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HomeMy WebLinkAboutApproved Minutes - March 14, 2024Finance Committee Regular Meeting Minutes March 14, 2024 Page 1 of 5 CITY OF NEWPORT BEACH FINANCE COMMITTEE CENTRAL LIBRARY – FRIENDS ROOM, 1000 AVOCADO AVENUE, NEWPORT BEACH, CA MARCH 14, 2024 REGULAR MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 3:02 p.m. by Mayor/Chair O’Neill. II. ROLL CALL PRESENT: Will O’Neill, Mayor/Chair Joe Stapleton, Mayor Pro Tem Noah Blom, Councilmember (arrived at 3:14 p.m.) William Collopy, Committee Member Keith Curry, Committee Member Nancy Scarbrough, Committee Member ABSENT: Allen Cashion, Committee Member STAFF PRESENT: Grace K. Leung, City Manager Jason Al-Imam, Finance Director/Treasurer Michael Gomez, Deputy Finance Director Brittany Cleberg, Assistant Management Analyst Shelby Burguan, Budget Manager Abigail Marin, Budget Analyst Jessica Nguyen, Budget Analyst Anthony Alannouf, Budget Analyst Jennifer Anderson, Purchasing & Contracts Administrator Theresa Schweitzer, Public Works Finance/Administrative Manager Raymund Reyes, Administrative Manager Paul Blank, Harbormaster MEMBERS OF THE PUBLIC: Jim Mosher Charles Klobe III. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by Mayor/Chair O’Neill. IV. PUBLIC COMMENTS Chair O’Neill opened public comments on agenda and non-agenda items. Seeing no others, Chair O’Neill closed public comments. V. CONSENT CALENDAR A. MINUTES OF FEBRUARY 15, 2024 Recommended Action: Approve and file. Chair O’Neill acknowledged the suggested edits submitted by Jim Mosher. MOTION: Committee Member Curry moved to approve the minutes of February 15, 2024, as amended, seconded by Committee Member Collopy. The motion carried as follows: Finance Committee Regular Meeting Minutes March 14, 2024 Page 2 of 5 AYES: Collopy, Curry, Scarbrough, Stapleton, O’Neill NOES: None ABSENT: Blom, Cashion (excused) ABSTAIN: None VI. CURRENT BUSINESS A. OVERVIEW OF REVENUE PROJECTIONS Recommended Action: Receive and file. Budget Manager Shelby Burguan and Finance Director/Treasurer Jason Al-Imam provided a presentation with a summary of the FY 2024-25 revenue projections as detailed in the associated agenda report and supplemental materials. The staff presentation included a review of projected increase of $7 million in General Fund revenue, with the primary drivers of revenue growth including the $5.7 million projected increase in property tax, $2.3 million projected increase in sales tax, and $0.6 million projected increase in transient occupancy tax. Details of the various factors impacting each revenue source and the associated projection methodologies were provided. Property tax, sales tax, and transient occupancy tax make up approximately 75% of the City’s General Fund revenues. Additional details were provided concerning the other sources of General Fund revenues including service fees and charges/licenses and permits (10%), property income (6%), and other taxes (3%). The remainder (3%) of General Fund revenues come from intergovernmental revenues (primarily Proposition 172), fines and penalties (primarily parking fines), and investment income and other revenues. Information concerning Tidelands Funds, Water Utility, and Wastewater Utility revenues was provided. Committee Member Collopy inquired if the estimated revenue for property tax was as conservative as the sales tax revenue estimates. Finance Director/Treasurer Al-Imam indicated that while secured property tax amounts are more predictable, some conservatism is built into the forecast for certain property tax revenue categories that are more volatile such as supplementals, delinquencies and property transfer tax revenues. City Manager Grace Leung noted the bulk of the revenue for property tax is a secure tax, set by the County Assessor, which does not have the same volatility as sales tax. Committee Member Curry pointed out that secured assessed values for properties citywide never declined even during the Great Recession and asked why the presentation shows a decrease in property tax revenue in 2011 and 2012. Finance Director/Treasurer Al-Imam responded that it is due to a decrease in supplemental property tax revenue, which was lower due to a decline in the number of homes sales during that period. Committee Member Scarbrough inquired about the timing of when the Porsche dealership is expected to reopen. Finance Director/Treasurer Al-Imam confirmed the dealership is expected to reopen in February 2025. Committee Member Collopy requested clarification as to whether transient occupancy tax revenues were reflected on a gross basis or net of amounts remitted to Visit Newport Beach. Budget Manager Burguan clarified that the numbers reflected in the presentation were net of amounts remitted to Visit Newport Beach. It was requested that transient occupancy tax revenues be reported on a gross basis and delineated from amounts remitted to Visit Newport Beach. Committee Member Scarbrough asked whether the city is seeing a slowdown in transient occupancy tax revenue. Finance Director/Treasurer Al-Imam indicated that growth from short- term lodging has flattened as the city has reduced the number of active permits and that growth Finance Committee Regular Meeting Minutes March 14, 2024 Page 3 of 5 from hotels were also flattening compared to the exponential growth experienced in 2022 and 2023. Committee Member Collopy asked about the upcoming renegotiation of the Visit Newport Beach contract (which expires at the end of 2024). Chair O’Neill confirmed that the City Council formed an ad hoc committee to advise the City Council in the renegotiation of the Visit Newport Beach contract. The staff presentation concluded with an announcement that the presentation of the proposed FY 2024-25 expenditure projections is scheduled for the next Finance Committee meeting. Chair O’Neill opened the meeting for public comment. Jim Mosher commented on the slide in the presentation related to residential sales trends and asked whether the line chart represented single family residential sales. Finance Director/Treasurer Al-Imam indicated that the line chart represented the average price and median price of single-family homes sold during that period. Chair O’Neill closed public comments as no other members of the public requested to speak. There was no further action taken on this item. B. FISCAL YEAR 2023-2024 FEE STUDY UPDATE Recommended Action: Review and discuss this report and provide any recommendations for consideration by the City Manager and City Council. Budget Analyst Abigail Marin provided a presentation of the FY 2023-24 Fee Study update as detailed in the associated agenda report and supplemental materials. The staff presentation included a review of the types of fees and charges associated with the City, degree of general versus private benefit, the governing authorities for cost-recovery based user fees, the basis for establishing cost of service and cost recovery analysis, and the rotating cycle of departments studied by the City. This year’s study included a review of the fees and charges for Finance, Harbor, Public Works, and Utilities and “one-off” fees. The various fee changes were presented. Overall, the proposed fee updates will result in approximately $581,000 of additional revenues, which are intended to offset the cost of providing services. Committee Member Scarbrough inquired, and discussion ensued concerning clarification as to whether the mooring fees should be included. Chair O’Neill responded that mooring fees were not included within the scope of the user fee study and that any adjustments to mooring fees will be addressed once the final fees are determined by City Council and the municipal code is updated to reflect those fees. Committee Member Curry requested clarification concerning the fees related to IT/Audio Visual support related to a room rental. City Manager Grace Leung clarified that this fee is intended to be charged in instances in which an additional level of IT support is required, for example, if IT personnel are requested to remain onsite to provide IT or audio-visual support associated with a facility rental. Chair O’Neill opened the meeting for public comment. Jim Mosher requested clarification of the logic concerning cost recovery determinations for appeals, stating they should be uniform throughout the document, and clarification concerning notifications to the public regarding changes to credit card convenience fees. He stated the municipal code and City General Plan require review of the fair share fee every five years and inquired as to the cost of administration of the Marine Program. Finance Committee Regular Meeting Minutes March 14, 2024 Page 4 of 5 It was determined that any cross-referencing errors would be corrected in the proposed document. Chair O’Neill closed public comments as no other members of the public requested to speak. At a later juncture of the meeting, discussion on this item was reopened for the purpose of offering a motion to recommend the item be forwarded to the City Council for consideration. MOTION: Councilmember Blom moved to recommend all fee schedule changes, as recommended by staff in the associated agenda report, to the City Council for approval, seconded by Committee Member Curry. The motion carried as follows: AYES: Blom, Collopy, Curry, Scarbrough, Stapleton, O’Neill NOES: None ABSENT: Cashion (excused) ABSTAIN: None C. INVESTMENT POLICY UPDATE Recommended Action: Review and discuss the report and recommend that the City Council formally approve the proposed changes to Council Policy F-1 by adopting a resolution. There was no staff report requested for this item. Chair O’Neill opened the meeting for public comment. Seeing none, Chair O’Neill closed public comments. At a later juncture of the meeting, discussion on this item was reopened for the purpose of offering a motion to recommend the item be forwarded to the City Council for consideration. MOTION: Committee Member Curry moved to recommend Investment Policy amendments, as recommended by staff in the associated agenda report, to the City Council for approval, seconded by Committee Member Collopy. The motion carried as follows: AYES: Blom, Collopy, Curry, Scarbrough, Stapleton, O’Neill NOES: None ABSENT: Cashion (excused) ABSTAIN: None D. WORK PLAN REVIEW Recommended Action: Receive and file. A summary of items scheduled for upcoming Finance Committee meetings was provided as listed in the publicly noticed agenda report, including upcoming joint meetings with the City Council for budget review. Chair O’Neill opened the meeting for public comment. Seeing none, Chair O’Neill closed public comments. This item was received and filed. There was no further action taken. VII. ADJOURNMENT The Finance Committee meeting adjourned at 3:58 p.m.