscal year 2022-23 represented four
years in a row the City Council appropriated additional funding towards an accelerated
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payment of the unfunded liability from year-end budget surplus funds. The $45 million
paydown strategy is anticipated to result in eliminating the City’s pension liability in 2032.
AWARDS AND ACKNOWLEDGMENTS
The City has prepared an Annual Comprehensive Financial Report for the past 30 years.
The City has received awards for excellence in financial reporting in each of those years.
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of
Newport Beach for its Annual Comprehensive Financial Report for the fiscal year ended
June 30, 2022. In order to be awarded a Certificate of Achievement, a government unit
must publish an easily readable and efficiently organized Annual Comprehensive
Financial Report. This report must satisfy both generally accepted accounting principles
and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Annual Comprehensive Financial Report continues to conform to the Certificate of
Achievement program requirements and we are submitting it to GFOA to determine its
eligibility for another certificate.
Acknowledgments: Preparation of this report was accomplished through the efficient and
dedicated services of everyone in the City’s Accounting Division. In addition, the Finance
Department staff would like to thank the City Manager, the Mayor, and the City Council
for their interest in and support of planning and conducting the financial operations of the
City in a responsible and progressive manner. We would also like to thank our auditors,
DavisFarr LLP, for their time and assistance in the preparation of the report.
Grace K. Leung
City Manager
Jason Al-Imam
Finance Director/Treasurer
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Newport Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
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Newport Beach City Officials
Robyn Grant
Council Member
District 4
Will O’Neill
Mayor
District 7
Lauren Kleiman
Council Member
District 6
Joe Stapleton
Mayor Pro Tem
District 1
Brad Avery
Council Member
District 2
Erik K. Weigand
Council Member
District 3
Noah Blom
Council Member
District 5
City Council Members
City Executive Staff
Grace K. Leung
City Manager
Aaron Harp
City Attorney
Leilani Brown
City Clerk
Tara Finnigan .......................................................................................................................... Assistant City Manager
Jason Al-Imam ..................................................................................................................Finance Director/Treasurer
Seimone Jurjis ................................................................Assistant City Manager/ Community Development Director
Jeff Boyles.....................................................................................................................................................Fire Chief
Paul Blank ............................................................................................................................................. Harbormaster
Barbara Salvini .................................................................................................................. Human Resources Director
Melissa Hartson.................................................................................................................... Library Services Director
Joseph L. Cartwright...................................................................................................................... ...........Police Chief
Dave Webb ............................................................................................................................... Public Works Director
Sean Levin........................................................................................................ Recreation & Senior Services Director
Mark Vukojevic ..................................................................................................................................Utilities Director
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Board of
Library Trustees
Building & Fire
Code of Appeals
City Arts
Commission
Civil Service Board
Harbor Commission
Parks, Beaches &
Recreation Commission
Planning
Commission
ELECTORATE
CITY
MANAGER
MAYOR &
COUNCIL
CITY
CLERK
CITY
ATTORNEY
Community
Development
Finance
Fire
Human
Resources
Harbor
Library
Services
Public
Works
Utilities
Police
Recreation &
Senior Services
City
Committees
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FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT
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INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of
Newport Beach (the “City”), as of and for the year June 30, 2023, and the related notes to
the financial statements, which collectively comprise the City of Newport Beach’s basic
financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Newport Beach,
as of June 30, 2023, and the respective changes in financial position and, where applicable,
cash flows thereof for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Emphasis of Matter
As described further in note 1 to the financial statements, during the year ended June 30,
2023, the City implemented Governmental Accounting Standards Board (GASB) Statement
No. 96 and Governmental Accounting Standards Board (GASB) Statement No. 94. Our opinion
is not modified with respect to these matters.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States
(Government Auditing Standards). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of
our report. We are required to be independent of the City and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States
of America, and for the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City’s
ability to continue as a going concern for twelve months beyond the financial statement date,
including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements
are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
•Exercise professional judgment and maintain professional skepticism throughout the
audit.
•Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
•Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City’s internal control. Accordingly,
no such opinion is expressed.
•Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
•Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time.
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, Budgetary Comparison Schedules for the General
Fund and each major special revenue fund, Schedules of Changes in the Net Pension Liability
and Related Ratios, Schedules of Contributions, Schedule of Changes in the Net OPEB Liability
and Related Ratios and Schedule of OPEB Contributions be presented to supplement the basic
financial statements. Such information is the responsibility of management and, although
not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in
accordance with GAAS, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The Combining and Individual
Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are presented for
the purpose of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial
statements. The information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used
to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with GAAS. In our opinion, the Combining and
Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive
Financial Report. The other information comprises the Introductory Section and Statistical
Section but does not include the financial statements and our auditor’s report thereon. Our
opinions on the financial statements do not cover the other information, and we do not
express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the
other information and consider whether a material inconsistency exists between the other
information and the financial statements, or the other information otherwise appears to be
materially misstated. If, based on the work performed, we conclude that an uncorrected
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
material misstatement of the other information exists, we are required to describe it in our
report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 27, 2023, on our consideration of the City’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the
scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control over
financial reporting and compliance.
Irvine, California
December 27, 2023
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FINANCIAL SECTION
MANAGEMENT’S DISCUSSION AND ANALYSIS
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MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR)
presents management’s discussion and analysis of the City’s financial performance during the
fiscal year that ended on June 30, 2023. This analysis should be read in conjunction with the
Transmittal Letter at the front of this report and the accompanying Basic Financial Statements.
OVERVIEW OF THE FINANCIAL STATEMENTS
The financial section of the Annual Comprehensive Financial Report contains the following
information: Independent Auditors’ Report, Management’s Discussion and Analysis (this section),
the Basic Financial Statements, the Required Supplementary Information, and the Supplementary
Information section, an optional section that presents combining and budgetary schedules for
individual non-major funds. The Basic Financial Statements are comprised of three components:
1) Government-wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the
Financial Statements. Management’s Discussion and Analysis is intended to be an introduction
to the Basic Financial Statements.
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements – The Government-wide Financial Statements use the
economic resources measurement focus and accrual basis of accounting, which is similar to the
accounting standard used by private sector companies. The Government-wide Financial
Statements are intended to provide a “Big Picture” view of the City. With the economic resources
measurement focus and accrual basis of accounting, changes in net position are recognized as
soon as the event occurs regardless of the timing of related cash flows.
The Statement of Net Position includes all the City’s assets (including non-spendable assets like
streets, roads, and land rights), deferred outflows of resources, liabilities (including long-term
liabilities that may be paid over twenty years), and deferred inflows of resources. All the current
year revenues and expenses are accounted for in the Statement of Activities regardless of when
cash is received or paid.
The Government-wide Financial Statements report the City’s net position and how net position
has changed. Net position – the difference between the City’s assets, deferred outflows of
resources, liabilities, and deferred inflows of resources – is one way to measure the City’s financial
health. Over time, increases or decreases in the City’s net position are an indicator of whether
its financial health is improving or deteriorating, respectively. To assess the overall health of the
City, one should also consider additional non-financial factors such as changes in the City’s
property tax base and the condition of its facilities and other major infrastructure.
The Government-wide Financial Statements of the City are divided into two categories:
Governmental Activities – This category depicts the extent to which programs are self-
supporting and the net amount provided by property taxes and other general revenues.
Most of the City’s basic services are included in this category such as public safety, public
works, community development, community services, and general administration. Taxes
and other general revenues finance most of these activities.
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Business-type Activities – The City accounts for its Water and Wastewater utilities as
business enterprises. The City charges fees to customers to recover the cost of providing
Water and Wastewater services.
Fund Financial Statements – A fund is a grouping of related accounts used to maintain control
over resources that have been segregated for specific activities or objectives. The City uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements such
as State and Federal law or bond covenants. Other funds are utilized simply to control and
manage resources intended for particular purposes. The Fund Financial Statements provide more
detailed information about the City’s most significant funds (major funds) but not the City as a
whole.
Fund Financial Statements have a short-term focus measuring inflows of current, spendable
assets. The resulting net difference between current financial assets and deferred outflows of
resources, and current financial liabilities and deferred inflows of resources, otherwise known as
fund balance (or net working capital in the private sector) is a measure of the City’s ability to
finance activities in the near term.
The City utilizes three broad categories of funds:
Governmental Funds – Unlike Government-wide Financial Statements, Governmental
Fund Financial Statements utilize the financial resources measurement focus and thus
concentrate on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Consequently,
the Governmental Fund Financial Statements provide a detailed short-term view that helps
a reader determine whether there are more or fewer financial resources that can be spent
in the near future to finance City programs. Also included in the Governmental Funds are
Permanent Funds. These funds are used to report resources that are legally restricted to
the extent that only earnings, not principal, may be used for purposes that support City
programs.
Proprietary Funds – Business-like services that receive significant financial support from
user fees and charges are generally reported in Proprietary Funds (Enterprise Funds and
Internal Service Funds). Like the Government-wide Financial Statements, these funds
provide both long and short-term financial information utilizing the economic resources
measurement focus. The City’s Enterprise Funds (Water and Wastewater Funds) provide
goods or services mostly to non-government users and are the individual funds
represented in the combined presentation of Business-type Activities in the Government-
wide Financial Statements. The individual fund presentation provides more detailed
information about each business segment, its operating statements, and statements of
cash flow. The City also uses Internal Service Funds that are utilized to report and allocate
the cost of certain centrally managed and operated activities (e.g., fleet and other
equipment maintenance, risk management, retiree insurance, telecommunications
systems, information technology services, etc.). Because the Internal Service Funds
primarily serve government users, they are reported with Governmental Activities, rather
than the Business-type Activities, in the Government-wide Financial Statements.
Fiduciary Funds – The City utilizes Fiduciary Funds to account for assets held by the City
in a trustee capacity, or as an agent for other governmental entities, private organizations,
or individuals. All the City’s fiduciary activities are reported in a separate statement of
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fiduciary net position, and a statement of changes in fiduciary net position. We exclude
these activities from the City’s Government-wide Financial Statements because the City
cannot use these assets to finance its operations.
Notes to the Financial Statements – The financial statements also include the Notes to the
Financial Statements that provide important narrative details about the information contained in
the financial statements. Information contained in the Notes to the Financial Statements is critical
to a reader’s full understanding of the Government-wide and Fund Financial Statements.
Required Supplementary Information – In addition to the Basic Financial Statements, we have
included a Required Supplementary Information section, which includes Budgetary Comparison
Schedules for the General Fund and two other major funds, the Schedule of Changes in Net
Pension Liability and Related Ratios, the Schedule of Changes in Net Post-Employment Health
Care Benefits (OPEB) Liability and Related Ratios, and the related Schedules of Contributions
for the Pension and OPEB plans.
Supplementary Information – In addition to the required elements of the Basic Financial
Statements, we have also included a Supplementary Information section, which includes
budgetary and combining schedules that provide additional details about the City’s Other
Governmental Funds, Internal Service Funds, and Fiduciary Funds.
ANALYSIS OF GOVERNMENT-WIDE FINANCIAL STATEMENTS
The Government-wide Financial Statements provide long-term and short-term information about
the City’s overall financial condition. This analysis addresses the financial statements of the City
as a whole.
Net Position Discussion
As shown in Figure 1, the City’s combined net position for the fiscal year ended June 30, 2023
was $2.5 billion, increasing $62.8 million or 2.6% over the prior year. Net position can serve as
an important indicator of whether the City’s overall financial condition is improving or deteriorating
over time.
Current and other assets increased $27.2 million. This increase is primarily due to a $24.2 million
increase in the City’s lease receivable from Governmental Accounting Standards Board
Statement 87 (GASB 87). The remaining $3.0 million increase is attributable to increases in cash
and investments, interest receivables, intergovernmental receivables, and a public-private
partnership receivable from the implementation of Governmental Standards Board Statement 94
(GASB 94); offset by decreases in accounts receivable, restricted cash and investments with
fiscal agents, and prepaid items. Capital assets increased $38.2 million, mostly due to additions
to land and rights of way, and structures.
Current liabilities decreased $2.7 million primarily due to decreases in accounts payable.
Long-term liabilities increased $146.8 million. The increase is primarily due to increases in the
City’s net pension liability and net OPEB liability as investment returns in both plans
underperformed. See Note (11), and Note (12) of the Notes to the Financial Statements for more
information.
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Figure 1
Net Position
June 30
(in thousands)
The largest portion of the City’s net position, at $2.4 billion of net position, reflects the net
investment in capital assets (e.g., land, right of way, street trees, buildings, infrastructure,
equipment, and intangibles) less accumulated depreciation, accumulated amortization, and any
related outstanding debt used to acquire those assets. The City uses these capital assets to
provide services to residents. Therefore, they do not represent a financial resource to the City
and consequently are not readily available for funding current obligations.
Restricted net position totaled $79.2 million of net position, an increase of $1.1 million from the
prior fiscal year, primarily due to increased restricted net position related to public works and
community services. Public works’ increase is mainly from State Gas Tax revenues not being
completely spent during the fiscal year. Community services’ increase is mainly from cable
franchise fees for public, education, and government programming not being completely spent
during the fiscal year.
As of June 30, 2023, unrestricted net position was $46.8 million, an increase of $26.4 million from
the prior fiscal year, primarily due to the receipt of unrestricted revenues such as property taxes
and sales taxes that were not spent or restricted by the end of the fiscal year.
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Current and other assets 603,672$ 633,179$ 38,970$ 36,647$ 642,642$ 669,826$
Capital assets 2,339,355 2,372,769 130,464 135,267 2,469,819 2,508,036
Total assets 2,943,027 3,005,948 169,434 171,914 3,112,461 3,177,862
Deferred outflows of resources 63,987 141,903 2,296 5,319 66,283 147,222
Current liabilities 43,924 41,327 4,383 4,245 48,307 45,572
Long-term liabilities 340,714 479,521 7,134 15,170 347,848 494,691
Total liabilities 384,638 520,848 11,517 19,415 396,155 540,263
Deferred inflows of resources 328,685 271,428 3,408 101 332,093 271,529
Net position
Net investment in capital assets 2,223,774 2,256,306 128,245 131,016 2,352,019 2,387,322
Restricted 78,100 79,152 - - 78,100 79,152
Unrestricted (8,183) 20,117 28,560 26,701 20,377 46,818
Total net position 2,293,691$ 2,355,575$ 156,805$ 157,717$ 2,450,496$ 2,513,292$
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GOVERNMENTAL ACTIVITIES
Governmental activities are generally financed through taxes, intergovernmental revenues, and
other non-exchange revenues. The Statement of Activities is intended to illustrate how the cost
of governmental activities is financed and determines the annual change in net position.
Figure 2
Changes in Net Position
For the Years Ended June 30
(in thousands)
Revenues Associated with Governmental Activities Discussion
Figure 2 illustrates in detail how the $333.7 million in Governmental Activities revenue was
derived. Figure 3 summarizes this revenue by major source. As shown on Figures 2 and 3, $74.5
million, or 22.3%, of the revenues were recovered from those who directly benefited from the
programs as a charge for service. Another $25.9 million, or 7.8%, of the revenues were generated
by contributions and grants received from governmental organizations, developers, and property
owners for both capital and operating activities. The remaining $233.3 million, or 69.9%,
represented general revenues of the City including taxes, intergovernmental revenues, and other
miscellaneous revenues.
Governmental Activities Business-Type Activities
2022 2023 2022 2023 2022 2023
Revenues:
Program revenues:
Charges for services 67,743$ 74,454$ 36,929$ 36,700$ 104,672$ 111,154$
Operating grants and contributions 16,800 20,132 117 - 16,917 20,132
Capital grants and contributions 8,693 5,810 - - 8,693 5,810
Total program revenues 93,236 100,396 37,046 36,700 130,282 137,096
General revenues:
Taxes:
Property taxes 128,484 138,359 - - 128,484 138,359
Sales tax 46,165 46,552 - - 46,165 46,552
Transient occupancy taxes 26,677 30,202 - - 26,677 30,202
Other taxes 9,110 10,080 - - 9,110 10,080
Investment related income (4,861) 2,520 (845) 258 (5,706) 2,778
Other 2,644 5,552 - - 2,644 5,552
Total general revenues 208,219 233,265 (845) 258 207,374 233,523
Total revenues 301,455 333,661 36,201 36,958 337,656 370,619
Expenses:
General government 19,374 26,912 - - 19,374 26,912
Public safety 104,767 121,310 - - 104,767 121,310
Public works 65,031 75,904 - - 65,031 75,904
Community development 9,665 13,048 - - 9,665 13,048
Community services 24,509 27,937 - - 24,509 27,937
Interest 6,878 6,666 - - 6,878 6,666
Water - - 27,117 30,702 27,117 30,702
Wastewater - - 4,094 5,344 4,094 5,344
Total expenses 230,224 271,777 31,211 36,046 261,435 307,823
Increases in net position 71,231 61,884 4,990 912 76,221 62,796
Net position at beginning of year 2,222,460 2,293,691 151,815 156,805 2,374,275 2,450,496
Net position at end of year 2,293,691$ 2,355,575$ 156,805$ 157,717$ 2,450,496$ 2,513,292$
Total
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Figure 3
Governmental Activities Revenue Sources
For the Year Ended June 30, 2023
As illustrated in Figure 2, program revenues related to Governmental Activities increased $7.2
million from the prior year. This increase was primarily attributable to increases in charges for
services for paramedics, tidelands, the Junior Lifeguard program, rentals, and fewer unrealized
investment losses. Additionally, operating grants and contributions increased mainly due to
earning American Rescue Plan Act grant revenue by spending part of the grant money on the
City’s Junior Lifeguard building. These increases were offset by a decrease in capital grants and
contributions mostly due to a decrease in assessment district financings.
The City’s general revenues related to Governmental Activities increased about $25.0 million from
the prior year primarily due to increases in property taxes, sales taxes, transient occupancy taxes,
other taxes, investment income, and other general revenues. Revenue increases across various
categories illustrates that Newport Beach’s underlying local economy continues to remain strong.
Property tax is the largest revenue source for the City and collections finished the year $9.9 million
higher than the previous fiscal year. This increase was mostly due to an increase in secured
taxes as a robust demand for coastal property continued driving property values higher.
At $46.6 million, sales taxes represent the second largest individual revenue source for the City.
Sales taxes increased about $387,599 from the previous fiscal year. This moderate increase in
sales tax revenue was due to consumer spending shifting from taxable sales, such as automobiles
and transportation, to nontaxable sales, such as entertainment.
Transient occupancy taxes (TOT), the City’s third largest revenue source, finished the year at
$30.2 million, which is an increase of $3.5 million from the previous fiscal year. Both residential
TOT and hotel TOT increased. Short term lodging businesses had strong demand. Hotel
occupancy rates continue to improve from the 2020 coronavirus pandemic lockdowns, and
average daily hotel room rates have increased.
22%
8%
68%
2%
Charges for Services
Contributions and Grants
Taxes
Other
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Investment income, comprised of both interest income and unrealized gains/losses, increased
about $7.4 million from the prior fiscal year. The increase is from interest income from higher
interest rates finally exceeding the increases to unrealized losses caused by higher interest rates.
Expenses Associated with Governmental Activities Discussion
The City is a full-service city providing residents and visitors with the following functional services:
General Government is comprised of six departments (City Council, City Clerk, City Manager,
City Attorney, Human Resources, and Finance) providing general governance, information
technology services, executive management, legal services, records management, risk
management, finance, and accounting.
Public Safety is comprised of two departments (Police and Fire) providing general law
enforcement, fire suppression and prevention services, paramedic and medical transport
services, disaster preparedness, and ocean lifeguard services.
Public Works is comprised of one department (Public Works) providing engineering, construction
and maintenance of public streets, highways, buildings, beaches, parks, facilities and related
infrastructure; as well as traffic engineering and street lighting.
Community Development is comprised of one department (Community Development) that
provides planning, building, and zoning services, economic development services, and building
plan check and code enforcement services.
Community Services is comprised of three departments (Library Services, Recreation & Senior
Services, and Harbor) providing library services, cultural and arts programs, recreation services,
senior social and transportation services, and harbor programs and services.
Business Enterprise Operations are overseen by the Utilities Department providing water and
wastewater services. These are considered business-type activities and are discussed further in
the Business-Type Activities section.
Figure 2 illustrates in detail how the $271.8 million of Governmental Activities expense was
derived. The increase of $41.6 million from the prior year is mostly due to increasing pension
liabilities. See Note (11) of the Notes to the Financial Statements for more information.
37
Figure 4 below summarizes the Governmental Activities expenses shared across function.
Figure 4
Governmental Activities Functional Expenses
For the Year Ended June 30, 2023
Figures 5 and 6 illustrate the net cost of each service. The net cost represents the amount that
governmental activities are subsidized by taxes and other general revenues of the City.
Figure 5
Governmental Activities
For the Years Ended June 30
(in thousands)
45%
28%
10%
10%
5%2%
Public Safety
Public Works
Community Services
General Government
Community Development
Interest
Total Cost Net (Cost) Total Cost Net (Cost)
of Service of Service of Service of Service
General government 19,374$ (14,833)$ 26,912$ (10,988)$
Public safety 104,767 (79,083) 121,310 (92,434)
Public works 65,031 (36,627) 75,904 (49,373)
Community development 9,665 1,844 13,048 (765)
Community services 24,509 (1,410) 27,937 (11,155)
Interest 6,878 (6,878) 6,666 (6,666)
230,224$ (136,987)$ 271,777$ (171,381)$
2022 2023
38
Figure 6
Program Expenses and Revenues – Governmental Activities
For the Year Ended June 30, 2023
(in millions)
BUSINESS-TYPE ACTIVITIES
As noted earlier, the City combines the Water Enterprise Fund and Wastewater Enterprise Fund
into Business-type Activities for the presentation of the Government-wide Financial Statements.
Business-type activities are mainly funded by charging fees to customers to recover the cost of
providing services.
Revenues Associated with Business-Type Activities Discussion
As displayed in Figure 2, total revenues related to Business-type activities totaled $37.0 million.
Program revenues totaled $36.7 million and were supplemented by about $258,000 of general
revenues related to investment income. As shown in Figure 7 on the following page, Water
activities represents about $32.0 million (87.3%) of program revenues, while Wastewater activities
represents $4.7 million (12.7%) of program revenues.
$0.0
$10.0
$20.0
$30.0
$40.0
$50.0
$60.0
$70.0
$80.0
$90.0
$100.0
$110.0
$120.0
$130.0
General
Government
Public Safety Public Works Community
Development
Community
Services
Interest
Total Expenses Program Revenues
39
Figure 7
Program Expenses and Revenue – Business-type Activities
For the Year Ended June 30, 2023
(in millions)
Expenses Associated with Business-Type Activities Discussion
Current year expenses for Business-type Activities totaled $36.0 million, an increase of about
$4.8 million over prior year as shown in Figure 2. This is attributable to increases in salaries and
benefits, maintenance, utilities, and miscellaneous expenses.
Major Business-type expenses in the current fiscal year included the following:
Water
Of the $30.7 million in water related expenses, $11.4 million (37.0%) is for the purchase of water,
$5.4 million (17.4%) covers employee related costs, $7.5 million (24.4%) is for maintenance,
supplies, and depreciation of the water system, $2.2 million (7.3%) is for professional services,
$2.1 million (7.0%) is for utility payments and the remaining $2.1 million (6.9%) is collectively
attributable to other miscellaneous expenses.
Wastewater
Of the $5.3 million in wastewater related expenses, $2.1 million (38.9%) is for maintenance,
supplies, and depreciation of the wastewater system, $1.7 million (31.3%) is for employee related
costs, and the remaining approximately $1.5 million (29.8%) is attributable to professional
services, utility payments and other miscellaneous expenses.
Figure 7 summarizes Business-type expenses separately for Water and Wastewater activities.
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
Water Wastewater
Total Expenses Program Revenues
40
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to highlight available financial resources and to
ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds
Utilizing the financial resources measurement focus, the City’s Governmental Funds provide
information on near-term inflows, outflows, and balances of spendable resources. This
information is useful in assessing the City’s financing requirements and may serve as a useful
measure of a government’s net resources available for spending at the end of the fiscal year.
Fund Balance – As shown in Figure 8, the City’s Governmental Funds reported combined fund
balances of $248.0 million, which is almost unchanged from the prior fiscal year. Increases in fund
balances in the Tide and Submerged Land – Operating Fund, other capital projects funds, and
other permanent funds in aggregate were almost completely offset by decreases in the General
Fund, Tide and Submerged Land – Harbor Capital Fund, Facilities Financial Planning Reserve
Fund, Debt Service Fund, and other special revenue funds in aggregate. The General Fund
represented $91.4 million or 36.9% of the combined fund balances of the Governmental Funds.
Figure 8
Governmental Funds Fund Balance
June 30
(in thousands)
The following describes the classification of fund balance as of June 30, 2023. Additional
information on the City’s fund balance can be found in Note (15) of the Notes to the Financial
Statements.
Nonspendable Fund Balance – The City has $12.9 million in fund balance classified as
nonspendable to indicate that it cannot be readily converted to cash. Of the $12.9 million
nonspendable fund balance, $1.1 million is for prepaid items, $188,828 is for inventories, $7.0
million is for long-term loan receivables, and $4.6 million is for permanent endowments.
Restricted Fund Balance – The City has $73.7 million in fund balance classified as restricted to
indicate that it has externally imposed restrictions on how the money may be spent. Of the $73.7
million restricted fund balance, $5.3 million is restricted in the Tide and Submerged Land –
Operating Fund, of which $3.8 million is restricted for capital projects and maintenance and
repairs, and $1.5 million is restricted for the Upper Newport Bay restoration; $30.2 million is
2022 2023 Change
General Fund 97,139$ 91,443$ (5,696)$
Tide and Submerged Land - Operating 4,548 6,107 1,559
Tide and Submerged Land - Harbor Capital 31,534 30,215 (1,319)
Facilities Financial Planning Reserve 34,172 24,800 (9,372)
Debt Service Fund 2,199 2,184 (15)
Non-major special revenue 27,844 26,518 (1,326)
Non-major capital projects 44,044 60,148 16,104
Non-major permanent 6,487 6,543 56
247,967$ 247,958$ (9)$
41
restricted in the Tidelands and Submerged Land – Harbor Capital Fund for capital projects related
to the harbor; and $2.2 million is restricted for debt service. Of the remaining $36.0 million in
restricted fund balance, $26.5 million is restricted for various special revenue funds, $7.3 million
is restricted for the Assessment District Fund, $282,123 is restricted for the Fire Station Fund,
and $1.9 million of fund balance is restricted for permanent funds.
Committed Fund Balance – The City has $83.7 million in fund balance classified as committed
to indicate that the City Council has committed how the money will be spent. Of the $83.7 million
committed fund balance, $5.5 million is committed in the General Fund mostly for contract
services; $840,000 is committed in the Tide and Submerged Land – Operating Fund; $24.8 million
is committed in the Facilities Financial Planning Reserve Fund; $3.0 million is committed in the
Fire Station Fund; $485,365 is committed in the Civic Center and Park Fund; $14.7 million is
committed in the Parks and Community Center Fund; $379,245 is committed in Balboa Village
Parking Management District Fund; $4.1 million is committed to the Facilities Maintenance Fund;
$15.9 million is committed in the Neighborhood Enhancement Fund; $1,083 is committed in the
Junior Lifeguards Fund; $11.5 million is committed in the Unrestricted Capital Improvements
Fund; $1.9 million is committed to the Miscellaneous Facilities Financing Fund; and $658,756 is
committed to the Police Facility Fund.
Assigned Fund Balance – The City does not have any fund balance classified as assigned.
Assigned fund balance is fund balance which is not restricted or committed and is classified as
assigned to indicate the City Manager’s intent to be used for specific purposes.
Unassigned Fund Balance – The remaining $77.7 million in fund balance is classified as
unassigned to indicate that it is the residual balance not otherwise restricted, committed, or
assigned.
Major Governmental Funds results for the year included the following:
General Fund revenues finished $23.0 million or 8.8% higher than the prior year mostly
due to a combined $17.9 million increase in the City’s top three revenues sources –
property taxes, sales taxes and transient occupancy taxes – with a $14.0 million increase
in property taxes as the City’s assessed valuation continued to increase due primarily to
the appreciation of property values; a $387,599 increase in sales taxes as consumer
spending shifted from taxable sales to nontaxable sales; and a $3.5 million increase in
transient occupancy taxes due strong short term lodging businesses and hotel occupancy
rates continuing to recover from the 2020 coronavirus pandemic lockdowns and increased
average daily hotel room rates. General Fund expenditures finished $33.6 million or 16.0%
higher than the prior fiscal year mostly due to changing the presentation of the General
Fund’s cost allocation expenditures on behalf of the Tide and Submerged Land –
Operating Fund. Previously these cost allocation expenditures were a net reduction to
General Fund expenditures. In an effort to reduce complexity and improve transparency,
Fiscal Year 2022-23 presents the full amount of these cost allocation expenditures in the
General Fund which get offset by a corresponding transfer into the General Fund from the
Tide and Submerged Land – Operating Fund. Other increases to General Fund
expenditures included internal service fund insurance, maintenance and repairs, and
residential solid waste disposal. Though revenues exceeded expenditures by about $40.8
million, there were substantial transfers out of the General Fund totaling $65.5 million
mostly for capital improvement projects, including purchasing a building and land for a
future police station. In total, fund balance in the General Fund decreased $5.7 million
and ended the year at $91.4 million.
42
Fund balance for the Tide and Submerged Land – Operating Fund increased $1.6 million
and ended the current year with $6.1 million in fund balance. The increase was due to the
City’s General Fund subsidizing the operations of the Tide and Submerged Land –
Operating Fund.
Fund balance for the Tide and Submerged Land – Harbor Capital Fund decreased $1.3
million ending at $30.2 million. This was largely due to the commencement of two major
harbor dredging capital improvement projects.
Fund balance for the Facilities Financial Planning Reserve Fund decreased $9.4 million
to end the current year at $24.8 million in fund balance. This was mainly due to transfers
to other funds for debt service and to ultimately cash fund construction projects related to
parks and facilities, and the acquisition of land and a building for a future police station.
Fund balance for the Debt Service Fund decreased $15,384 ending at $2.2 million. The
decrease was due to administrative charges and debt service related to servicing
certificates of participation.
Proprietary Funds
The City’s Proprietary Funds (Enterprise and Internal Service Funds) presented in the Fund
Financial Statements section basically provide the same type of information in the Government-
wide Financial Statements, but also include information for individual funds.
Enterprise Fund results for the year included the following:
Net position in the Water Fund increased $1.9 million mostly due to reduced expenses
from imported water purchases. Fiscal Year 2022-23’s quantity of water purchased
decreased mildly compared to the prior fiscal year. However, almost all the decrease
occurred with imported water, which cost significantly more per unit than other sources of
water. As a result, the expense of imported water purchases decreased significantly.
Net position in the Wastewater Fund decreased $445,725 mainly due to increased
professional services and miscellaneous expenditures. During November 2023, the City
Council adopted a resolution to increase sewer rates each January 1st during calendar
years 2024 through 2028. Increasing sewer rates should improve the Wastewater Fund’s
net position in future years.
Major Internal Service Fund activity in the current fiscal year included the following:
Total net position in the Internal Service Funds increased $7.5 million in the current fiscal
year. This was mostly due to operating income of $5.9 million, which included increases
in revenue from charges for services for the City’s self-insured general liability and
workers’ compensation programs. Operating income’s contribution to net position was
supplemented by positive non-operating revenue and transfers in, which increased net
position by approximately $1.6 million.
43
GENERAL FUND BUDGETARY HIGHLIGHTS
Changes to Original Budget
Final budgeted revenues for the General Fund increased $5.7 million from the original budget
during the year ended June 30, 2023. Factors contributing to this fluctuation are highlighted as
follows:
Final budgeted intergovernmental revenue increased $1.3 million primarily due to
adjustments related to the Newport Beach Fire Department’s mutual aid reimbursements,
revenue sharing with the County under a Waste Disposal Agreement, and a correction to
the budget for the Permanent Local Housing Allocation program grant.
Charges for services increased from the adopted budget by $1.2 million. This adjustment
is related to increased revenue received for recreation classes. This was offset slightly by
a reduction to the budget for plan check fees for grading that was double budgeted in two
accounts.
Property income revenues increased by $412,400 due to estimates of rental income from
the acquisition and operation of the Dove Street property, which was acquired during the
fiscal year with the intention of being made into a police station in the future.
Other revenues were adjusted upward from the adopted budget by a total of $2.7 million,
primarily due to a settlement that the City received regarding polychlorinated biphenyls
(PCBs) contamination, as well as the sale of a City owned property, and a donation
received from the Friends of the Library.
Donations were adjusted upward by $103,260 related to donations to both the Library
Services Department and the Recreation & Senior Services Department.
Final budgeted expenditures for the General Fund increased $13.0 million from the original budget
during the year ended June 30, 2023. The significant factors contributing to the increase are as
follows:
The addition of $6.2 million to the benefits and salary budget associated with an additional
discretionary payment of $5.0 million toward the City's unfunded pension liability and $1.2
million from approved contracts with the majority of the City's employee associations.
Budgeted carryovers from Fiscal Year 2021-22 totaling $4.4 million were added to the
adopted budget.
Variance with Final Budget
Actual General Fund revenues came in at $14.1 million above final budgeted revenues for the
year ended June 30, 2023. Significant factors contributing to this favorable variance are
summarized as follows:
Property tax revenues came in $3.6 million higher than the final budget, largely due to
supplemental taxes.
44
Transient occupancy tax revenues were $2.4 million higher due to increased revenue from
short-term lodging businesses and many hotel properties reporting record high transient
occupancy tax receipts.
Other taxes ended the year $1.3 million higher than projected due primarily to business
license taxes, utility franchise fees, and solid waste franchise fees.
Charges for services came in $2.0 million higher due primarily to receipts for paramedic
service fees, plan check fees, as well as revenue received from recreation fee-based
classes, and the Junior Lifeguard program.
Property income ended the year $2.9 million higher mainly due to overages in Beacon
Bay, Balboa Yacht Basin, and WNCC Pacifica, as well as parking revenue, and GASB 87.
Intergovernmental revenues came in $1.3 million higher than the final budget largely due
to payments from the Newport Beach Fire Department to the IGT-GEMT program resulting
in additional revenue to the City, as well as reimbursements for mutual aid.
Other revenues exceeded the budgeted amount by $814,813 and were made up largely
of the net of bad debt and damage to city property revenues.
Actual General Fund expenditures of $244.0 million were less than final budgetary estimates of
$257.5 million. The $13.5 million favorable variance was due largely in part to routine savings in
salaries as well as contract services. Salary and benefit savings are spread across multiple
departments, with savings in the larger departments (such as the Police Department, the Public
Works Department, and the Fire Department) totaling $3.5 million.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City’s capital assets for Governmental and Business-type Activities as of June 30, 2023
amount to $2.5 billion, net of accumulated depreciation/amortization. This is comprised of a broad
range of tangible capital assets including land, buildings, machinery and equipment, park facilities,
road improvements, storm drains, piers, oil wells, sound walls, an 800 MHz radio communications
system, parking pay stations and meters, and bridges; and intangible capital assets including the
rights to use land and rights of way, structures and equipment. Total capital assets increased
$38.2 million over the prior fiscal year.
45
Figure 9
Capital Assets
June 30
(net of depreciation/amortization, in thousands)
Major capital asset events during the current fiscal year included the following:
Capital asset additions totaled $74.2 million in both the Governmental and Business-type
Activities in the current year. Of the $74.2 million, $18.4 million is related to structure
additions of a fire station and the purchase of a building for a future police station; $13.7
million represents additions of infrastructure assets mostly related to the road system and
water system; $4.8 million is related to equipment and intangible right to use equipment
additions; $2.4 million is related to intangible rights to use land and rights of way. The
remaining $34.9 million is comprised of additions of non-depreciable/non-amortizable
assets such as work in progress of $16.4 million, and land and rights of way of $18.5
million.
Of the $65.2 million of additions in governmental assets in the current year, additions in
infrastructure contributed $11.1 million, which was mostly due to upgrades in the road
system. The remaining $54.1 million added in the current year as governmental assets is
comprised of $18.5 million of land additions and $18.4 million of structure additions, both
related to the completion of a new fire station and the purchase of land and a building for
a future police station; $12.4 million of work in progress, mostly related to upgrades to
Sunset View park, upgrades to the road system, and a building for the City’s junior
lifeguard program; and $4.8 million of equipment additions, mostly related to vehicle
purchases and information technology related purchases.
The $9.0 million of business-type asset additions in the current year is comprised of $2.6
million in water system infrastructure additions, $2.4 million in intangible rights to use land
and right of way related to the water system, and $4.0 million of work in progress additions
related to water system improvements.
Additional information on the City’s capital assets can be found in Note (6) of the Notes to the
Financial Statements.
2022 2023 2022 2023 2022 2023
Land 1,899,966$ 1,918,486$ 2,219$ 2,219$ 1,902,185$ 1,920,705$
Intangible right to use
land and rights of way - - 1,509 3,809 1,509 3,809
Structures 183,197 196,235 394 378 183,591 196,613
Intangible right to use structures 13,021 12,007 - - 13,021 12,007
Equipment 19,017 19,346 126 101 19,143 19,447
Intangible right to use equipment 310 236 - - 310 236
Intangible right to use subscriptions -2,231 - - - 2,231
Infrastructure 211,008 210,389 122,484 121,062 333,492 331,451
Work in progress 12,836 13,839 3,731 7,697 16,567 21,536
Totals 2,339,355$ 2,372,769$ 130,463$ 135,266$ 2,469,818$ 2,508,035$
Activities Activities
Governmental Business-Type
Total
46
Long-term Debt
Figure 10
Outstanding Debt
June 30
(in thousands)
The City’s total debt decreased $4.3 million during the current fiscal year. The decrease is the
result of expected debt service payments. Additional information on the City’s long-term debt
obligation can be found in Note (7) of the Notes to the Financial Statements.
FACTORS AFFECTING NEXT YEAR’S BUDGET
Economy
Recent trends in inflation and inverted Treasury yield curves have caused concern in the broader
economy and financial markets. Economic growth has slowed compared to the robust
improvement experienced the previous year after emerging from the global pandemic, and a
slower rate of growth in the upcoming fiscal year is generally anticipated for revenues. However,
the local economy in Newport Beach remains strong with a positive economic outlook for the
foreseeable future. The City is well positioned to withstand the impacts of a potential recession
and is expected to maintain long-term fiscal sustainability.
Local Revenue Trends
Property tax revenue, the City’s largest source of revenue, is projected to increase approximately
3.1% next fiscal year, which is largely related to the Proposition 13 inflationary adjustment and
due to changes in ownership and new construction. Although higher interest rates and rising
mortgage rates have slowed sales and slightly decreased market values, the taxable value of
properties reacts slower than the market value, so decreases in market value do not immediately
reduce the City’s property tax revenue, which is based on the assessed values. Property tax
revenues are expected to continue growing for the foreseeable future.
Sales tax revenue is the second largest source of General Fund revenue. Approximately 84% of
sales tax revenue is generated from autos and transportation, restaurants and hotels, general
consumer goods, and the State and County pools. Sales tax revenue is projected to decrease
approximately 2.8% next fiscal year due to decreases in sales from most industry groups except
for restaurants and hotels. Consumer spending trends have continued shift from taxable goods,
such as new car sales, to nontaxable items, such as travel, leisure, and entertainment. For
example, sales from autos and transportation (the City’s largest source of sales tax revenue) are
projected to be lower due to a softening of demand for new vehicles, which is largely related to
2022 2023 2022 2023 2022 2023
Certificates of participation 101,550$ 97,610$ -$ -$ 101,550$ 97,610$
Bond premium 1,149 1,007 - - 1,149 1,007
CDBG Loan 208 - - - 208 -
Totals 102,907$ 98,617$ -$ -$ 102,907$ 98,617$
Activities Activities
Governmental Business-Type Total
47
higher interest rates. Sales from restaurants and hotels are expected to remain strong which will
offset some of the decrease in revenues related to autos and transportation.
Transient occupancy tax (TOT) revenue, which is the third largest source of revenue in the
General Fund, continues to remain strong. This trend is expected to continue with TOT revenues
projected to increase approximately 5% next fiscal year, which is largely due to hotels reporting
record high TOT receipts and also due to the opening of the Pendry hotel in September 2023.
Discretionary Appropriations
The annual budget serves as the foundation for financial planning and control, and allows the City
Council to prioritize expenditures in alignment with core community values. The budget as
adopted is reflective of strong revenues, healthy reserves, and a sound debt position. This budget
reflects a strong local economy that continues to provide stable revenues that support a wide
variety of programs and initiatives.
The City Council adopted a Fiscal Year 2023-24 budget that maintains a deliberate resource
balance between these important municipal expenses:
Addressing long-term obligations such as pension liabilities, post-employment health care
benefits, and debt service;
Keeping a level of operations that reflects the community’s desire for an active, safe, and
attractive community; and
Investing in infrastructure to maintain a high-quality natural and physical environment.
An aspect of the City’s balanced approach to fiscal management is managing resources as
efficiently as possible, responsibly managing debt, and working collaboratively with employees to
recalibrate the compensation structure and share in the costs of pension obligations.
During the adoption of the budget for Fiscal Year 2023-24, the City Council approved funding for
the continuation of an aggressive pension paydown strategy, which includes $45 million being
paid to CalPERS next fiscal year towards the unfunded pension liability, which is approximately
$15 million more than the amount required to be paid. This ongoing aggressive paydown strategy
of making $45 million payments to CalPERS each year is expected to eliminate the City’s pension
liability by 2032.
In October 2023, the City Council approved allocating an additional $5.8 million towards paying
down the City’s OPEB liability. This additional payment combined with the annual required
contributions, is projected to eliminate the OPEB liability within the next year or two (excluding
amounts related to the implied rate subsidy), which will provide for $1.5 million in annual budgetary
savings.
Overall, the City’s total debt burden is low and remains affordable. The economy benefits from
the City's mature, robust tax base and strong employment among a diversity of business sectors,
as well as retail shopping and tourism activity. Residential and commercial property values are
among the highest in the country. Our overall assessed valuation (AV) has been stable despite
the economic downturn between 2009 and 2012, with growth in the each of the last 29 years.
48
A strong financial profile is a particularly important factor considered by rating agencies in their
evaluation of the creditworthiness of local government debt. The rating agencies Fitch, Moody's,
and Standard & Poor's have all assigned the City the highest quality credit rating of AAA. Both
Moody’s and Fitch reaffirmed their AAA ratings in 2023. Expenditure controls within the past
decade have included early retirement incentive plans, increased employee contributions to
pension plans, contracting services, and freezing vacant positions when necessary, usually
during recessionary periods. Financial operations produced net surpluses (after transfers) in the
last ten years due to conservative budgeting and a stable and growing tax revenue base. The
City has used surpluses for important one-time purposes, like paying more towards retirement
obligations and investing in IT and communications infrastructure. Financial management
policies are robust and have continued to improve in recent years.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the City’s finances and to demonstrate the City’s
accountability for the money it receives. If you have questions about this report or need additional
financial information, contact the City’s Finance Department, 100 Civic Center Drive, Newport
Beach, CA 92660, (949) 644-3146. The City’s Budgets, Annual Comprehensive Financial
Reports, as well as other City financial information can be found on the City’s website at:
www.newportbeachca.gov/financialinfo.
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FINANCIAL SECTION
GOVERNMENT-WIDE FINANCIAL
STATEMENTS
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Governmental Business-type
Activities Activities Total
Assets:
Cash and investments (note 2)329,278,781$ 30,437,051$ 359,715,832$
Receivables:
Accounts (net of allowance)6,602,052 7,084,871 13,686,923
Interest 1,157,360 107,837 1,265,197
Intergovernmental receivables 13,851,769 1,481 13,853,250
Lease receivables (note 3)268,671,212 - 268,671,212
Public-private partnership receivable 853,723 - 853,723
Restricted cash and investments with fiscal agent (note 2)8,815,605 - 8,815,605
Internal balances 984,632 (984,632) -
Due from agency funds 100,000 - 100,000
Investment in joint ventures (note 13)214,631 - 214,631
Inventory 627,401 - 627,401
Prepaid items 2,021,785 - 2,021,785
Capital assets (note 6):
Non-depreciable/non-amortizable 1,932,325,202 9,916,858 1,942,242,060
Depreciable/amortizable 738,562,975 203,763,392 942,326,367
Accumulated depreciation/amortization (298,118,856) (78,413,441) (376,532,297)
Total assets 3,005,948,272 171,913,417 3,177,861,689
Deferred Outflows of Resources:
Deferred amount from pension plans (note 11)124,129,251 4,341,481 128,470,732
Deferred amount from OPEB (note 12)17,773,307 978,016 18,751,323
Total deferred outflows of resources 141,902,558 5,319,497 147,222,055
Liabilities:
Accounts payable 14,053,167 3,980,130 18,033,297
Accrued payroll 6,272,460 233,697 6,506,157
Accrued interest payable 3,360,976 - 3,360,976
Deposits payable 3,171,682 31,459 3,203,141
Unearned revenue 14,468,527 - 14,468,527
Noncurrent liabilities:
Due within one year:
Lease liability (note 7)1,004,482 44,120 1,048,602
Subscription liability (note 7)520,085 - 520,085
Other (note 7)14,318,929 - 14,318,929
Due in more than one year:
Net pension liability (note 11)307,125,662 10,176,747 317,302,409
Net OPEB liability (note 12)21,492,688 1,172,264 22,664,952
Lease liability (note 7)11,269,667 3,776,654 15,046,321
Subscription liability (note 7)1,715,047 - 1,715,047
Other (note 7)122,074,089 - 122,074,089
Total liabilities 520,847,461 19,415,071 540,262,532
Deferred Inflows of Resources:
Deferred amount from pension plans (note 11)3,487,631 81,010 3,568,641
Deferred amount from OPEB (note 12)361,988 19,815 381,803
Deferred amount from leases 266,652,645 - 266,652,645
Deferred amount from public-private partnerships 925,723 - 925,723
Total deferred inflows of resources 271,427,987 100,825 271,528,812
Net Position:
Net investment in capital assets 2,256,305,577 131,015,969 2,387,321,546
Restricted for:
Public safety 624,358 - 624,358
Public works 27,879,060 - 27,879,060
Community services 41,065,756 - 41,065,756
Community development 856,713 - 856,713
Debt service 2,183,979 - 2,183,979
Permanent funds:
Nonexpendable 4,629,781 - 4,629,781
Expendable 1,912,781 - 1,912,781
Unrestricted 20,117,377 26,701,049 46,818,426
Total net position 2,355,575,382$ 157,717,018$ 2,513,292,400$
CITY OF NEWPORT BEACH
Statement of Net Position
June 30, 2023
See accompanying notes to basic financial statements
53
CITY OF NEWPORT BEACH
Statement of Activities
For the Year Ended June 30, 2023
Operating Capital Total
Charges for Grants and Grants and Program
Expenses Services Contributions Contributions Revenues
Functions/Programs
Primary government:
Governmental activities:
General government 26,911,510 12,386,628 3,536,523 - 15,923,151
Public safety 121,309,057 26,273,944 2,600,981 - 28,874,925
Public works 75,904,138 8,770,525 12,167,252 5,593,573 26,531,350
Community development 13,048,442 11,269,905 993,875 20,261 12,284,041
Community services 27,937,349 15,753,446 832,882 195,728 16,782,056
Interest on long-term debt 6,666,044 - - - -
Total governmental activities 271,776,540 74,454,448 20,131,513 5,809,562 100,395,523
Business-type activities:
Water 30,701,834 32,033,631 - - 32,033,631
Wastewater 5,343,891 4,666,685 - - 4,666,685
Total business-type activities 36,045,725 36,700,316 - - 36,700,316
Total primary government 307,822,265 111,154,764 20,131,513 5,809,562 137,095,839
Taxes:
Property tax
Sales tax
Transient occupancy tax
Business license tax
Franchise tax
Other taxes
Investment income
Net decrease in fair value of investments
Other
Total general revenues
Change in net position
Net position at beginning of year
Net position at end of year
Program Revenues
See accompanying notes to basic financial statements
54
Governmental Business-type
Activities Activities Total
(10,988,359) - (10,988,359)
(92,434,132) - (92,434,132)
(49,372,788) - (49,372,788)
(764,401) - (764,401)
(11,155,293) - (11,155,293)
(6,666,044) - (6,666,044)
(171,381,017) - (171,381,017)
- 1,331,797 1,331,797
- (677,206) (677,206)
- 654,591 654,591
(171,381,017) 654,591 (170,726,426)
138,358,730 - 138,358,730
46,552,459 - 46,552,459
30,201,649 - 30,201,649
4,901,385 - 4,901,385
4,996,526 - 4,996,526
181,800 - 181,800
3,208,250 520,736 3,728,986
(687,766) (262,867) (950,633)
5,552,372 - 5,552,372
233,265,405 257,869 233,523,274
61,884,388 912,460 62,796,848
2,293,690,994 156,804,558 2,450,495,552
2,355,575,382$ 157,717,018$ 2,513,292,400$
Net (Expense) Revenue and Changes in Net Assets
Primary Government
See accompanying notes to basic financial statements
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FINANCIAL SECTION
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS
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GOVERNMENTAL FUNDS
Major Funds
The General Fund is used to account for fiscal resources that are dedicated to
governmental operations of the City, and not required to be accounted for in
another fund.
The Tide and Submerged Land – Operating Fund is a Special Revenue Fund
used to account for revenues related to the operation of the City’s tidelands,
including beaches and marinas, and the related expenditures. Revenue from
tideland operations includes, but is not limited to, rents from moorings, piers, and
leases, as well as income from parking lots, meters, and the sale of oil.
The Tide and Submerged Land – Harbor Capital Fund is a Special Revenue
Fund used to account for incremental increases in revenue from certain property
lease, pier, and mooring rentals that exceed Council designated base year
revenue amounts, as well as other designated revenues and the related
expenditures for capital projects, maintenance, and servicing of loan advances
from the General Fund.
The Facilities Financial Planning Reserve Fund is used to account for the
receipt and expenditure of funds for the replacement of facilities. In prior years,
this fund was called the Facilities Replacement Fund.
The Debt Service Fund is used to account for debt service transactions related
to the Certificates of Participation issued to finance the construction of the Civic
Center Complex and the construction of Fire Station No. 2.
Other Governmental Funds
Other governmental funds are those governmental funds that do not meet the
criteria of a major fund. For reporting purposes in this section, they are
combined as Other Governmental Funds.
59
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Assets
Cash and investments (note 2)83,820,043$ 5,907,076$ 37,536,116$
Receivables:
Accounts (net of allowance)4,776,670 1,181,864 -
Interest 357,342 37,474 114,936
Intergovernmental receivables 11,015,449 - -
Lease receivables (note 3)84,877,331 183,793,881 -
Public-private partnership receivable - 853,723 -
Restricted cash and investments with fiscal agent (note 2)- --
Due from other funds (note 4)551,076 - -
Advance to other funds (note 4)7,026,659 - -
Prepaid items 1,024,080 - -
Inventory 188,828 - -
Total assets 193,637,478$ 191,774,018$ 37,651,052$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 6,872,639$ 1,187,543$ 509,582$
Accrued payroll 5,507,736 53,305 -
Deposits payable 2,955,915 215,767 -
Unearned revenue 2,805,276 757,105 -
Advance from other funds (note 4)- - 6,926,659
Due to other funds (note 4)- - -
Total liabilities 18,141,566 2,213,720 7,436,241
Deferred Inflows of Resources:
Unavailable revenue - - -
Deferred amount from leases 84,053,387 182,599,258 -
Deferred amount from public-private partnerships - 853,723 -
Total deferred inflows of resources 84,053,387 183,452,981 -
Fund balances (deficits):
Nonspendable:
Prepaid items 1,024,080 - -
Inventories 188,828 - -
Long-term loan receivable 7,026,659 - -
Permanent endowment - - -
Restricted:
Upper Newport Bay restoration - 1,479,188 -
Other - 3,788,129 30,214,811
Committed:
Capital Re-appropriations 350,000 - -
Oil and gas - 840,000 -
Other 5,115,426 - -
Unassigned 77,737,532 - -
Total fund balances 91,442,525 6,107,317 30,214,811
Total liabilities, deferred inflows of
resources and fund balances 193,637,478$ 191,774,018$ 37,651,052$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2023
Page 1 of 2
See accompanying notes to basic financial statements
60
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Assets
Cash and investments (note 2)18,382,442$ - 106,144,752$ 251,790,429$
Receivables:
Accounts (net of allowance)- - 641,039 6,599,573
Interest 68,590 - 304,617 882,959
Intergovernmental receivables - - 2,836,320 13,851,769
Lease receivables (note 3)- - - 268,671,212
Public-private partnership receivable - - - 853,723
Restricted cash and investments with fiscal agent (note 2)- 8,533,482 282,123 8,815,605
Due from other funds (note 4)6,349,460 - - 6,900,536
Advance to other funds (note 4)- - - 7,026,659
Prepaid items - - 21,150 1,045,230
Inventory - - - 188,828
Total assets 24,800,492$ 8,533,482$ 110,230,001$ 566,626,523$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 43$ 4,755,180$ 13,324,987$
Accrued payroll - - 2,669 5,563,710
Deposits payable - - - 3,171,682
Unearned revenue - - 10,906,146 14,468,527
Advance from other funds (note 4)- - - 6,926,659
Due to other funds (note 4)- 6,349,460 198,075 6,547,535
Total liabilities - 6,349,503 15,862,070 50,003,100
Deferred Inflows of Resources:
Unavailable revenue - - 1,158,981 1,158,981
Deferred amount from leases - - - 266,652,645
Deferred amount from public-private partnerships - - - 853,723
Total deferred inflows of resources - - 1,158,981 268,665,349
Fund balances (deficits):
Nonspendable:
Prepaid items - - 21,150 1,045,230
Inventories - - - 188,828
Long-term loan receivable - - - 7,026,659
Permanent endowment - - 4,629,781 4,629,781
Restricted:
Upper Newport Bay restoration - - - 1,479,188
Other - 2,183,979 35,991,302 72,178,221
Committed:
Capital Re-appropriations - - - 350,000
Oil and gas - - - 840,000
Other 24,800,492 - 52,578,342 82,494,260
Unassigned - - (11,625) 77,725,907
Total fund balances 24,800,492 2,183,979 93,208,950 247,958,074
Total liabilities, deferred inflows of
resources and fund balances 24,800,492$ 8,533,482$ 110,230,001$ 566,626,523$
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2023
Page 2 of 2
See accompanying notes to basic financial statements
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Fund balances of governmental funds 247,958,074$
Amounts reported for governmental activities in the statement of net position are
different because:
Capital assets net of accumulated depreciation have not been included
as financial resources in governmental fund activity. Amount excludes
capital assets from internal service funds which are added below.2,353,177,480
All liabilities (both current and long-term) are reported in the Statement of Net Position.
Amounts exclude long-term debt activity from internal service funds which have been
added below:
Certificates of participation payable - Series 2010B (91,190,000)
Certificates of participation payable - Series 2020A (6,420,000)
Bond premium - Series 2020A (1,006,764)
Lease liability (12,071,977)
Subscription liability (366,952)
Deferred inflows for improvements by the operator to the underlying asset of a
public-private partnership are recognized only in the government-wide statements
for governmental activities.(72,000)
Pension related debt applicable to the governmental activities are not due and payable in
the current period and accordingly are not reported as fund liabilities. Deferred outflows
of resources and deferred inflows of resources related to pension are only reported in
the Statement of Net Position as the changes in these amounts affect only the
government-wide statements for governmental activities. Amounts exclude internal
service fund activity which has been added below:
Deferred outflows of resources 121,273,720
Deferred inflows of resources (3,434,348)
Pension liability (300,432,089)
OPEB related debt applicable to the governmental activities are not due and payable in
the current period and accordingly are not reported as fund liabilities. Deferred outflows
of resources and deferred inflows of resources related to OPEB are only reported in
the Statement of Net Position as the changes in these amounts affect only the
government-wide statements for governmental activities. Amounts exclude internal
service fund activity which has been added below:
Deferred outflows of resources 17,130,034
Deferred inflows of resources (348,955)
OPEB liability (20,721,648)
Accrued interest payable for the current portion of interest due on long-term debt
has not been reported in the governmental funds.(3,360,976)
Some of the revenue will be collected after year-end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds.1,158,981
Internal service funds are used by management to charge the costs of certain
activities, such as self-insurance, workers' compensation, compensated absences,
retiree insurance, fleet management and information technology, to individual funds.
The assets (including capital assets) and liabilities of the internal service funds must be
added to the statement of net position.53,103,539
Investment in joint ventures is not a current financial resource and therefore not reported
in the governmental funds.214,631
Internal balance created by the consolidation of internal service fund activities
related to enterprise funds is not reported in the governmental funds.984,632
Net position of governmental activities 2,355,575,382$
CITY OF NEWPORT BEACH
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2023
See accompanying notes to basic financial statements
63
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Revenues:
Taxes and assessments:
Property tax 138,358,730$ -$ -$
Sales tax 46,552,459 - -
Transient occupancy tax 30,201,649 - -
Other taxes 10,079,711 - -
Intergovernmental 4,369,009 - -
Licenses, permits and fees 5,676,642 85,244 -
Charges for services 25,187,127 27,057 -
Fines and forfeitures 3,840,774 52,101 -
Investment income 1,905,894 108,738 617,424
Net decrease in fair value of investments (215,495) (78,768) (249,668)
Property income 15,459,206 14,166,264 5,919,115
Donations 142,031 - 12,415
Special assessments - - -
Other 3,263,578 1,200 -
Total revenues 284,821,315 14,361,836 6,299,286
Expenditures:
Current:
General government 20,223,962 432,505 -
Public safety 131,900,751 - -
Public works 50,927,167 1,889,771 -
Community development 14,048,305 12,784 -
Community services 25,148,509 2,198,993 -
Capital outlay 529,489 1,434,064 12,218,947
Debt service:
Principal 1,148,166 - -
Interest and fiscal charges 70,683 - -
Total expenditures 243,997,032 5,968,117 12,218,947
Excess (deficiency) of revenues
over expenditures 40,824,283 8,393,719 (5,919,661)
Other financing sources (uses):
Transfers in (note 5)18,428,263 11,546,069 4,600,000
Transfers out (note 5)(65,478,891) (18,380,271) -
Inception of subscription-based IT arrangements 529,489 - -
Total other financing sources (uses)(46,521,139) (6,834,202) 4,600,000
Net change in fund balances (5,696,856) 1,559,517 (1,319,661)
Fund balances, beginning 97,139,381 4,547,800 31,534,472
Fund balances, ending 91,442,525$ 6,107,317$ 30,214,811$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
Page 1 of 2
See accompanying notes to basic financial statements
64
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Revenues:
Taxes and assessments:
Property tax -$ -$ -$ 138,358,730$
Sales tax - - - 46,552,459
Transient occupancy tax - - - 30,201,649
Other taxes - - 874,747 10,954,458
Intergovernmental - 2,133,824 14,577,452 21,080,285
Licenses, permits and fees 34,309 - 923,774 6,719,969
Charges for services - - - 25,214,184
Fines and forfeitures - - - 3,892,875
Investment income 371,710 61,136 1,460,438 4,525,340
Net decrease in fair value of investments (161,745) - 239,803 (465,873)
Property income - - 285,777 35,830,362
Donations - - 562,711 717,157
Special assessments - - 4,948,430 4,948,430
Other - - 147,524 3,412,302
Total revenues 244,274 2,194,960 24,020,656 331,942,327
Expenditures:
Current:
General government - - 24,411 20,680,878
Public safety - - 540,281 132,441,032
Public works - - 3,229,296 56,046,234
Community development - - 674,493 14,735,582
Community services - - 211,258 27,558,760
Capital outlay - - 54,251,627 68,434,127
Debt service:
Principal - 3,940,000 208,000 5,296,166
Interest and fiscal charges - 6,832,688 5,322 6,908,693
Total expenditures - 10,772,688 59,144,688 332,101,472
Excess (deficiency) of revenues
over expenditures 244,274 (8,577,728) (35,124,032) (159,145)
Other financing sources (uses):
Transfers in (note 5)12,966,191 8,562,344 72,396,724 128,499,591
Transfers out (note 5)(22,581,608) - (22,438,273) (128,879,043)
Inception of subscription-based IT arrangements - - - 529,489
Total other financing sources (uses)(9,615,417) 8,562,344 49,958,451 150,037
Net change in fund balances (9,371,143) (15,384) 14,834,419 (9,108)
Fund balances, beginning 34,171,635 2,199,363 78,374,531 247,967,182
Fund balances, ending 24,800,492$ 2,183,979$ 93,208,950$ 247,958,074$
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
Page 2 of 2
See accompanying notes to basic financial statements
65
(9,108)$
Amounts reported for governmental activities in the statement of activities differ
from the amounts reported in governmental funds because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the costs of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount by which depreciation exceeded
capital outlay in the current period.31,531,145
The issuance of long-term debt provides current financial resources to governmental funds, while
repayment of the principal and issuance costs of long-term debt consumes the current financial
resources of the governmental funds. Issuance of bond principal is an other financing source and
repayment of bond principal is an expenditure in governmental funds, but the issuance increases
long-term liabilities and the repayment reduces long-term liabilities in the Statement of Net Position.
The amounts are the net effect of these differences in the treatment of long-term debt:
Repayment of principal on bonds 4,148,000
Amortization of principal on leases 985,629
Amortization of principal on subscriptions 162,537
Inception of subscription-based IT arrangements (529,489)
Amortization of deferred inflows for improvements by the operator to the underlying asset of a
public-private partnership are recognized only in the government-wide statements for
governmental activities.8,000
Premium on bonds is recognized as revenues in the period received; however, in the
statement of activities, it is amortized over the life of the bond.
Amortization of bond premium - Series 2020A 142,131
Accrued interest for debt service is the net change in accrued interest for the current period.107,140
Pension expense reported in the governmental funds includes the employer contributions made.
In the Statement of Activities, pension expense includes the change in the net pension liability
and related change in pension amounts for deferred outflows of resources and deferred inflows
of resources.13,213,430
OPEB expense reported in the governmental funds includes the employer contributions made.
In the Statement of Activities, OPEB expense includes the change in the net OPEB liability
and related change in OPEB amounts for deferred outflows of resources and deferred inflows
of resources.4,132,483
Some of the revenue will be collected after year-end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds. This is the net change in unavailable revenue
for the current period.(29,472)
Internal service funds are used by management to charge the costs of certain
activities, such as self-insurance, workers' compensation, compensated absences,
retiree insurance and fleet management, to individual funds. The net revenue of the internal
service funds is reported in the statement of activities.7,487,482
Investment in joint ventures creates an explicit, measurable equity interest reported only
in the statement of activities.(27,336)
Internal balance created by the consolidation of internal service funds activities related
to enterprise funds is reflected as a reduction of revenues in the statement of activities.561,816
Change in net position of governmental activities 61,884,388$
Net change in fund balances - total governmental funds
CITY OF NEWPORT BEACH
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Year Ended June 30, 2023
See accompanying notes to basic financial statements
66
FINANCIAL SECTION
FUND FINANCIAL STATEMENTS
PROPRIETARY FUNDS
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PROPRIETARY FUNDS
Business-type Activities
The Water Fund is a Major Fund used to account for the operations of the City’s
water utility, a self-supporting activity which is entirely financed though user
charges.
The Wastewater Fund is a Major Fund used to account for the operations of the
City’s wastewater system, a self-supporting activity which is entirely financed
through user charges.
Governmental Activities
The Internal Service Funds are used to allocate the cost of providing goods and
services by one department to other departments on a cost reimbursement basis.
69
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Assets and Deferred Outflows of Resources
Current assets:
Cash and investments (note 2)26,591,421$ 3,845,630$ 30,437,051$ 77,488,352$
Receivables:
Accounts (net of allowance)6,185,726 899,145 7,084,871 2,479
Interest 94,237 13,600 107,837 274,401
Intergovernmental receivables - 1,481 1,481 -
Inventories - -- 438,573
Prepaid items - -- 976,555
Total current assets 32,871,384 4,759,856 37,631,240 79,180,360
Noncurrent assets:
Capital assets (note 6):
Land 2,219,450 - 2,219,450 -
Intangible right to use land 3,883,062 - 3,883,062 -
Structures 688,396 - 688,396 39,581
Equipment 301,192 35,989 337,181 46,273,432
Intangible right to use equipment - - - 353,888
Software - - - 4,360,625
Intangible right to use subscriptions - - - 2,104,945
Infrastructure 150,028,159 48,826,594 198,854,753 -
Work in progress 7,697,408 - 7,697,408 - Less accumulated depreciation/amortization (57,145,498) (21,267,943) (78,413,441) (33,540,630)
Total capital assets (net of accumulated
depreciation/amortization)107,672,169 27,594,640 135,266,809 19,591,841
Total assets 140,543,553 32,354,496 172,898,049 98,772,201
Deferred outflows of resources:
Deferred amount from pension plans (note 11)3,136,833 1,204,648 4,341,481 2,855,531
Deferred amount from OPEB (note 12)706,643 271,373 978,016 643,273
Total deferred outflows of resources 3,843,476 1,476,021 5,319,497 3,498,804
Liabilities and Deferred Inflows of Resources
Current liabilities:
Accounts payable 3,688,240 291,890 3,980,130 728,180
Accrued payroll 180,040 53,657 233,697 708,750
Deposits payable 31,459 - 31,459 -
Due to other funds (note 4)- - - 353,001
Workers' compensation - current - - - 3,072,704
General liability - current - - - 2,938,129
Compensated absences - current - - - 4,223,096
Lease liability - current 44,120 - 44,120 68,951
Subscription liability - current - - - 320,052
Total current liabilities 3,943,859 345,547 4,289,406 12,412,863
Noncurrent liabilities:
Workers' compensation (note 7)- - - 13,323,449
General liability (note 7)- - - 5,750,932
Compensated absences (note 7)- - - 8,467,944
Lease liability (note 7)3,776,654 - 3,776,654 133,221
Subscription liability (note 7)- - - 1,548,128
Net pension liability (note 11)7,352,979 2,823,768 10,176,747 6,693,573
Net OPEB liability (note 12)846,992 325,272 1,172,264 771,040
Total noncurrent liabilities 11,976,625 3,149,040 15,125,665 36,688,287
Total liabilities 15,920,484 3,494,587 19,415,071 49,101,150
Deferred inflows of resources:
Deferred amount from pension plans (note 11)58,532 22,478 81,010 53,283
Deferred amount from OPEB (note 12)14,318 5,497 19,815 13,033
Total deferred inflows of resources 72,850 27,975 100,825 66,316
Net Position
Net investment in capital assets 103,421,329 27,594,640 131,015,969 17,441,583
Unrestricted 24,972,366 2,713,315 27,685,681 35,661,956
Total net position 128,393,695$ 30,307,955$ 158,701,650 53,103,539$
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds (984,632)
Net position of business-type activities 157,717,018$
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Net Position
June 30, 2023
Enterprise Funds
See accompanying notes to basic financial statements
70
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Operating revenues:
Charges for sales and services:
Water sales 31,657,910$ -$ 31,657,910$ -$
Charges for services - - - 36,134,126
Sewer service and connection fees - 4,624,572 4,624,572 -
Employee contributions - - - 25,880
Other 375,721 42,113 417,834 3,854,933
Total operating revenues 32,033,631 4,666,685 36,700,316 40,014,939
Operating expenses:
Purchase of water 11,374,586 - 11,374,586 -
Salaries and benefits 5,355,470 1,673,490 7,028,960 3,458,730
Depreciation/amortization 1,837,144 640,804 2,477,948 4,091,842
Professional services 2,232,734 622,190 2,854,924 1,011,004
Maintenance and supplies 2,737,524 1,213,165 3,950,689 3,274,429
System maintenance 2,905,362 225,762 3,131,124 -
Utilities 2,144,331 84,409 2,228,740 -
Fleet parts and supplies - - - 517,579
Telecommunication - - - 204,977
Hardware - - - 220,378
Software - - - 322,030
Workers' compensation - - - 4,903,042
Claims and judgments - - - 5,618,183
Compensated absences - - - 2,007,182
OPEB ARC - cash subsidy - - - 6,187,129
Other 1,710,295 706,576 2,416,871 2,289,379
Total operating expenses 30,297,446 5,166,396 35,463,842 34,105,884
Operating income (loss) 1,736,185 (499,711) 1,236,474 5,909,055
Nonoperating revenues (expenses):
Investment income 456,336 64,400 520,736 1,226,922
Net decrease in fair value of investments (252,453) (10,414) (262,867) (376,595)
Gain on sale of capital assets - - - 355,270
Interest expense (20,067) - (20,067) (6,622)
Total nonoperating revenues (expenses)183,816 53,986 237,802 1,198,975
Income (loss) before transfers 1,920,001 (445,725) 1,474,276 7,108,030
Transfers in (note 5)- - - 379,452
Total transfers - - - 379,452
Change in net position 1,920,001 (445,725) 1,474,276 7,487,482
Net position, beginning of year 126,473,694 30,753,680 45,616,057
Net position, end of year 128,393,695$ 30,307,955$ 53,103,539$
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds (561,816)
Change in net position of business-type activities 912,460$
Enterprise Funds
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Revenues,
Expenses and Changes in Net Position
For the Year Ended June 30, 2023
See accompanying notes to basic financial statements
71
CITY OF NEWPORT BEACH
Statement of Cash Flows
For the Year Ended June 30, 2023
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Cash flows from operating activities:
Cash received from customers or user departments 31,643,661$ 4,676,773$ 36,320,434$ 36,148,886$
Cash payments to employees for services (5,774,078) (1,835,327) (7,609,405) (10,316,828)
Cash payments to suppliers for goods and services (21,732,950) (1,963,484) (23,696,434) (18,843,868)
Cash payments for other operating activities (1,334,574) (664,463) (1,999,037) -
Cash received for other operating activities - - - 3,880,813
Net cash provided by operating activities 2,802,059 213,499 3,015,558 10,869,003
Cash flows from noncapital financing activities:
Cash received from other funds - - - 379,449
Net cash provided by noncapital financing activities - - - 379,449
Cash flows from capital and related financing activities:
Acquisition of capital assets (4,928,039) - (4,928,039) (3,784,710)
Lease liabilities and related (65,023) - (65,023) (67,960)
Subscription liabilities and related - - - (242,105)
Proceeds from sale of capital assets - - - 355,270
Net cash provided (used) for capital and related financing activities (4,993,062) - (4,993,062) (3,739,505)
Cash flows from investing activities:
Investment income (loss)193,677 50,903 244,580 779,452
Net cash provided by investing activities 193,677 50,903 244,580 779,452
Net increase (decrease) in cash and cash equivalents (1,997,326) 264,402 (1,732,924) 8,288,399
Cash and cash equivalents, beginning 28,588,747 3,584,193 32,172,940 69,199,953
Cash and cash equivalents, ending 26,591,421$ 3,848,595$ 30,440,016$ 77,488,352$
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position 26,591,421$ 3,845,630$ 30,437,051$ 77,488,352$
Cash and cash equivalents 26,591,421$ 3,845,630$ 30,437,051$ 77,488,352$
Reconciliation of operating income to net cash
provided by operating activities:
Operating income (loss)1,736,185$ (499,711)$ 1,236,474$ 5,909,055$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 1,837,144 640,804 2,477,948 4,091,842
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (10,455) 50,720 40,265 14,760
Decrease in intergovernmental receivables - 1,481 1,481 -
(Increase) in inventories - -- (57,187)
Decrease in prepaid items - -- 1,588,166
Increase (decrease) in accounts payable and accrued payroll (321,765) 187,357 (134,408) (829,789)
(Decrease) in deposits payable (3,794) - (3,794) -
Increase in workers' compensation - - - 641,565
(Decrease) in general liability - - - (6,819)
(Decrease) in compensated absences - - - (86,368)
(Decrease) in net pension liability and deferred cash flows (264,575) (101,605) (366,180) (240,847)
(Decrease) in net OPEB liability and deferred cash flows (170,681) (65,547) (236,228) (155,375)
Total adjustments 1,065,874 713,210 1,779,084 4,959,948
Net cash provided by operating activities 2,802,059$ 213,499$ 3,015,558$ 10,869,003$
Noncash investing, capital and financing activities:
Net (decrease) in fair value of investments (252,453)$ (10,414)$ (262,867)$ (376,595)$
Obtaining an intangible right to use lease asset 2,353,156 - 2,353,156 5,616
Obtaining an intangible right to use subscription asset - - - 2,104,945
Total of noncash activities 2,100,703$ (10,414)$ 2,090,289$ 1,733,966$
Proprietary Funds
Enterprise Funds
See accompanying notes to basic financial statements
72
FINANCIAL SECTION
FUND FINANCIAL STATEMENTS
FIDUCIARY FUNDS
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FIDUCIARY FUNDS
Custodial Funds, a type of Fiduciary Funds, are used to account for assets
held by the City as an agent for other government entities, private
organizations, or individuals.
75
Custodial
Funds
Assets
Cash and investments (note 2)1,401,778$
Restricted cash and investments with fiscal agent (note 2)1,318,999
Receivable:
Interest 2,018
Intergovernmental receivable 29,936
Total assets 2,752,731
Liabilities
Advances from other funds (note 4)100,000
Due to others 425,758
Total liabilities 525,758
Net Position
Restricted for:
Individuals, organizations, and other governments 2,226,973
Total net position 2,226,973$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2023
See accompanying notes to basic financial statements
76
Custodial
Funds
Additions
Special assessments 1,289,499$
Investment earnings 47,553
Other 323,353
Total additions 1,660,405
Deductions
Debt service 1,653,677
Administrative 112,756
Other 268,907
Total deductions 2,035,340
Net increase (decrease) in fiduciary net position (374,935)
Net position, beginning of year 2,601,908
Net position, end of year 2,226,973$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2023
See accompanying notes to basic financial statements
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FINANCIAL SECTION
NOTES TO THE FINANCIAL STATEMENTS
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies
The basic financial statements of the City of Newport Beach (the “City”) have been prepared in
conformity with generally accepted accounting principles (“GAAP”) as applicable to government
units. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting
body for establishing governmental accounting and financial reporting principles.
a. Reporting Entity
The City of Newport Beach was incorporated on September 1, 1906. The current City
Charter was adopted in 1954. Since adoption, the Charter has been amended several times.
The most recent Charter amendment was approved by the voters on November 2, 2010.
The City operates under a Council-Manager form of government and provides the following
services: public safety (police, fire, and marine), highway and streets, cultural and
recreation, public improvements, planning and zoning, utilities, and general administrative
services.
The financial statements present the financial activity of the City of Newport Beach (the
primary government) and its component unit. The component unit discussed below is
included in the City's reporting entity because of the significance of its operational or
financial relationship with the City. This entity is legally separate from the City. However, the
City of Newport Beach’s elected officials have continuing full or partial accountability for
fiscal matters of the component unit. The financial reporting entity consists of: (1) the City,
(2) organizations for which the City is financially accountable, and (3) organizations for which
the nature and significance of their relationship with the City are such that exclusion would
cause the City's financial statements to be misleading or incomplete.
An organization is fiscally dependent on the primary government if it is unable to adopt its
budget, levy taxes, set rates or charges, or issue bonded debt without approval by the
primary government. In a blended presentation, a component unit’s balances and
transactions are reported in a manner similar to the balances and transactions of the City.
Component units are presented on a blended basis when the component unit's governing
body is substantially the same as the City's or the component unit provides services almost
entirely to the City.
Blended Component Unit
The financial statements of the City of Newport Beach include the financial activities of the
Newport Beach Public Facilities Corporation (the "Corporation"). The Corporation was
formed on March 9, 1992, for the purpose of assisting the City of Newport Beach in the
financing of public improvements, including the City’s Central Library, Civic Center, and
most recently the new Fire Station No. 2. The Corporation is governed by a Board of
Directors, which is comprised of the seven City Council Members of the City of Newport
Beach. The Corporation's financial data and transactions are included in the debt service
fund. Separate financial statements are not prepared for the Corporation. The debt service
81
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1)Summary of Significant Accounting Policies (Continued)
fund is used solely to account for the activities of the Corporation and contains no other City
debt financing activities.
b.Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
•Government-wide financial statements
•Fund financial statements
•Notes to the financial statements
Government-wide Financial Statements
Government-wide financial statements display information about the reporting government
as a whole, except for its fiduciary activities. These statements include separate columns
for the governmental and business-type activities of the primary government (including its
blended component units). The City of Newport Beach has no discretely presented
component units. Eliminations have been made in the Statement of Activities so that certain
allocated expenses are recorded only once (by the function to which they were allocated).
However, general government expenses have not been allocated as indirect expenses to
the various functions of the City.
Government-wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources
measurement focus, all (both current and long-term) economic resources and obligations of
the reporting government are reported in the government-wide financial statements. Basis
of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. Under the accrual basis of accounting, revenues,
expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like
transactions are recognized when the exchange takes place.
Program revenues include charges for services, special assessments, and payments made
by parties outside of the reporting government’s citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the statement
of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government-wide
financial statements, rather than reported as an expenditure. Proceeds of long-term debt
are recorded as a liability in the government-wide financial statements, rather than as an
other financing source. Amounts paid to reduce long-term indebtedness of the reporting
government are reported as a reduction of the related liability, rather than as an expenditure.
82
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted – net position and unrestricted – net position in the
government-wide and proprietary fund financial statements, a flow assumption must be
made about the order in which the resources are considered to be applied. It is the City’s
practice to consider restricted-net position to have been depleted before unrestricted – net
position is applied.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of
separate funds, each of which is considered to be a separate accounting entity. The
operations of each fund are accounted for with a separate set of self-balancing accounts
that comprise its assets, liabilities, deferred inflows/outflows of resources, fund equity,
revenues, and expenditures or expenses, as appropriate. Governmental resources are
allocated to and accounted for in individual funds based upon the purposes for which they
are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government’s governmental, proprietary, and
fiduciary funds are presented after the government-wide financial statements. These
statements display information about major funds individually and non-major funds in the
aggregate for governmental and enterprise funds. Fiduciary funds are excluded from
government-wide financial statements. Fiduciary statements include financial information
for fiduciary funds. Fiduciary funds of the City primarily represent assets held by the City in
a custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental funds are presented using the modified-
accrual basis of accounting. Their revenues are recognized when they become measurable
and available as net current assets. Measurable means that the amounts can be estimated,
or otherwise determined. Available means that the amounts were collected during the
reporting period or soon enough thereafter to be available to finance the expenditures
accrued for the reporting period. The City uses an availability period of 60 days for all
revenues.
Property taxes, sales taxes, franchise taxes, gas taxes, motor vehicle license fees, transient
occupancy taxes, grants, and interest associated with the current fiscal period are all
considered to be subject to accrual and so have been recognized as revenues of the current
fiscal period to the extent normally collected within the availability period. Other revenue
items are considered to be measurable and available when cash is received by the City.
83
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1)Summary of Significant Accounting Policies (Continued)
Revenue recognition is subject to the measurability and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are recognized
as revenues in the period in which they are earned (i.e., the related goods or services are
provided). Locally imposed derived tax revenues are recognized as revenues in the period
in which the underlying exchange transaction upon which they are based takes place.
Imposed non-exchange transactions are recognized as revenues in the period for which
they were imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are received,
whichever occurs first. Government-mandated and voluntary non-exchange transactions
are recognized as revenues when all applicable eligibility requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and deferred
outflows of resources, and current liabilities and deferred inflows of resources are generally
included on their balance sheets. The reported fund balance is considered to be a measure
of “available spendable resources”. Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other
financing uses) in fund balance. Accordingly, they are said to present a summary of sources
and uses of “available spendable resources” during a period.
Non-current portions of long-term receivables due to governmental funds are reported on
their balance sheets in spite of their spending measurement focus.
Because of their spending measurement focus, expenditure recognition for governmental
fund types excludes amounts represented by non-current liabilities. Since they do not affect
“available spendable resources”, such long-term amounts are not recognized as
governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that
resources were expended, rather than as fund assets. The proceeds of long-term debt are
recorded as other financing sources rather than as a fund liability. Amounts paid to reduce
long-term indebtedness are reported as fund expenditures.
Permanent Funds, also referred to as Endowment Funds, are governmental funds used to
report resources that are legally restricted to the extent that only earnings, and not principal,
may be used for purposes that support City programs. The amount of net appreciation on
investments that is available to support City programs is $1,912,779. The amount of
investment earnings available for expenditure is reported as Restricted Fund Balance in the
fund level financial statements. The endowment principal is reported as Nonspendable for
Permanent Endowments in the Balance Sheet. The State law governing the spending of
endowment funds investment earnings is California Probate Code Section 18504. The
authority for spending investment earnings for scholarships resides with the City Manager,
and the authority for periodic maintenance dredging in the Newport Bay resides with the
City Council.
84
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
Proprietary & Fiduciary Funds
The City’s enterprise and internal service funds are proprietary funds. In the fund financial
statements, proprietary and fiduciary funds are presented using the accrual basis of
accounting. Revenues are recognized when they are earned and expenses are recognized
when the related goods or services are delivered. In the fund financial statements,
proprietary funds are presented using the economic resources measurement focus. This
means that all assets, deferred outflows of resources, all liabilities and deferred inflows of
resources (whether current or non-current) associated with their activity are included on their
balance sheets. Proprietary fund type operating statements present increases (revenues)
and decreases (expenses) in total net position.
Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are
those in which each party receives and gives up essentially equal values. Non-operating
revenues, such as subsidies, taxes, and investment earnings result from non-exchange
transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as
assets in the proprietary fund financial statements, rather than reported as expenditures.
Proceeds of long-term debt are recorded as a liability in the proprietary fund financial
statements, rather than as other financing sources. Amounts paid to reduce long-term
indebtedness of the proprietary funds are reported as reductions of the related liabilities,
rather than as expenditures.
When both restricted and unrestricted resources are combined in a proprietary fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
Fiduciary funds are also reported using the economic resources measurement focus and
the accrual basis of accounting.
c. Fund Classifications
The City utilizes the following broad categories of funds:
Major Funds – Major funds are those funds which are either material or of particular
importance.
Major Governmental Funds – Governmental funds are generally used to account for tax
supported activities. The following governmental funds meet the criteria of a major fund:
General Fund
The General Fund is the general operating fund of the City. It is used to account for all
activities, except those required to be accounted for in another fund.
85
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
Special Revenue Funds
Tide and Submerged Land – Operating
The Tide and Submerged Land – Operating Fund is a special revenue fund used to account
for revenues related to the operation of the City’s tidelands, including beaches and marinas,
and the related expenditures. Revenue from tideland operations includes, but is not limited
to, rents from moorings, piers, and leases, as well as income from parking lots, meters, and
the sale of oil.
Tide and Submerged Land – Harbor Capital
The Tide and Submerged Land - Harbor Capital Fund is used to account for incremental
increases in revenue from certain property lease, pier, and mooring rentals that exceed
Council designated base year revenue amounts, as well as other designated revenues and
the related expenditures for capital projects, maintenance, and servicing of loan advances
from the General Fund.
Capital Project Funds
Facilities Financial Planning Reserve Fund
The Facilities Financial Planning Reserve Fund is used to account for the receipt and
expenditure of funds for the replacement of facilities. In prior years, this fund was called the
Facilities Replacement Fund.
Debt Service Fund
The Debt Service Fund is used to account for debt service transactions related to the
Certificates of Participation issued to finance the construction of the City’s Civic Center
Complex and the construction of Fire Station No. 2.
Major Proprietary Funds – Proprietary funds are used to report an activity for which a fee is
charged to external users to recover the cost of operation.
Water Fund
The Water Fund is an enterprise fund used to account for the activities associated with the
transmission and distribution of potable water by the City to its users.
Wastewater Fund
The Wastewater Fund is an enterprise fund used to account for the activities associated
with providing sewer services by the City to its users.
Other Governmental Funds – Other Governmental Funds are those funds which do not
meet the criteria of a major fund. Other Governmental Funds used by the City fall into the
following governmental fund types:
86
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
Other Special Revenue Funds – Other Special Revenue Funds are used to account for the
proceeds of specific revenue sources which are legally restricted to expenditures for
specified purposes.
Other Capital Projects Funds – Other Capital Projects Funds are used to account for
resources used for the acquisition and construction of capital facilities by the City, except
those financed by Enterprise Funds.
Permanent Funds – Permanent Funds are used to report resources that are legally
restricted for the extent that only earnings, not principal, may be used for purposes that
support the reporting government’s programs.
Internal Service Funds – The Internal Service Funds are used to account for the City’s
self-insured general liability and workers’ compensation, compensated absences, and
retiree insurance liabilities; the cost of maintaining and replacing the City’s rolling stock fleet,
parking equipment, coordinated communications systems equipment, certain fire
equipment, and recreation equipment; and the cost of maintaining and replacing the City’s
information technology systems. City departments are the primary users of these services
and are charged a fee on a cost reimbursement basis.
Fiduciary Funds – The Custodial Funds, a type of Fiduciary Fund, are used to account for
assets held by the City as an agent for property owners with special assessments, local
businesses in business improvements districts, and monies held on behalf of employees for
flexible spending accounts.
d. New Accounting Pronouncements
Current Year Standards
In fiscal year 2022-23, the City implemented the following Government Accounting
Standards Board (GASB) Statements:
• GASB Statement No. 91 – “Conduit Debt Obligations”, effective for periods
beginning after December 15, 2021. The primary objective of this statement is to
provide a single method of reporting conduit debt obligations by issuers and
eliminate diversity in practice.
• GASB Statement No. 94 – “Public-Private and Public-Public Partnerships and
Availability Payment Arrangements”, effective for periods beginning after June 15,
2022. The primary objective of this statement is to improve financial reporting by
addressing issues related to public-private and public-public partnership
arrangements.
87
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1)Summary of Significant Accounting Policies (Continued)
•GASB Statement No. 96 – “Subscription-Based Information Technology
Arrangements”, effective for fiscal years beginning after June 15, 2022. This
statement provides guidance on the accounting and financial reporting for
subscription-based information technology arrangements (SBITAs) for
governments.
Pending Accounting Standards
GASB has issued the following statements, which may impact the City’s financial reporting
requirements in the future:
•GASB Statement No. 100 – “Accounting Changes and Error Corrections”, effective
for periods beginning after June 15, 2023. The objective of this statement is to
amend GASB Statement No. 62 and clarify the existing definition of accounting
changes, and requires enhancements to accounting and financial reporting for
accounting changes and error corrections to provide more understandable, reliable,
relevant, consistent and comparable information.
•GASB Statement No. 101 – “Compensated Absences”, effective for periods
beginning after June 15, 2023. The objective of this Statement requires that liabilities
for compensated absences be recognized for (1) leave that has not been used and
(2) leave that has been used but not yet paid in cash or settled through noncash
means. A liability should be recognized for leave that has not been used if (a) the
leave is attributable to services already rendered, (b) the leave accumulates, and (c)
the leave is more likely than not to be used for time off or otherwise paid in cash or
settled through noncash means. Leave is attributable to services already rendered
when an employee has performed the services required to earn the leave. Leave
that accumulates is carried forward from the reporting period in which it is earned to
a future reporting period during which it may be used for time off or otherwise paid
or settled.
e.Cash and Investments
Cash and Cash Equivalents
Cash and cash equivalents are defined to be cash on hand, demand deposits and highly
liquid investments with a maturity of three months or less from the date of purchase.
Investments
Investments are generally stated at fair value which is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
88
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
Cash and investments are pooled to maximize investment yields. The net change in fair
value and interest earned on the investments is allocated to the respective funds based on
each fund’s average monthly cash and investments balance.
The City’s investment in LAIF is $20,381,638 at June 30, 2023. This investment value is
based on information provided by the State Treasurer’s Office. The carrying value of the
City’s position in the fund is materially consistent with the fair value of the fund shares. This
pool is under the regulatory oversight of the State Treasurer’s Office. The LAIF Board
consists of five members as designated by Statute. The Chairperson is the State Treasurer,
or her designated representative. Two members qualified by training and experience in the
field of investment or finance, and two members who are treasurers, finance or fiscal
officers, or business managers employed by any county, city or local district, or municipal
corporation of this state, are appointed by the State Treasurer. The term of each
appointment is two years, or at the pleasure of the appointing authority.
f. Accounts Receivable
Accounts receivable represent all service and capital project billings other than
intergovernmental receivables stated below. As of June 30, 2023, accounts receivable
deemed to be uncollectible with an outstanding balance over 120 days past due were written
off the City’s accounting records to ensure that the income statement and balance sheet are
fairly stated at the amount expected to be collected in receivables. Receivables with
governmental organizations are generally excluded from the write-off as they are more likely
to be received due to the governments’ creditworthiness.
g. Intergovernmental Receivables
Intergovernmental receivables represent grant reimbursement requests, capital project
billings, and pending transfers of taxes and fees collected by other government agencies.
As of June 30, 2023, the balance of these accounts totaled $13,853,250.
h. Inventories and Prepaid Items
Inventories are valued at cost, which approximates market, using the first-in, first-out
method. The City follows the consumption method for inventory control. The costs of
governmental fund and internal service fund inventories are recorded as expenditures when
consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items. The City follows the consumption method for prepaid items.
89
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1)Summary of Significant Accounting Policies (Continued)
i.Capital Assets
Capital assets are tangible and intangible assets, which include land, structures, equipment,
and infrastructure assets, and are reported in the applicable governmental or business-type
activities columns in the Government-wide Financial Statements. Tangible capital assets
are recorded at cost where historical records are available and at an estimated original cost
where no historical records exist. Equipment purchased in excess of $5,000 is capitalized if
it has an expected useful life in excess of one year. Buildings, infrastructure, and
improvements are capitalized if cost is in excess of $30,000 and the expected useful life is
in excess of one year. The cost of normal maintenance and repairs that do not add to the
value of the asset’s life are not capitalized. The City chose to value and report on
infrastructure assets in their entirety (e.g., prior to 1980).
Major capital outlays for tangible capital assets and improvements are capitalized as
projects are constructed. Tangible capital assets acquired through lease obligations are
valued at the present value of future lease payments at the date acquired. Contributed
tangible capital assets are valued at their estimated acquisition value at the date of
contribution. Intangible capitals assets are generally an estimated present value of certain
future lease or software subscription payments for the leases or subscriptions in which the
City is the lessee or subscriber.
Capital assets used in operations are depreciated/amortized using the straight-line method
in the government-wide financial statements and in the fund financial statements of the
proprietary funds. Tangible capital assets are depreciated over their estimated useful lives.
Intangible assets are amortized over the shorter of the estimated useful life of the underlying
asset or the period of time included in the estimated present value. Depreciation/
amortization is charged as an expense against operations and accumulated depreciation/
amortization is reported on the respective balance sheet. The ranges of useful life for
depreciation purposes for each capital asset class are as follows:
Structures 15-75 years
Equipment 3-15 years
Infrastructure 20-75 years
j.Claims and Judgments
The City accounts for material claims and judgments and associated legal and
administrative costs when it is probable that the liability claim has been incurred and the
amount of the loss can be reasonably estimated. The City records the estimated loss
liabilities in the Internal Service Fund. Included therein are claims incurred but not reported,
which consists of (a) known loss events expected to be presented as claims later, (b)
unknown loss events that are expected to become claims, and (c) expected future
development on claims already reported. This is based upon historical actual results that
have established a reliable pattern supplemented by specific information about current
matters. Small dollar claims and judgments are recorded as expenditures when paid.
90
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
k. Property Taxes
The assessment, levy, and collection of property taxes are the responsibility of the County
of Orange. The City records property taxes as revenue when received from the County,
except at fiscal year-end, when property taxes received within 60 days are accrued as
revenue. Property taxes are assessed and collected each fiscal year according to the
following property tax calendar:
Lien date January 1
Levy date July 1
Due dates November 1 1st installment
March 1 2nd installment
Collection dates December 10 1st installment
April 10 2nd installment
l. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and
limited amounts of earned but unused sick leave benefits, which will be paid to employees
upon separation from City service. Beginning in fiscal year 1990, the City adopted a general
leave plan to replace the traditional vacation and sick leave plan. The City uses a general
leave plan that permits a maximum of three years’ accrual for every employee, above which
the excess either stops accruing or is paid out as current compensation. All employees hired
prior to January 1,1990, were given the option of remaining in the traditional vacation and
sick leave plan or enrolling in the general leave plan. All employees hired on or after January
1,1990, are automatically enrolled in the general leave plan. Compensated absences are
accrued in the Compensated Absence Internal Service Fund when employee services have
been rendered and when it becomes probable that the City will compensate the employees
for benefits through paid time off or cash payments at termination or retirement. Benefits
that have been earned but are not yet available for use because employees have not met
certain conditions are accrued to the extent it is probable that the employees will meet the
conditions for compensation in the future.
m. Deposits Payable
In the government-wide and fund-level financial statements, deposits payable represents
monies collected for developer deposits, demolition deposits, planning deposits and others,
for services which have not yet been performed. These unspent portions are reported as
liabilities on the financial statements.
n. Unearned Revenue
Unearned revenues are those where asset recognition criteria have been met, but the
revenue recognition criteria have not been met.
91
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
o. Deferred Inflows/Outflows of Resources
In addition to assets, the statement of net position and the governmental funds balance
sheet will sometimes report a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a
consumption of net assets that applies to future periods and so will not be recognized as an
outflow of resources (expense) until that time. The City has three items that qualify for
reporting in this category. The first item is the deferred outflows related to employer pension
and OPEB contributions made after the measurement date. The second item is a deferred
outflow related to pensions and OPEB resulting from changes in assumptions. This amount
is amortized over a closed period equal to the average of expected remaining service lives
of all employees that are provided pensions and OPEB through the plans. The third item is
a deferred outflow related to pensions and OPEB resulting from the difference between
expected and actual experience. This amount is amortized over a closed period equal to the
average of expected remaining service lives of all employees that are provided pensions
and OPEB through the plans.
In addition to liabilities, the statement of net position and the governmental funds balance
sheet will sometimes report a separate section for deferred inflows of resources. This
separate financial statement element, deferred inflows of resources, represents an
acquisition of net assets that applies to future periods and will not be recognized as an inflow
of resources (revenue) until that time. The City has five items that qualify for reporting in this
category. The first item is unavailable revenues, which is only reported in the governmental
funds balance sheet. The governmental funds report unavailable revenues from two
sources: grants receivable and rent collections. These amounts are deferred and
recognized as an inflow of resources in the period that the amounts become available. The
second item is a deferred inflow related to pensions and OPEB resulting from the difference
between actual and expected experience. This amount is amortized over a closed period
equal to the average of the expected remaining service lives of all employees that are
provided pensions through the plans. The third item is a deferred inflow related to pensions
and OPEB resulting from the change in assumptions. This amount is amortized over a
closed period equal to the average of expected remaining service lives of all employees that
are provided pensions through the plans. The fourth item is a deferred inflow for certain
leases for which the City is lessor, and relates to a present value estimate of certain future
lease payments. This amount generally is amortized over the same time period associated
with the related present value estimate. The fifth item is a deferred inflow from a certain
public-private partnership arrangement where the City is the transferor, and represents the
sum of certain improvements by the operator to the underlying public-private partnership
asset and a present-value estimate of certain future payments from the operator to the City.
This amount is generally amortized over the same time period associated with the related
present value estimate.
92
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
p. Fund Balance Classifications
The governmental fund balance is made up of different classifications and the following
provides explanations as to the nature and purpose of each classification:
Nonspendable fund balance
That portion of fund balance that typically includes amounts that are either (a) not in a
spendable form such as inventories and prepaid items, or (b) legally or contractually
required to be maintained intact such as endowments.
Restricted fund balance
The portion of fund balance that reflects constraints placed on the use of resources (other
than nonspendable items) that are either (a) externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments; or (b) imposed by law through
constitutional provisions or enabling legislation.
Committed fund balance
That portion of a fund balance that includes amounts that can only be used for specific
purposes pursuant to constraints imposed by formal action by the government’s highest
level of decision making authority, and remain binding unless removed in the same manner.
The City Council has authority to establish or modify a fund balance commitment by
legislation (Council action) and can only rescind a fund balance commitment by new
legislation requiring the same voting consensus. The City considers a resolution to
constitute a formal action of the City Council for the purposes of establishing committed fund
balance.
Assigned fund balance
That portion of a fund balance that includes amounts that are constrained by the City’s intent
to be used for specific purposes and do not meet the criteria to be classified as restricted or
committed. Constraints imposed on the use of assigned amounts are more easily removed
or modified than those imposed on amounts classified as committed. The City’s Reserve
Policy gives the City Manager the authority to establish, modify, or rescind a fund balance
assignment.
Unassigned fund balance
The residual portion of a fund balance that is not otherwise restricted, committed, or
assigned. Positive unassigned fund balance is available to be used for any purpose. Only
the general fund may report a positive unassigned fund balance. Funds, except the general
fund, may report negative unassigned fund balance in certain circumstances.
In the governmental fund statements, when expenditures are incurred for purposes for which
both restricted and unrestricted (committed, assigned, or unassigned) fund balances are
available, the City uses the most restrictive funds first. The City uses the appropriate funds
in the following order: restricted, committed, assigned, and finally unassigned amounts.
93
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1)Summary of Significant Accounting Policies (Continued)
q.Estimates
The preparation of financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of certain assets,
deferred outflows of resources, liabilities and deferred inflows of resources, disclosure of
contingent assets and liabilities, and the related amounts of revenues and expenditures.
Actual results could differ from those estimates. Management believes that the estimates
are reasonable.
r.Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of
resources related to pensions, and pension expense, information about the fiduciary net
position of the City of Newport Beach’s California Public Employees’ Retirement System
(CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position
have been determined on the same basis as they are reported by CalPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at
fair value.
GASB 68 requires that the reported results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD)June 30, 2021
Measurement Date (MD)June 30, 2022
Measurement Period (MP)July 1, 2021 to June 30, 2022
s.Post-Employment Health Care Benefits (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources
related to OPEB and OPEB expense, information about the fiduciary net position of the City
of Newport Beach’s California Public Employees’ Retirement System (CalPERS) Health
Plan and additions to/deductions from the Plans’ fiduciary net position have been
determined on the same basis as they are reported by CalPERS. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
GASB 75 requires that the reported results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD)June 30, 2021
Measurement Date (MD)June 30, 2022
Measurement Period (MP)July 1, 2021 to June 30, 2022
94
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(1) Summary of Significant Accounting Policies (Continued)
t. Lease Liabilities and Receivables
Lease liabilities and receivables are estimated present values of future lease payments.
Estimating present values involves various related estimates, including lease terms and
interest rates. The estimated lease term is the time period that the lease is noncancelable,
plus extension and termination time periods if based on the lease agreement it is reasonable
that the extensions will be exercised, and the terminations will not be exercised. When a
lease’s implicit interest rate is not known, estimates are made of either the City’s incremental
borrowing rate or the rate the City may charge a lessee. Non-lease components of lease
agreements have been treated as separate non-lease agreements when practicable, and
are excluded from the City’s estimated lease liabilities and receivables. Leases that do not
meet the Governmental Accounting Standards Board’s definition of a lease liability or
receivable (e.g., short-term leases, etc.) are also excluded from the City’s estimated lease
liabilities and receivables.
u. Subscription-Based Information Technology (IT) Arrangements
The City is a participant in subscription-based IT arrangements as detailed in note 8. The
City recognizes a subscription liability and intangible right to use subscription assets in the
financial statements. At the commencement of the arrangement, the City initially measures
the liability at the present value of payments expected to be paid during the arrangement
term. Subsequently, the liability is reduced by the principal portion of payments made. The
intangible right to use subscription assets are initially measured at the initial amount of the
subscription liability. Subsequently, the intangible right to use subscription assets are
amortized over the life of the arrangement term.
v. Public-Private Partnerships (PPP)
The City’s public-private partnership receivable is an estimated present-value of future
payments from the operator to the City. The estimated public-private partnership term is
the time period that the operator’s right to use the underlying public-private partnership asset
is noncancelable, plus extension and termination time periods if based on the public-private
partnership arrangement it is reasonable that the extensions will be exercised, and the
terminations will not be exercised. When the public-private partnership arrangement’s
implicit interest rate is not known an estimate is made of the rate the City may charge an
operator. Non-public-private partnership components of public-private partnership
arrangements have been treated as separate arrangements when practicable and are
excluded from the City’s estimated receivable. Arrangements that do not meet the
Governmental Accounting Standards Board’s definition of a public private partnership (e.g.,
leases that do not require the operator to improve the City’s existing assets, etc.) are also
excluded from the City’s estimated receivable.
95
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2) Cash and Investments
Cash and investments as of June 30, 2023, are classified in the accompanying financial
statements as follows:
Cash and investments as of June 30, 2023, consist of the following:
Investments Authorized by the California Government Code and the Entity’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City’s investment policy, where more restrictive). The table also
identifies certain provisions of the California Government Code (or the City’s investment policy,
whichever is more restrictive) that address interest rate risk and concentration of credit risk. This
table does not address investments of debt proceeds held by bond trustees that are governed by
the provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City’s investment policy.
Statement of net position:
Cash and investments 359,715,832$
Restricted cash and investments
with fiscal agent
Fiduciary funds:
Cash and investments 1,401,778
Restricted cash and investments
with fiscal agent 1,318,999
Total cash and investments 371,252,214$
8,815,605
Cash on hand 27,069$
Deposits with financial institutions 23,070,618
Cash and receivables in investment accounts 141,822
Investments 348,012,705
Total cash and investments 371,252,214$
96
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2) Cash and Investments (Continued)
Authorized Investment Type
Maximum
Maturity*
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer*
Local Agency Bonds 5 years 30% 5%
U.S. Treasury Obligations 5 years No Limit No Limit
U.S. Agency Securities 5 years No Limit 30%
Federal Home Loan Mortgage Corp 5 years No Limit 30%
Banker’s Acceptances 180 days 40% 5%
Commercial Paper 270 days 40% 5%
Negotiable Certificates of Deposit 2 years 30% 5%
Repurchase Agreements 30 days No Limit 5%
Reverse Repurchase Agreements 30 days 10% 5%
Medium-Term Notes 5 years 30% 5%
Mutual Funds N/A 20% 10%
Money Market Mutual Funds N/A 20% 20%
Mortgage Pass-Through Securities 5 years 20% 5%
LA County Pooled Investment Funds N/A 5% 5%
Local Agency Investment Fund (LAIF) N/A $75 million $75 million
Supranationals 5 years 20% 10%
* Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustees (i.e., fiscal agents) are governed by
provisions of the debt agreements, rather than the general provisions of the California
Government Code or the City’s investment policy. The table below identifies the investment types
that are authorized for investments held by bond trustees. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and concentration
of credit risk.
97
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2)Cash and Investments (Continued)
Authorized Investment Type Maximum Maturity
Maximum
Percentage
Allowed
Maximum
Investment
in One Issuer
U.S. Treasury Obligations 6 months – No Limit No Limit No Limit
U.S. Agency Securities 6 months – No Limit No Limit No Limit
Banker’s Acceptances 6 months – 1 Year 0% - No Limit No Limit
Commercial Paper 180 days – 6 months No Limit 10%
Money Market Mutual Funds N/A No Limit No Limit
Investment Agreements 6 months – No Limit No Limit No Limit
Certificates of Deposit 6 months – No Limit No Limit No Limit
Demand Deposits 6 months – No Limit No Limit No Limit
Time Deposits 6 months – No Limit No Limit No Limit
Local Agency Bonds 6 months – No Limit No Limit No Limit
Forward Delivery Agreement 6 months – No Limit 0% - No Limit No Limit
Forward Purchase Agreement 6 months – No Limit 0% - No Limit No Limit
Repurchase Agreements 6 months – No Limit No Limit No Limit
Local Agency Investment Fund (LAIF)N/A No Limit No Limit
Municipal Obligations 6 months – No Limit No Limit No Limit
County Pooled Investment Funds N/A 0% - No Limit No Limit
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in market interest rates. One of the ways that the City manages its
exposure to interest rate risk is by purchasing a combination of shorter term and longer term
investments and by timing cash flows from maturities so that a portion of the portfolio is maturing
or coming close to maturity over time as necessary to provide the cash flow and liquidity needed
for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments
held by bond trustees) to market interest rate fluctuations is provided by the following table that
shows the distribution of the City’s investments by maturity:
98
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2) Cash and Investments (Continued)
Some of the City’s investments may have call features where the investments’ principal may be
paid down before its maturity. Such investments include asset backed securities, FHLMCs,
investments with make whole call provisions, and investments with call dates.
The City’s asset backed securities pay monthly coupons, at which time principal may be paid
down. As of June 30, 2023, the City held asset backed securities of $18,141,982.
The City’s FHLMCs may pay down principal prior to maturity. As of June 30, 2023, the City held
FHLMCs of $13,941,758.
Investments with make whole call provisions generally may be called any time, but the terms of
the call price generally mitigate the financial impact of a call. As of June 30, 2023, the City held
corporate, municipal, and Yankee bonds with make whole call provisions as summarized below:
Investment Maturities (In Years)
Investment Type Fair Value Less than 1 1 to 3 3 to 5 More than 5 Total
Money Market Funds 14,838,878$ 14,838,878$ -$ -$ -$ 14,838,878$
U.S. Treasury Bills 43,562,123 43,562,123 - - - 43,562,123
U.S. Treasuries 90,154,286 13,812,949 46,723,612 29,617,725 - 90,154,286
Certificates of Deposit 3,797,773 3,797,773 - - - 3,797,773
U.S. Agency Securities 56,305,926 41,342,711 10,977,215 3,986,000 - 56,305,926
FHLMC 13,941,758 1,471,452 7,415,724 5,054,582 - 13,941,758
Asset Backed Securities 18,141,982 611,044 11,970,649 5,560,289 - 18,141,982
Corporate Bonds 61,022,923 19,117,288 28,215,555 13,690,080 - 61,022,923
Municipal Bonds 1,955,920 1,955,920 - - - 1,955,920
LAIF 20,381,638 20,381,638 - - - 20,381,638
Yankee Bonds 1,899,500 - 1,899,500 - - 1,899,500
Supranationals 11,898,698 5,795,284 6,103,414 - - 11,898,698
Investments with Fiscal Agent:
Money Market Funds 9,775,881 9,775,881 - - - 9,775,881
U.S. Treasuries 54,287 54,287 - - - 54,287
LAIF 281,132 281,132 - - - 281,132
Totals 348,012,705$ 176,798,360$ 113,305,669$ 57,908,676$ -$ 348,012,705$
Assuming callable securities (if any) will not be called.
Maturity Value
January 2024 1,482,780$
February 2024 1,955,920
May 2024 4,544,561
July 2024 1,899,500
February 2025 944,010
March 2027 1,892,940
September 2027 1,037,178
Total 13,756,889$
99
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2)Cash and Investments (Continued)
Investments with call dates may be called anytime on or after the call date. As of June 30, 2023,
the City held corporate bonds with call dates as summarized below:
Investments may have both a make whole call provision and a regular call date. As of June 30,
2023, the City held corporate bonds with both a make whole call provision and a regular call date
as summarized below:
Approximately $9.6 million of the investments that are FHLMC's or have either a regular call date
or both a make whole call provision and a regular call date, also have interest rate reset dates. If
$5.7 million of the securities with interest rate reset dates are not called by their call date, then
these securities will convert to floating rate securities tied to a benchmark index. Prior to their call
date, these securities pay a fixed rate of interest. An additional $2.9 million of the securities with
interest rate reset dates are FHLMC's with a potential variable coupon rate.
Maturity Value Call Date
August 2023 995,920$ July 2023
February 2024 1,970,940 January 2024
April 2025 1,418,227 March 2025
February 2026 843,129 February 2025
May 2027 2,889,570 April 2027
Total 8,117,786$
Maturity Value Call Date
February 2024 1,295,204$ December 2023
March 2024 2,151,326 February 2024
May 2024 1,087,659 July 2023
June 2024 998,500 July 2023
July 2024 447,384 July 2023
September 2024 961,770 August 2024
March 2025 1,960,340 March 2024
March 2025 2,851,050 February 2025
April 2025 2,857,170 March 2025
June 2025 950,560 June 2024
August 2025 2,322,868 May 2025
July 2026 1,962,260 July 2025
September 2027 980,580 August 2027
Total 20,826,671$
100
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2)Cash and Investments (Continued)
The remaining $998,500 of the securities with interest rate reset dates converted to floating rate
securities before the end of the financial statements' fiscal year.
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
As of June 30, 2023, the City did not have any investments (including investments held by fiscal
agent) whose fair values were highly sensitive to interest rate fluctuations.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented in the following schedule is the minimum
rating (where applicable) required by the California Government Code, the City’s investment
policy, or debt agreements, and the actual rating by Standard & Poor’s as of the June 30, 2023
for each investment type.
Concentration of Credit Risk
The investment policy of the City and the California Government Code limit the amount that can
be invested in any one issuer as previously discussed. Investments in any one issuer (excluding
U.S. Treasury Bills, U.S. Treasuries, mutual funds, and pooled investments) that represent 5% or
more of total City’s investments are as follows:
Issuer Investment Type Amount
FHLMC U.S. Agency Securities $16,257,299
FHLMC FHLMC 13,941,758
Minimum Legal
Investment Type Fair Value Rating AAA AAAm AA+ AA AA- A-1+ A+ A A- Not Rated
Money Market Funds 14,838,878 AAAm -$ 14,838,878$ -$ -$ -$ -$ -$ -$ -$ -$
U.S. Treasury Bills 43,562,123 None - -- - - 43,562,123 - - - -
U.S. Treasuries 90,154,286 None - - 90,154,286 - - - - - - -
Certificates of Deposit 3,797,773 A-1 - -- - - 3,797,773 - - - -
U.S. Agency Securities 56,305,926 None - - 56,305,926 - - - - - - -
FHLMC 13,941,758 None 1,471,452 - 12,470,306 - - - - - - -
Asset Backed Securities 18,141,982 AAA 12,126,060 - -- - - - - - 6,015,922
Corporate Bonds 61,022,923 A-- - 8,947,361 2,739,776 5,818,607 - 11,765,039 20,995,461 10,756,679 -
Municipal Bonds 1,955,920 A-- - 1,955,920 - - - - - - -
LAIF 20,381,638 N/A - - - - - - - - - 20,381,638
Yankee Bonds 1,899,500 A-- - - - - - - - 1,899,500 -
Supranationals 11,898,698 AA-11,898,698 - - - - - - - - -
Investments with Fiscal Agent:
Money Market Funds 9,775,881 AAm - 9,775,881 - - - - - - - -
U.S. Treasuries 54,287 None - -54,287 - - - - - - -
LAIF 281,132 N/A - -- - - - - - - 281,132
Totals 348,012,705$ 25,496,210$ 24,614,759$ 169,888,086$ 2,739,776$ 5,818,607$ 47,359,896$ 11,765,039$ 20,995,461$ 12,656,179$ 26,678,692$
101
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2) Cash and Investments (Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The custodial credit risk for
investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to
a transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The California Government Code and the
City’s investment policy do not contain legal or policy requirements that would limit the exposure
to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by
state or local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The fair value
of the pledged securities in the collateral pool must equal at least 110% of the total amount
deposited by the public agencies. California law also allows financial institutions to secure City
deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits. As of June 30, 2023, none of the City’s deposits with financial institutions in excess of
federal depository amounts were held in uncollateralized accounts.
For investments identified herein as restricted cash with fiscal agent, the fiscal agent selects the
investment under the terms of the applicable trust agreement, acquires the investment, and holds
the investment on behalf of the reporting government.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated
by the California Government Code under the oversight of the Treasurer of the State of California.
The fair value of the City’s investment in this pool is reported in the accompanying financial
statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for
the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available
for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. LAIF is not rated.
Limitations and restrictions apply to the City’s investment in LAIF. Up to 15 transactions with LAIF
are permitted each month. Balances in LAIF may not exceed $75 million, with the exception of
bond accounts. LAIF requests one day prior notice for withdrawals of $10 million or more.
Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for
identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are
significant unobservable inputs.
102
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(2) Cash and Investments (Continued)
Most of the City’s investments are in Level 2 of the fair value hierarchy. Examples of Level 2
valuation inputs include:
• Quoted prices for similar assets or liabilities in active markets
• Quoted prices for identical or similar assets or liabilities in markets that are not active
• Inputs other than quoted prices that are observable for the asset or liability
• Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
Following are the City’s recurring fair value measurements as of June 30, 2023:
(3) Lease Receivables
City as Lessor
Lease agreements that meet the requirements of GASB 87 for which the City is lessor are
disclosed as lease receivables on the City’s financial statements. Included in the City’s lease
receivables are over 900 agreements related to land and structures. GASB 87 excludes certain
inflows (e.g., certain variable payments, etc.) from the measurement of lease receivables. For
the fiscal year ending June 30, 2023, the City recognized $4,701,780 of variable payments related
Fair Value
Investments
That Are Not
Subject to Fair
Value Hierarchy
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Quoted Prices
for Similar
Assets in Active
Markets (Level 2)
Significant
Unobservable
Inputs (Level 3)
Money Market Funds 14,838,878$ 14,838,878$ -$ -$ -$
U.S. Treasury Bills 43,562,123 - - 43,562,123 -
U.S. Treasuries 90,154,286 - - 90,154,286 -
Certificates of Deposit 3,797,773 - - 3,797,773 -
U.S. Agency Bonds 56,305,926 - - 56,305,926 -
FHLMC 13,941,758 - - 13,941,758 -
Asset Backed Securities 18,141,982 - - 18,141,982 -
Corporate Bonds 61,022,923 - - 61,022,923 -
Municipal Bonds 1,955,920 - - 1,955,920 -
LAIF 20,381,638 20,381,638 - - -
Yankee Bonds 1,899,500 - - 1,899,500 -
Supranationals 11,898,698 - - 11,898,698 -
Investments with Fiscal Agent:
Money Market Funds 9,775,881 9,775,881 - - -
U.S. Treasuries 54,287 - - 54,287 -
LAIF 281,132 281,132 - - -
Totals 348,012,705$ 45,277,529$ -$ 302,735,176$ -$
103
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(3)Lease Receivables (Continued)
to the lease receivables that were excluded from the measurement of the lease receivables.
Lease inflows, including inflows excluded from GASB 87, are included on the City’s financial
statements as property income. Lease inflows for interest revenue from amortization of the GASB
87 lease receivables totaled $2,622,004. Lease inflows for lease revenue from amortization of the
related GASB 87 deferred inflows of resources from leases was $8,042,290. Lease receivables
at June 30, 2023 were $268,671,212.
Regulated Lease
While not technically a lease, the City licenses streetlight space for cellphone antennas and
related equipment to a cellphone company. Restrictions to the license cause the license to be a
GASB 87 regulated lease that is excluded from GASB 87’s present value calculations and notes.
Generally, these licensed streetlight spaces are licensed nonexclusively, but some of these
licensed spaces may be licensed exclusively. The total revenue recognized during the fiscal year
for this license was $8,596. Below are the expected future minimum payments to the City from
this license. License payments by the cellphone company to the City do not secure debt issued
by the City.
Year Ending License
June 30,Payments
2024 4,843$
2025 1,500
2026 1,500
2027 1,500
2028 1,500
2029-2033 7,500
2034-2038 7,500
2039 1,000
Total 26,843$
104
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(4) Interfund Receivables and Payables
At June 30, 2023, interfund receivables and payable were as follows:
The above balances are primarily due to reclassification of negative cash balances in the city-
wide cash pool.
At June 30, 2023, interfund advances receivable and payable were as follows:
The General Fund advance to the Tide and Submerged Land – Harbor Capital Fund was utilized
for dredging within the City’s Tidelands. Repayment of the advance to the General Fund is funded
from incremental revenue increases generated from certain leases, mooring rents, commercial
and residential pier rents, and parking meter revenues.
Due from Due to
General Fund 551,076$ -$
Facilities Financial Planning Reserve Fund 6,349,460 -
Debt Service Fund - 6,349,460
Internal Service Fund - 353,001
Other Governmental Funds - 198,075
Totals 6,900,536$ 6,900,536$
Advance to Advance from
General Fund 7,026,659$ -$
Tide and Submerged Land - Harbor Capital Fund - 6,926,659
Flexible Spending Account Custodial Fund - 100,000
Totals 7,026,659$ 7,026,659$
105
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(4)Interfund Receivables and Payables (Continued)
The annual amortization of the repayment of the advance is as follows:
The General Fund advance to the Flexible Spending Account Fund was to fund the new plan year
beginning January 1, 2023, as employees can spend their total elected contribution amount
before any employee contributions have been made. Repayment of the advance to the General
Fund will be funded from forfeited employee balances.
(5)Interfund Transfers
Interfund transfers at June 30, 2023, consisted of the following:
The City typically uses transfers to fund ongoing subsidies and to set aside resources for long-
term needs such as capital facilities replacement and major maintenance. The General Fund
transferred:
Advance #1 Advance #2
Dredging Marina Park
Fiscal Projects Project Total
Year Repayment Repayment Repayment
2024 750,000 500,000 1,250,000
2025 750,000 500,000 1,250,000
2026 750,000 500,000 1,250,000
2027 750,000 500,000 1,250,000
2028 426,659 500,000 926,659
2029 - 500,000 500,000
2030 - 500,000 500,000
Totals 3,426,659$ 3,500,000$ 6,926,659$
Harbor Capital Fund Advance - Repayment Terms
(Zero-Interest Advance)
General Fund
Tide and
Submerged
Land -
Operating
Tide and
Submerged
Land - Harbor
Capital
Facilities
Financial
Planning
Reserve Debt Service
Internal
Service
Funds
Other
Governmental
Funds Total
General Fund -$ 11,546,069$ 4,600,000$ 12,924,919$ -$ 379,452$ 36,028,451$ 65,478,891$
Tide and Submerged Land -
Operating 18,380,271 - - - - - - 18,380,271
Facilities Financial Planning
Reserve - - - - 8,562,344 - 14,019,264 22,581,608 Other Governmental Funds 47,992 - - 41,272 - - 22,349,009 22,438,273
Totals 18,428,263$ 11,546,069$ 4,600,000$ 12,966,191$ 8,562,344$ 379,452$ 72,396,724$ 128,879,043$
Transfers In
T
r
a
n
s
f
e
r
s
O
u
t
106
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(5) Interfund Transfers (Continued)
• $11,546,069 to subsidize the maintenance and operation of the Tide and Submerged Land
– Operating Fund;
• $4,600,000 to the Tide and Submerged Land – Harbor Capital Fund to cash fund Harbor
Capital projects;
• $12,924,919 to the Facilities Financial Planning Reserve Fund to cash fund construction
projects for General Fund supported facilities;
• $379,452 to the Equipment Maintenance Internal Service Fund to fund ongoing Plymovent
exhaust extraction system updates; and
• $36,028,451 to Other Governmental Funds, which includes $8,430,000 to the Unrestricted
Capital Improvements Fund to cash fund General Fund capital improvements, $5,010 to
close Measure M project, $24,093,440 to Police Facility Fund to purchase property for a
future police station site, $1,000,000 to the Neighborhood Enhancement Fund for capital
improvement projects, $2,500,000 to the Facilities Maintenance Fund for maintenance of
facilities.
The Tide and Submerged Land – Operating Fund transferred $18,380,271 to the General Fund
to reimburse for tidelands related expenditures.
The Facilities Financial Planning Reserve Fund transferred $8,562,344 to the Debt Service Fund
for the debt service payments related to the Civic Center Certificates of Participation and the Fire
Station No. 2 Certificates of Participation.
The Facilities Financial Planning Reserve Fund also transferred to Other Governmental Funds as
follows:
• $6,900,000 to the Miscellaneous FFP Projects Fund for CNG fueling support facility and
transfer station rehabilitation;
• $3,324,919 to the Police Facility Fund to purchase property for a future police station;
• $900,000 to the Fire Station Fund for design costs related to the replacement of Fire
Station No. 1 and Balboa Library; and
• $2,894,345 to the Parks and Community Centers Fund for construction costs related to a
pedestrian and bicycle bridge, and a public restroom.
Other Governmental Funds, transferred $22,349,009 to other funds as follows:
• The Unrestricted Capital Improvements Fund transferred $1,450,000 and $15,500,000 to
the Police Facility Fund and the Neighborhood Enhancement Fund respectively to
purchase property for a future police station and for construction costs related to
neighborhood enhancement projects;
• The Oceanfront Encroachment Fund transferred $500,000 to the Unrestricted Capital
Improvements Fund to fund construction costs to beach access; and
• The Miscellaneous FFP Projects Fund transferred $4,899,009 to the Parks and
Community Centers Fund to fund the construction of a new library lecture hall.
107
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(6)Capital Assets
Capital asset activity for the year ended June 30, 2023, was as follows:
Governmental Activities:
Governmental Activities capital assets net of accumulated depreciation/amortization at June 30,
2023 are comprised of the following:
Beginning
Balance,Balance
As Restated*Additions Deletions June 30, 2023
Non-depreciable/non-amortizable:
Land and rights of way 1,899,966,292$ 18,519,934$ -$ 1,918,486,226$
Work in progress 12,835,533 12,360,637 (11,357,194) 13,838,976
1,912,801,825 30,880,571 (11,357,194) 1,932,325,202
Depreciable/amortizable:
Structures 242,645,417 18,405,432 (342,470) 260,708,379
Intangible right to use structures 14,060,855 - (133,170) 13,927,685
Equipment 58,990,143 4,814,699 (2,999,011) 60,805,831
Intangible right to use equipment 348,272 5,616 - 353,888
Intangible right to use subscriptions 2,634,434 - - 2,634,434
Infrastructure 396,452,687 11,060,030 (7,379,959) 400,132,758
715,131,808 34,285,777 (10,854,610) 738,562,975
Less accumulated depreciation/amortization for:
Structures (59,448,334) (5,343,834) 319,236 (64,472,932)
Intangible right to use structures (1,040,019) (1,014,212) 133,171 (1,921,060)
Equipment (39,972,804) (4,412,477) 2,925,134 (41,460,147)
Intangible right to use equipment (38,584) (79,225) - (117,809)
Intangible right to use subscriptions - (403,595) - (403,595)
Infrastructure (185,444,512) (7,608,262) 3,309,461 (189,743,313)
(285,944,253) (18,861,605) 6,687,002 (298,118,856)
Net depreciable/amortizable 429,187,555 15,424,172 (4,167,608) 440,444,119
Net capital assets 2,341,989,380$ 46,304,743$ (15,524,802)$ 2,372,769,321$
* The beginning balance amount for intangible right to use subscriptions includes prior adjustment of $2,634,434 from
implementing GASB 96, which requires a capital asset to be reported for certain subscriptions where the City is the
subscriber based on a present value estimate of certain subscription payments. See Note (7) for additional details.
108
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(6) Capital Assets (Continued)
Business-type Activities:
Depreciation/amortization expense was charged in the following functions in the Statement of
Activities:
General Capital Assets, net 2,353,177,480$
Internal Service Fund Capital Assets, net 19,591,841
Total 2,372,769,321$
Beginning Balance
Balance Additions Deletions June 30, 2023
Non-depreciable/non-amortizable:
Land 2,219,450$ -$ -$ 2,219,450$
Work in progress 3,730,587 4,042,274 (75,453) 7,697,408
5,950,037 4,042,274 (75,453) 9,916,858
Depreciable/amortizable:
Intangible right to use land and right of way 1,529,906 2,353,156 - 3,883,062
Structures 688,396 - - 688,396
Equipment 337,181 - - 337,181
Infrastructure 198,141,357 2,600,848 (1,887,452) 198,854,753
Total Capital Assets 200,696,840 4,954,004 (1,887,452) 203,763,392
Less accumulated depreciation/amortization for:
Intangible right to use land and right of way (20,513) (53,656) - (74,169)
Structures (294,855) (15,357) - (310,212)
Equipment (210,838) (25,291) - (236,129)
Infrastructure (75,657,112) (2,383,644) 247,825 (77,792,931)
(76,183,318) (2,477,948) 247,825 (78,413,441)
Net depreciable/amortizable 124,513,522 2,476,056 (1,639,627) 125,349,951
Net capital assets 130,463,559$ 6,518,330$ (1,715,080)$ 135,266,809$
109
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(6)Capital Assets (Continued)
Internal Service Fund depreciation/amortization of $4,091,842 is allocated to governmental
functions above.
(7)Long-Term Liabilities
Changes in Long-Term Liabilities
The long-term liabilities for governmental activities for the year ended June 30, 2023, are as
follows:
Governmental Business-type
Activities Activities
General Government 6,671,560$ -$
Public Safety 1,650,615 -
Public Works 178,131 -
Community Development 508,964 -
Community Service 9,852,335 -
Water - 1,837,144
Wastewater - 640,804
Totals 18,861,605$2,477,948$
Beginning Amounts
Balance,Ending Due Within
As Restated*Additions Deletions Balance One Year
Governmental activities:
Other debt:
Certificates of participation - Series 2010B 94,465,000$ -$ (3,275,000)$ 91,190,000$ 3,390,000$
Certificates of participation - Series 2020A 7,085,000 -(665,000)6,420,000 695,000
Bond premium - Series 2020A 1,148,895 -(142,131)1,006,764 -
Direct borrowing:
CDBG loan 208,000 -(208,000)--
Other long-term liabilities:
Workers' compensation payable 15,754,588 4,903,042 (4,261,477)16,396,153 3,072,704
Claims and judgments payable 8,695,880 5,618,185 (5,625,004)8,689,061 2,938,129
Compensated absences 12,777,408 2,007,182 (2,093,550)12,691,040 4,223,096
Lease liability 13,321,041 5,616 (1,052,508)12,274,149 1,004,482
Subscription liability 2,634,434 -(399,301)2,235,133 520,085
Total governmental activities 156,090,246$ 12,534,025$ (17,721,971)$ 150,902,300$ 15,843,496$
* The beginning balance amount for subscription liability includes a prior adjustment of $2,634,434 from implementing GASB 96, which
requires a liability to be reported for certain subscriptions where the City is the subscriber based on a present value estimate of certain
subscription payments. See Note (7) for additional details.
110
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(7) Long-Term Liabilities (Continued)
Internal service funds predominantly serve the governmental funds. Accordingly, long-term
liabilities for them are included as part of the above totals for governmental activities. Also,
liabilities for workers’ compensation, claims and judgments, compensated absences, and net
OPEB obligation are typically liquidated from the internal service funds through resources
collected from individual funds.
The long-term liabilities for business-type activities for the year ended June 30, 2023, are as
follows:
2010 Certificates of Participation
In Fiscal Year 2010-11, the City issued $20,085,000 of Series 2010A (Tax Exempt) and
$106,575,000 of Series 2010B (Federally Taxable Direct Pay Build America Bonds) Certificates
of Participation. The 2010A Certificates were issued to prepay the $3,990,000 principal
outstanding on the 1998 Library Certificates of Participation. Accordingly, the 1998 Library
Certificates have been defeased and are no longer outstanding. The remaining proceeds from
the Series 2010A Certificates were used to finance the acquisition, improvement and equipping
of the Civic Center Project. The Series 2010B Certificates were issued to provide additional
financing for the Civic Center Project. The proceeds of the Certificates also were applied to pay
certain costs of issuance incurred in connection with the Certificates.
The lease payments made by the City are held by a trustee who makes semi-annual payments
on the Certificates of Participation. The lease payments began January 1, 2011, and are in
amounts sufficient to cover the payment of principal and interest of the Certificates. Interest on
the Certificates is payable semiannually on January 1 and July 1 of each year. The 2010A
Certificates have been defeased and are no longer outstanding. The 2010B Certificates interest
rates range from 4.45% to 7.17%. The City has designated the Series 2010B Certificates as
“Build America Bonds” (BABs) under the provisions of the American Recovery and Reinvestment
Act of 2009. Thus, the City receives refundable credits from the United States Treasury on the
interest paid on the 2010B Certificates. As of June 30, 2023, the City has received $29,455,774
of BABs Subsidy from the United States Treasury and expects to receive subsidy equal to about
33% on future interest payable on the 2010B Certificates. Principal payments are payable
annually on July 1 of each year. The remaining principal payments for the Series 2010B
Certificates, which are payable through July 1, 2040, range from $3,390,000 to $7,245,000. The
total outstanding balance at June 30, 2023 amounted to $91,190,000. The use of the following
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Lease liability 1,512,574$ 2,353,156$ (44,956)$ 3,820,774$ 44,120$
Total business-type activities 1,512,574$ 2,353,156$ (44,956)$ 3,820,774$ 44,120$
111
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(7)Long-Term Liabilities (Continued)
assets has been pledged as security for the outstanding balance: the Central Library and the
Civic Center.
The annual amortization requirements of the outstanding Series 2010B Certificates of
Participation are as follows:
2020 Certificates of Participation
In Fiscal Year 2020-21, the City issued $7,860,000 of Series 2020A Certificates of Participation.
The 2020A Certificates were issued to finance the acquisition, improvement, and equipping of
Fire Station No. 2. The proceeds of the Certificates also were applied to pay certain costs of
issuance incurred in connection with the Certificates.
The lease payments made by the City are held by a trustee who makes semi-annual payments
on the Certificates of Participation. The lease payments began June 15, 2021, and are in amounts
sufficient to cover the payment of principal and interest of the Certificates. Interest on the
Certificates is payable semiannually on January 1st and July 1st of each year. The 2020A
Certificates’ interest rate is 4.00%. Principal payments are payable annually on July 1st of each
year. The remaining principal payments of the Series 2020A Certificates, which are payable
through July 1, 2030, range from $695,000 to $915,000. The total outstanding balance at June
30, 2023 amounted to $6,420,000. The use of the following assets has been pledged as security
for the outstanding balance: Fire Station 5 and Fire Station 7.
The annual amortization requirements of the outstanding Series 2020A Certificates of
Participation are as follows:
Year Ending
June 30 Principal Interest Total
2024 3,390,000$ 6,365,978$ 9,755,978$
2025 3,510,000 6,142,971 9,652,971
2026 3,675,000 5,889,360 9,564,360
2027 3,850,000 5,623,515 9,473,515
2028 4,025,000 5,345,089 9,370,089
2029-2033 23,060,000 22,068,073 45,128,073
2034-2038 28,900,000 12,815,308 41,715,308
2039-2041 20,780,000 2,279,425 23,059,425
Totals 91,190,000$ 66,529,719$ 157,719,719$
112
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(7) Long-Term Liabilities (Continued)
CDBG Loan
In fiscal year 2003, the City received $2,400,000 in Section 108 loan proceeds to assist with the
funding for the Balboa Village Improvement Program. The loan is collateralized by future
Community Development Block Grant allocations. The original loan was refinanced in fiscal year
2015 lowering the average interest rate from 6.5% to 1.5%. As of June 30, 2023, the outstanding
balance on the loan is $0.
Claims and Judgments
The City retains the risk of loss for general liability and workers’ compensation claims as described
in Note (8). These amounts represent estimates of amounts to be paid for reported general liability
and workers' compensation claims including incurred-but-not-reported claims based upon past
experience, modified for current trends and information. While the ultimate amount of losses
incurred through June 30, 2023, is dependent on future developments based upon information
from the City’s attorney, the City's claims administrators, and others involved with the
administration of the programs, City management believes the accrual is adequate to cover such
losses. The estimated liability at June 30, 2023, for general liability amounted to $8,689,061 and
for workers’ compensation was $16,396,153.
Compensated Absences
The City's policies relating to compensated absences are described in Note (1). This liability at
June 30, 2023, is $12,691,040. Compensated absences are liquidated from the Compensated
Absences internal service fund.
Unused Credit
The City has a letter of credit in the amount of $300,938.
Year Ending
June 30 Principal Interest Total
2024 695,000$ 242,900$ 937,900$
2025 725,000 214,500 939,500
2026 755,000 184,900 939,900
2027 785,000 154,100 939,100
2028 815,000 122,100 937,100
2029-2031 2,645,000 161,300 2,806,300
Totals 6,420,000$ 1,079,800$ 7,499,800$
113
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(7)Long-Term Liabilities (Continued)
Leases
Lease agreements that meet the requirements of GASB 87 for which the City is lessee are
disclosed as lease liabilities on the City’s financial statements that are presented on the accrual
basis of accounting and with an economic resources measurement focus. Included in the City’s
lease liabilities are agreements related to an animal shelter, water well easements, storage,
lifeguard communication equipment, and part of a homeless shelter. During the fiscal year there
were no variable lease payments that were not previously included in the City’s lease liabilities.
Estimates of the future lease payments for the City’s lease liability for governmental activities are
as follows:
Estimates of the future lease payments for the City’s lease liability for business-type activities are
as follows:
Year Ending
June 30 Principal Interest Total
2024 1,004,483$ 65,407$ 1,069,890$
2025 1,010,019 59,871 1,069,890
2026 1,009,760 54,304 1,064,064
2027 951,085 48,915 1,000,000
2028 956,327 43,673 1,000,000
2029-2033 4,861,277 138,723 5,000,000
2034-2038 2,481,198 18,802 2,500,000
Totals 12,274,149$ 429,695$ 12,703,844$
Year Ending
June 30 Principal Interest Total
2024 44,120$ 20,903$ 65,023$
2025 44,364 20,659 65,023
2026 44,608 20,415 65,023
2027 44,854 20,169 65,023
2028 45,101 19,922 65,023
2029-2033 229,266 95,852 325,118
2034-2038 235,656 89,462 325,118
Thereafter 3,132,805 508,067 3,640,872
Totals 3,820,774$ 795,449$ 4,616,223$
114
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(7) Long-Term Liabilities (Continued)
Subscription-Based Information Technology Arrangements
Subscription-based information technology arrangements (SBITAs) that meet the requirements
of GASB 96 for which the City is a subscriber are disclosed as SBITA liabilities on the City’s
financial statements that are presented on the accrual basis of accounting with an economic
resources measurement focus. Included in the City’s SBITA liabilities are subscriptions related
to computer security, training, library operations, public communications, recreation classes
registrations, website hosting, word processing, spreadsheets, information backups, performance
evaluations, telephone calls, public safety, etc. GASB 96 excludes certain outflows (e.g., certain
variable payments, etc.) from the measurement of SBITA liabilities.
During the fiscal year, outflows of resources from the City to one SBITA vendor included variable
payments that were not previously included in the City’s SBITA liabilities. The city’s recreation
class registration software vendor charges fees for every class registration. These fees cover
both credit card processing and the registration software subscription. The amount of fees paid
to the software vendor varies with the number of registrations. However, the fees will not
decrease below the vendor’s annual minimum fee. Only the estimated annual minimum software
subscription fee has been included in the City’s GASB 96 subscription liabilities.
For the fiscal year ending June 30, 2023, there were approximately $80,203 of software
subscription fees in excess of the annual minimum.
Estimates of the future subscription payments for the City’s SBITA liabilities are as follows:
(8) Limited Obligation Bonds
The City has issued certain Assessment District and Community Facilities District Bonds.
Although the City collects and disburses funds for these districts, the City has no obligation or
duty to pay any delinquency out of any available funds of the City. Neither the faith and credit nor
Year Ending
June 30 Principal Interest Total
2024 520,085$ 10,880$ 530,965$
2025 335,606 8,515 344,121
2026 248,869 6,941 255,810
2027 171,315 5,787 177,102
2028 172,259 4,842 177,101
2029-2033 786,998 9,960 796,958
Totals 2,235,132$ 46,925$ 2,282,057$
115
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(8) Limited Obligation Bonds (Continued)
the taxing power of the City is pledged to the payment of the bonds, and therefore the bonded
indebtedness is not shown in the financial statements of the City. The City holds reserve funds
on behalf of bondholders, and the assets are recorded in the Special Assessment District
Custodial Fund. Bonds outstanding at June 30, 2023, for each district under the Bond Acts of
1911 and 1915 are as follows:
Assessment District Original Issue
Bonds Outstanding
June 30, 2023
Reassessment District 2012 $13,583,436 $ 1,159,546
Assessment District No. 117 2,955,000 2,375,000
Assessment District No. 116 1,575,000 1,365,000
Assessment District No. 116B 665,000 580,000
Assessment District No. 111 2,412,000 2,196,000
Assessment District No. 113 4,565,000 4,330,000
Totals $25,755,436 $12,005,546
(9) Risk Management – General Liability and Workers’ Compensation
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction
of assets, errors and omissions, injuries to employees, and natural disasters. The City carries
commercial insurance with independent third parties for loss risks associated with real and
personal property, and automotive liability. The City purchases fidelity bonds for employees in key
positions. Settled claims from these risks have not exceeded commercial insurance coverage for
the past three years.
The City utilizes Public Risk Innovation, Solutions, and Management (PRISM), formerly called
California State Association of Counties – Excess Insurance Authority (CSAC-EIA), a joint powers
authority, to provide excess insurance for the general liability and workers’ compensation
programs. PRISM provides coverage under the terms of a joint-powers agreement with the City
as follows:
Type of Coverage Self-Insured Retention Coverage Limits
General liability $500,000 $25,000,000
Workers’ compensation 500,000 Statutory
PRISM was established for the purpose of creating a risk management pool for all California
public entities. PRISM is governed by a Board of Directors consisting of representatives of its
member public entities.
The Insurance Reserve fund was established to account for costs associated with general liability
and workers’ compensation. The Insurance Reserve fund is accounted for as an internal service
116
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(9) Risk Management – General Liability and Workers’ Compensation (Continued)
fund where assets are set aside for risk management, administration, claim settlements and
benefit distribution. A premium is charged to each fund that accounts for part-time or full-time
employees. The total charge allocated to each of the funds is calculated using trends in actual
experience after considering unexpected and unusual claims.
Fund liabilities are reported when it is probable that a loss has occurred and the amount of the
loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred
but not reported (IBNR). Claims liabilities are calculated considering the effects of inflation, recent
claim settlement trends including frequency and amounts of payouts and other economic and
social factors. The total claims payable was $25,085,214 at June 30, 2023, which represents the
discounted present value of all outstanding claims. The claims are discounted using an interest
rate of 3%.
(10) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all City employees, permits them to set aside
a portion of their salary and defer taxation on the contributions and any investment earnings until
future years.
Section 457 plan assets were placed in trust for the exclusive benefit of all employees and their
beneficiaries. Therefore, all employee assets held in Section 457 plans are not the property of the
City and are not subject to the claims of the City’s general creditors. The assets under the plan,
which are not included in the accompanying financial statements, totaled $142,015,238 at June
30, 2023.
(11) Pension Plans
a. General Information about the Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to
participate in the City of Newport Beach’s separate Safety (police and fire) and Miscellaneous
June 30, 2022 June 30, 2023 June 30, 2022 June 30, 2023
Unpaid claims, beginning of fiscal year 8,265,635$ 8,695,880$ 14,753,000$ 15,754,588$
Insured claims (including IBNR)5,957,756 5,618,185 4,213,387 4,903,042
Claim payments (5,527,511) (5,625,004) (3,211,799) (4,261,477)
Unpaid claims, end of fiscal year 8,695,880$ 8,689,061$ 15,754,588$ 16,396,153$
General Liability Workers' Compensation
117
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11)Pension Plans (Continued)
(all other) Employee Pension Plans, agent multiple-employer defined benefit pension plans
administered by the California Public Employees’ Retirement System (CalPERS), which acts
as a common investment and administrative agent for its participating member employers.
Benefit provisions under the Plans are established by State statute and Local Government
resolution. CalPERS issues publicly available reports that include a full description of the
pension plans regarding benefit provisions, assumptions and membership information that
can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost
of living adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full-time
employment. Members with five years of total service are eligible to retire at age 50 to 62 with
statutorily reduced benefits. PEPRA miscellaneous members become eligible for service
retirement upon attainment of age 52 with at least 5 years of service. All members are eligible
for non-duty disability benefits after 5 years of service. The death benefit is one of the
following: the Basic Death Benefit, the 1959 Survivor Benefit, the Optional Settlement 2W
Death Benefit, or the 1957 Survivor Benefit. Safety members can receive a special death
benefit if the member dies while actively employed and the death is job-related. Fire members
may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor
Benefit if the member dies while actively employed and has at least 20 years of total CalPERS
service. The cost of living adjustments for each plan are applied as specified by the Public
Employees’ Retirement Law.
The Plans’ provisions and benefits in effect for the measurement period ended June 30, 2022 are
summarized as follows:
Prior to On or after On or after
Hire date November 24,2012 November 24, 2012 January 1, 2013
Benefit formula 2.5%@55 2.0%@60 2.0%@62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50-55 50-63 52-67
Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 1.092% to 2.418% 1.0% to 2.5%
Required employee contribution rates 12.35% - 13.0% 12.35% - 13.0% 12.35% - 13.0%
Required employer contribution rates 30.83% - 31.48% 27.41% - 28.06% 26.91% - 27.56%
Miscellaneous
118
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11) Pension Plans (Continued)
Employees Covered – At the measurement date of June 30, 2022, the following employees were
covered by the benefit terms for each Plan:
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires
that the employer contribution rates for all public employers are determined on an annual basis
by the actuary and shall be effective on the July 1 following notice of a change in the rate. The
total plan contributions are determined through CalPERS’ annual actuarial valuation process. The
actuarially determined rate is the estimated amount necessary to finance the costs of benefits
earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The City is required to contribute the difference between the actuarially determined rate
and the contribution rate of employees. City contribution rates may change if plan contracts are
amended. Payments made by the employer to satisfy contribution requirements that are identified
by the pension plan terms as plan member contributions requirements are classified as plan
member contributions.
Prior to On or after On or after
Hire date November 24,2012 November 24, 2012 January 1, 2013
Benefit formula 3.0%@50 2.0%@50; 3.0%@55 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50-55 50-55 50-57
Monthly benefits, as a % of eligible compensation 3.0%2.0% - 2.7%; 2.4% - 3.0%2.0% to 2.7%
Required employee contribution rates 13.5% - 14.6% 13.5% - 14.6% 13.5% - 14.6%
Required employer contribution rates 65.04% - 66.14% 65.04% - 66.14% 67.54% - 68.64%
Safety
Miscellaneous Safety
Inactive employees or
beneficiaries currently
receiving benefits 748 466
Inactive employees entitled to
but not yet receiving benefits 627 95
Active employees 534 279
Totals 1,909 840
119
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11)Pension Plans (Continued)
b.Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the
pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as
of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June
30, 2022 using standard update procedures. The General Fund, Tidelands Funds, Water Fund,
and Wastewater Fund have typically been used in prior years to liquidate the net pension liability.
A summary of principal assumptions and methods used to determine the net pension liability is
shown below.
Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial valuations
were determined using the following actuarial assumptions:
Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 6.90%6.90%
Inflation 2.30%2.30%
Payroll growth 2.75%2.75%
Projected salary increases
Investment Rate of Return 7.00%(1)7.00%(1)
Mortality Rate Table(2)
Post Retirement Benefit Increase
e(1)
e(2)
Derived using CalPERS' Membership
Entry-Age Normal Cost Method
Varies by Entry Age and Services
The mortality table used was developed based on CalPERS-specific data.
The probabilities of mortality are based on the 2021 CalPERS Experience
Study for the period from 2001 to 2019. Pre-retirement and Post-retirement
mortality rates include generational mortality improvement using 80% of
Scale MP-2020 published by the Society of Actuaries. For more details on
this table, please refer to the CalPERS Experience Study and Review of
Actuarial Assumptions report from November 2021 that can be found on
the CalPERS website.
Data for all Funds
The lesser of contract COLA or 2.50%
until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies, 2.5% thereafter
Net of pension plan investment and administrative expenses; includes
inflation.
120
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11) Pension Plans (Continued)
All other actuarial assumptions used in the June 30, 2021 valuation were based on the results of
an actuarial experience study for the period from 1997 to 2015, including updates to salary
increase, mortality and retirement rates. The Experience Study report can be obtained at the
CalPERS website under Forms and Publications.
Discount Rate – The discount rate used to measure the total pension liability was 6.90%. The
projection of cash flows used to determine the discount rate assumed that contributions from plan
members will be made at the current member contribution rates and that contributions from
employers will be made at statutorily required rates, actuarially determined. Based on those
assumptions, the Plan’s fiduciary net position was projected to be available to make all projected
future benefit payments of current plan members. Therefore, the long-term expected rate of return
on plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
Long-term Expected Rate of Return – The long-term expected rate of return on pension plan
investments was determined using a building-block method in which expected future real rates of
return (expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations. Using historical returns of all of the funds’ asset
classes, expected compound (geometric) returns were calculated over the next 20 years using a
building-block approach. The expected rate of return was then adjusted to account for assumed
administrative expenses of 10 Basis points.
The expected real rates of return by asset class are as follows:
Assumed
Asset Real Return
Allocation Years 1-10(2)
Global equity - Cap-weighted 30.00%4.54%
Global equity - Non-Cap-weighted 12.00%3.84%
Private Equity 13.00%7.28%
Treasury 5.00%0.27%
Mortgage-backed Securities 5.00%0.50%
Investment Grade Corporates 10.00%1.56%
High Yield 5.00%2.27%
Emerging Market Debt 5.00%2.48%
Private Debt 5.00%3.57%
Real Assets 15.00%3.21%
Leverage -5.00%-0.59%
e(1)An expected inflation of 2.30% used for this period.
e(2)Figures are based on the 2021 Asset Liability Management study.
Asset Class(1)
121
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11)Pension Plans (Continued)
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year
2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the
excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a
reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since
CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the
board elected to defer any changes to the asset allocation until the ALM process concluded, and
the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset
allocation along with the new capital market assumptions, economic assumptions and
administrative expense assumption support a discount rate of 6.90% (net of investment expense
but without a reduction for administrative expense) for financial reporting purposes. This includes
a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the
November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study
also recommended modifications to retirement rates, termination rates, mortality rates and rates
of salary increases that were adopted by the board. These new assumptions will be reflected in
the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
c.Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan for the measurement period follow:
122
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11) Pension Plans (Continued)
Miscellaneous Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2021 468,868,928$ 412,498,374$ 56,370,554$
Changes in the Year:
Service cost 8,261,032 - 8,261,032
Interest on the total pension liability 32,759,522 - 32,759,522
Changes in benefit terms - - -
Changes in assumptions 15,640,771 - 15,640,771
Differences between expected and
actual experience (1,394,332) - (1,394,332)
Net plan to plan resource movement - - -
Contribution - employer - 18,352,430 (18,352,430)
Contribution - employee - 3,974,974 (3,974,974)
Net investment income - (30,856,252) 30,856,252
Benefit payments, including refunds
of employee contributions (24,940,419) (24,940,419) -
Administrative Expense - (256,962) 256,962
Other Miscellaneous (Income)/Expense - - -
Net Changes 30,326,574 (33,726,229) 64,052,803
Balance at June 30, 2022 499,195,502$ 378,772,145$ 120,423,357$
Increase (Decrease)
123
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11)Pension Plans (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following
presents the net pension liability of the City for each Plan, calculated using the discount rate for
each Plan, as well as what the City’s net pension liability would be if it were calculated using a
discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Safety Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2021 628,841,903$ 508,966,420$ 119,875,483$
Changes in the Year:
Service cost 10,918,046 - 10,918,046
Interest on the total pension liability 43,860,290 - 43,860,290
Changes in benefit terms - - -
Changes in assumptions 22,634,816 - 22,634,816
Differences between expected and
actual experience (3,451,985) - (3,451,985)
Net plan to plan resource movement - - -
Contribution - employer - 32,394,203 (32,394,203)
Contribution - employee - 3,417,660 (3,417,660)
Net investment income - (38,537,209) 38,537,209
Benefit payments, including refunds
of employee contributions (35,654,758) (35,654,758) -
Administrative Expense - (317,056) 317,056
Other Miscellaneous (Income)/Expense - --
Net Changes 38,306,409 (38,697,160) 77,003,569
Balance at June 30, 2022 667,148,312$ 470,269,260$ 196,879,052$
Increase (Decrease)
Miscellaneous Safety
1% Decrease 5.90%5.90%
Net Pension Liability 187,537,650$ 284,130,749$
Current Discount Rate 6.90%6.90%
Net Pension Liability 120,423,357$ 196,879,052$
1% Increase 7.90%7.90%
Net Pension Liability 65,154,579$ 124,839,803$
124
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11) Pension Plans (Continued)
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary
net position is available in the separately issued CalPERS financial reports.
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2023, the City recognized pension expense of $42,313,796
($16,441,280 Miscellaneous Plan and $25,872,516 Safety Plan). At June 30, 2023, the City
reported deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Miscellaneous plan:
Pension contributions subsequent to
measurement date 20,794,397$ -$
Differences between expected and 576,605 (958,603)
actual experience
Change in assumptions 10,753,030 -
Net differences between projected and actual
and actual earnings on plan investments 19,249,525 -
Total miscellaneous plan 51,373,557 (958,603)
Safety plan:
Pension contributions subsequent to
measurement date 35,283,235 -
Differences between expected and
actual experience 476,993 (2,610,038)
Change in assumptions 17,114,129 -
Net differences between projected and actual
and actual earnings on plan investments 24,222,818 -
Total safety plan 77,097,175 (2,610,038)
Total all plans 128,470,732$ (3,568,641)$
125
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(11)Pension Plans (Continued)
$56,077,632 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the fiscal
year ending June 30, 2024. Other amounts reported as deferred outflows of resources and
deferred inflows of resources related to pensions will be recognized as pension expense as
follows:
e.Payable to the Pension Plan
At June 30, 2023, the City had no outstanding contributions to the pension plan required for the
year ended June 30, 2023.
f.Plan Description - Defined Contribution Plan
Pursuant to City Council Resolution No. 91-106, the City entered into a defined contribution plan
administrated by the private administrator known as Public Agency Retirement System ("PARS")
for all of its part-time employees, pursuant to the requirements of Section 11332 of the Social
Security Act. The City Council has the authority for establishing and amending the plan’s
provisions per the Resolution, including establishing and amending contribution requirements. In
a defined contribution plan, benefits depend solely on amounts contributed to the plan plus
investment earnings. All part-time employees are eligible to participate from the date of
employment. Federal legislation requires contributions of at least 7.5% to a retirement plan, and
City Council resolved to match the employees' contributions of 3.75%. The City's contributions for
each employee (and interest earned by the accounts) are fully vested immediately.
For the year ended June 30, 2023, the City's covered payroll for employees participating in the
plan was $3,984,887. Employees made contributions of $149,667 (3.75% of current covered
payroll), which was matched by the employer in the same amount. Assets of the plan totaled
$2,345,796 at June 30, 2023.
Fiscal
Year Ending
June 30,Miscellaneous Safety Total
2024 8,134,817$ 9,100,470$ 17,235,287$
2025 7,319,893 8,333,995 15,653,888
2026 2,328,674 6,574,441 8,903,115
2027 11,837,173 15,194,997 27,032,170
Thereafter - - -
126
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12) Post-Employment Health Care Benefits (OPEB)
The following description of the City of Newport Beach Retiree Health Savings (“RHS”) Plan
provides only general information. Participants should refer to the Plan agreement for a more
complete description of the Plan’s provisions.
Plan Description
The Retiree Health Savings Plan consists of the following post-retirement medical benefits:
PEMHCA
The CalPERS Public Employees' Medical and Hospital Care Act (PEMHCA) plan under the
authority of section 22750 to 22948 of the state of California's government code, is an agent
multiple employer plan. The City pays the required PEMHCA minimum contribution for all
miscellaneous and safety employees retiring directly from the City who enroll in a CalPERS
medical plan. The 2023 PEMHCA minimum contribution amount is $151 per month.
Implicit Subsidy
The City provides healthcare benefits to retirees in the form of an implied rate subsidy, which
results from the pooling of non-Medicare retirees and active employees for premium purposes.
Therefore, retirees receive the benefit of a lower premium, which would be higher if the premium
for retirees was based on age, health status or claims history. The difference between these
amounts is the implicit rate subsidy.
Other Retiree Medical Benefits
The City provides other retiree medical benefits in the form a single-employer defined contribution
plan, a single-employer defined benefit plan, and a hybrid of the two. In January 2006, the City
and employee associations agreed to major changes in the Post-Employment Health Care Plan.
All employees hired after January 1, 2006, and certain employees hired prior to this date, as well
as employees who elected to fully convert to a defined contribution formula (hereafter fully
converted employees), participate in a program that requires mandatory employee and employer
contributions. However, once these contributions have been made to the employee’s account,
the City has no further funding obligation to the Plan on their behalf, except for the Public
Employees’ Medical and Hospital Care Act (“PEMHCA”) minimum, which is the responsibility of
the City. These employees and eligible retirees participate in a Retiree Health Savings (“RHS”)
Plan sponsored by the City, the single employer of the plan. Plan assets are held in trust and
managed by MissionSquare Retirement (Trustee), under IRS Revenue Ruling 2002-41 (June 26,
2002) and IRS Notice 2002-45 (June 26, 2002).
Certain employees hired prior to January 1, 2006, had the option to retain a hybrid of the former
defined benefit plan, or to fully convert to the new Plan. Employees electing to retain a hybrid of
the former defined benefit formula participate in a program requiring mandatory defined
127
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12)Post-Employment Health Care Benefits (OPEB) (Continued)
contributions by employees and the City, as well as a defined benefit consisting of an ongoing
contribution from the City to the participant’s RHS account each month after retirement.
Additionally, these employees are eligible to receive health care benefits under the City’s group
health care plans. In order to receive these benefits, these employees are required to pay the City
$100 per month up until their retirement to offset the unfunded portion of post-employment health
care benefits existing at the inception of the plan.
For fully converted employees, the City made a one-time contribution into their individual RHS
account of $100 per month for every month the employee contributed to the previous defined
benefit plan up to a maximum of 15 years. For employees who elected to retain a hybrid plan, the
City made a one-time contribution into their individual RHS account of $75 per month for every
month the employee contributed to the previous defined plan up to a maximum of 15 years. In
order to receive these contributions, the employee must retire from the City. At June 30, 2023,
the liability for the conversion part of the RHS Plan was $994,475. This amount is not included
in the net OPEB liability, but is included in the compensated absences liability. See Note (6).
Employees who retired prior to January 1, 2006, continue to receive an ongoing defined benefit
consisting of a contribution made by the City to the participant’s RHS account each month. The
defined benefit portion of the plan is closed to new participants.
The City has elected to participate in the California Employers’ Retiree Benefit Trust (“CERBT”)
Fund to prefund its OPEB liability. CERBT is managed by CalPERS and invests in global equity,
global debt securities, inflation assets, commodities, and REITs. By placing funds in trust to fund
future City contributions before those future contributions are due, the City earns investment
income that will help pay those future contributions and thereby reduce the City’s long-term OPEB
budgetary requirements. CERBT is an agent multiple-employer trust. The CERBT Trust is not
reported in the financial statements since the CERBT Trust does not qualify as a fiduciary fund
under the accounting standards. Copies of CalPERS annual financial report may be obtained
from their executive office: 400 "P" Street, Sacramento, California 95814.
Employees Covered
As of the measurement date June 30, 2022, the following current and former employees were
covered by the benefit terms under the plan:
Inactive employees, spouses, or beneficiaries currently receiving benefits 450
Inactive employees or beneficiaries entitled to but not receiving benefits 327
Active employees 821
Total 1,598
128
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Contributions
Contribution requirements are established by City policy and may be amended by the City
Council. The annual contribution is based on the actuarially determined contribution. For the year
ended June 30, 2023, the City’s cash contributions were $6,187,129 to the trust in premium
payments and $967,136 for the estimated implicit subsidy, resulting in a total payment of
$7,154,265.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used
to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021.
The General Fund, Tidelands Funds, Water Fund, and Wastewater Fund have typically been
used in prior years to liquidate the net OPEB liability. A summary of the principal assumptions
and methods used to determine the total OPEB liability is shown below.
Actuarial Assumptions
The total OPEB liability as of June 30, 2021 actuarial valuation was determined using the following
actuarial assumptions and applied to all periods included in the measurement, unless otherwise
specified:
The actuarial assumptions used in the June 30, 2021, valuation were based on a standard set of
assumptions the actuary has used for similar valuations, modified as appropriate for the City.
The long-term expected rate of return on OPEB plan investment is assumed to be 6.00%. This
was determined using a building-block method in which expected future real rates of return
(expected returns, net of OPEB plan investment expense and inflation) are developed for each
major asset class. These expected future real rates of return are then combined to produce the
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.00%
Inflation 2.75%
Projected Salary Increase 3.00% per annum, in aggregate
Expected long term investment rate of return 6.00%
Healthcare Cost Trend Rates 6.25% HMO/6.25% PPO
Post-Retirement Turnover Derived from CalPERS pension plan
Mortality From Society of Actuaries Pub-2010 Public
Retirement Plans Mortality Table Report
129
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12)Post-Employment Health Care Benefits (OPEB) (Continued)
long-term expected rate of return by weighting them based on the target asset allocation
percentage and adding in expected inflation (2.75%). The asset class percentages are taken from
the current composition of the CERBT Fund, and the expected yields by asset class were not
available to the actuary:
Discount Rate
The discount rate used to measure the total OPEB liability is 6.00% per annum. This is the
expected long-term rate of return on City assets using investment strategy 1 within CERBT. The
projection of cash flows used to determine the discount rate assumed that the City contribution
will be made at rates equal to the actuarially determined contribution rates. Based on those
assumptions, the OPEB plan’s fiduciary net position is projected to cover all future OPEB
payments. Therefore, the discount rate was set equal to the long-term expected rate of return.
Changes in the Net OPEB Liability
The changes in the net OPEB liability are as follows:
Asset Expected Real
Allocation Rate of Return
Global Equities 49.00% N/A
Fixed Income 23.00% N/A
TIPS 5.00% N/A
REITs 20.00% N/A
Commodities 3.00%N/A
Totals 100.00%6.00%
Asset Class
130
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Change of Assumptions
The mortality table has been updated from the 2017 CalPERS Public Agency Misc. Mortality to
the following tables from the Society of Actuaries (SOA) Pub-2010:
• Employees and retirees: General Headcount Weighted Mortality Table fully generational
using Scale MP-2021.
• Surviving Spouses: Continuing Survivor Headcount Weighted Mortality Table Fully
generational using Scale MP-2021.
• Disabled retirees: Safety Headcount Weighted Mortality Table fully generational using
Scale MP-2021.
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2021 51,603,833$ 34,969,715$ 16,634,118$
Changes in the Year:
Service cost 530,843 - 530,843
Interest on the total OPEB liability 3,237,390 - 3,237,390
Changes of benefit terms - - -
Changes of assumptions 2,473,450 - 2,473,450
Differences between actual and
expected experience 1,120,534 - 1,120,534
Contribution - employer - 6,185,537 (6,185,537)
Contribution - employees - - -
Net investment income - (4,845,154) 4,845,154
Benefit payments, including refunds of
employee contributions (4,731,846) (4,731,846) -
Administrative expenses - (9,000) 9,000
Net Changes 2,630,371 (3,400,463) 6,030,834
Balance at June 30, 2022 54,234,204$ 31,569,252$ 22,664,952$
Increase (Decrease)
131
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12)Post-Employment Health Care Benefits (OPEB) (Continued)
•Future health care cost trend rates have been reset to an initial rate of 6.50% beginning
in fiscal year end 2023 and decreasing by 0.50% annually to an ultimate rate of 4.50%.
Change of Benefit Terms
There was no change of benefit terms.
Subsequent Events
There were no subsequent events that would materially affect the results presented in this
disclosure.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City, calculated using the discount rate for
the Plan, as well as what the City’s total OPEB liability would be if it were calculated using a
discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Sensitivity of the Net OPEB Liability to Changes in Health-Care Cost Trend Rates
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point
lower (5.25% HMO/5.25% PPO) or 1-percentage point higher (7.25% HMO/7.25% PPO) than
current healthcare cost trend rates:
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2023, the City recognized OPEB expense of $3,328,748. At June
30, 2023, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
1% Decrease Discount Rate 1% Increase
(5.00%)(6.00%)(7.00%)
Net OPEB Liability 28,302,507$ 22,664,952$ 17,915,213$
1% Decrease Current Healthcare 1% Increase
Cost Trend Rates
(5.25%HMO/5.25%PPO (6.25%HMO/6.25%PPO (7.25%HMO/7.25%PPO
decreasing to decreasing to decreasing to
3.5%HMO/3.5%PPO)4.5%HMO/4.5%PPO)5.5%HMO/5.5%PPO)
Net OPEB Liability 19,939,264$ 22,664,952$ 26,487,570$
132
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
The differences between expected and actual experience, and changes of assumptions are
amortized over a six-year period or a nine-year period, depending on the fiscal year the difference
occurred. The net difference between projected and actual earnings on plan investment is
amortized over a five-year period.
An amount of $7,154,265, which is reported as deferred outflows of resources related to
contributions subsequent to the measurement date, will be recognized as a reduction of the net
OPEB liability in the fiscal year ending June 30, 2024.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Payable to the OPEB Plan
At June 30, 2023, the City had no outstanding amount of contributions to the OPEB plan required
for the year ended June 30, 2023.
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB contriutions subsequent to measurement date 7,154,265$ -$
Differences between projected and actual experience 6,631,144 (146,515)
Change of assumptions 2,236,725 (235,288)
Net difference between projected and actual earnings
on OPEB plan investments 2,729,189 -
Totals 18,751,323$ (381,803)$
Description
Fiscal Year
Ending
June 30, Amount
2024 1,937,071$
2025 1,948,801
2026 1,369,838
2027 2,458,609
2028 1,025,730
Thereafter 2,475,206
133
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(13)Joint Venture Agreements
Bonita Canyon Public Facilities Financing Authority
The Bonita Canyon Public Facilities Financing Authority (Authority) is a joint powers authority
comprised of the City of Newport Beach and the Newport-Mesa Unified School District. The
Authority’s Board is comprised of two members appointed by each of the member agencies. The
Authority created Community Facilities District 98-1 to finance public facilities that will benefit the
properties within the District’s boundaries. In 1998, the Authority issued $45,000,000 of special
tax bonds to be repaid by special assessments. $30,577,712 (81.7%) of the proceeds were used
to pay for the costs of the City acquiring and constructing public facilities including parks and road
improvements. In Fiscal Year 2011-12, the Authority issued $38,330,000 of special tax refunding
bonds to refinance the 1998 Series. In Fiscal Year 2017-18, the Authority issued $28,245,000 of
special tax refunding bonds to refinance the 2012 series; the City is not obligated in any manner
to repay the bonds. As of June 30, 2023, the contributions from property owners have been fully
spent and no funds are held in trust by the fiscal agent. The City does not make any annual
contributions to the Authority and does not include the Authority as a component unit, as the City
is not financially accountable for the Authority’s activities and the Authority is not fiscally
dependent on the City. The City’s equity interest in the Authority is not readily determinable.
Complete separate financial statements can be obtained at the Newport Mesa Unified School
District, 2985 Bear Street, Suite 8M, Costa Mesa, California.
Metro Cities Fire Authority
The City of Newport Beach is a participant in a joint venture consisting of the cities of Anaheim,
Brea, Fountain Valley, Fullerton, Huntington Beach, and Orange for the operation of a
communication network utilized by fire suppression, emergency medical assistance, and rescue
services. The oversight board consists of one voting member and one alternate appointed by the
governing body of each member agency. The City of Newport Beach’s costs are based each fiscal
year upon the number of recorded incidents attributable to the City divided by the recorded
incidents attributable to all members during the year, and are recorded in the General Fund as an
expenditure for service. Upon termination of the agreement, the proceeds from the sale of the
property and assets of the joint venture will be paid to each member agency pursuant to their fair
share percentage. Annually, the amounts paid by the City to this joint venture are approximately
$781,180. The City’s 11.03% interest in the net equity of this joint venture at June 30, 2023,
amounts to $214,631. Complete separate financial statements can be obtained at the Metro Cities
Fire Authority offices at 201 S. Anaheim Boulevard, Suite 302, Anaheim, California.
Integrated Law and Justice Agency of Orange County
The City is a participant in a joint venture with several other public agencies in Orange County for
the operation of the Integrated Law and Justice Agency of Orange County (ILJAOC). The ILJAOC
was established in fiscal year 2006-07 and consists of 23 member agencies, with an oversight
board consisting of 12 members from the participating agencies. Annually, each member agency
pays a percentage of the operating and replacement costs for the ILJAOC. The City’s annual
134
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(13) Joint Venture Agreements (Continued)
contribution and interest in the net equity of this joint venture was immaterial as of June 30, 2023.
The City of Newport Beach acted as the Treasurer/Controller of the ILJAOC from inception
through the end of fiscal year 2010-11. Beginning July 1, 2011, the City of Brea, another member
agency, was appointed to serve as Treasurer/Controller, and assumed responsibility for all
operating activities of the ILJAOC. Complete separate financial statements can be obtained from
the City of Brea, 1 Civic Center Circle, Brea, California 92821.
(14) Commitments and Contingencies
Claims and Judgments
Numerous claims and suits have been filed against the City in the normal course of business. The
estimated liability under such claims, based upon information received from the City Attorney,
contracted attorneys, and the Risk Manager, has been estimated and recorded as accrued claims
and judgments payable. (See Note 8.)
Operating Agreements
The City of Newport Beach first entered into an agreement with Visit Newport Beach Inc. (“VNB”),
a legally separate non-profit marketing organization, in 1987. The primary responsibility of VNB
is to attract additional visitor business by promoting the City as the premier tourist and business
destination in Orange County. VNB is governed by an Executive Committee comprised of seven
individuals not appointed by the City Council of the City of Newport Beach. The current agreement
was entered into on September 27, 2011, and subsequently amended on January 28, 2014,
extending the agreement through December 31, 2024. The City pays VNB 18% of the Total
Transient Occupancy Tax collected during the fiscal year. For the Fiscal Year ending June 30,
2023, the City paid VNB $6,532,660.
Contractual Commitments
Construction and contractual commitments for major construction projects are as follows:
135
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(14) Commitments and Contingencies (Continued)
At fiscal year end, the City’s encumbrances with contractors were as follows:
Annual Project YTD Unexpended
Budget Expenditures Commitments
Lower Sunset View Park Concept 13,197,709$ 3,522,811$ 9,674,898$
Newport Coast Dr Pavement Rehab 6,350,032 3,476,754 2,873,277
Junior Lifeguards Building 6,895,130 3,722,321 3,172,810
West Irvine Terrace Water Main Repl 4,360,100 1,365,308 2,994,792
WCH Hwy Intersection Imp Ped Bridge 1,128,521 35,694 1,091,410
Advanced Metering Infrastructure 3,672,267 2,661,139 1,011,128
Bay Crossing Water Main Replc 1,150,343 170,611 817,799
Traffic Signal Rehabilitation 1,695,000 625 748,122
Facilities Maintenance Master Plan 1,418,481 684,923 689,126
Concrete Replacement Program 1,352,850 698,584 654,266
Central Library Lecture Hall 11,623,210 194,608 661,499
CNG Fueling System 7,014,403 87,911 618,793
Library/Fire Station No. 1 Repl 900,000 102,229 595,019
Balboa Island Drainage Master Plan 7,013,139 128,950 591,010
Tide and Tide and Special Capital
Submerged Submerged Land - Revenue Project Permanent
General Land - Operating Harbor Capital Funds Funds Funds Total
Streets and highways -$ -$ -$ 3,794,413$ 3,740,105$ -$ 7,534,518$
Parks and community centers - - - - 8,600,276 - 8,600,276
Facilities - - - - 317,054 - 317,054
Public arts and culture - - - 36,350 - - 36,350
Libraries - - - - - 11,620 11,620
Fiin - - - 9,910 - - 9,910
Capital re-appropriations - - - - 3,375,771 - 3,375,771
Beaches - 352,335 363,577 - - - 715,912
Marinas - 3,599 - - - - 3,599
Dredging - - 23,356 - - - 23,356
Equipment - 295,122 253,689 - - - 548,811
Facilities Replacement - - - - 100 - 100
Drainage - - - - 637,274 - 637,274
Miscellaneous and studies - - - - 540,048 - 540,048
Contract services 2,897,741 - - - - - 2,897,741
Supplies and materials 159,078 - - - - - 159,078
Maintenance and repairs 1,445,082 - - - 1,642,666 - 3,087,748
General 301,567 - - - - - 301,567
Total encumbrances 4,803,468$ 651,056$ 640,622$ 3,840,673$ 18,853,294$ 11,620$ 28,800,733$
Major Governmental Funds Other Governmental Funds
136
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(15) Fund Balance
Governmental Fund Balance at June 30, 2023, is classified as follows:
(16) Deficit Fund Equity
The following funds reported deficit equity balances:
Special Revenue Fund
Contributions 11,625$
Internal Service Fund
Compensated Absences 6,859,223$
Tide and Tide and Facilities Special Capital
Submerged Submerged Financial Planning Debt Service Revenue Project Permanent
General Land - Operating Land - Harbor Capital Reserve Fund Funds Funds Funds Totals
Nonspendable:
Prepaid items (legally restricted)1,024,080$ -$ -$ -$ -$ 21,150$ -$ -$ 1,045,230$
Inventories (legally restricted)188,828 - - - - - - - 188,828
Long-term loan receivable (form restricted)7,026,659 - - - - - - - 7,026,659
Permanent endowment (legally restricted)- - - - - - - 4,629,781 4,629,781 Restricted:
Affordable housing - - - - - 352,412 - - 352,412
Oceanfront encroachment - - - - - 945,623 - - 945,623
Upper Newport bay restoration - 1,479,188 - - - - - - 1,479,188
Cable franchise reserve - - - - - 3,152,537 - - 3,152,537 Community development - - - - - - 3,248 - 3,248
Streets and highways - - - - - 6,741,011 - - 6,741,011
Public safety - - - - - 530,365 - - 530,365
Parks - - - - - 82,673 - - 82,673
Facilities - - - - - 82,673 282,123 - 364,796
Transportation - - - - - 308,134 - - 308,134
Air quality improvement - - - - - 1,536,417 - - 1,536,417
Environmental liability mitigation - - - - - 9,235,547 - - 9,235,547
Public arts and culture - - - - - 966,702 - - 966,702
Parking - - - - - 216,689 - - 216,689
Training - - - - - 464,704 - - 464,704
Libraries - - - - - - - 205,358 205,358
Scholarships - - - - - - - 203,390 203,390 Fiin - - - - - 1,190,056 - - 1,190,056
Debt service - - - - 2,183,979 - - - 2,183,979
Capital re-appropriations - 3,137,075 - - - 703,496 7,284,113 - 11,124,684
Beaches - 352,335 363,577 - - - - - 715,912
Marinas - 3,599 - - - - - - 3,599 Dredging - - 29,597,545 - - - - 1,504,031 31,101,576
Equipment - 295,120 253,689 - - - - - 548,809
Committed:
Facilities replacement - - - 24,800,492 - - 658,756 - 25,459,248
Facilities maintenance - - - - - - 3,748,658 - 3,748,658
Civic center and park - - - - - - 485,365 - 485,365
Oil and gas liabilities - 840,000 - - - - - - 840,000
Parking management - - - - - - 97,537 - 97,537 Neighborhood enhancement - - - - - - 2,901,378 - 2,901,378
Capital re-appropriations 350,000 - - - - - 26,012,420 - 26,362,420
Drainage - - - - - - 637,274 - 637,274
Streets - - - - - - 3,740,105 - 3,740,105
Facilities - - - - - - 3,062,759 - 3,062,759 Miscellaneous and studies - - - - - - 540,048 - 540,048
Parks and community centers - - - - - - 9,051,376 - 9,051,376
Contract services 2,897,741 - - - - - - - 2,897,741
Supplies and materials 471,036 - - - - - - - 471,036
Maintenance and repairs 1,445,082 - - - - - 1,642,666 - 3,087,748
General 301,567 - - - - - - - 301,567
Unassigned 77,737,532 - - - - (11,625) - - 77,725,907
Total fund balances 91,442,525$ 6,107,317$ 30,214,811$ 24,800,492$ 2,183,979$ 26,518,564$ 60,147,826$ 6,542,560$ 247,958,074$
Other Governmental Funds
Governmental Fund Balance
137
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(16)Deficit Fund Equity (Continued)
The Contributions Fund accounts for revenues received from other government agencies and
developers as reimbursement for projects. The City will receive reimbursement in the following
fiscal year which will eliminate the deficit fund balance.
For the Compensated Absences Fund, the City’s Reserve Policy sets the maximum cash reserve
at 50% of the long-term compensated absences liability and targets a lesser amount that is the
median between that amount and a three-year average of the actual payments made for the cash-
out of accumulated leave balances. Accordingly, this deficit fund balance is intentional and in
compliance with the City Council-approved Reserve Policy.
(17)Tax Abatements
The City may enter into sales tax abatement agreements with automobile dealerships under City
Council Resolution 99-64. Under that Resolution, the City may rebate sales taxes “for the sole
purpose of reimbursing [automobile dealerships] for costs incurred for a project necessary to
make the project financially feasible.” Automobile dealerships must covenant “to complete the
project, to remain and operate the project for a specified period of time… [, and] to maximize the
City as the point-of-sale…”. Automobile dealership sales tax rebates are based on negotiations
that require City Council approval. On an accrual basis, for the fiscal year ended June 30, 2023,
the City rebated sales taxes to automobile dealerships totaling $541,290 under this program.
(18)Public-Private Partnerships
Agreements that meet the requirements of GASB 94 for which the city is transferor are disclosed
as public-private partnerships (PPP) receivables on the City’s financial statements. The City’s
PPP receivable is related to the facilities for the Balboa Island Ferry, Inc. (operator). GASB 94
excludes certain inflows (e.g., certain variable payments, etc.) from the measurement of PPP
receivables. Payments from the operator to the City include variable payments, because the
operator pays the City the greater of a minimum base amount or a specified percentage of the
operator’s gross receipts. For the fiscal year ending June 30, 2023, the City recognized $1,815
of payments related to PPP receivables that were excluded from the measurement of the PPP
receivables. A discount rate of 1.50% was applied to the measurement of the PPP receivable.
The PPP agreement leases facilities to the operator for the continued operation of a ferry between
Balboa Island and Balboa Peninsula. The City retains the right to inspect the property anytime
without notice to the operator. Please see the Statement of Net Position for additional information
about the nature and amounts of the PPP receivable and PPP deferred inflow.
138
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2023
(19) Subsequent Events
Limited Obligation Bond Issue for Assessment District No. 120-2
On August 10, 2023, the City issued $2,505,000 of Assessment District No. 120-2 Limited
Obligation Improvement Bonds pursuant to the provisions of the Improvement Bond Act of 1915.
The bonds are issued in serial and term maturities over twenty years ranging from 4.0% to 5.0%.
The bond proceeds will primarily be used to provide financing to underground power, telephone,
and cable facilities in the Improvement Area. Bond proceeds will also be used to establish a debt
service reserve fund and pay costs of issuance and capitalized interest on the bonds. Although
the City will be collecting and disbursing funds for this district, the City has no obligation or duty
to pay any delinquency out of any available funds of the City. Neither the faith and credit nor the
taxing power of the City is pledged to the payment of the bonds.
Limited Obligation Bond Issue for Assessment District No. 124
On August 10, 2023, the City issued $23,625,000 of Assessment District No. 124 Limited
Obligation Improvement Bonds pursuant to the provisions of the Improvement Bond Act of 1915.
The bonds are issued in serial and term maturities over twenty years ranging from 4.0% to 5.0%.
The bond proceeds will primarily be used to provide financing to underground power, telephone,
and cable facilities in the Improvement Area. Bond proceeds will also be used to establish a debt
service reserve fund and pay costs of issuance and capitalized interest on the bonds. Although
the City will be collecting and disbursing funds for this district, the City has no obligation or duty
to pay any delinquency out of any available funds of the City. Neither the faith and credit nor the
taxing power of the City is pledged to the payment of the bonds.
139
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140
FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION
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141
2023 2022 2021 2020 2019
Measurement period June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Total Pension Liability
Service cost $ 8,261,032 $ 7,438,050 $ 7,347,708 $ 7,084,444 $ 7,334,861
Interest on total pension liability 32,759,522 31,805,532 30,565,919 29,409,624 28,226,598
Differences between expected and actual experience 15,640,771 1,624,975 369,351 403,676 2,243,854
Changes in assumption (1,394,332)- - - (2,522,093)
Changes in benefits - - - - -
Benefit payments, including refunds of employee contributions (24,940,419) (22,976,493) (21,516,515) (20,129,701) (18,458,539)
Net Change in Total Pension Liability 30,326,574 17,892,064 16,766,463 16,768,043 16,824,681
Total Pension Liability - beginning 468,868,928 450,976,864 434,210,401 417,442,358 400,617,677
Total Pension Liability - ending (a)499,195,502 468,868,928 450,976,864 434,210,401 417,442,358
Plan Fiduciary Net Position
Contributions - employer 18,352,430 18,612,457 16,346,284 15,700,833 15,797,595
Contributions - employee 3,974,974 4,057,107 4,067,751 3,955,144 3,979,337
Net investment income (30,856,252) 76,031,841 16,074,793 19,895,019 23,855,196
Administrative expense (256,962) (336,753) (454,777) (216,502) (435,499)
Other miscellaneous income/(expense)- - - 700 (827,021)
Plan to plan resource movement - - - 1,570 (700)
Benefit payments (24,940,419) (22,976,493) (21,516,515) (20,129,701) (18,458,539)
Net change in Plan Fiduciary Net Position (33,726,229) 75,388,159 14,517,536 19,207,063 23,910,369
Plan Fiduciary Net Position - beginning 412,498,374 337,110,215 322,592,679 303,385,616 279,475,247
Plan Fiduciary Net Position - ending (b)378,772,145 412,498,374 337,110,215 322,592,679 303,385,616
Net pension liability - ending (a)-(b)120,423,357$ 56,370,554$ 113,866,649$ 111,617,722$ 114,056,742$
Plan fiduciary net position as a percentage of the total pension liability 75.88%87.98%74.75%74.29%72.68%
Covered payroll 45,210,057$ 44,809,856$ 43,902,594$ 42,153,383$ 41,468,634$
Net pension liability as percentage of covered payroll 266.36%125.80%259.36%264.79%275.04%
Notes to Schedule:
* Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
Benefit Changes:
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement
Date. However, Offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the
figures above, unless the liability impact is deemed to be material by the plan actuary.
Change in Assumption:
Last 10 Years*
Defined Benefit Plan for Miscellaneous Employees
As of June 30, 2023
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
Last Ten Fiscal Years*
Effective with the 2022 measurement date, the discount rate was reduced from 7.15% to 6.90%.. None in 2019 through 2021. In 2018, demographic assumptions
and inflation rate were changed in accordance to the CalPERS Experience Study and Review Assumptions December 2017. There were no changes in the
discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of
the discount rate from 7.50% percent (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2014, amounts
reported were based on the 7.50% discount rate.
Page 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
142
2018 2017 2016 2015
Measurement period June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Total Pension Liability
Service cost $ 7,151,754 $ 6,303,642 $ 6,087,960 $ 6,523,874
Interest on total pension liability 27,069,673 26,375,073 25,427,094 24,624,559
Differences between expected and actual experience (4,912,853) (2,686,814) (4,736,006)-
Changes in assumption 22,616,424 - (6,309,248)-
Changes in benefits - - - -
Benefit payments, including refunds of employee contributions (17,249,398) (16,714,022) (16,374,370) (15,290,340)
Net Change in Total Pension Liability 34,675,600 13,277,879 4,095,430 15,858,093
Total Pension Liability - beginning 365,942,077 352,664,198 348,568,768 332,710,675
Total Pension Liability - ending (a)400,617,677 365,942,077 352,664,198 348,568,768
Plan Fiduciary Net Position
Contributions - employer 10,509,243 9,904,636 6,615,920 5,793,768
Contributions - employee 4,134,130 4,206,942 4,321,646 4,319,336
Net investment income 28,349,491 1,241,432 5,687,908 38,237,161
Administrative expense (375,172) (155,791) (287,862)-
Other miscellaneous income/(expense)- - - -
Plan to plan resource movement - (2,387) 26,981 -
Benefit payments (17,249,398) (16,714,022) (16,374,370) (15,290,340)
Net change in Plan Fiduciary Net Position 25,368,294 (1,519,190) (9,777) 33,059,925
Plan Fiduciary Net Position - beginning 254,106,953 255,626,143 255,635,920 222,575,995
Plan Fiduciary Net Position - ending (b)279,475,247 254,106,953 255,626,143 255,635,920
Net pension liability - ending (a)-(b)121,142,430$ 111,835,124$ 97,038,055$ 92,932,848$
Plan fiduciary net position as a percentage of the total pension liability 69.76%69.44%72.48%73.34%
Covered payroll 41,727,563$ 40,031,404$ 38,512,011$ 37,775,051$
Net pension liability as percentage of covered payroll 290.32%279.37%251.97%246.02%
Last 10 Years*
Defined Benefit Plan for Miscellaneous Employees
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
Page 2 of 2
143
2023 2022 2021 2020 2019
Actuarially determined contribution 15,250,219$ 14,432,250$ 14,600,178$ 13,080,630$ 12,374,026$
contributions (20,794,397) (18,372,473) (18,730,840) (16,351,592) (15,713,898)
Contribution deficiency (excess)(5,544,178)$ (3,940,223)$ (4,130,662)$ (3,270,962)$ (3,339,872)$
Covered Payroll 48,099,822$ 45,210,057$ 44,809,856$ 43,902,594$ 42,153,383$
Contributions as a percentage of covered payroll 43.23%40.64%41.80%37.25%37.28%
Notes to Schedule:
Valuation Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016
Methods and Assumptions Used to Determine
Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.50%2.50%2.50%2.63%2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.00% (3)7.00% (3)7.00% (3)7.25% (3)7.375% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
(1)Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established after
June 30, 2019.
(2)Depending on age, service, and type of employment
(3)Net of pension plan investment and administrative expense; includes inflation
(4)Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study adopted by
the CalPERS Board
(5)Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the
CalPERS Board
* Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
As of June 30, 2023
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
Defined Benefit Plan for Miscellaneous Employees
Page 1 of 2
Contributions in relation to the actuarially determined
Schedule of Contributions
Last Ten Fiscal Years*
144
2018 2017 2016 2015
Actuarially determined contribution 11,924,053$ 10,412,963$ 9,943,342$ 7,117,065$
Contributions in relation to the actuarially determined
contributions (15,742,587) (10,412,963) (9,943,342) (7,117,065)
Contribution deficiency (excess)(3,818,534)$ -$ -$ -$
Covered Payroll 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$
Contributions as a percentage of covered payroll 37.96%24.95%24.84%18.48%
Notes to Schedule:
Valuation Date 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine
Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value 15 Year
Inflation 2.75%2.75%2.75%2.75%
Salary increases (2)(2)(2)(2)
Investment rate of return 7.5% (3)7.5% (3)7.5% (3)7.5% (3)
Retirement age (4)(4)(4)(4)
Mortality (5)(5)(5)(5)
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
Schedule of Contributions
Last Ten Fiscal Years*
145
2023 2022 2021 2020 2019
Measurement period June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018
Total Pension Liability:
Service cost 10,918,046$ 9,817,913$ 9,622,985$ 9,292,715$ 9,223,465$
Interest on total pension liability 43,860,290 42,760,906 41,449,511 40,081,524 38,458,387
Differences between expected and actual experience (3,451,985) 196,690 957,686 4,798,077 3,278,018
Changes in assumptions 22,634,816 - - - (1,630,045)
Changes in benefits - - - - -
Benefit payments, including refunds of employee contributions (35,654,758) (33,765,218) (32,285,653) (30,443,097) (29,183,598)
Net Change in Total Pension Liability 38,306,409 19,010,291 19,744,529 23,729,219 20,146,227
Total Pension Liability - Beginning 628,841,903 609,831,612 590,087,083 566,357,864 546,211,637
Total Pension Liability - Ending (a) 667,148,312 628,841,903 609,831,612 590,087,083 566,357,864
Plan Fiduciary Net Position:
Contributions - employer 32,394,203 32,367,091 28,539,301 28,344,445 26,779,897
Contributions - employee 3,417,660 3,347,740 3,249,005 3,162,044 3,104,318
Net investment income (38,537,209) 93,813,435 19,685,354 24,254,890 29,064,749
Administrative expense (317,056) (413,178) (556,832) (263,991) (532,480)
Plan to plan resource movement - - - (1,570) (855)
Benefit payments (35,654,758) (33,765,218) (32,285,653) (30,443,097) (29,183,598)
Other miscellaneous income/(expense)- - - 855 (1,011,188)
Net Change in Plan Fiduciary Net Position (38,697,160) 95,349,870 18,631,175 25,053,576 28,220,843
Plan Fiduciary Net Position - Beginning 508,966,420 413,616,550 394,985,375 369,931,799 341,710,956
Plan Fiduciary Net Position - Ending (b) 470,269,260 508,966,420 413,616,550 394,985,375 369,931,799
Net Pension Liability - Ending (a)-(b) 196,879,052$ 119,875,483$ 196,215,062$ 195,101,708$ 196,426,065$
Plan fiduciary net position as a percentage of the total pension liability 70.49%80.94%67.82%66.94%65.32%
Covered payroll 35,231,003$ 34,863,204$ 34,279,062$ 33,935,043$ 32,866,620$
Net pension liability as percentage of covered payroll 558.82%343.85%572.40%574.93%597.65%
Notes to Schedule:
* Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
Benefit Changes:
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement
Date. However, Offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the
figures above, unless the liability impact is deemed to be material by the plan actuary.
Changes in Assumptions:
Effective with the 2022 measurement date, the discount rate was reduced from 7.15% to 6.90%.. None in 2019 through 2021. In 2018, demographic
assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review Assumptions December 2017. There were no
changes in the discount rate. In 2017, the discount rate was reduced from 7.65% to 7.15%. In 2016, there were no changes. In 2015, amounts reported
reflect an adjustment of the discount rate from 7.50% percent (net of administrative expense) to 7.65% (without a reduction for pension plan
administrative expense). In 2014, amounts reported were based on the 7.50% discount rate.
Page 1 of 2
Last 10 Years *
Defined Benefit Plan for Safety Employees
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
146
2018 2017 2016 2015
Measurement period June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Total Pension Liability:
Service cost 9,015,985$ 8,075,553$ 8,077,826$ 8,091,585$
Interest on total pension liability 37,083,966 36,239,226 35,098,055 33,807,462
Differences between expected and actual experience (2,192,667) (1,613,985) (316,827) -
Changes in assumptions 30,110,384 - (8,359,009) -
Changes in benefits - - - -
Benefit payments, including refunds of employee contributions (28,074,414) (27,447,982) (25,838,982) (24,529,802)
Net Change in Total Pension Liability 45,943,254 15,252,812 8,661,063 17,369,245
Total Pension Liability - Beginning 500,268,383 485,015,571 476,354,508 458,985,263
Total Pension Liability - Ending (a) 546,211,637 500,268,383 485,015,571 476,354,508
Plan Fiduciary Net Position:
Contributions - employer 19,260,537 18,496,776 21,529,513 12,089,637
Contributions - employee 2,967,318 2,826,831 2,969,503 3,122,237
Net investment income 34,814,011 1,561,480 7,049,577 47,151,493
Benefit payments (462,427) (193,780) (357,866) -
Net plan to plan resource movement - 2,387 - -
Other miscellaneous expense (28,074,414) (27,447,982) (25,838,982) (24,529,802)
Administrative expense - - - -
Net Change in Plan Fiduciary Net Position 28,505,025 (4,754,288) 5,351,745 37,833,565
Plan Fiduciary Net Position - Beginning 313,205,931 317,960,219 312,608,474 274,774,909
Plan Fiduciary Net Position - Ending (b) 341,710,956 313,205,931 317,960,219 312,608,474
Net Pension Liability - Ending (a)-(b) 204,500,681$ 187,062,452$ 167,055,352$ 163,746,034$
Plan fiduciary net position as a percentage of the total pension liability 62.56%62.61%65.56%65.63%
Covered payroll 32,450,020$ 30,816,246$ 30,189,633$ 29,944,665$
Net pension liability as percentage of covered payroll 630.20%607.03%553.35%546.83%
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
Last 10 Years *
Defined Benefit Plan for Safety Employees
Page 2 of 2
147
2023 2022 2021 2020 2019
Actuarially determined contribution 25,952,201$ 25,115,878$ 25,341,788$ 22,980,289$ 22,227,698$
Contributions in relation to the actuarially
determined contributions (35,283,235) (32,317,538) (32,251,903) (28,531,744) (28,346,069)
Contribution deficiency (excess)(9,331,034)$ (7,201,660)$ (6,910,115)$ (5,551,455)$ (6,118,371)$
Covered payroll 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$ 33,935,043$
Contributions as a percentage of covered payroll 96.56%91.73%92.51%83.23%83.53%
Notes to Schedule:
Valuation Date 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016
Methods and Assumptions Used to Determine
Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.50%2.50%2.50%2.63%2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.00% (3)7.00% (3)7.00% (3)7.25% (3)7.375% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
(1)Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established
after June 30, 2019
(2)Depending on age, service, and type of employment
(3)Net of pension plan investment and administrative expense; includes inflation
(4)Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study
adopted by the CalPERS Board
(5)Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted
by the CalPERS Board
*Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
Last 10 Years *
Defined Benefit Plan for Safety Employees
Last Ten Fiscal Years*
Page 1 of 2
SCHEDULE OF CONTRIBUTIONS
148
2018 2017 2016 2015
Actuarially determined contribution 21,524,636$ 19,338,360$ 18,466,207$ 13,393,374$
Contributions in relation to the actuarially
determined contributions (26,620,697) (19,338,360) (18,466,207) (20,993,374)
Contribution deficiency (excess)(5,096,061)$ -$ -$ (7,600,000)$
Covered payroll 32,866,620 32,450,020 30,816,246 30,189,633
Contributions as a percentage of covered payroll 81.00%59.59%59.92%69.54%
Notes to Schedule:
Valuation Date 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Methods and Assumptions Used to Determine
Contribution Rates:
Actuarial cost method Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value 15 Year
Inflation 2.75%2.75%2.75%2.75%
Salary increases (2)(2)(2)(2)
Investment rate of return 7.5% (3)7.5% (3)7.5% (3)7.5% (3)
Retirement age (4)(4)(4)(4)
Mortality (5)(5)(5)(5)
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2023
Last 10 Years *
Defined Benefit Plan for Safety Employees
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
149
2023 2022 2021
Measurement date June 30, 2022 June 30, 2021 June 30, 2020
Total OPEB Liability:
Service cost 530,843$ 529,600$ 521,285$
Interest 3,237,390 2,909,400 2,944,050
Differences between expected and actual experience 1,120,534 6,159,865 (219,772)
Changes of assumptions 2,473,450 (302,512) -
Changes in benefits terms - - -
Benefit payments, including refunds of member contributions (4,731,846) (3,786,232) (3,787,663)
Net Change in Total OPEB Liability 2,630,371 5,510,121 (542,100)
Total OPEB Liability - Beginning 51,603,833 46,093,712 46,635,812
Total OPEB Liability - Ending (a)54,234,204 51,603,833 46,093,712
Plan Fiduciary Net Position:
Contributions - employer 6,185,537 5,785,342 4,674,814
Contributions - member - - -
Net investment income (4,845,154) 7,184,241 900,087
Benefit payments, including refunds of member contributions (4,731,846) (3,786,232) (3,787,663)
Administrative expense (9,000) (9,908) (12,037)
Other expense - - -
Net Change in Plan Fiduciary Net Position (3,400,463) 9,173,443 1,775,201
Plan Fiduciary Net Position - Beginning 34,969,715 25,796,272 24,021,071
Plan Fiduciary Net Position - Ending (b)31,569,252 34,969,715 25,796,272
City's Net OPEB Liability - Ending (a)-(b)22,664,952$ 16,634,118$ 20,297,440$
Plan fiduciary net position as a percentage of the total OPEB liability 58.21%67.77%55.96%
Covered - employee payroll(1)79,636,594$ 78,621,426$ 77,637,171$
City's Net OPEB liability as percentage of covered-employee payroll 28.46%21.16%26.14%
Notes to Schedule:
(1)Covered-employee payroll is used because contributions are not entirely based on a measure of pay
*Fiscal year 2018 was the first year of implementation, therefore only six years are shown.
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years *
Page 1 of 2
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2023
Last 10 Years *
150
2020 2019 2018
Measurement date June 30, 2019 June 30, 2018 June 30, 2017
Total OPEB Liability:
Service cost 524,717$ 509,434$ 478,341$
Interest 2,795,490 2,814,685 2,830,153
Differences between expected and actual experience 2,532,319 - -
Changes of assumptions 114,311 - -
Changes in benefits terms - - -
Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406)
Net Change in Total OPEB Liability 2,339,142 (317,596) (204,912)
Total OPEB Liability - Beginning 44,296,670 44,614,266 44,819,178
Total OPEB Liability - Ending (a)46,635,812 44,296,670 44,614,266
Plan Fiduciary Net Position:
Contributions - employer 4,460,937 4,675,193 4,594,772
Contributions - member - - -
Net investment income 1,495,861 1,605,114 1,875,536
Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406)
Administrative expense (4,980) (11,076) (9,452)
Other Expense - (25,258) -
Net Change in Plan Fiduciary Net Position 2,324,123 2,602,258 2,947,450
Plan Fiduciary Net Position - Beginning 21,696,948 19,094,690 16,147,240
Plan Fiduciary Net Position - Ending (b)24,021,071 21,696,948 19,094,690
City's Net OPEB Liability - Ending (a)-(b)22,614,741$ 22,599,722$ 25,519,576$
Plan fiduciary net position as a percentage of the total OPEB liability 51.51%48.98%42.80%
Covered - employee payroll(1)75,814,626$ 73,999,059$ 74,484,613$
City's Net OPEB liability as percentage of covered-employee payroll 29.83%30.54%34.26%
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2023
Last 10 Years *
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years *
Page 2 of 2
151
2023 2022 2021 2020 2019 2018
Actuarially determined contribution 4,359,593$ 4,124,923$ 4,108,719$ 3,834,916$ 3,827,337$ 3,925,087$
Contributions in relation to the actuarially determined
contributions (7,154,265) (4,950,445) (6,511,545) (5,379,799) (5,133,062) (5,309,626)
Contribution deficiency (excess)(2,794,672)$ (825,522)$ (2,402,826)$ (1,544,883)$ (1,305,725)$ (1,384,539)$
Covered - employee payroll 81,451,477$ 79,636,594$ 78,621,426$ 77,637,171$ 75,814,626$ 73,999,059$
Contributions as a percentage of covered-employee payroll -8.78%-6.22%-8.28%-6.93%-6.77%-7.18%
Notes to Schedule:
Valuation Date June 30, 2021 June 30, 2019 June 30, 2019 June 30, 2017 June 30, 2017 June 30, 2015
(1)Covered-employee payroll is used because contributions are not entirely based on a measure of pay.
* Fiscal year 2018 was the first year of implementation; therefore, only six years are shown.
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2023
Last 10 Years*
152
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Taxes and assessments:
Property 134,803,082$ 134,803,082$ 138,358,730$ 3,555,648$
Sales 46,526,493 46,526,493 46,552,459 25,966
Transient occupancy 27,788,729 27,788,729 30,201,649 2,412,920
Other taxes 8,774,567 8,774,567 10,079,711 1,305,144
Intergovernmental 1,823,903 3,108,014 4,369,009 1,260,995
Licenses, permits and fees 5,870,373 5,870,373 5,676,642 (193,731)
Charges for services 22,005,341 23,228,088 25,187,127 1,959,039
Fines and forfeitures 3,870,567 3,870,567 3,840,774 (29,793)
Investment income 1,300,000 1,300,000 1,905,894 605,894
Net decrease in fair value of investments - - (215,495) (215,495)
Property income 12,098,168 12,510,568 15,459,206 2,948,638
Donations 412,300 515,560 142,031 (373,529)
Other (243,020) 2,448,765 3,263,578 814,813
Total revenues 265,030,503 270,744,806 284,821,315 14,076,509
Expenditures:
General government:
City council 909,554 915,541 688,972 226,569
City clerk 1,265,760 1,515,310 1,175,423 339,887
City attorney 2,350,264 2,438,796 2,323,016 115,780
City manager 5,992,008 6,044,686 3,965,256 2,079,430
Finance 9,541,320 9,809,329 8,923,557 885,772
Human resources 3,440,696 3,601,179 3,147,738 453,441
Total general government 23,499,602 24,324,841 20,223,962 4,100,879
Public safety:
Police 71,622,531 74,489,964 70,728,319 3,761,645
Fire 60,255,549 63,255,373 61,172,432 2,082,941
Total public safety 131,878,080 137,745,337 131,900,751 5,844,586
Public works:
Public works - general services 32,490,987 34,897,868 33,330,511 1,567,357
Public works 11,906,935 12,686,077 11,780,556 905,521
Utilities 5,649,416 5,797,297 5,816,100 (18,803)
Total public works 50,047,338 53,381,242 50,927,167 2,454,075
CITY OF NEWPORT BEACH
General Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2023
Budgeted Amounts
Page 1 of 2
See accompanying notes to required supplementary information
153
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Community development:
Community development 12,933,976 13,396,827 13,193,708 203,119
Code and water quality enforcement 864,723 884,817 854,597 30,220
Total community development 13,798,699 14,281,644 14,048,305 233,339
Community services:
Parking operations 2,236,701 2,884,799 2,099,521 785,278
Library services 9,432,008 10,292,150 9,204,395 1,087,755
Recreation and senior services 13,627,977 14,564,352 13,844,593 719,759
Total community services 25,296,686 27,741,301 25,148,509 2,592,792
Capital outlay - - 529,489 (529,489)
Debt service:
Principal - - 1,148,166 (1,148,166)
Interest and fiscal charges - - 70,683 (70,683)
Total debt service - - 1,218,849 (1,218,849)
Total expenditures 244,520,405 257,474,365 243,997,032 13,477,333
Excess of revenues
over expenditures 20,510,098 13,270,441 40,824,283 27,553,842
Other financing sources (uses):
Transfers in 17,300,724 18,428,263 18,428,263 -
Transfers out (31,597,269) (65,478,891) (65,478,891) -
Inception of subscription-based IT arrangements - - 529,489 529,489
Total other financing
sources (uses)(14,296,545) (47,050,628) (46,521,139) 529,489
Net change in fund balance 6,213,553 (33,780,187) (5,696,856) 28,083,331
Fund balance, beginning 97,139,381 97,139,381 97,139,381 -
Fund balance, ending 103,352,934$ 63,359,194$ 91,442,525$ 28,083,331$
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2023
CITY OF NEWPORT BEACH
Budgeted Amounts
Page 2 of 2
See accompanying notes to required supplementary information
154
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 5,000$ -$ (5,000)$
Licenses, permits and fees 70,690 70,690 85,244 14,554
Charges for services 10,481 10,481 27,057 16,576
Fines and forfeitures 29,500 29,500 52,101 22,601
Investment income 192,208 192,208 108,738 (83,470)
Net decrease in fair value of investments - - (78,768) (78,768)
Property income 12,645,321 13,145,321 14,166,264 1,020,943
Other - - 1,200 1,200
Total revenues 12,948,200 13,453,200 14,361,836 908,636
Expenditures:
General government 432,505 432,505 432,505 -
Public works 1,311,056 1,927,388 1,889,771 37,617
Community development 2,050 9,550 12,784 (3,234)
Community services 1,932,382 2,358,399 2,198,993 159,406
Capital outlay 1,975,000 4,687,023 1,434,064 3,252,959
Total expenditures 5,652,993 9,414,865 5,968,117 3,446,748
Excess (deficiency) of revenues
over expenditures 7,295,207 4,038,335 8,393,719 4,355,384
Other financing sources:
Transfers in 9,987,817 11,546,069 11,546,069 -
Transfers out (17,300,724) (18,380,271) (18,380,271) -
Total other financing sources (7,312,907) (6,834,202) (6,834,202) -
Net change in fund balance (17,700) (2,795,867) 1,559,517 4,355,384
Fund balance, beginning 4,547,800 4,547,800 4,547,800 -
Fund balance, ending 4,530,100$ 1,751,933$ 6,107,317$ 4,355,384$
CITY OF NEWPORT BEACH
Tide and Submerged Land - Operating
Budgetary Comparison Schedule
For the Year Ended June 30, 2023
Budgeted Amounts
See accompanying notes to required supplementary information
155
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Investment income 436,141$ 436,141$ 617,424$ 181,283$
Net decrease in fair value of investments - - (249,668) (249,668)
Property income 3,945,664 3,945,664 5,919,115 1,973,451
Donations - 12,000 12,415 415
Total revenues 4,381,805 4,393,805 6,299,286 1,905,481
Expenditures:
Capital outlay 3,471,406 16,713,995 12,218,947 4,495,048
Excess (deficiency) of revenues
over expenditures 910,399 (12,320,190)(5,919,661) 6,400,529
Other financing sources:
Transfers in 4,600,000 4,600,000 4,600,000 -
Net change in fund balance 5,510,399 (7,720,190) (1,319,661) 6,400,529
Fund balance, beginning 31,534,472 31,534,472 31,534,472 -
Fund balance, ending 37,044,871$ 23,814,282$ 30,214,811$ 6,400,529$
CITY OF NEWPORT BEACH
Tide and Submerged Land - Harbor Capital
Budgetary Comparison Schedule
For the Year Ended June 30, 2023
Budgeted Amounts
See accompanying notes to required supplementary information
156
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2023
(1) Budgetary Control and Compliance
The City adheres to the following general procedures in establishing the budgetary data reflected
in the financial statements:
• During May, the City Manager submits to the City Council a proposed operating budget
for the fiscal year commencing the following July 1. The operating budget includes
proposed expenditures and the means of financing them. Public hearings are conducted
at City Council meetings to obtain citizen comments. Prior to July 1, the budget is legally
adopted through passage of an appropriation resolution.
• Budgets are adopted on an annual basis consistent with generally accepted accounting
principles for General and Special Revenue Funds, except for the Opioid Remediation
Fund, for which no budget was adopted.
• The City does not present budget information on Capital Projects Funds since the City
approves project-length budgets. These project-length budgets authorize total
expenditures over the duration of a construction project rather than through year-by-year
budgeting.
• The City does not present budget information on Debt Service and Permanent Funds
since the City is not required to and does not adopt an annual budget for these funds.
• The budget is formally integrated into the accounting system and employed as a
management control device during the year.
• The legal level of budgetary control is at the fund level. The City Manager is authorized to
transfer budgeted amounts between departments within any fund; however, any revisions
which alter the total appropriations of any fund must be approved by the City Council.
• At fiscal year-end, budget appropriations lapse. Budget appropriations for incomplete
capital projects are re-budgeted in the following fiscal year by City Council action and are
included in the revisions noted above. Projects that are not started during the budget year
are re-evaluated in the following year.
• Encumbrances represent commitments related to unperformed contracts for goods and
services. The City utilizes an encumbrance system as a management control technique
to assist in controlling expenditures. Under this system, encumbrance accounting for the
expenditure of funds is recorded in order to indicate outstanding commitments and is
employed in the governmental fund types. Encumbrances outstanding at year-end are
reported as committed or restricted fund balances since they do not constitute
expenditures or liabilities. Encumbrances and their related budgets are honored in the
subsequent year to fulfill these commitments and are presented in the original adopted
budget.
157
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2023
(1)Budgetary Control and Compliance (Continued)
Expenditures exceeded appropriations in the following governmental funds:
Appropriations Expenditures Variance
Supplemental Law Enforcement 200,000$ 215,174$ (15,174)$
158
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
OTHER GOVERNMENTAL FUNDS
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160
OTHER GOVERNMENTAL FUNDS
Other Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources
which are legally restricted to expenditures for specified purposes. The City of Newport
Beach Special Revenue Funds are as follows:
The State Gas Tax Fund accounts for all State Gas Tax related revenues and expenditures,
including street repair, construction, and maintenance. State law requires that these funds be
used exclusively for maintenance of the street and highway system.
The SB1 Gas Tax RMRA Fund accounts for all Road Maintenance and Rehabilitation Account
related revenues and expenditures. State law requires that these funds be used exclusively for
the transportation system. RMRA revenues are from fuel and vehicle registration taxes imposed
by the state’s Road Repair and Accountability Act of 2017.
The Asset Forfeiture Fund was established to account for all revenues resulting from the
seizure of assets in conjunction with criminal cases (primarily drug trafficking) in which judicial
proceedings have been completed. All such funds are property of the City, and it is the City's
policy that these funds shall be used for enhancement of law enforcement programs.
The Office of the Traffic Safety (OTS) DUI Grant Fund is used to account for federal funding of
the Selective Traffic Enforcement Program (STEP). These funds are used exclusively for DUI
enforcement.
The Circulation and Transportation Fund is used to account for fair share revenues collected
from developers and restricted for capital improvement projects meeting the circulation element of
the City’s General Plan.
The Building Excise Tax Fund is used to account for revenues received from builders or
developers on building or remodeling projects within the City. Expenditures from this fund are
used exclusively for public safety, libraries, parks, beaches, or recreational activities.
The Community Development Block Grant Fund is used to account for revenues and
expenditures relating to the City's Community Development Block Grant program. These funds
are received from the Federal Department of Housing and Urban Development and must be
expended exclusively on programs for low or moderate income individuals/families.
The Air Quality Management District Fund is used to account for revenues received from the
South Coast Air Quality Management District restricted for the use of reducing air pollution.
The Environmental Liability Fund is used to account for solid waste fees restricted for
mitigation of future environmental liability relating to the handling of solid waste.
The Supplemental Law Enforcement Services Fund (SLESF) is used to account for revenues
received from the county to be used exclusively for front line law enforcement services.
The Opioid Remediation Fund is used to account for revenues received from various
settlements related to opioid manufacturing and distribution to be used exclusively for opioid
remediation activities.
161
The Contributions Fund is used to account for revenues received from other government
agencies or private developers and expended for specific streets, highway, construction, or water
quality projects.
The Fostering Interest in Nature (FIIN) Fund is restricted for recreation and education
programming as a mitigation effort by the California Coastal Commission.
The Restricted Programs Fund is used to account for revenues received that are restricted for
affordable housing, public arts and culture, parking improvements, and disability access training.
The Measure M Fund is used to account for the revenues and expenditures of funds received
from the Orange County Transportation Authority. Expenditures from this fund are used
exclusively for transportation related purposes.
The Oceanfront Encroachment Fund is restricted for ocean front restoration and improvement
and maintenance to enhance public access and use of ocean beaches as restricted by the Local
Coastal Program.
The American Rescue Plan Act Fund is used to account for federal funding received through
Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act.
The PEG Fees Fund is used to account for cable franchise fees received from cable providers for
support of Public, Education, and Government access programming only.
Other Capital Projects Funds
Capital Projects Funds are used to account for resources used for the acquisition and
construction of capital facilities by the City, except those financed by Enterprise Funds.
The City of Newport Beach Capital Projects Funds are as follows:
The Assessment District Fund is used to account for the receipt and expenditure of funds
received from 1911 Act and 1915 Act Assessment Districts for capital improvement projects.
The Fire Station Fund is used to account for the design and construction of new fire stations.
The Civic Center and Park Fund is used to account for the design and construction of a new
Civic Center Complex. In prior years, this fund was called City Hall Improvements Fund.
The Police Facility Fund is used to account for the purchase, design and construction of a new
police station.
The Newport Uptown Undergrounding Fund is used to account for the receipt and
expenditures related to the development within the Newport Uptown Planned Community
Development Plan.
The Parks and Community Centers Fund is used to account for expenditures for park and
community center rehabilitation, expansion and/or replacement in accordance with the Facilities
Financing Planning Program.
The Balboa Village Parking Management District Fund is used to account for revenues and
expenditures associated with parking management improvements in Balboa Village.
The Facilities Maintenance Fund is used to account for revenues and expenditures associated
with the maintenance of existing facilities.
The Neighborhood Enhancement Fund is used to account for projects that will enhance
neighborhood aesthetics and functionality.
162
The Miscellaneous FFP Projects Fund is used to account for expenditures for small scale
facility rehabilitation, expansion and/or replacement in accordance with the Facilities Financing
Planning Program.
The Junior Lifeguards Fund is used to account for capital improvement projects related to the
Junior Lifeguards program.
The Unrestricted Capital Improvements Fund is used to separately account for general fund
capital improvement projects.
Other Permanent Funds
Permanent Funds are used to report resources that are legally restricted for the extent that
only earnings, not principal, may be used for purposes that support the reporting
government’s programs. The City of Newport Beach Permanent Funds are as follows:
The Bay Dredging Fund is used to account for the receipt of permanent endowments intended
to fund the ongoing cost of maintaining and dredging of the Upper Newport Bay.
The Ackerman Donation Fund is used to account for the receipt of permanent endowments
intended as follows: 75% of the fund’s investment proceeds will be used for the purchase of high-
tech library equipment while the remaining 25% will be used for scholarships for needy students.
163
State SB1 Gas Tax Asset OTS
Gas Tax RMRA Forfeiture DUI Grant
Assets
Cash and investments 3,506,082$ 420,495$ 529,236$ -$
Receivables:
Accounts (net of allowance)- - - -
Interest 12,583 1,509 1,129 -
Intergovernmental receivables 189,264 333,019 - 89,202
Restricted cash and investments with fiscal agent - - - -
Prepaid items - - - -
Total assets 3,707,929$ 755,023$ 530,365$ 89,202$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 350$ 338,972$ -$ -$
Accrued payroll - - - -
Unearned revenue - - - -
Due to other funds - - - 89,202
Total liabilities 350 338,972 - 89,202
Deferred inflows of resources:
Unavailable revenue - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - -
Permanent endowment - - - -
Restricted 3,707,579 416,051 530,365 -
Committed - - - -
Unassigned - - - -
Total fund balances (deficits)3,707,579 416,051 530,365 -
Total liabilities, deferred inflows of resources
and fund balances 3,707,929$ 755,023$ 530,365$ 89,202$
(continued)
Special Revenue
Page 1 of 7
Other Governmental Funds
June 30, 2023
CITY OF NEWPORT BEACH
Combining Balance Sheet
164
Circulation Building Community Air Quality
and Excise Development Management
Transportation Tax Block Grant District
Assets
Cash and investments 1,964,320$ 199,767$ -$ 1,547,183$
Receivables:
Accounts (net of allowance)- - - -
Interest 7,050 716 - 5,552
Intergovernmental receivables - - 328,762 27,924
Restricted cash and investments with fiscal agent - - - -
Prepaid items - - - -
Total assets 1,971,370$ 200,483$ 328,762$ 1,580,659$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 317,611$ 12,500$ 219,889$ -$
Accrued payroll - - - -
Unearned revenue - - - -
Due to other funds - - 108,873 -
Total liabilities 317,611 12,500 328,762 -
Deferred inflows of resources:
Unavailable revenue - - - 27,924
Fund balances (deficits):
Nonspendable:
Prepaid items - - - -
Permanent endowment - - - -
Restricted 1,653,759 187,983 - 1,552,735
Committed - - - -
Unassigned - - - -
Total fund balances (deficits)1,653,759 187,983 - 1,552,735
Total liabilities, deferred inflows of resources
and fund balances 1,971,370$ 200,483$ 328,762$ 1,580,659$
(continued)
Special Revenue
June 30, 2023
Page 2 of 7
CITY OF NEWPORT BEACH
Combining Balance Sheet
Other Governmental Funds
165
Supplemental
Law Opioid
Environmental Enforcement Remediation
Liability Services Fund Contributions FIIN
Assets
Cash and investments 9,220,852$ -$ 334,260$ 2,541,179$ 1,185,800$
Receivables:
Accounts (net of allowance)- - - 527,313 -
Interest 33,084 - - 254 4,256
Intergovernmental receivables - - - 745,047 -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items 21,150 - - - -
Total assets 9,275,086$ -$ 334,260$ 3,813,793$ 1,190,056$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 15,720$ -$ -$ 298,945$ -$
Accrued payroll 2,669 - - - -
Unearned revenue - - 334,260 3,104,430 -
Due to other funds - - - - -
Total liabilities 18,389 - 334,260 3,403,375 -
Deferred inflows of resources:
Unavailable revenue - - - 422,043 -
Fund balances (deficits):
Nonspendable:
Prepaid items 21,150 - - - -
Permanent endowment - - - - -
Restricted 9,235,547 - - - 1,190,056
Committed - - - - -
Unassigned - - - (11,625) -
Total fund balances (deficits)9,256,697 - - (11,625) 1,190,056
Total liabilities, deferred inflows of resources
and fund balances 9,275,086$ -$ 334,260$ 3,813,793$ 1,190,056$
(continued)
Special Revenue
June 30, 2023
Page 3 of 7
CITY OF NEWPORT BEACH
Combining Balance Sheet
Other Governmental Funds
166
Restricted Oceanfront American PEG
Programs Measure M Encroachment Rescue Plan Act Fees
Assets
Cash and investments 1,995,021$ 3,566,148$ 910,052$ 7,112,115$ 3,060,132$
Receivables:
Accounts (net of allowance)- - 32,304 - 81,422
Interest 7,160 13,450 3,267 - 10,983
Intergovernmental receivables - 1,123,102 - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 2,002,181$ 4,702,700$ 945,623$ 7,112,115$ 3,152,537$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 1,674$ 1,542,618$ -$ 159,430$ -$
Accrued payroll - - - - -
Unearned revenue - 514,771 - 6,952,685 -
Due to other funds - - - - -
Total liabilities 1,674 2,057,389 - 7,112,115 -
Deferred inflows of resources:
Unavailable revenue - 709,014 - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 2,000,507 1,936,297 945,623 - 3,152,537
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits)2,000,507 1,936,297 945,623 - 3,152,537
Total liabilities, deferred inflows of resources
and fund balances 2,002,181$ 4,702,700$ 945,623$ 7,112,115$ 3,152,537$
(continued)
Special Revenue
Page 4 of 7
June 30, 2023
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
167
Newport
Assessment Civic Center Uptown
District Fire Station and Park Police Facility Undergrounding
Assets
Cash and investments 7,672,742$ 3,099,911$ 484,892$ 647,395$ 3,236$
Receivables:
Accounts (net of allowance)- - - - -
Interest 27,809 11,126 1,561 11,361 12
Intergovernmental receivables - - - - -
Restricted cash and investments with fiscal agent - 282,123 - - -
Prepaid items - -- - -
Total assets 7,700,551$ 3,393,160$486,453$ 658,756$ 3,248$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 416,438$ 83,209$ 1,088$ -$ -$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities 416,438 83,209 1,088 - -
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 7,284,113 282,123 - - 3,248
Committed - 3,027,828 485,365 658,756 -
Unassigned - - - - -
Total fund balances (deficits)7,284,113 3,309,951 485,365 658,756 3,248
Total liabilities, deferred inflows of resources
and fund balances 7,700,551$ 3,393,160$486,453$ 658,756$ 3,248$
(continued)
Capital Projects
Page 5 of 7
June 30, 2023
CITY OF NEWPORT BEACH
Combining Balance Sheet
Other Governmental Funds
168
Balboa Village
Parks and Parking
Community Management Facilities Neighborhood Miscellaneous
Centers District Maintenance Enhancement FFP Projects
Assets
Cash and investments 14,808,700$ 378,492$ 4,200,568$ 16,366,547$ 1,950,592$
Receivables:
Accounts (net of allowance)- - - - -
Interest 53,164 1,355 15,076 58,741 -
Intergovernmental receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 14,861,864$ 379,847$ 4,215,644$ 16,425,288$ 1,950,592$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 180,383$ 602$ 160,271$ 553,688$ 78,783$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities 180,383 602 160,271 553,688 78,783
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - - - - -
Committed 14,681,481 379,245 4,055,373 15,871,600 1,871,809
Unassigned - - - - -
Total fund balances (deficits)14,681,481 379,245 4,055,373 15,871,600 1,871,809
Total liabilities, deferred inflows of resources
and fund balances 14,861,864$ 379,847$ 4,215,644$ 16,425,288$ 1,950,592$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2023
Page 6 of 7
Capital Projects
169
Total
Unrestricted Other
Junior Capital Ackerman Governmental
Lifeguards Improvements Bay Dredging Donation Funds
Assets
Cash and investments 1,079$ 11,913,811$ 5,341,859$ 1,182,286$ 106,144,752$
Receivables:
Accounts (net of allowance)- - - - 641,039
Interest 4 - 19,172 4,243 304,617
Intergovernmental receivables - - - - 2,836,320
Restricted cash and investments with fiscal agent - - - - 282,123
Prepaid items - - - - 21,150
Total assets 1,083$ 11,913,811$ 5,361,031$ 1,186,529$ 110,230,001$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 368,009$ -$ 5,000$ 4,755,180$
Accrued payroll - - - - 2,669
Unearned revenue - - - - 10,906,146
Due to other funds - - - - 198,075
Total liabilities - 368,009 - 5,000 15,862,070
Deferred inflows of resources:
Unavailable revenue - - - - 1,158,981
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - 21,150
Permanent endowment - - 3,857,000 772,781 4,629,781
Restricted - - 1,504,031 408,748 35,991,302
Committed 1,083 11,545,802 - - 52,578,342
Unassigned - - - - (11,625)
Total fund balances (deficits)1,083 11,545,802 5,361,031 1,181,529 93,208,950
Total liabilities, deferred inflows of resources
and fund balances 1,083$ 11,913,811$ 5,361,031$ 1,186,529$ 110,230,001$
Capital Projects Permanent Fund
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2023
Page 7 of 7
170
State SB1 Gas Tax Asset OTS
Gas Tax RMRA Forfeiture DUI Grant
Revenues:
Other taxes -$ -$ -$ -$
Intergovernmental 2,155,859 1,900,470 13,458 299,968
Licenses, permits and fees - - - -
Property income - - - -
Investment income 53,607 21,281 9,050 -
Net increase (decrease) in fair value of investments (32,267) 17,008 (799) -
Donations - - - -
Special assessments - - - -
Other - - - -
Total revenues 2,177,199 1,938,759 21,709 299,968
Expenditures:
Current:
General government - - - -
Public safety - - 25,139 299,968
Public works - - - -
Community development - - - -
Community services - - - -
Capital outlay 919,833 3,655,720 - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 919,833 3,655,720 25,139 299,968
Excess (deficiency) of revenues
over expenditures 1,257,366 (1,716,961) (3,430) -
Other financing sources (uses):
Transfers in - - - -
Transfers out - - - -
Total other financing sources (uses)- - - -
Net change in fund balances 1,257,366 (1,716,961) (3,430) -
Fund balances (deficits), beginning 2,450,213 2,133,012 533,795 -
Fund balances (deficits), ending 3,707,579$ 416,051$ 530,365$ -$
(continued)
Special Revenue
Page 1 of 7
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
CITY OF NEWPORT BEACH
Other Governmental Funds
171
Circulation Building Community Air Quality
and Excise Development Management
Transportation Tax Block Grant District
Revenues:
Other taxes -$ -$ -$ -$
Intergovernmental - - 997,666 110,841
Licenses, permits and fees 289,075 144,392 - -
Property income - - - -
Investment income 50,418 5,325 - 25,183
Net increase (decrease) in fair value of investments (16,025) (4,595) - (7,107)
Donations - - - -
Special assessments - - - -
Other - - - -
Total revenues 323,468 145,122 997,666 128,917
Expenditures:
Current:
General government - - - -
Public safety - - - -
Public works - - - -
Community development - - 667,747 -
Community services - - - -
Capital outlay 1,849,971 250,975 - -
Debt service:
Principal - - 208,000 -
Interest and fiscal charges - - 2,548 -
Total expenditures 1,849,971 250,975 878,295 -
Excess (deficiency) of revenues
over expenditures (1,526,503) (105,853) 119,371 128,917
Other financing sources (uses):
Transfers in - - - -
Transfers out - - - -
Total other financing sources (uses)- - - -
Net change in fund balances (1,526,503) (105,853) 119,371 128,917
Fund balances (deficits), beginning 3,180,262 293,836 (119,371) 1,423,818
Fund balances (deficits), ending 1,653,759$ 187,983$ -$1,552,735$
(continued)
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
Page 2 of 7
Special Revenue
Combining Statement of Revenues,
CITY OF NEWPORT BEACH
Other Governmental Funds
172
Supplemental
Law Opioid
Environmental Enforcement Remediation
Liability Services Fund Contributions FIIN
Revenues:
Other taxes 874,747$ -$ -$ -$ -$
Intergovernmental - 215,174 - 2,973,366 -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 153,229 - - 4,672 21,038
Net increase (decrease) in fair value of investments (59,583) - - (27,592) (10,997)
Donations - - - 492,038 -
Special assessments - - - - -
Other 70,058 - - 8,428 -
Total revenues 1,038,451 215,174 - 3,450,912 10,041
Expenditures:
Current:
General government - - - - -
Public safety - 215,174 - - -
Public works 380,823 - - - -
Community development - - - - -
Community services - - - - 118,830
Capital outlay - - - 3,635,163 -
Debt service:
Principal - - - - -
Interest and fiscal charges - - - - -
Total expenditures 380,823 215,174 - 3,635,163 118,830
Excess (deficiency) of revenues
over expenditures 657,628 - - (184,251) (108,789)
Other financing sources (uses):
Transfers in - - - - -
Transfers out - - - - -
Total other financing sources (uses)- - - - -
Net change in fund balances 657,628 - - (184,251) (108,789)
Fund balances (deficits), beginning 8,599,069 - - 172,626 1,298,845
Fund balances (deficits), ending 9,256,697$ -$ -$ (11,625)$ 1,190,056$
(continued)
For the Year Ended June 30, 2023
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
Special Revenue
Page 3 of 7
CITY OF NEWPORT BEACH
Other Governmental Funds
173
Restricted Oceanfront American PEG
Programs Measure M Encroachment Rescue Plan Act Fees
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - 2,697,652 - 3,212,998 -
Licenses, permits and fees 150,000 - - - 340,307
Property income 24,300 - 261,477 - -
Investment income 28,364 57,163 12,457 - 44,888
Net increase (decrease) in fair value of investments 20,329 (28,118) 8,898 - 33,763
Donations 64,829 - - - -
Special assessments - - - - -
Other 69,038 -- - -
Total revenues 356,860 2,726,697 282,832 3,212,998 418,958
Expenditures:
Current:
General government - - - 24,411 -
Public safety - - - - -
Public works - - - - -
Community development 1,746 - - - -
Community services 92,428 - - - -
Capital outlay - 2,990,672 - 3,188,587 -
Debt service:
Principal - - - - -
Interest and fiscal charges -- - - -
Total expenditures 94,174 2,990,672 - 3,212,998 -
Excess (deficiency) of revenues
over expenditures 262,686 (263,975) 282,832 - 418,958
Other financing sources (uses):
Transfers in - 5,010 - - -
Transfers out -- (500,000) - (47,992)
Total other financing sources (uses)-5,010 (500,000) - (47,992)
Net change in fund balances 262,686 (258,965) (217,168) - 370,966
Fund balances (deficits), beginning 1,737,821 2,195,262 1,162,791 - 2,781,571
Fund balances (deficits), ending 2,000,507$ 1,936,297$ 945,623$ -$ 3,152,537$
(continued)
Page 4 of 7
Special Revenue
Other Governmental Funds
For the Year Ended June 30, 2023
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
CITY OF NEWPORT BEACH
174
Newport
Assessment Civic Center Uptown
District Fire Station and Park Police Facility Undergrounding
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 119,878 55,655 7,460 216,587 55
Net increase (decrease) in fair value of investments 17,100 29,340 (3,484) 437,569 (24)
Donations - - - - -
Special assessments 4,948,430 - - - -
Other - - - - -
Total revenues 5,085,408 84,995 3,976 654,156 31
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works 2,848,473 - - - -
Community development - - - - -
Community services - - - - -
Capital outlay - 288,132 - 28,863,760 -
Debt service:
Principal - - - - -
Interest and fiscal charges - - 2,774 - -
Total expenditures 2,848,473 288,132 2,774 28,863,760 -
Excess (deficiency) of revenues
over expenditures 2,236,935 (203,137) 1,202 (28,209,604) 31
Other financing sources (uses):
Transfers in - 900,000 - 28,868,360 -
Transfers out - - - - -
Total other financing sources (uses)- 900,000 - 28,868,360 -
Net change in fund balances 2,236,935 696,863 1,202 658,756 31
Fund balances (deficits), beginning 5,047,178 2,613,088 484,163 - 3,217
Fund balances (deficits), ending 7,284,113$ 3,309,951$ 485,365$ 658,756$ 3,248$
(continued)
Capital Projects
Page 5 of 7
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
CITY OF NEWPORT BEACH
Other Governmental Funds
175
Balboa Village
Parks and Parking
Community Management Facilities Neighborhood Miscellaneous
Undergrounding Centers District Maintenance Enhancement FFP Projects
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 183,778 8,950 77,501 190,960 -
Net increase (decrease) in fair value of investments (63,957) (22,321) (11,671) 21,689 -
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 119,821 (13,371) 65,830 212,649 -
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 916,327 36,448 1,227,860 2,323,440 87,910
Debt service:
Principal - - - - -
Interest and fiscal charges - - - - -
Total expenditures 916,327 36,448 1,227,860 2,323,440 87,910
Excess (deficiency) of revenues
over expenditures (796,506) (49,819) (1,162,030) (2,110,791) (87,910)
Other financing sources (uses):
Transfers in 7,793,354 - 2,500,000 16,500,000 6,900,000
Transfers out - - - - (4,940,281)
Total other financing sources (uses)7,793,354 - 2,500,000 16,500,000 1,959,719
Net change in fund balances 6,996,848 (49,819) 1,337,970 14,389,209 1,871,809
Fund balances (deficits), beginning 7,684,633 429,064 2,717,403 1,482,391 -
Fund balances (deficits), ending 14,681,481$ 379,245$ 4,055,373$ 15,871,600$ 1,871,809$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
Capital Projects
Page 6 of 7
176
Total
Unrestricted Other
Junior Capital Ackerman Governmental
Lifeguards Improvements Bay Dredging Donation Funds
Revenues:
Other taxes -$ -$ -$ -$ 874,747
Intergovernmental - - - - 14,577,452
Licenses, permits and fees - - - - 923,774
Property income - - - - 285,777
Investment income 1,194 - 91,484 20,261 1,460,438
Net increase (decrease) in fair value of investments (5,894) - (42,061) (9,398) 239,803
Donations 5,844 - - - 562,711
Special assessments - - - - 4,948,430
Other - - - - 147,524
Total revenues 1,144 - 49,423 10,863 24,020,656
Expenditures:
Current:
General government - - - - 24,411
Public safety - - - - 540,281
Public works - - - - 3,229,296
Community development - - - 5,000 674,493
Community services - - - - 211,258
Capital outlay 87,795 3,929,034 - - 54,251,627
Debt service:
Principal - - - - 208,000
Interest and fiscal charges - - - - 5,322
Total expenditures 87,795 3,929,034 - 5,000 59,144,688
Excess (deficiency) of revenues
over expenditures (86,651) (3,929,034) 49,423 5,863 (35,124,032)
Other financing sources (uses):
Transfers in - 8,930,000 - - 72,396,724
Transfers out - (16,950,000) - - (22,438,273)
Total other financing sources (uses)- (8,020,000) - - 49,958,451
Net change in fund balances (86,651) (11,949,034) 49,423 5,863 14,834,419
Fund balances (deficits), beginning 87,734 23,494,836 5,311,608 1,175,666 78,374,531
Fund balances (deficits), ending 1,083$ 11,545,802$ 5,361,031$ 1,181,529$ 93,208,950$
Page 7 of 7
CITY OF NEWPORT BEACH
Capital Projects Permanent Funds
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2023
177
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,503,731$ 2,503,731$ 2,155,859$ (347,872)$
Investment income 21,669 21,669 53,607 31,938
Net decrease in fair value of investments - - (32,267) (32,267)
Total revenues 2,525,400 2,525,400 2,177,199 (348,201)
Expenditures:
Capital outlay 2,075,000 3,642,243 919,833 2,722,410
Net change in fund balance 450,400 (1,116,843) 1,257,366 2,374,209
Fund balance, beginning 2,450,213 2,450,213 2,450,213 -
Fund balance, ending 2,900,613$ 1,333,370$ 3,707,579$ 2,374,209$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
178
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 1,957,264$ 1,957,264$ 1,900,470$ (56,794)$
Investment income 3,321 3,321 21,281 17,960
Net increase in fair value of investments - - 17,008 17,008
Total revenues 1,960,585 1,960,585 1,938,759 (21,826)
Expenditures:
Capital outlay 2,000,000 3,990,028 3,655,720 334,308
Net change in fund balance (39,415) (2,029,443) (1,716,961) 312,482
Fund balance, beginning 2,133,012 2,133,012 2,133,012 -
Fund balance, ending 2,093,597$ 103,569$ 416,051$ 312,482$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
SB1 Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
179
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$-$13,458$13,458$
Investment income -- 9,050 9,050
Net decrease in fair value of investments -- (799)(799)
Total revenues -- 21,709 21,709
Expenditures:
Public safety 65,000 65,000 25,139 39,861
Net change in fund balance (65,000)(65,000)(3,430)61,570
Fund balance, beginning 533,795 533,795 533,795 -
Fund balance, ending 468,795$468,795$530,365$61,570$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2023
180
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 67,500$ 417,500$ 299,968$ (117,532)$
Expenditures:
Public safety 67,773 417,773 299,968 117,805
Net change in fund balance (273) (273) - 273
Fund balance, beginning - - - -
Fund balance, ending (273)$ (273)$ -$ 273$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2023
181
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees -$ -$ 289,075$ 289,075$
Investment income - - 50,418 50,418
Net decrease in fair value of investments - - (16,025) (16,025)
Total revenues - - 323,468 323,468
Expenditures:
Capital outlay - 3,103,098 1,849,971 1,253,127
Net change in fund balance - (3,103,098) (1,526,503) 1,576,595
Fund balance, beginning 3,180,262 3,180,262 3,180,262 -
Fund balance, ending 3,180,262$ 77,164$ 1,653,759$ 1,576,595$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
182
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 202,950$ 202,950$ 144,392$ (58,558)$
Investment income 3,006 3,006 5,325 2,319
Net decrease in fair value of investments - - (4,595) (4,595)
Total revenues 205,956 205,956 145,122 (60,834)
Expenditures:
Capital outlay - 273,613 250,975 22,638
Net change in fund balance 205,956 (67,657) (105,853) (38,196)
Fund balance, beginning 293,836 293,836 293,836 -
Fund balance, ending 499,792$ 226,179$ 187,983$ (38,196)$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2023
183
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 385,974$ 1,202,150$ 997,666$ (204,484)$
Expenditures:
Community development 183,586 925,899 667,747 258,152
Debt service:
Principal 208,000 208,000 208,000 -
Interest and fiscal charges 2,548 2,548 2,548 -
Total expenditures 394,134 1,136,447 878,295 258,152
Net change in fund balance (8,160) 65,703 119,371 53,668
Fund balance, beginning (119,371) (119,371) (119,371) -
Fund balance (deficit), ending (127,531)$ (53,668)$ -$ 53,668$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
184
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 100,000$ 100,000$ 110,841$ 10,841$
Investment income 16,734 16,734 25,183 8,449
Net decrease in fair value of investments - - (7,107) (7,107)
Total revenues 116,734 116,734 128,917 12,183
Expenditures:
Capital outlay - 16,319 - 16,319
Net change in fund balance 116,734 100,415 128,917 28,502
Fund balance, beginning 1,423,818 1,423,818 1,423,818 -
Fund balance, ending 1,540,552$ 1,524,233$ 1,552,735$ 28,502$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
185
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other taxes 670,563$670,563$874,747$204,184$
Investment income 153,829 153,829 153,229 (600)
Net decrease in fair value of investments - - (59,583) (59,583)
Other revenue 40,000 40,000 70,058 30,058
Total revenues 864,392 864,392 1,038,451 174,059
Expenditures:
Public works 684,737 685,566 380,823 304,743
Net change in fund balance 179,655 178,826 657,628 478,802
Fund balance, beginning 8,599,069 8,599,069 8,599,069 -
Fund balance, ending 8,778,724$ 8,777,895$ 9,256,697$ 478,802$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2023
186
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 200,000$ 200,000$ 215,174$ 15,174$
Expenditures:
Public safety 200,000 200,000 215,174 (15,174)
Net change in fund balance - - - -
Fund balance, beginning - - - -
Fund balance, ending -$ -$ -$ -$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Services Special Revenue Fund
For the Year Ended June 30, 2023
187
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other - 395,766$ - (395,766)$
Expenditures:
Public safety - 395,766 - 395,766
Net change in fund balance - - - -
Fund balance, beginning - - - -
Fund balance, ending -$ -$ -$ -$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Opioid Remediation Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
188
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 5,147,691$ 8,585,269$ 2,973,366$ (5,611,903)$
Investment income 36,533 36,533 4,672 (31,861)
Net decrease in fair value of investments - - (27,592) (27,592)
Donations 8,371,043 8,963,927 492,038 (8,471,889)
Other - 42,650 8,428 (34,222)
Total revenues 13,555,267 17,628,379 3,450,912 (14,177,467)
Expenditures:
Capital outlay 8,502,000 17,157,115 3,635,163 13,521,952
Net change in fund balance 5,053,267 471,264 (184,251) (655,515)
Fund balance, beginning 172,626 172,626 172,626 -
Fund balance, ending 5,225,893$ 643,890$ (11,625)$ (655,515)$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Contributions Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
189
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Investment income 23,910$23,910$21,038$(2,872)$
Net decrease in fair value of investments - - (10,997) (10,997)
Total revenues 23,910 23,910 10,041 (13,869)
Expenditures:
Community services 147,000 147,000 118,830 28,170
Net change in fund balance (123,090) (123,090) (108,789) 14,301
Fund balance, beginning 1,298,845 1,298,845 1,298,845 -
Fund balance, ending 1,175,755$ 1,175,755$ 1,190,056$ 14,301$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
FIIN Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
190
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 150,000$ 150,000$ 150,000$ -$
Property income 32,118 32,118 24,300 (7,818)
Investment income - - 28,364 28,364
Net increase in fair value of investments - - 20,329 20,329
Donations 35,000 35,000 64,829 29,829
Other 16,672 16,672 69,038 52,366
Total revenues 233,790 233,790 356,860 123,070
Expenditures:
Community development - 20,000 1,746 18,254
Community services - 128,881 92,428 36,453
Total Expenditures - 148,881 94,174 54,707
Net change in fund balance 233,790 84,909 262,686 177,777
Fund balance, beginning 1,737,821 1,737,821 1,737,821 -
Fund balance, ending 1,971,611$ 1,822,730$ 2,000,507$ 177,777$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Restricted Programs Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
191
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 3,293,536$ 3,831,508$ 2,697,652$ (1,133,856)$
Investment income 7,123 7,123 57,163 50,040
Net decrease in fair value of investments - - (28,118) (28,118)
Total revenues 3,300,659 3,838,631 2,726,697 (1,111,934)
Expenditures:
Capital outlay 1,857,000 5,675,923 2,990,672 2,685,251
Excess (deficiency) of revenues
over expenditures 1,443,659 (1,837,292) (263,975) 1,573,317
Other financing sources:
Transfers in - 5,010 5,010 -
Net change in fund balance 1,443,659 (1,832,282) (258,965) 1,573,317
Fund balance, beginning 2,195,262 2,195,262 2,195,262 -
Fund balance, ending 3,638,921$ 362,980$ 1,936,297$ 1,573,317$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Measure M Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
192
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Property income 254,640$ 254,640$ 261,477$ 6,837$
Investment income - - 12,457 12,457
Net increase in fair value of investments - - 8,898 8,898
Total revenues 254,640 254,640 282,832 28,192
Other financing sources:
Transfers in 500,000 - - -
Transfers out (500,000) (500,000) (500,000) -
Total other financing sources (uses)- (500,000) (500,000) -
Net change in fund balance 254,640 (245,360) (217,168) 28,192
Fund balance, beginning 1,162,791 1,162,791 1,162,791 -
Fund balance, ending 1,417,431$ 917,431$ 945,623$ 28,192$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Oceanfront Encroachment Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
193
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 10,141,272$ 3,238,596$ 3,212,998$ (25,598)$
Expenditures:
General government -50,009 24,411 25,598
Capital outlay 10,100,000 10,141,272 3,188,587 6,952,685
Total expenditures 10,100,000 10,191,281 3,212,998 6,978,283
Net change in fund balance 41,272 (6,952,685)-(6,952,685)
Fund balance, beginning -- --
Fund balance, ending 41,272$ (6,952,685)$-$(6,952,685)$
Budgeted Amounts
CITY OF NEWPORT BEACH
American Rescue Plan Act
Budgetary Comparison Statement
For the Year Ended June 30, 2023
194
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 360,000$ 360,000$ 340,307$ (19,693)$
Investment income - - 44,888 44,888
Net increase in fair value of investments - - 33,763 33,763
Total revenues 360,000 360,000 418,958 58,958
Other financing (uses):
Transfers out - (47,992) (47,992) -
Net change in fund balance 360,000 312,008 370,966 58,958
Fund balance, beginning 2,781,571 2,781,571 2,781,571 -
Fund balance, ending 3,141,571$ 3,093,579$ 3,152,537$ 58,958$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
PEG Fees Special Revenue Fund
For the Year Ended June 30, 2023
Budgeted Amounts
195
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196
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
FI
NANFI
N
A
N
C
I
A
L CI
A
L
S
SEECCTITI
O
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197
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198
INTERNAL SERVICE FUNDS
The Internal Service Funds are used to allocate the cost of providing
goods and services by one department to other departments on a cost
reimbursement basis.
The City of Newport Beach Internal Service Funds are listed below:
The Insurance Reserve Fund is used to account for the City's self-
insured general liability and workers' compensation program.
The Compensated Absences Fund is used to account for the City’s
accumulated liability for compensated absences.
The Retiree Insurance Fund is used to account for the cost of providing
post-employment health care benefits.
The Equipment Maintenance Fund is used to account for the cost of
maintaining and replacing the City’s rolling stock fleet, parking equipment,
coordinated communications system equipment, fire equipment and recreation
equipment.
The Information Technology Fund is used to account for the cost of
maintaining and replacing the City’s computers, printers, copiers and
telecommunication services to other departments.
199
Total
Insurance Compensated Retiree Equipment Information Internal
Assets Reserve Absences Insurance Maintenance Technology Service Funds
Current assets:
Cash and investments 41,908,438$ 6,208,195$ 742,138$ 17,972,583$ 10,656,998$ 77,488,352$
Receivables:
Accounts (net of allowance)- - 905 1,574 - 2,479
Interest 148,622 20,856 2,241 64,718 37,964 274,401
Inventories - - - 438,573 - 438,573
Prepaid items 49,178 - 259,241 - 668,136 976,555
Total current assets 42,106,238 6,229,051 1,004,525 18,477,448 11,363,098 79,180,360
Noncurrent assets:
Capital assets:
Equipment - - - 42,794,283 3,479,149 46,273,432
Intangible right to use equipment - - - - 353,888 353,888
Structures - - - 39,581 - 39,581
Software - - - - 4,360,625 4,360,625
Intangible right to use subscriptions - - - 1,723,597 381,348 2,104,945
Work in progress - - - - - -
Less accumulated depreciation/amortization - - - (27,019,639) (6,520,991) (33,540,630)
Total capital assets (net of accumulated
depreciation/amortization)- - - 17,537,822 2,054,019 19,591,841
Total assets 42,106,238 6,229,051 1,004,525 36,015,270 13,417,117 98,772,201
Deferred outflows of resources:
Deferred amount from pension plans - - - 950,453 1,905,078 2,855,531
Deferred amount from OPEB - - - 214,109 429,164 643,273
Total deferred outflows of resources - - - 1,164,562 2,334,242 3,498,804
Liabilities
Current liabilities:
Accounts payable 89,324 - - 540,108 98,748 728,180
Accrued payroll - 397,234 188,324 37,816 85,376 708,750
Due to other funds - - 353,001 - - 353,001
Workers' compensation - current 3,072,704 - - - - 3,072,704
General liability - current 2,938,129 - - - - 2,938,129
Compensated absences - current - 4,223,096 - - - 4,223,096
Lease liability - current - - - - 68,951 68,951
Subscription liability - current - - - 168,512 151,540 320,052
Total current liabilities 6,100,157 4,620,330 541,325 746,436 404,615 12,412,863
Noncurrent liabilities:
Workers' compensation 13,323,449 - - - - 13,323,449
General liability 5,750,932 - - - - 5,750,932
Compensated absences - 8,467,944 - - - 8,467,944
Lease liability - - - - 133,221 133,221
Subscription liability - - - 1,470,387 77,741 1,548,128
Net pension liability - - - 2,227,921 4,465,652 6,693,573
Net OPEB liability - - - 256,634 514,406 771,040
Total noncurrent liabilities 19,074,381 8,467,944 - 3,954,942 5,191,020 36,688,287
Total liabilities 25,174,538 13,088,274 541,325 4,701,378 5,595,635 49,101,150
Deferred inflows of resources:
Deferred amount from pension plans - - - 17,736 35,547 53,283
Deferred amount from OPEB - - - 4,338 8,695 13,033
Total deferred inflows of resources - - - 22,074 44,242 66,316
Net Position
Invested in capital assets - - - 15,830,374 1,611,209 17,441,583
Unrestricted 16,931,700 (6,859,223) 463,200 16,626,006 8,500,273 35,661,956
Total net position 16,931,700$ (6,859,223)$ 463,200$ 32,456,380$ 10,111,482$ 53,103,539$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Net Position
June 30, 2023
200
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Operating revenues:
Charges for services 13,356,646$ 2,796,453$ 4,124,923$ 8,205,587$ 7,650,517$ 36,134,126$
Employee contributions - - 25,880 - - 25,880
Other 11,872 - 3,838,788 3,918 355 3,854,933
Total operating revenues 13,368,518 2,796,453 7,989,591 8,209,505 7,650,872 40,014,939
Operating expenses:
Salaries and wages - - - 986,886 2,471,844 3,458,730
Depreciation/amortization - - - 3,534,588 557,254 4,091,842
Professional services - - - 301,283 709,721 1,011,004
Maintenance and supplies - - - 1,670,153 1,584,709 3,254,862
Fleet parts and supplies - - - 517,579 - 517,579
Telecommunication - - - - 204,977 204,977
Hardware - - - - 211,872 211,872
Software - - - - 349,977 349,977
Workers' compensation 4,903,042 - - - - 4,903,042
Claims and judgments 5,618,183 - - - - 5,618,183
Compensated absences - 2,007,182 - - - 2,007,182
OPEB - - 6,187,129 - - 6,187,129
Other - - 2,289,379 - 126 2,289,505
Total operating expenses 10,521,225 2,007,182 8,476,508 7,010,489 6,090,480 34,105,884
Operating income (loss)2,847,293 789,271 (486,917) 1,199,016 1,560,392 5,909,055
Nonoperating revenues:
Investment income 659,427 96,233 14,710 281,867 174,685 1,226,922
Net decrease in fair value of investments (205,646) (40,899) (12,582) (70,700) (46,768) (376,595)
Gain on sale of capital assets - - - 355,270 - 355,270
Interest expense - - - (3,852) (2,770) (6,622)
Total nonoperating revenues 453,781 55,334 2,128 562,585 125,147 1,198,975
Income (loss) before transfers 3,301,074 844,605 (484,789) 1,761,601 1,685,539 7,108,030
Transfers in - - - 379,452 - 379,452
Total transfers - - - 379,452 - 379,452
Change in net position 3,301,074 844,605 (484,789) 2,141,053 1,685,539 7,487,482
Net position, beginning 13,630,626 (7,703,828) 947,989 30,315,327 8,425,943 45,616,057
Net position, ending 16,931,700$ (6,859,223)$ 463,200$ 32,456,380$ 10,111,482$ 53,103,539$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2023
201
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Cash flows from operating activities:
Receipts from user departments 13,356,646$ 2,796,453$ 4,130,243$ 8,215,027$ 7,650,517$ 36,148,886$
Payments to employees (4,270,715) (2,202,671) - (1,112,839) (2,730,603) (10,316,828)
Payments to suppliers (6,131,165) - (8,466,370) (510,052) (3,736,281) (18,843,868)
Other operating cash receipts 11,872 - 3,864,668 3,918 355 3,880,813
Net cash provided (used) by operating activities 2,966,638 593,782 (471,459) 6,596,054 1,183,988 10,869,003
Cash flows from noncapital financing activities:
Cash received from other funds - - - 379,449 - 379,449
Net cash provided by noncapital financing activities - - - 379,449 - 379,449
Cash flows from capital and related financing activities:
Acquisition of capital assets - - - (3,550,221) (234,489) (3,784,710)
Lease liabilities and related - - - - (67,960) (67,960)
Subscription liabilities and related - - - (88,550) (153,555) (242,105)
Proceeds from sale of capital assets - - - 355,270 - 355,270
Net cash provided (used) for capital and related financing
activities - - - (3,283,501) (456,004) (3,739,505)
Cash flows from investing activities:
Investment income 419,706 49,492 2,958 188,393 118,903 779,452
Net cash provided by investing activities 419,706 49,492 2,958 188,393 118,903 779,452
Net increase (decrease) in cash and cash equivalents 3,386,344 643,274 (468,501) 3,880,395 846,887 8,288,399
Cash and cash equivalents, beginning 38,522,094 5,564,921 1,210,639 14,092,188 9,810,111 69,199,953
Cash and cash equivalents, ending 41,908,438$ 6,208,195$ 742,138$ 17,972,583$ 10,656,998$ 77,488,352$
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position 41,908,438$ 6,208,195$ 742,138$ 17,972,583$ 10,656,998$ 77,488,352$
Cash and cash equivalents 41,908,438$ 6,208,195$ 742,138$ 17,972,583$ 10,656,998$ 77,488,352$
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)2,847,293$ 789,271$ (486,917)$ 1,199,016$ 1,560,392$ 5,909,055$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation - - - 3,534,588 557,254 4,091,842
Changes in operating assets and liabilities:
Decrease in accounts receivable - - 5,320 9,440 - 14,760
Decrease in inventories - - - (57,187) - (57,187)
(Increase) decrease in prepaid items (37,377) - (59) 1,964,440 (338,838) 1,588,166
Increase (decrease) in accounts payable and accrued
payroll (478,024) (109,121) 10,197 77,637 (330,478) (829,789)
Increase in workers' compensation 641,565 - - - - 641,565
Increase in general liability (6,819) - - - - (6,819)
(Decrease) in compensated absences - (86,368) - - - (86,368)
(Decrease) in net pension liability and deferred cash flows - - - (80,165) (160,682) (240,847)
(Decrease) in net OPEB liability and deferred cash flows - - - (51,715) (103,660) (155,375)
Total adjustments 119,345 (195,489) 15,458 5,397,038 (376,404) 4,959,948
Net cash provided (used) by operating activities 2,966,638$ 593,782$ (471,459)$ 6,596,054$ 1,183,988$ 10,869,003$
Noncash investing, capital, and financing activities:
Residual Equity transfer
Net (decrease) in fair value of investments (205,646)$ (40,899)$ (12,582)$ (70,700)$ (46,768)$ (376,595)$
Obtaining an intangible right to use lease asset - - - - 5,616 5,616
Obtaining an intangible right to use subscription asset - - - 1,723,597 381,348 2,104,945
Total of noncash activities (205,646)$ (40,899)$ (12,582)$ 1,652,897$ 340,196$ 1,733,966$
CITY OF NEWPORT BEACH
Combining Statement of Cash Flows
For the Year Ended June 30, 2023
Internal Service Funds
202
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
FIDUCIARY FUNDS
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FIDUCIARY FUNDS
Fiduciary Funds are used to account for assets held by the City in a trustee
capacity, or as an agent for other government entities, private
organizations, or individuals.
The City of Newport Beach Fiduciary Funds are listed below:
The Special Assessment District Fund is used to account for funds received
from affected property owners and payable to holders of 1911 Act and 1915 Act
special assessment bonds.
The Tourism Business Improvement Fund is used to account for the Newport
Beach Tourism Business Improvement District’s special assessment on short
term room rental revenue collected by the City for Visit Newport Beach Inc.
The Other Business Improvement Fund is used to account for monies
collected from local business districts for district property improvements and
business enhancement.
The Police Custodial Fund is used to account for monies received by the City’s
police department in a custodial capacity, such as warrants and items pending
adjudication.
The Flexible Spending Account Fund is used to account for monies withheld
by the City from employees’ wages based on their voluntary enrollment in flexible
spending accounts.
205
Custodial Funds
Special Tourism Other Flexible Total
Assessment Business Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds
Assets
Cash and investments 561,421$ 418,250$ 6,823$ 289,556$ 125,728$ 1,401,778$
Restricted cash and investments with fiscal agent 1,318,999 - - - - 1,318,999
Receivable:
Interest 2,018 - - - - 2,018
Intergovernmental receivable 29,936 - - -- 29,936
Total assets 1,912,374 418,250 6,823 289,556 125,728 2,752,731
Liabilities
Advances from other funds - - - - 100,000 100,000
Due to others 39 418,250 6,823 646 -425,758
Total liabilities 39 418,250 6,823 646 100,000 525,758
Net Position
Restricted for:
Individuals, organizations, and other governments 1,912,335 - - 288,910 25,728 2,226,973
Total net position 1,912,335$ -$ -$ 288,910$ 25,728$ 2,226,973$
CITY OF NEWPORT BEACH
Fiduciary Funds
Combining Statement of Fiduciary Net Position
June 30, 2023
206
Custodial Funds
Special Tourism Other Flexible Total
Assessment Business Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds
Additions
Special assessments 1,289,499$ -$ -$ -$ -$ 1,289,499$
Investment earnings 47,328 - - 225 - 47,553
Other - - - 101,673 221,680 323,353
Total additions 1,336,827 - - 101,898 221,680 1,660,405
Deductions
Debt service 1,653,677 - - - - 1,653,677
Administrative 112,756 - - - - 112,756
Other - - - 72,955 195,952 268,907
Total deductions 1,766,433 - - 72,955 195,952 2,035,340
Net increase (decrease) in fiduciary net position (429,606) - - 28,943 25,728 (374,935)
Net position, beginning of year 2,341,941 - - 259,967 - 2,601,908
Net position, end of year 1,912,335$ -$ -$ 288,910$ 25,728$ 2,226,973$
CITY OF NEWPORT BEACH
Fiduciary Funds
Combining Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2023
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STATISTICAL SECTION
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FINANCIAL TRENDS
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules contain trend information illustrating how the City’s financial performance and well-being have changed over time:
• Net Position by Component
• Changes in Net Position
• Fund Balances of Governmental Funds
• Changes in Fund Balance of Governmental Funds
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.
211
20141 20152 20163 20174
Net investment in capital assets 2,148,942,928$ 2,176,644,408$ 2,193,773,102$ 2,201,552,683$
Restricted 59,998,344 45,689,702 44,033,677 45,753,736
Unrestricted (184,990,765) (150,532,773) (130,468,268) (133,461,197)
2,023,950,507$ 2,071,801,337$ 2,107,338,511$ 2,113,845,222$
Business-type activities:
Net investment in capital assets 115,948,522$ 113,914,514$ 117,055,576$ 116,238,944$
Unrestricted 13,160,611 21,756,124 23,430,189 28,890,311
129,109,133$ 135,670,638$ 140,485,765$ 145,129,255$
Primary government:
Net investment in capital assets 2,264,891,450$ 2,290,558,922$ 2,310,828,678$ 2,317,791,627$
Restricted 59,998,344 45,689,702 44,033,677 45,753,736
Unrestricted (171,830,154) (128,776,649) (107,038,079) (104,570,886)
2,153,059,640$ 2,207,471,975$ 2,247,824,276$ 2,258,974,477$
1
2
3
4
5
6
Governmental activities:
Total governmental activities
Total business-type activities
Total primary government
The City of Newport Beach implemented GASB 63 and GASB 65 for the fiscal year ended June 30, 2013.
The City of Newport Beach implemented GASB 68 for the fiscal year ended June 30, 2015.
The City of Newport Beach implemented GASB 75 for the fiscal year ended June 30, 2018.
The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022.
The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
Reflects restatement of net position due to compensated absences and deferred outflow adjustments related to fiscal year ended June 30, 2016.
2022 data varies from trend due to receipt of revenues such as property taxes and sales taxes that were not spent
or restricted by the end of the fiscal year.
Reflects restatement of net position due to deferred outflow adjustments related to fiscal year ended June 30, 2017.
Reflects restatement of net position due to implementation of GASB 75 in fiscal year ended June 30, 2018.
Reflects restatement of net position due to adjustments for capital assets and compensated absences liability in fiscal year ended June 30, 2019.
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Reflects restatement of net position due to the implementation of GASB 68 in fiscal year ended June 30, 2015 and
an adjustment to record deferred amount from gain on refunding.
Fiscal Year
212
20185 2019 2020 2021 2022 2023
2,208,832,391$ 2,218,040,304$ 2,217,852,660$ 2,227,572,605$ 2,223,773,786$ 2,256,305,577$
49,791,908 56,426,811 67,708,225 67,189,020 78,100,496 79,152,428
(122,024,754) (102,035,181) (90,214,086) (72,301,558) (8,183,288) 20,117,377
2,136,599,545$ 2,172,431,934$ 2,195,346,799$ 2,222,460,067$ 2,293,690,994$ 2,355,575,382$
119,375,596$ 119,346,350$ 120,291,689$ 124,775,772$ 128,244,924$ 131,015,969$
29,183,382 30,331,669 30,276,662 27,039,499 28,559,633 26,701,049
148,558,978$ 149,678,019$ 150,568,351$ 151,815,271$ 156,804,557$ 157,717,018$
2,328,207,987$ 2,337,386,654$ 2,338,144,349$ 2,352,348,377$ 2,352,018,710$ 2,387,321,546$
49,791,908 56,426,811 67,708,225 67,189,020 78,100,496 79,152,428
(92,841,372) (71,703,512) (59,937,424) (45,262,059) 20,376,345 6 46,818,426
2,285,158,523$ 2,322,109,953$ 2,345,915,150$ 2,374,275,338$ 2,450,495,551$ 2,513,292,400$
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
213
2014 2015 2016 2017
18,834,165$ 24,558,041$ 19,335,275$ 20,443,569$
87,676,062 96,945,872 91,046,455 102,494,314
42,953,118 45,774,939 45,443,988 54,039,601
10,283,481 10,073,248 9,943,868 12,056,086
21,357,271 22,418,287 22,700,052 26,583,440
7,888,192 7,711,334 7,615,094 7,472,188
Total governmental activities expenses 188,992,289 207,481,721 196,084,732 223,089,198
22,037,284 21,175,954 21,605,197 22,004,013
3,368,656 3,452,398 3,818,165 4,218,926
Total business-type activities expenses 25,405,940 24,628,352 25,423,362 26,222,939
Total primary government expenses 214,398,229 232,110,073 221,508,094 249,312,137
General government 3,046,232 3,647,210 3,722,557 5,089,123
Public safety 19,124,113 19,386,017 19,108,222 19,899,242
Public works 5,517,103 5,276,991 5,319,510 5,214,426
Community development 8,043,390 8,608,645 8,419,588 10,838,114
Community services 13,270,316 13,667,775 13,964,018 13,653,466
Operating grants and contributions:15,196,696 10,673,286 17,826,914 11,632,188
Capital grants and contributions:563,786 38,157,665 1 2,717,504 27,993,317 1
64,761,636 99,417,589 71,078,313 94,319,876
Water 29,397,882 27,705,129 24,499,952 25,371,307
Wastewater 3,438,670 3,326,362 3,065,762 3,161,114
Operating grants and contributions:- - - -
32,836,552 31,031,491 27,565,714 28,532,421
97,598,188 130,449,080 98,644,027 122,852,297
(124,230,653) (108,064,132) (125,006,419) (128,769,322)
7,430,612 6,403,139 2,142,352 2,309,482
(116,800,041)$ (101,660,993)$ (122,864,067)$ (126,459,840)$
General revenues and other changes in net position:
Property tax 79,889,346$ 84,121,461$ 91,516,611$ 96,964,060$
Sales tax 23,142,065 24,832,412 33,937,986 33,702,895
Sales tax in-lieu 7,727,876 8,046,424 2,870,474 -
Transient occupancy tax 18,176,369 20,369,158 21,083,199 22,382,361
Business license tax 4,156,130 4,141,282 4,024,386 4,149,016
Franchise tax 3,998,943 4,189,130 4,047,584 4,026,005
Other taxes 216,604 354,919 327,009 358,209
Investment income 542,915 437,272 584,259 589,001
Net increase (decrease) in fair value of investments 53,783 61,337 376,311 -
Other 3,803,728 3,161,567 4,001,486 2,290,482
Transfers - - - (3,500,000)
141,707,759 149,714,962 162,769,305 160,962,029
Investment income 128,439 123,445 216,576 77,752
Net increase (decrease) in fair value of investments 18,199 34,921 148,527 -
Other - - 2,375,000 -
Capital contributions - - 22,516 - Transfers - - - 3,500,000
146,638 158,366 2,762,619 3,577,752
141,854,397 149,873,328 165,531,924 164,539,781
17,477,106 41,650,830 37,762,886 32,192,707
7,577,250 6,561,505 4,904,971 5,887,234
25,054,356$ 48,212,335$ 42,667,857$ 38,079,941$
1
Interest on long-term debt
Expenses:
Governmental activities:
General government
Public safety
Public works
Community development
Community services
Total governmental activities program revenues
Business-type activities:
Charges for services:
Total business-type activities program revenues
Business-type activities:
Water
Wastewater
Program revenues:
Governmental activities:
Charges for services:
Governmental activities:
Taxes:
Total governmental activities
Business-type activities:
Total business-type activities
Total primary government program revenues
Net revenues (expenses):
Governmental activities
Business-type activities
Total net revenues (expenses)
Data varies from trend because of one-time receipt of developer contributions.
Fiscal Year
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Changes in net position
Governmental activities
Business-type activities
Total primary government
Total primary government
214
2018 2019 2020 2021 2022 2023
19,011,099$ 20,549,224$ 20,714,050$ 20,177,482$ 19,374,179$ 26,911,510$
107,647,562 111,556,065 119,194,302 119,184,958 104,767,466 121,309,057
47,615,000 53,339,878 60,054,860 63,689,155 65,031,715 75,904,138
12,377,394 11,493,204 12,842,020 12,157,226 9,664,500 13,048,442
27,307,115 27,758,097 26,668,079 28,214,205 24,508,702 27,937,349
7,381,743 7,187,971 7,064,521 7,321,612 6,877,577 6,666,044
221,339,913 231,884,439 246,537,832 250,744,638 230,224,139 271,776,540
23,724,918 26,898,075 27,387,120 28,943,243 27,117,471 30,701,834
4,158,155 4,222,228 4,291,755 5,223,245 4,094,448 5,343,891
27,883,073 31,120,303 31,678,875 34,166,488 31,211,919 36,045,725
249,222,986 263,004,742 278,216,707 284,911,126 261,436,058 307,822,265
5,355,887 5,887,265 3,846,962 2,914,007 3,625,809 12,386,628
20,733,883 21,979,376 22,232,248 22,038,904 23,156,703 26,273,944
5,789,579 5,778,441 5,054,694 5,067,478 7,538,103 8,770,525
9,956,226 9,902,445 9,599,848 10,491,970 11,119,757 11,269,905
13,974,329 13,556,360 16,936,285 17,601,288 22,302,788 15,753,446
11,943,941 14,021,506 14,659,016 20,361,620 16,800,039 20,131,513
1,815,464 6,638,356 7,352,407 7,658,387 8,693,429 5,809,562
69,569,309 77,763,749 79,681,460 86,133,654 93,236,628 100,395,523
26,931,193 26,843,751 27,100,429 30,739,726 32,104,202 32,033,631
3,445,772 4,069,265 4,110,815 4,618,186 4,825,249 4,666,685
- - - - 116,629 -
30,376,965 30,913,016 31,211,244 35,357,912 37,046,080 36,700,316
99,946,274 108,676,765 110,892,704 121,491,566 130,282,708 137,095,839
(151,770,604) (154,120,690) (166,856,372) (164,610,984) (136,987,511) (171,381,017)
2,493,892 (207,287) (467,631) 1,191,424 5,834,161 654,591
(149,276,712)$ (154,327,977)$ (167,324,003)$ (163,419,560)$ (131,153,350)$ (170,726,426)$
101,593,290$ 108,365,261$ 113,313,535$ 119,157,057$ 124,335,985$ 138,358,730$
36,373,253 37,168,063 36,232,969 38,956,275 46,164,860 46,552,459
- - - - - - 22,857,737 24,697,446 21,097,384 16,886,197 26,677,331 30,201,649
4,282,935 4,428,440 4,882,419 4,481,349 4,363,145 4,901,385
4,228,469 4,286,496 4,394,156 4,204,224 4,561,278 4,996,526
3,346,987 2,633,720 2,592,369 4,166,549 4,333,071 181,800
632,808 2,644,319 2,621,488 2,603,982 1,995,214 3,208,250 - 2,234,249 2,520,033 (2,086,189) (6,856,640) (687,766)
3,416,348 3,495,085 2,116,884 3,354,808 2,644,194 5,552,372
- - - - - -
176,731,827 189,953,079 189,771,237 191,724,252 208,218,438 233,265,405
184,906 713,970 732,099 525,295 345,218 520,736
- 612,358 625,864 (469,799) (1,190,093) (262,867)
- - - - - -
- - - - - - - - - - - -
184,906 1,326,328 1,357,963 55,496 (844,875) 257,869
176,916,733 191,279,407 191,129,200 191,779,748 207,373,563 233,523,274
24,961,223 35,832,389 22,914,865 27,113,268 71,230,927 61,884,388
2,678,798 1,119,041 890,332 1,246,920 4,989,286 912,460
27,640,021$ 36,951,430$ 23,805,197$ 28,360,188$ 76,220,213$ 62,796,848$
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
215
2014 2015 2016 2017
General fund:
Nonspendable 16,316,499$ 15,784,396$ 15,210,896$ 14,434,017$
Restricted 3,939,751 5,389,810 3,083,133 3,797,009
Committed 12,782,235 1 11,847,852 2,726,020 2 10,570,638 3
Assigned 1,326,170 1,421,225 4,201,311 567,132
Unassigned 51,015,820 1 55,509,258 56,618,041 60,009,244
Total general fund 85,380,475$ 89,952,541$ 81,839,401$ 2 89,378,040$ 3
All other governmental funds:
Nonspendable 4,629,781$ 4,669,269$ 4,629,781$ 4,666,256$
Restricted 33,243,790 29,842,384 33,662,859 31,950,139
Committed 19,513,389 26,159,261 40,248,977 49,510,047
Unassigned (14,291,969) (12,495,729) (15,422,984) (6,308,331)
Total all other governmental funds 43,094,991$ 48,175,185$ 63,118,633$ 79,818,111$
Total all governmental funds 128,475,466$ 138,127,726$ 144,958,034$ 169,196,151$
1
2
3
4
5
6
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
Data varies from trend due to the reclassification of the contingency reserve from committed fund balance to unassigned fund balance per council approval.
Data varies from trend due to the moving of general fund capital projects to a separate capital project fund.
Data varies from trend due to additional funds set aside for seawall construction and pension-related items.
Data varies from trend due to the relocation of restricted funds to special revenue funds.
Data varies from trend due to the City's absence of fund balance not restricted or committed to be used for specific purposes in fiscal year ended June 30, 2022.
Data varies from trend due to additional funds set aside mainly in the Facilities Financial Planning Reserve
Fund and Unrestricted Capital Improvements Fund.
216
2018 2019 2020 2021 2022 2023
14,050,930$ 13,147,221$ 11,864,115$ 10,637,097$ 9,407,143$ 8,239,567$
4,412,302 4,757,437 5,710,434 4,876,025 - 4 -
13,444,487 13,335,675 2,210,811 3,235,746 4,429,573 5,465,426
590,368 1,199,682 2,598,828 1,489,350 - 5 -
61,415,049 64,146,123 76,699,284 85,715,180 83,302,665 77,737,532
93,913,136$ 96,586,138$ 99,083,472$ 105,953,398$ 97,139,381$ 91,442,525$
4,787,243$ 4,715,545$ 4,646,529$ 4,707,330$ 4,690,430$ 4,650,931$
38,629,419 45,958,167 53,310,518 63,914,627 73,013,208 73,657,409
41,731,742 40,732,124 48,032,259 47,863,154 73,243,534 6 78,218,834
(376,162) (253) (50,137) (136,299) (119,371) (11,625)
84,772,242$ 91,405,583$ 105,939,169$ 116,348,812$ 150,827,801$ 156,515,549$
178,685,378$ 187,991,721$ 205,022,641$ 222,302,210$ 247,967,182$ 247,958,074$
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Fund Balances
Total General Fund
Total all other Governmental Funds
217
2014 2015 2016 2017
Revenues:
Taxes 137,910,879$ 146,664,903$ 158,386,385$ 162,184,218$
Intergovernmental 16,825,839 11,813,208 17,262,147 17,073,653
Licenses, permits and fees 6,659,203 14,676,754 6,571,123 9,844,908
Charges for services 16,864,092 16,914,210 18,827,991 19,197,065
Fines and forfeitures 3,272,951 3,732,405 3,684,602 3,590,700
Investment income 1,136,062 928,729 1,157,539 772,546
Net increase (decrease) in fair value of investments 124,439 177,485 769,460 -
Property income 22,214,256 21,406,667 22,259,425 23,553,188
Donations 1,170,171 22,249,427 4,190,822 16,827,889
Special assessments - - - -
Other 1,400,048 6,984,418 2,982,924 2,277,322
Total revenues 207,577,940 245,548,206 236,092,418 255,321,489
Expenditures:
Current:
General government 14,471,167 14,060,512 14,629,672 15,086,397
Public safety 82,642,988 94,568,122 96,225,784 98,750,981
Public works 32,414,457 33,694,578 36,000,905 35,961,024
Community development 9,768,928 9,876,706 10,913,205 11,696,779
Community services 19,047,813 20,235,546 21,784,680 23,607,284
Capital outlay 33,572,193 47,169,671 31,934,463 30,822,972
Debt service:
Principal 4,091,000 4,183,000 4,272,000 4,401,000
Interest and fiscal charges 8,052,927 7,957,811 7,839,341 7,704,957
Total expenditures 204,061,473 231,745,946 223,600,050 228,031,394
3,516,467 13,802,260 12,492,368 27,290,095
Other financing sources (uses):
Transfers in 41,223,727 53,281,956 48,523,132 45,342,446
Transfers out (47,245,283)(57,431,956)(54,185,192)(49,390,226)
Proceeds from sale - - - 995,802
Certificates of participation issued - - - -
Premium on certificates of participation issued - - - -
Proceeds from loan issuance - 1,339,000 - -
Payment to refunded loan escrow agent - (1,339,000) - -
Inception of subscription-based IT arrangements - -- -
(6,021,556)(4,150,000)(5,662,060)(3,051,978)
Net change in fund balances (2,505,089)$ 9,652,260$ 6,830,308$ 24,238,117$
Debt service as a percentage of
6.9%6.6%7.2%6.0%
1 Data varies from trend due to implementation of GASB 96 for the fiscal year ended June 30, 2023.
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
noncapital expenditures
Excess (deficiency) of revenues over (under) expenditures
Total other financing sources (uses)
Fiscal Year
218
2018 2019 2020 2021 2022 2023
171,982,240$ 183,455,182$ 182,983,069$ 188,351,057$ 211,259,402$ 226,067,296$
16,148,754 15,818,543 12,672,931 22,233,872 19,683,307 21,080,285
6,405,668 6,302,603 5,783,862 6,566,555 6,995,700 6,719,969
19,828,786 19,472,866 21,125,622 18,434,439 22,897,475 25,214,184
3,181,823 3,347,714 3,509,883 3,923,726 4,191,518 3,892,875
1,143,210 3,490,992 3,765,753 3,201,376 2,756,712 4,525,340
- 2,938,136 3,477,299 (2,634,682) (8,900,762) (465,873)
25,430,217 26,674,107 25,651,360 28,842,374 33,770,750 35,830,362
414,123 402,709 795,561 5,491,871 1,805,249 717,157
- - - - 8,086,594 4,948,430
2,893,770 5,173,716 5,950,279 3,504,103 1,441,813 3,412,302
247,428,591 267,076,568 265,715,619 277,914,691 303,987,758 331,942,327
16,099,310 16,769,920 15,968,085 17,154,507 17,397,786 20,680,878
109,760,129 116,054,531 118,290,847 126,006,313 127,590,486 132,441,032
38,012,230 44,132,877 45,730,965 46,817,293 54,293,534 56,046,234
12,979,656 12,310,621 12,612,751 12,996,840 13,021,562 14,735,582
25,538,966 26,372,495 24,474,242 26,745,189 26,421,141 27,558,760
24,054,866 26,347,312 20,376,106 33,728,085 28,603,393 68,434,127
3,335,000 3,470,000 3,576,000 3,247,000 5,138,250 5,296,166
7,617,107 7,428,469 7,265,703 7,306,143 7,141,264 6,908,693
237,397,264 252,886,225 248,294,699 274,001,370 279,607,416 332,101,472
10,031,327 14,190,343 17,420,920 3,913,321 24,380,342 (159,145)
45,308,862 54,664,532 40,373,981 70,379,824 76,061,564 128,499,591
(45,850,962)(59,548,532)(40,763,981)(65,965,012)(74,776,934)(128,879,043)
- - - - - -
- - - 7,860,000 - -
- - - 1,373,936 - -
- - - - - -
- - - - - -
- - - - - 529,489 1
(542,100)(4,884,000)(390,000)13,648,748 1,284,630 150,037
9,489,227$ 9,306,343$ 17,030,920$ 17,562,069$ 25,664,972$ (9,108)$
5.3%4.8%4.8%4.2%4.8%4.5%
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
219
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220
REVENUE CAPACITY
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules present factors affecting the City’s ability to generate its
own revenue and its most significant local revenue source, the property tax:
•Assessed Value and Estimated Actual Value of Taxable Property
•Direct and Overlapping Property Tax Rates
•Principal Property Tax Payers
•Property Tax Levies and Collections
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
221
Fiscal Year
Ended June 30 Residential Commercial Other Unsecured Total Taxable Assessed Value Change Total Direct Tax Rate
2014 34,678,952,381 4,688,189,694 1,489,111,147 1,484,909,241 42,341,162,463 5.37%1.000%
2015 36,814,891,583 5,007,508,388 1,348,136,131 1,581,520,801 44,752,056,903 5.69%1.000%
2016 39,263,791,190 5,264,898,550 1,394,764,145 1,465,016,213 47,388,470,098 5.89%1.000%
2017 41,834,060,284 5,539,551,197 1,398,481,252 1,569,593,832 50,341,686,565 6.23%1.000%
2018 44,862,969,434 5,953,148,011 1,499,414,812 1,464,683,763 53,780,216,020 6.83%1.000%
2019 48,246,937,786 6,466,645,074 1,474,416,367 1,513,162,553 57,701,161,781 7.29%1.000%
2020 50,791,887,238 6,807,750,346 1,552,189,492 1,592,979,478 60,744,806,554 5.27%1.000%
2021 53,636,707,086 6,979,031,018 1,428,005,141 1,645,923,436 63,689,666,681 4.85%1.000%
2022 56,171,689,696 7,152,717,180 1,745,857,017 1,509,466,705 66,579,730,598 4.54%1.000%
2023 60,461,442,254 7,647,078,297 1,489,884,026 1,731,351,434 71,329,756,011 7.13%1.000%
NOTE:
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
In 1978,the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessedvalue of the property being taxed.Each year,the assessed value of property may be increased by an "inflation factor"(limited to a maximum increase of2%).With few exceptions, property is only re-assessed as a result of new construction activity or at the time it is sold to a new owner.At that point,the
property is reassessed based upon the added value of the construction or at the purchase price or economic value of the property sold.The assessed
valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to thelimitations described above.
Secured
222
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$
Total City Direct Rate 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Overlapping Rates:
Water districts 0.081 0.047 0.047 0.047 0.047 0.047 0.032 0.047 0.047 0.047 0.170 0.182 0.183 0.173 0.176 0.161 0.173 0.186 0.170 0.175
Total Overlapping Rate 0.251 0.229 0.230 0.220 0.223 0.208 0.205 0.233 0.218 0.222
Total Direct & Overlapping Rate 1.251$ 1.229$ 1.230$ 1.220$ 1.223$ 1.208$ 1.205$ 1.233$ 1.218$ 1.222$
NOTE:
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of other debt obligations.
School districts
City Direct Rates:
City basic rate
Fiscal Year
223
Taxpayer Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value
The Irvine Company 809,325,938$ 1 1.22%1,690,011,263$ 1 3.99%
PH Finance LLC 331,194,718 2 0.50%N/A -0.00%
Fashion Island Retail LLC 295,013,622 3 0.44%N/A -0.00%
Villas at Fashion Island LLC 281,699,380 4 0.42%N/A -0.00%
Newport Center Residences LLC 196,027,123 5 0.29%N/A -0.00%
HG Newport Owner LLC 189,243,673 6 0.28%N/A -0.00%
520 Newport Center Drive LLC 186,829,357 7 0.28%N/A -0.00%
Newport Bluffs LLC 171,078,970 8 0.26%144,534,708 2 0.34%
650 Newport Center Drive LLC 169,210,202 9 0.25%N/A -0.00%
Balboa Bay Club Ventures LLC 154,941,702 10 0.23%106,618,895 6 0.25%
2,784,564,685$ 4.17%1,941,164,866$ 4.58%
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
2023 2014
224
CITY OF NEWPORT BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year Ended
June 30
Taxes Levied for
the Fiscal Year Amount 1 Percent of
Levy
Collections in Subsequent
Years 2 Amount
Percent of
Levy
2014 79,195,727 77,758,504 98.19%650,273 78,408,777 99.01%
2015 83,843,488 82,191,604 98.03%642,292 82,833,896 98.80%
2016 84,166,940 81,762,526 97.14%612,863 82,375,389 97.87%
2017 86,264,321 84,019,053 97.40%574,124 84,593,177 98.06%
2018 92,139,181 90,279,099 97.98%581,969 90,861,068 98.61%
2019 98,471,700 96,356,203 97.85%646,203 97,002,406 98.51%
2020 102,636,451 100,701,002 98.11%886,688 101,587,690 98.98%
2021 107,647,017 105,781,072 98.27%862,772 106,643,844 99.07%
2022 113,318,692 110,354,271 97.38%789,969 111,144,240 98.08%
2023 123,844,578 121,011,910 97.71%-3 121,011,910 97.71%
1
2
3
Source: Orange County Auditor Controller's Office
The total amount of Fiscal Year 2023 delinquent taxes collected in subsequent years was not available as of thedate the information was collected for the City's Annual Comprehensive Financial Report.
Collected within the Fiscal
Year of Levy Total Collections to Date
Exclusive of penalty charges.
Net collections reflect deductions for refunds and impoundments.
225
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226
DEBT CAPACITY
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules exhibit the City’s levels of outstanding debt over time, to
help readers assess the affordability of the current level of outstanding debt, and the City’s ability to issue additional debt:
• Ratios of Outstanding Debt by Type
• Ratios of General Bonded Debt Outstanding
• Direct and Overlapping Debt
• Legal Debt Margin Information
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
227
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228
Fiscal Year Ended June 30
Certificates of
Participation 1 Pre-Annexation Agreement CDBG Loan Leases 3
Subscription-based Information Technology
Arrangements 3
Total Governmental Activities Leases 3 Total Business-type Activities Total Primary Government
Percentage of Personal
Income 2 Debt Per
Capita 2
2014 120,178,318 3,600,000 1,462,000 - - 125,240,318 - - 125,240,318 1.81%1,442
2015 117,197,765 2,400,000 1,339,000 - - 120,936,765 - - 120,936,765 1.77%1,386
2016 114,137,212 1,200,000 1,207,000 - - 116,544,212 - - 116,544,212 1.77%1,383
2017 110,956,659 - 1,066,000 - - 112,022,659 - - 112,022,659 1.66%1,319
2018 107,651,106 - 916,000 - - 108,567,106 - - 108,567,106 1.48%1,245
2019 104,220,553 - 756,000 - - 104,976,553 - - 104,976,553 1.36%1,204
2020 100,695,000 - 585,000 - - 101,280,000 - - 101,280,000 1.24%1,181
2021 106,781,026 - 403,000 - - 107,184,026 - - 107,184,026 1.31%1,248
2022 102,698,895 - 208,000 13,321,040 - 116,227,935 1,512,574 1,512,574 117,740,509 1.34%1,406
2023 98,616,764 - -12,274,149 2,235,132 113,126,045 3,820,774 3,820,774 116,946,819 1.27%1,402
1
2 These ratios are calculated using personal income and population for the prior calendar year.
3 The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Amounts include any applicable bond premium.
Governmental Activities
Note: This schedule excludes claims and judgments, employee compensated absence, pension, OPEB, and Early Retirement Incentive Plan liabilities. Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Business-type Activities
229
Fiscal Year
Ended
June 30
Certificates of
Participation1
Amounts
Restricted for
Debt Service Total
Percent of
Assessed
Value2
General
Bonded Debt
Per Capita
2014 120,178,318 (2,352,746) 117,825,572 0.28%1,356
2015 117,197,765 (2,350,210) 114,847,555 0.26%1,316
2016 114,137,212 (2,362,904) 111,774,308 0.24%1,326
2017 110,956,659 (2,364,034) 108,592,625 0.22%1,279
2018 107,651,106 (2,384,338) 105,266,768 0.20%1,207
2019 104,220,553 (2,362,228) 101,858,325 0.18%1,168
2020 100,695,000 (1,159,389) 99,535,611 0.16%1,160
2021 106,781,026 (2,255,795) 104,525,231 0.16%1,217
2022 102,698,895 (2,199,363) 100,499,532 0.15%1,200
2023 98,616,764 (2,183,979) 96,432,785 0.14%1,156
1
2 Assessed value was used because the actual value of taxable property is not readily available in the
State of California.
CITY OF NEWPORT BEACH
Ratios of General Bonded Debt
Last Ten Fiscal Years
Amounts include any applicable bond premium.
230
City Net Assessed Valuation:71,329,756,011$
Percentage
Applicable (1)Outstanding Debt
6/30/23
Estimated Share of
Overlapping DebtOVERLAPPING DEBT:Metropolitan Water District 1.961%19,215,000$ 376,806$ Coast Community College District 34.941%920,781,084 321,730,119 Rancho Santiago Community College District 2.693%176,539,286 4,754,203
Rancho Santiago Community College District School Facilities Improvement District No. 1 5.082%149,820,000 7,613,852
Laguna Beach Unified School District 14.964%12,050,000 1,803,162 Laguna Beach Unified School District Community Facilities District No. 98-1 100.000%6,785,000 6,785,000 Newport Mesa Unified School District 73.345%224,754,326 164,846,060 Santa Ana Unified School District 6.247%418,970,373 26,173,079
Irvine Ranch Water District Improvement Districts 2.757% -
100.000%412,017,630 46,028,267
100.000%16,055,000 16,055,000
100.000%8,230,000 8,230,000
City of Newport Beach 1915 Act Bonds 100.000%12,005,546 12,005,546 Orange County Newport Coast Assessment District No. 01-1 100.000%3,410,000 3,410,000 Orange County Newport Coast Reassessment District No. 17-1R 100.000%20,750,000 20,750,000 Orange County General Fund Obligations 9.841%451,165,000 44,399,148 Orange County Board of Education General Fund Obligations 9.841%10,860,000 1,068,733
Coast Community College District General Fund Obligations 34.941%1,480,000 517,127
Coast Community College District Pension Obligation Bonds 34.941%1,380,000 482,186 Santa Ana Unified School District General Fund Obligations 6.247%46,436,043 2,900,860 Overlapping Tax Increment Debt (Successor Agency):70.918%1,320,000 936,118 TOTAL OVERLAPPING DEBT 2,914,024,288$ 690,865,266$
DIRECT DEBT:City of Newport Beach Certificates of Participation 100.000%102,698,895$ 102,698,895$
Community Development Block Grant Loan 100.000%208,000 208,000
Leases (3)100.000%16,094,923 16,094,923
Subscription-based Information Technology Arrangements (3)100.000%2,235,132 2,235,132 TOTAL DIRECT DEBT 121,236,950$ 121,236,950$
TOTAL DIRECT AND OVERLAPPING DEBT 812,102,216$
GROSS COMBINED TOTAL DEBT (2)812,102,216$
(1)
(2)
(3)
Ratios to 2022-23 Net Assessed Valuation:
Total Overlapping Debt 0.97%Total Direct Debt ($121,236,950)0.17%Gross Combined Total Debt 1.14%
Ratios to Redevelopment Incremental Valuation ($1,549,279,228):
Total Overlapping Tax Increment Debt 0.06%
Source: California Municipal Statistics, Inc.
The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the
City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
CITY OF NEWPORT BEACH
Direct and Overlapping Debt
June 30, 2023
Bonita Canyon Public Facilities Financing Authority Community Facilities District No. 98-1
California Statewide Community Development Authority Community Facilities District No. 2018-3
231
2014 2015 2016 2017
42,341,162,463$ 44,752,056,903$ 47,388,470,098$ 50,341,686,565$
25%25%25%25%
10,585,290,616 11,188,014,226 11,847,117,525 12,585,421,641
15%15%15%15%
1,587,793,592 1,678,202,134 1,777,067,629 1,887,813,246
General obligation bonds - - - -
1,587,793,592$ 1,678,202,134$ 1,777,067,629$ 1,887,813,246$
as a percentage of debt limit 0.0%0.0%0.0%0.0%
NOTE:
Source: City Finance Department
The State of California Government Code Section 43605 provides for a legal debt limit of 15% of gross assessed
valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value.
Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent
change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for
each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located within the state.
Adjusted assessed valuation
Debt limit
Total net debt applicable to limit:
Legal debt margin
Total debt applicable to the limit
Debt limit percentage
Conversion percentage
Assessed valuation
Fiscal Year
CITY OF NEWPORT BEACHLegal Debt Margin Information
Last Ten Fiscal Years
232
2018 2019 2020 2021 2022 2023
53,780,216,020$ 57,701,161,781$ 60,744,806,554$ 63,689,666,681$ 66,579,730,598$ 71,329,756,011$
25%25%25%25%25%25%
13,445,054,005 14,425,290,445 15,186,201,639 15,922,416,670 16,644,932,650 17,832,439,003
15%15%15%15%15%15%
2,016,758,101 2,163,793,567 2,277,930,246 2,388,362,501 2,496,739,897 2,674,865,850
- - - - - -
2,016,758,101$ 2,163,793,567$ 2,277,930,246$ 2,388,362,501$ 2,496,739,897$ 2,674,865,850$
0.0%0.0%0.0%0.0%0.0%0.0%
Fiscal Year
CITY OF NEWPORT BEACHLegal Debt Margin Information
Last Ten Fiscal Years
233
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234
DEMOGRAPHIC AND ECONOMIC INFORMATION
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules depict demographic and economic indicators to assist the reader in understanding the socio-economic environment in which the City’s financial activities take place:
• Demographic and Economic Statistics
• Principal Employers
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.
235
Fiscal Year Population1 Personal Income
(in thousands)
Per Capita
Income(2)
Unemployment
Rate2(3)
2014 86,874 6,926,725 79,733 3.6%
2015 87,249 6,848,523 78,494 4.0%
2016 84,270 6,574,071 78,012 3.4%
2017 84,915 6,736,392 79,331 3.1%
2018 87,182 7,334,970 84,134 2.9%
2019 87,180 7,704,445 88,374 2.6%
2020 85,780 8,183,755 95,404 4.6%
2021 85,865 8,175,464 95,213 (4)6.0%
2022 83,727 8,791,502 105,002 3.0%
2023 83,411 9,219,835 110,535 3.0%
1
2
Sources:
CITY OF NEWPORT BEACH
Demographic and Economic Statistics
Last Ten Fiscal Years
(4)HdL, Coren & Cone
(2)U.S. Census Bureau - American Community Survey 1-Year Estimates
(3)State of California, Employment Development Department
(1)California State Department of Finance, E-4 Population Estimates for Cities, Counties
and State 2008-2010; and, E-1 Population Estimates for Cities, Counties and State
January 1, 2015 - 2021.
Population estimates are as of January 1 of the year shown and do not reflect revised
estimates made available after the date the information was collected for the City's
Annual Comprehensive Financial Report.
Unemployment rate represents an average of all monthly unemployment rates within a
fiscal year.
236
Employer
Number of
Employees Rank
Percent of Total
Employment
Number of
Employees Rank
Percent of Total
Employment
Hoag Memorial Hospital 5,437 1 6.72%5,001 1 5.97%
Pacific Life Insurance 1,672 2 2.07%1,074 4 1.32%
PIMCO 1,275 3 1.58%1,179 2 1.41%
Irvine Management Company 1,015 4 1.25%N/A 2 -N/A
Glidewell Dental 881 5 1.09%1,086 3 1.30%
City of Newport Beach 741 6 0.92%736 7 0.90%
Balboa Bay Club and Resort 729 7 0.90%480 9 0.59%
Tower Semiconductor 722 8 0.89%671 8 0.82%
Newport-Mesa Unified School District 720 9 0.89%845 6 1.04%
Resort at Pelican Hill 618 10 0.76%900 5 1.10%
Marriott Newport Coast Villas 435 11 0.54%N/A 2 -N/A
CBRE Inc.420 12 0.52%N/A 2 -N/A
1
2
Source: Data obtained from companies listed and compiled by City Finance Department.
Figures reflect number of employees of employer at the time the information was collected.
Company listed was unable to provide employee data for 2014.
CITY OF NEWPORT BEACH
Principal Employers1
Current Year and 9 years ago
2023 2014
237
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238
OPERATING INFORMATION
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules present information on the City’s operations and
resources including service and infrastructure data to facilitate the readers’ understanding of how financial statement information relates to the services the City provides and the activities it performs:
•Full Time City Employees by Functions
•Operating Indicators by Function
•Capital Asset Statistics by Function
•Water Sold by Customer Type
•Utility Rates
•Major Water Customers
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
239
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240
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General government 79 78 77 77 79 80 78 80 81 85
Public safety 366 370 374 371 372 375 375 376 376 377
Community development 53 52 52 52 53 53 53 52 53 56
Public works 119 109 104 99 98 96 99 98 98 102
Community services 74 75 79 81 79 78 78 78 78 79
Water 32 31 32 31 33 33 33 33 33 32
Wastewater 13 13 12 13 11 11 11 11 11 11
Total 736 728 730 724 725 726 727 728 730 741
Source: City Finance Department
Function
Fiscal Year
CITY OF NEWPORT BEACH
Full-time City Employees by Function
Last Ten Fiscal Years
241
2014 2015 2016 2017
Police:
2,794 3,472 3,158 3,178
51,609 59,753 64,762 69,246
Fire:
356 305 300 247
3,352 1,281 1,201 1,216
General Services:
2,408 2,711 1,890 1,439
37,607 27,175 27,000 20,490
Recreation & Senior Services:
294,000 303,152 305,000 425,000
13,956 13,740 14,000 13,500
Water:
72 187 194 229
15.96 16.39 11.66 13.80
Sewer:
22 20 17 41
245 260 250 202
Library Services:
1,689,870 1,610,818 1,575,000 1,464,640
1
2
3
Source: City of Newport Beach
Street Patching (tons of mix)
Sidewalk Repair (square feet)
Co-Sponsored Youth Organization Attendance
Senior Transportation Services
Data varies with trend due to COVID-19 restrictions being lifted in 2022.
New Connections
Average Daily Consumption (hundred cubic feet)
Data varies with trend due to inclusion of responses to fires, hazardous materials, medical and other e
Data varies with trend due to COVID-19 restrictions in 2021.
New Connections
Miles of Pipe Cleaned
Library Circulation of Materials
Fire Inspections
Adult Arrests
Parking Citations Issued
Fire Responses
Fiscal Year
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
242
2018 2019 2020 2021 2022 2023
3,266 3,520 3,093 2,872 2,650 2,800
56,685 67,048 73,372 86,439 83,307 85,003
248 209 11,913 1 12,204 13,251 13,486
1,307 1,033 2,842 475 2 3,015 3 2,807
1,403 1,402 913 920 901 903
22,925 14,840 11,729 7,805 13,590 12,885
437,751 469,959 439,954 455,442 392,605 454,418
13,071 13,386 9,300 6,287 8,805 10,048
210 210 256 160 252 184
14.07 13.75 13.44 14.87 14.28 11.06
137 46 10 25 3 12
211 196 221 240 209 178
1,424,594 1,376,041 1,084,206 1,043,629 1,195,151 1,172,951
Fiscal Year
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
243
2014 2015 2016 2017
Police:
Stations 1 1 1 1
Fire:
Fire Stations 8 8 8 8
Lifeguard Headquarters 1 1 1 1
Public works:
Streets (miles)395 395 399 400
Streetlights 5,977 5,977 5,978 5,978
Traffic Signals 808 808 808 808
Recreation & Senior Services:
Parks 64 64 64 64
Community Centers (includes leased property)14 14 15 15
Aquatic Center 1 1 1 1
Water:
Water Mains (miles)298.37 299.58 299.77 300.64
Maximum Daily Capacity (thousands of gallons)27,704 27,800 27,800 27,800
Wastewater:
Sanitary Sewers (miles)202.62 202.64 202.75 202.72
Storm Sewers (miles)70.62 94.14 92.08 94.74
Library Services:
Libraries 4 4 4 4
Source: City of Newport Beach
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
244
2018 2019 2020 2021 2022 2023
1 1 1 1 1 1
8 8 8 8 8 8
1 1 1 1 1 1
400 400 400 400 400 401
5,978 5,971 5,972 5,973 5,974 5,974
808 808 808 808 808 808
64 65 65 65 66 66
15 15 15 15 14 14
1 1 1 1 1 1
300.30 300.88 300.82 301.23 301.13 301.48
27,800 27,800 27,800 27,800 27,800 27,800
203.56 203.99 204.10 204.13 204.30 204.72
95.12 95.35 95.89 96.18 97.37 97.81
4 4 4 4 4 4
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
245
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Type of Customer:
Residential 3,902,007 3,853,566 3,072,589 3,564,203 3,603,927 3,439,655 3,747,408 3,811,231 3,714,134 3,242,477Commercial2,525,169 2,560,620 1,847,372 2,142,952 2,201,254 2,075,812 2,081,860 2,231,809 2,078,199 1,728,975
Government 455,251 396,605 263,116 305,214 289,738 256,398 270,638 299,442 314,128 256,850
Total 6,882,427 6,810,791 5,183,077 6,012,369 6,094,919 5,771,865 6,099,906 6,342,482 6,106,461 5,228,302
Total direct rate per 100 cubic ft.3.08$ 3.08$ 3.08$ 3.08$ 3.08$ 3.08$ 3.11$ 1 3.35$ 2 3.60$ 3 3.87$ 4
1 Reflects increase in commodity rate effective January 1, 2020
2 Reflects increase in commodity rate effective January 1, 2021
3 Reflects increase in commodity rate effective January 1, 2022
4 Reflects increase in commodity rate effective January 1, 2023
Source: City Utilities Department
Fiscal Year
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
246
Fiscal Year
Ended June
30 Monthly
Base Rate
Rate per
100 cubic ft
2014 21.77 3.43
2015 21.77 3.43
2016 21.77 3.43
2017 21.77 3.43
2018 23.73 3.46
2019 24.34 3.50
2020 28.09 3.57
2021 30.25 3.85
2022 32.03 4.14
2023 33.77 4.41
1
Source: City Revenue Division
CITY OF NEWPORT BEACH
Utility Rates1
Last Ten Fiscal Years
Rates are based on 5/8" or 3/4" meter,
which are the standard household meter
sizes.Rates include sewer service. The
City charges an excess-use rate above
normal demand.
247
Water Customer Water Charges Rank
Percent of Total
Water Revenues Water Charges Rank
Percent of Total
Water Revenues
Irvine Company Apartment 680,732$ 1 2.11%514,439$ 1 1.75%
Irvine Company Office 495,749 2 1.54%428,889 2 1.46%
Hoag Memorial Hospital 409,205 3 1.27%348,424 4 1.19%
Big Canyon Country Club 363,423 4 1.13%260,686 8 0.89%
Newport Beach Country Club 333,748 5 1.04%393,373 3 1.34%
UDR Newport Beach 292,976 6 0.91%253,326 9 0.86%
Irvine Company Retail 291,114 7 0.90%211,241 10 0.72%
Bluffs Homeowners Association 288,851 8 0.90%292,982 5 1.00%
Newport-Mesa Unified School District 265,005 9 0.82%288,436 6 0.98%
Park Newport Ltd 230,555 10 0.72%278,202 7 0.95%
Pacific View - Pierce Bros.183,995 11 0.57%183,882 13 0.63%
Newport Dunes Resort 142,009 12 0.44%131,617 16 0.15%
Villa Balboa Community Association 133,263 13 0.41%156,521 14 0.53%
Jasmine Creek Community Association 125,325 14 0.39%208,984 11 0.71%
Harbor Ridge Estates 124,484 15 0.39%86,557 24 0.29%
4,360,434$ 13.53%4,037,560$ 13.45%
Source: City Revenue Division
CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Nine Years Ago
2023 2014
248
City of Newport Beach
100 Civic Center Drive Newport Beach, CA 92660 (949)644-3123www.newportbeachca.gov/acfr