HomeMy WebLinkAboutFinance Committee Agenda Packet - May 9, 2024CITY OF NEWPORT BEACH
FINANCE COMMITTEE AGENDA
Community Room - 100 Civic Center Drive, Newport Beach, CA 92660
Thursday, May 9, 2024 - 3:00 PM
Finance Committee Members:
Will O'Neill, Mayor / Chair
Joe Stapleton, Mayor Pro Tem
Noah Blom, Council Member
Allen Cashion, Committee Member
William Collopy, Committee Member
Keith Curry, Committee Member
Nancy Scarbrough, Committee Member
Staff Members:
Grace K. Leung, City Manager
Jason Al-Imam, Finance Director/Treasurer
Shelby Burguan, Acting Deputy Finance Director
Brittany Cleberg, Assistant Management Analyst
NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT
Any presentation requiring the use of the City of Newport Beach’s equipment must be submitted to the Finance
Director/Treasurer 24 hours prior to the scheduled Finance Committee meeting.
NOTICE REGARDING PUBLIC PARTICIPATION
Questions and comments may also be submitted in writing for the Finance Committee’s consideration by sending them
to Jason Al-Imam, Finance Director/Treasurer, at jalimam@newportbeachca.gov. To give the Finance Committee
adequate time to review your questions and comments, please submit your written comments by no later than 5 p.m.
the day prior to the Finance Committee meeting. All correspondence will be made part of the record.
NOTICE TO THE PUBLIC
The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that
their agenda be posted at least twenty-four (24) hours in advance of each special meeting and that the public be allowed
to comment on agenda items before the Committee and items not on the agenda but are within the subject matter
jurisdiction of the Finance Committee. The Chair may limit public comments to a reasonable amount of time, generally
three (3) minutes per person.
It is the intention of the City of Newport Beach to comply with the Americans with Disabilities Act (“ADA”) in all respects.
If, as an attendee or a participant at this meeting, you will need special assistance beyond what is normally provided, the
City of Newport Beach will attempt to accommodate you in every reasonable manner. If requested, this agenda will be
made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in
implementation thereof. Please contact the City Clerk’s Office at least forty-eight (48) hours prior to the meeting to
inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3127 or
jalimam@newportbeachca.gov.
I.CALL MEETING TO ORDER
II.ROLL CALL
III.PLEDGE OF ALLEGIANCE
IV.PUBLIC COMMENTS
Public comments are invited on agenda and non-agenda items generally considered to be
within the subject matter jurisdiction of the Finance Committee. Speakers must limit comments
to three (3) minutes. Before speaking, we invite, but do not require, you to state your name for
the record. The Finance Committee has the discretion to extend or shorten the speakers’ time
limit on agenda or non-agenda items, provided the time limit adjustment is applied equally to all
speakers. As a courtesy, please turn cell phones off or set them in the silent mode.1
May 9, 2024
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Finance Committee Meeting
ADDITIONAL MATERIALS RECEIVEDA.
PUBLIC COMMENTS - ADDITIONAL MATERIALS RECEIVED
V.CONSENT CALENDAR
MINUTES OF APRIL 11, 2024A.
Recommended Action:
Approve and file.
MINUTES
VI.CURRENT BUSINESS
FISCAL YEAR 2024-25 PROPOSED BUDGET REVISIONSA.
Summary:
Revisions to the FY 2024-25 Proposed Budget as presented at the April 11th Finance
Committee meeting are recommended.
Recommended Action:
Review and discuss the proposed budget revisions and provide any recommendations for
consideration by the City Manager and City Council.
STAFF REPORT - UPDATED
STAFF REPORT
ATTACHMENT A
ATTACHMENT B
ATTACHMENT C - UPDATED
STAFF PRESENTATION - UPDATED
PERFORMANCE METRICSB.
Summary:
The fiscal year 2024-25 budget document will incorporate performance metrics across all
departments, which fulfills one of the elements set forth in the Fiscal Sustainability Plan.
Performance metrics were identified for each department as part of an ongoing effort to
ensure high-quality and efficient delivery of city programs and services.
Recommended Action:
Review and discuss the performance metrics evaluated in this report and provide any
recommendations for consideration by the City Manager and City Council.
STAFF REPORT
ATTACHMENT A
THIRD QUARTER BUDGET UPDATEC.
Summary:
The Finance Department prepares quarterly financial reports to review the status of
revenues and expenditures for the City’s General Fund and to monitor budgetary trends in 2
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Finance Committee Meeting
other City funds. This report contains information on revenues, expenditures, and
estimated fund balance for the third quarter of Fiscal Year 2023-24. The FY 2023-24 third
quarter financial report provides an analysis of the City’s financial activity from July 2023
through March 2024. An $8.9 million unrestricted General Fund operating surplus is
projected for FY 2023-24 based on information currently available through the end of the
third quarter.
Recommended Action:
Review and discuss this report and provide any recommendations for consideration by
the City Manager and City Council
STAFF REPORT
STAFF PRESENTATION
WORK PLAN REVIEWD.
Summary:
Staff and Finance Committee to review the proposed work plan and identify matters that
members would like placed on a future Agenda for discussion, action, or report.
Recommended Action:
Receive and file.
WORK PLAN
VII.ADJOURNMENT
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ITEM NO. 4A1 PUBLIC COMMENTS
ATTACHMENT A
PUBLIC COMMENTS – ADDITIONAL MATERIALS RECEIVED
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May 9,2024,Finance Committee Agenda Comments
These comments on Newport Beach Finance Committee agenda items are submitted by:
Jim Mosher (jimmosher@yahoo.com ),2210 Private Road,Newport Beach 92660 (949-548-6229).
Item No.IV.PUBLIC COMMENTS
As Item 14 at its April 23 meeting,the City Council adopted a new fee schedule incorporating
changes reviewed by the Finance Committee on March 14.The Council’s action seems to have
also included some changes not reviewed by the committee.
Among those,the basis months used for computing most CPI increases have been changed
from March to February.More importantly,the format of the schedule has been completely
changed,eliminating key pieces of information that helped the public understand the basis of
the charges listed.I know this has already created confusion among those who will be charged
the fees and rents.
For example,I know that mooring permit holders facing possible large rent increases have
noticed that in the Resolution No.2024-29 adopted on April 23,the rent for residential piers will
be $0.55 per square foot per year (presumably starting July 1,2024?)and is listed as no longer
subject to CPI increases.
This contrasts with the currently posted SRFF,which notes (line 767 on page 18)that a rent of
$0.56 per square foot per year is set by Resolution No.2015-10 and CPI adjustments occuring
on a special schedule (it might be noted that on March 14,the Committee was told1 that the
lower rent of $0.55 was both the current and proposed rent).
Although not noted by the mooring holders,when the Finance Committee reviewed the
proposed changes on March 14,it was told2 the rent for offshore moorings would be increasing
from $39.383 to $40.17 per lineal foot per year (a CPI increase capped at 2%),with a footnote
indicating this was based on Resolution No.2016-17.But the newly adopted schedule omits
any such indication of where the fees originate.Instead,without explanation,it announces the
offshore mooring rate will be $39.38 and not subject to CPI.
This is surely more confusing and less informative than the old SRFF format.
Item No.V.A.MINUTES OF APRIL 11,2024
Comments and suggested changes:
Page 2 of 7 (agenda packet page 5),last sentence:“Director/Treasurer Al-Imam responded that
the projected TOT would have likely been flat or negative if not for the opening of the Pendry,as
generally speaking,overall hotel tax revenue has been slowing and revenue from short-term
lodging has been negative.”[I’m not sure what was said,but the part in bold seems unlikely.
Should “negative”(less than zero)be “down”?]
3 See line 625 page 15 of the currently posted SRFF.
2 See page 52 of the March 14 agenda packet.
1 See page 56 of the March 14 agenda packet.
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May 9,2024,Finance Committee agenda comments -Jim Mosher Page 2 of 3
Page 4 of 7 (agenda packet page 7),full paragraph 5,sentence 1:“Committee Member
Scarbrough inquired as to the location of projected revenues for the newly opened City docks.”
[I do not understand how public docks would generate revenue other than through fines for
overstaying time limits.Is that what the reference is to?]
Page 5 of 7 (agenda packet page 8),full paragraph 1,sentence 1:“Acting Deputy Director
Burguan continued her presentation which included detail on the Fusus Intelligence Ecosystem,
the foundation of the day-to-day Crime Information Center operations,and that will enable
integration of multiple systems into a single ecosystem for crime analysis and investigation.”
Item No.VI.A.FISCAL YEAR 2024-25 PROPOSED BUDGET
REVISIONS
1.The City Clerk’s office seems generally understaffed (for example,it had,for a while,two
employees processing Public Records Act requests,but now appears to have only one).
According to page 56 of the proposed budget,with the transfer of the fulltime department
assistant,it will be left with only one part time department assistant.But the remaining
part time position is listed as 1.0 FTE.What does that mean?Will the Clerk have
multiple department assistants,each part time but adding to 1.0 FTE?
2.If TOT is to be changed to gross in the Revenue Overview charts on pages 19 and 20,
won’t there need to be changes to the revenue detail on page 22 so the totals match?
And won’t that require moving the TOT expenses to the Expenditures section?And for
consistency,won’t that require moving the other negative revenue listings to
Expenditures,as well?
3.As to the proposal to transition Water and Wastewater billing from a bi-monthly to a
monthly basis,why would the Finance Committee support this if it results in a net loss to
the City (as the report seems to indicate)?It seems like extra work for all.Why is this
being suggested?
Item No.VI.B.PERFORMANCE METRICS
It is good to see the statements of the departments’goals and objectives for the upcoming fiscal
year,as well as the suggested performance measurement metrics (and the lists of
accomplishments in the current year).
It is less clear if or how a department’s achieving its goals/objectives and targets would be used
in future “results based budgeting”(which is Element 8 of the same Fiscal Sustainability Plan)–
or if that is even still thought desirable (a department unable to meet a desired service
measurement level may need more funding rather than less).4
It would be tedious to comment on all the information presented in Attachment A.For example,
one could note that even after working “on a plan to fund and build the Library Lecture Hall,”the
City Attorney’s office does not seem to know the building in question is no longer a “Library”
4 My vague understanding is that in “results based budgeting”management rewards programs that
produce “results”with higher allocations,and takes funding away from those that don’t produce “results.”
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May 9,2024,Finance Committee agenda comments -Jim Mosher Page 3 of 3
Lecture Hall,but simply a “Lecture Hall,”or,as I have heard,a “Civic Auditorium.Or that while it
is great to learn the City Clerk’s office has “Worked with Netfile to create a Lobbyist application
for maintaining Lobbyist Registration Forms,”is it not a problem that the public viewing portal
shows only four currently-registered5 lobbyists,and two of their forms (including one from just
three weeks ago)cannot be viewed online.
Of this first set of departmental “Performance Measures,”it might be noted that they are not
always (or perhaps even often)tied to the department’s stated “Goals/Objectives for Upcoming
Fiscal Year,”and they certainly don’t appear to constitute comprehensive lists of measures for
all a department’s many tasks.
Additionally,different departments seem to understand the performance “Target”differently.
Some seem to see it as an aspirational (but not truly achievable)goal,such as “100%
satisfaction.”Others see it as setting a more realistic goal they hope to exceed,such as “95%
satisfaction.”And still others use it simply to indicate the size of the workload the department
expects to face to justify the budget allotted,such as “101,000 calls for service,”where receiving
a call could be a positive or negative thing.
It does,nonetheless,seem an interesting experiment.
5 Registrations expire after one year,so only those date April 2023 and later are still valid.
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April 11, 2024
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CITY OF NEWPORT BEACH
FINANCE COMMITTEE
APRIL 11, 2024 REGULAR MEETING MINUTES
I. CALL MEETING TO ORDER
The meeting was called to order at 3:00 p.m. by Mayor Pro Tem Stapleton
II. ROLL CALL
PRESENT: Joe Stapleton, Mayor Pro Tem
William Collopy, Committee Member
Keith Curry, Committee Member
Nancy Scarbrough, Committee Member
ABSENT: Will O’Neill, Mayor/Chair (excused)
Noah Blom, Councilmember (excused)
Allen Cashion, Committee Member (excused)
STAFF PRESENT: Grace K. Leung, City Manager
Jason Al-Imam, Finance Director/Treasurer
Shelby Burguan, Acting Deputy Finance Director
Brittany Cleberg, Assistant Management Analyst
Theresa Schweitzer, Public Works Finance/Administrative Manager
Jonathan Stafford, Deputy Director, Newport Beach Police
Jessica Kan, Revenue Manager
Jessica Nguyen, Budget Analyst
Anthony Alannouf, Budget Analyst
Jennifer Anderson, Purchasing & Contracts Administrator
Raymund Reyes, Fire Administrative Manager
MEMBERS OF THE
PUBLIC: Jim Mosher
Charles Klobe
III. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Committee Member Curry.
IV. PUBLIC COMMENTS
Jim Mosher commented on the recent Harbor Commission meeting which included discussion
concerning the rental rates for City-owned moorings. He inquired as to whether the City has
tidelands that are not under the State’s jurisdiction, such as one created artificially by the Irvine
Company. He believes the City should be charging for use of City-owned tidelands and
requested the City look into the matter.
Mayor Pro Tem Stapleton closed public comments.
V. CONSENT CALENDAR
A. MINUTES OF MARCH 14, 2024
Recommended Action:
Approve and file.
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April 11, 2024
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MOTION: Committee Member Curry moved to approve the minutes of March 14, 2024,
seconded by Committee Member Scarbrough. The motion carried as follows:
AYES: Collopy, Curry, Scarbrough, Stapleton
NOES: None
ABSENT: Blom (excused), Cashion (excused), O’Neill (excused)
ABSTAIN: None
VI. CURRENT BUSINESS
A. PROPOSED FISCAL YEAR 2024-25 BUDGET
Recommended Action: Review and discuss the proposed budget and provide any
recommendations for consideration by the City Manager and City Council.
Acting Deputy Finance Director Shelby Burguan and Finance Director/Treasurer Jason Al-
Imam provided a detailed summary and presentation of the proposed Fiscal Year 2024-25
budget. Director/Treasurer Al-Imam noted a minor change to the PowerPoint presentation that
was included in the agenda packet. The document was revised to include the next Finance
Committee meeting of May 9, 2024.
Acting Deputy Director Burguan commenced her presentation which included detail on the
timeline for budget development, budget priorities for the upcoming year, public meeting
schedule, a brief recap of the FY 2023-24 second quarter where General Fund revenues are
projected to be higher than the adopted budget projection, a high-level projection for FY 2024-
25, which includes increases due to a larger proposed capital improvement budget, and
increases in routine salaries, internal service funds, and transfers.
Committee Member Collopy inquired as to the nature of the Capital Improvement Program
(“CIP”) increase from FY 2022-23 to 2023-24. Acting Deputy Director Burguan responded that
the increase was due to the influx of ARPA funding. Committee Member Collopy inquired as to
the nature of the CIP increase in FY 2024-25 from the previous year’s amount of $29,375,044
to the upcoming year’s amount of $56,464,000. Finance Director/Treasurer Al-Imam reported
at the end of the discussion on this item that the increase in the CIP in FY 2024-25 related to
the following projects: $9.3 million for the Balboa Library/Fire Station No. 1; $6.6 million for the
Big Canyon Restoration Project; $2.4 million in additional street improvement projects; and a
$1.3 million increase associated with the Parks Master Plan.
Acting Deputy Director Burguan continued her presentation which included detail on the
breakdown of the total operating expenditure budget by fund and the City’s main three revenue
sources: property, sales, and transient occupancy tax (TOT).
Committee Member Collopy inquired if the TOT revenue displayed was the net or gross
amount. Acting Deputy Director Burguan responded it was the net amount. Committee Member
Collopy recalled he requested the information to be expressed in gross terms.
Director/Treasurer Al-Imam responded that staff would change it to gross terms moving
forward.
Acting Deputy Director Burguan continued her presentation which included detail on the total
projected General Fund revenue for FY 2024-25, 2.1% higher than current year-end
projections for FY 2023-24, due to items which include increases in property tax and
projected rebound in sales tax activity.
Committee Member Scarbrough noted the Pendry was now open and inquired as to why TOT
was only projected at a 2% increase. Director/Treasurer Al-Imam responded that the projected
TOT would have likely been flat or negative if not for the opening of the Pendry, as generally
speaking, overall hotel tax revenue has been slowing and revenue from short-term lodging has
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been negative. Commission and staff discussion ensued concerning the overall slowdown in
hotel tax revenue and that sales tax revenue will be increasing due to Porsche coming back
online in the upcoming year.
Committee Member Scarbrough inquired whether the City has anyone working with Porsche
on processing permits. City Manager Grace Leung responded the City’s Community
Development Department is working closely with the business. Committee Member
Scarbrough commented the reopening should be expedited as the City is losing money
monthly.
Mayor Pro Tem Stapleton stated he recently toured the new Restoration Hardware, and their
representatives commented the City has been very involved in facilitating an expedited
opening, and the same thing is happening with Porsche. General discussion ensued
commenting on the positive impact these openings will have on sales tax for the City.
Committee Member Collopy inquired if the City has the ability to estimate the projected sales
tax for a business such as Restoration Hardware, and whether the business itself provides
those estimates. Director/Treasurer Al-Imam responded that the City’s sales tax consultant
has access to a statewide database and general projections could be made based upon a
business’ sales tax revenue generation in other locations, however it should be noted the
City’s new Restoration Hardware location is very unique. Committee and staff discussion
ensued concerning the upcoming openings and reopening of various businesses and their
positive impacts on the City’s budget.
Acting Deputy Director Burguan continued her presentation which included detail on the
proposed FY 2024-25 budget expenditures, a 5.9% increase over the current budget,
including $40 million toward paying down the City’s unfunded pension liabilities. Other items
presented included proposed program enhancements, internal service charges, the majority
of which are increases to the workers comp and general liability premiums. Detail on other
projected expenditures was presented including General Fund enhancements, inflationary
adjustments to maintenance and operating budgets, cost of living adjustments, merit
increases, and Dove Street property expenses.
Committee Member Scarbrough inquired if the expense associated with the Dove Street
Property was budgeted somewhere else and then moved. Acting Deputy Director Burguan
responded that previously the City was budgeting for revenue net of expenses. However, now
revenues and expenses are reported on a gross basis in their respective categories.
Additionally, $3.8 million was added to the General Fund budget to increase capital
contributions to the various capital funds.
Committee Member Collopy inquired whether the costs for the ambulance include staffing.
Acting Deputy Director Burguan responded the amount is just for purchase and outfitting of
the ambulance, and those costs are much higher than they used to be. In response to
Committee Member Collopy’s request for confirmation of the actual ambulance related costs,
City Manager Leung responded she was confident with the approximately $600,000 costs;
however, she and staff would provide accurate detail to the Committee.
Committee Member Collopy requested clarification concerning the Police recruitment
assistance program. City Manager Leung responded it was a one-time dollar amount
included in the proposed budget, primarily to address overfill situations. This was explained to
be a situation where the City has met its budgeted number of hired police officers, but then
the recruiting class has a couple more people. Then, if the City anticipates there are some
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retirements upcoming, they can overfill for a period of time. If the funds are not utilized, the
amount is just carried over to the next year, so it does not have to be re-budgeted.
Acting Deputy Director Burguan continued her presentation which included detail on the cost
-of-living adjustments citywide, program enhancements in various Departments, general
municipal election costs, and the backing out of the one-time program enhancements for
recruitment assistance.
Committee Member Collopy inquired as to the cost-of-living adjustment process for
employees not represented by bargaining units. Director/Treasurer Al-Imam responded that
the expenditure increases across Departments include cost-of-living adjustments for all
employees, but also the costs for contractual and other services.
Mayor Pro Tem Stapleton confirmed with staff that the increase in the Community
Development Department includes the expansion of the Code Enforcement enhancements.
Acting Deputy Director Burguan continued her presentation which included detail on the
proposed transfers for CIP, master plan, and parks projects, to subsidize other operations,
tidelands fund, bonds, and debt service requirements.
Committee Member Scarbrough inquired as to the location of projected revenues for the newly
opened City docks. Acting Deputy Director Burguan responded that revenues associated with
the Harbor are generally split between the Tidelands (43%) and General Funds (57%).
Acting Deputy Director Burguan continued her presentation which included detail on internal
service funds, which encompass increases in insurance-related costs, particularly the
workers' compensation and liability premiums, even though the City shopped for carriers.
Director/Treasurer Al-Imam stated the City also looks at various methods to optimize
premium costs.
Committee Member Scarbrough commented that the City should consider alternatives due to
the high costs.
Committee Member Collopy inquired as to the items the City elects to self-insure.
Director/Treasurer Al-Imam responded the City self-insures workers’ compensation and
general liability to a certain level and then excess insurance kicks in. City Manager Leung
noted that there are certain City activities, such as Police and Fire positions, which increase
risk exposure, and related insurance costs are increased accordingly.
Acting Deputy Director Burguan continued her presentation which included detail on
compensated absences, cost-of-living and merit increases, proposed new positions and
program enhancements, Tidelands fund subsidy, the proposed Police Department Crime
Information Center and addition of three full-time Police Civilian Investigators. In response to
an inquiry from Committee Member Collopy, Acting Deputy Director Burguan confirmed the
proposed $359,000 for the three full-time positions was a “fully loaded” number as they are
non-sworn positions.
Acting Deputy Director Burguan continued her presentation which included detail on a
proposed automated license plate reader system (ALPR). Committee and staff discussion
ensued on this topic, as follows. The ALPR system reads all plates it can identify clearly, and it
was confirmed that it confirms with various databases whether there are related crimes
throughout the country related to a particular vehicle. The system will feature fixed equipment
at various locations throughout the City, with specific locations yet to be determined, but
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focused on main thoroughfares, ingress/egress points, and areas of special interest where the
population density is higher. It was noted that the fixed cameras perform better than those
mounted on vehicles. Discussion ensued on the success of ALPR systems in other
jurisdictions.
Acting Deputy Director Burguan continued her presentation which included detail on the
Fusus Intelligence Ecosystem, the foundation of the day-to-day Crime Information Center
operations, and will enable integration of multiple systems into a single ecosystem for crime
analysis and investigation. Discussion ensued related to the options for various entities to
register and work within the Ecosystem. This is annually licensed software.
Acting Deputy Director Burguan continued her presentation which included detail on the use
of asset forfeiture funds for software and equipment for the Crime Information Center and
new use of force immersive training simulator. Additional funds are also proposed for outside
agency staffing for Fourth of July, the mounted enforcement unit, and uniform expenses.
Committee Member Curry inquired as to the funding for animal control and animal shelter
contracts. Deputy Director, Newport Beach Police Department Jonathan Stafford, responded
the associated costs are budgeted within the Police Department Traffic Division and various
detail regarding both was provided. In response to inquiries from two Committee Members,
additionally, Deputy Director Stafford stated that the $20,000 increase establishes the mounted
enforcement unit and associated costs, and that it is a very selected deployment, not an
everyday resource. The unit is part of the Orange County Mounted Enforcement Unit which
provide mutual aid to member agencies. The costs include uniforms, tack, feed, and use of the
individual Officer’s personal horses.
Acting Deputy Director Burguan continued her presentation which included detail on the
remaining program enhancements, encompassing non-personnel items such building
maintenance, maintenance for new city facilities, increase in contract services for Streets and
Beaches, and increased programming for youth programs as well as instructor payments at
various community centers. In response to an inquiry from Committee Member Collopy,
Acting Deputy Director Burguan stated the costs for increased youth programs and instructor
payments would be offset by user fees.
Acting Deputy Director Burguan continued her presentation which included detail on the
remaining program enhancements, encompassing increases for a replacement Harbor
Department patrol vessel and crane maintenance. In response to an inquiry from Committee
Member Scarbrough, City staff noted the crane is owned by the City and located at Marina
Park.
Acting Deputy Director Burguan continued her presentation which included detail on citywide
proposed additional staffing and personnel enhancements.
Committee Member Collopy referred to individual former Council Members who did not sign
off on proposed budgets in previous years due to proposed increases in staff and other
reasons. He inquired whether City Manager Leung has had discussions, in compliance with
the Brown Act, with the Council in order to avoid such uncomfortable situations in the future.
City Manager Leung responded she has had legally compliant discussions with the City
Council concerning personnel impacts to the proposed budgets. It is understandable when
the City is dealing with a pension liability and the concern with bringing on full-time employees,
so she understood where the reluctance came from. What really changed the equation for the
better was the implementation of PEPRA (pension reform) which is a sustainable retirement
formula. It is the City Manager’s responsibility to evaluate and recommend personnel
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structures that are needed by the City in order to effectively meet Council directives and
policies.
Committee Member Collopy inquired whether the proposed 921 personnel number will
remain consistent year over year. City Manager Leung responded the City’s needs are
dynamic and the City also tends to be fiscally conservative. As a result, she thoroughly
evaluates true needs concerning staffing as they are proposed by the individual Departments.
Committee Member Collopy expressed support for the deep dives into the Fire and Police
budgets, including their versions of work volume indicators and requested the same for future
reviews of budgets, in particular that of the Public Works Department. Director/Treasurer Al-
Imam stated that Departments have been asked to provide performance metrics and a
related report will be on the next Finance Committee meeting agenda.
Committee Member Scarbrough mentioned that there may be additional needed services from
the Police, Fire, and Building Departments due to State housing-related mandates.
Acting Deputy Director Burguan continued her presentation which included detail on
projected surplus, UAL payments, increased contributions to the various Capital Improvement
Plan funds for long-term leases, and any program enhancements proposed by the City
Council. Director/Treasurer Al-Imam briefly commented on the various Capital Improvement
Project and Program proposals.
Committee Member Scarbrough inquired as to the design and rehabilitation phases of the
pier project and the clarification of the associated costs. Committee and staff discussion
ensued including confirmation of the budgeted amount for current rehabilitation, however, the
larger scale project (the entire McFadden Square) is still several years out. There will be
public meetings to obtain input on the project prior to finalization, as at this time it is still at the
committee level for preliminary discussion.
Mayor Pro Tem Stapleton opened public comments.
Jim Mosher requested clarification on the organizational chart for the Library Board of Trustees,
uniformity of fund balance references throughout various pages of the preliminary budget, and
lack of information and projected funds as related to City moorings in light of recent
consideration by the Harbor Commission on rates.
Director/Treasurer Al-Imam responded that the City Council had not yet approved the proposed
mooring rental rates, therefore placing information in the preliminary budget would be subject
to that final approval.
Committee Member Collopy inquired as to the total amount of fees if recommended to the City
Council via Finance Committee approval. Director/Treasurer Al-Imam responded that it would
be approximately $600,000, with the majority related to credit card fees and utility costs.
Committee Member Collopy also inquired if the City had considered creation of an assessment
district for maintenance of the bridges which serve only specific residences. City Manager
Leung responded that staff could review that suggestion, however the responsibility would be
placed on the City, as there would likely not be any incentive for residents to initiate the process
for an assessment.
Seeing no others, Mayor Pro Tem Stapleton closed public comments.
City Manager Leung stated the Finance Committee will review the budget, including proposed
performance metrics, at their next meeting, after which the Finance Committee will meet in joint
session with the City Council for overall budget review. Then one final meeting for final
comments prior to presentation to the City Council for adoption on June 11, 2024.
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This item was received and filed and there was no further action taken.
B. BUDGET AMENDMENTS FOR QUARTER ENDING MARCH 31, 2024
Recommended Action: Receive and file
Director/Treasurer Al-Imam stated they were available to answer any questions on the
materials provided in the publicly available agenda report.
Mayor Pro Tem Stapleton opened public comments.
Jim Mosher requested clarification concerning the lack of sequencing for reference numbers
associated with the budget amendment in the agenda report. Acting Deputy Director Burguan
responded that some budget amendments take longer to process and post, even though they
had been received and assigned a number by staff when originally submitted. The budget
amendments do not always end up with the same date and number order as when they are
created.
Seeing no other public comments, Mayor Pro Tem Stapleton closed public comments.
This item was received and filed and there was no further action taken.
C. 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.
Mayor Pro Tem Stapleton opened public comments. Seeing none, Mayor Pro Tem Stapleton
closed public comments.
This item was received and filed and there was no further action taken.
VII. ADJOURNMENT
The Finance Committee meeting adjourned at 3:58 p.m.
Attest:
___________________________________ _____________________
Will O’Neill, Mayor/Chair Date
Finance Committee
14
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
UPDATED
Agenda Item No. 6A May 9, 2024
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department Jason Al-Imam, Finance Director/Treasurer 949-644-3123, jalimam@newportbeachca.gov
SUBJECT: FISCAL YEAR 2024-25 PROPOSED BUDGET REVISIONS
SUMMARY: Revisions to the FY 2024-25 Proposed Budget as presented at the April 11th Finance
Committee meeting are recommended.
RECOMMENDED ACTION: Review and discuss the proposed budget revisions and provide any recommendations
for consideration by the City Manager and City Council.
DISCUSSION: The FY 2024-25 Proposed Budget was presented to the Finance Committee in April and
is comprised of the City Manager’s Proposed Operating Budget and the proposed Capital
Improvement Program (CIP) budget. A third component of the budget includes proposed budget revisions (PBR) to the initial proposed budget released in April. General Fund
Proposed additions in the General Fund total $6,681. The proposed item requests a full-
time Department Assistant position in the City Clerk’s Office to be transferred to the City Manager's Office as a full-time Administrative Assistant position. This transfer provides flexibility, efficiency, and enhanced departmental support to the City Manager’s office.
A modification has been proposed to the Revenue Overview pages in the FY2024-25
Proposed Budget Book. During the Finance Committee session in April, feedback was received to include the gross values of Transient Occupancy Tax (TOT) in the Revenue
15
FY 2024-25 Proposed Budget Revisions May 9, 2024 Page 2
Overview sections. Finance staff has incorporated this feedback to the revenue overview charts on pages 19 and 20 of the Proposed Budget book.
Other Funds
An additional $212,400 is proposed within the Water and Wastewater Funds as staff recommends that the city transition from billing on a bi-monthly basis to monthly billing. This is comprised of one-time costs of $81,600 for Tyler Technologies support for configurations, updates, and additional assistance. In addition, annual operating costs
are projected to increase by $51,200 to increase 0.3 FTE for one Senior Fiscal Clerk for
added support, and $79,600 for costs related to postage, paper bill presentment, and e-billing presentment. Other Updates to the Proposed Budget Book
A revision has been made to the “Summary of Beginning and Ending Spendable Fund Balance by Fund – FY 2024-25” page in the Proposed Budget book. The beginning estimated spendable fund balances for the Water Enterprise, Wastewater Enterprise, and Wastewater capital funds have been updated. In addition, the expenditures listed for the
Tidelands Operating Fund on this page was corrected. The schedule erroneously stated
that operating expenditures were $24,381,032, when they are $24,579,410 as reflected in the expenditure summaries of the budget book, such as the Expenditures by Division and Expenditures by Function sections. Total budget numbers were not impacted by this correction, and the proposed budget revisions listed in attachment A are not reflected in
the numbers on these pages.
Prepared and Submitted by:
/s/ Shelby Burguan
_____________________________
Shelby Burguan Acting Deputy Finance Director
Attachment(s): A. FY 2024-25 Proposed Budget Revisions B. Revenue Overview C. Summary of Beginning and Ending Spendable Fund Balance by Fund – FY
2024-25
16
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 6A May 9, 2024
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE FROM: Finance Department Jason Al-Imam, Finance Director/Treasurer
949-644-3123, jalimam@newportbeachca.gov
SUBJECT: FISCAL YEAR 2024-25 PROPOSED BUDGET REVISIONS
SUMMARY: Revisions to the FY 2024-25 Proposed Budget as presented at the April 11th Finance
Committee meeting are recommended.
RECOMMENDED ACTION: Review and discuss the proposed budget revisions and provide any recommendations
for consideration by the City Manager and City Council.
DISCUSSION: The FY 2024-25 Proposed Budget was presented to the Finance Committee in April and
is comprised of the City Manager’s Proposed Operating Budget and the proposed Capital
Improvement Program (CIP) budget. A third component of the budget includes proposed budget revisions (PBR) to the initial proposed budget released in April. General Fund
Proposed additions in the General Fund total $6,681. The proposed item requests a full-
time Department Assistant position in the City Clerk’s Office to be transferred to the City Manager's Office as a full-time Administrative Assistant position. This transfer provides flexibility, efficiency, and enhanced departmental support to the City Manager’s office.
A modification has been proposed to the Revenue Overview pages in the FY2024-25
Proposed Budget Book. During the Finance Committee session in April, feedback was received to include the gross values of Transient Occupancy Tax (TOT) in the Revenue
17
FY 2024-25 Proposed Budget Revisions May 9, 2024 Page 2
Overview sections. Finance staff has incorporated this feedback to the revenue overview charts on pages 19 and 20 of the Proposed Budget book.
Other Funds
An additional $212,400 is proposed within the Water and Wastewater Funds as staff recommends that the city transition from billing on a bi-monthly basis to monthly billing. This is comprised of one-time costs of $81,600 for Tyler Technologies support for configurations, updates, and additional assistance. In addition, annual operating costs
are projected to increase by $51,200 to increase 0.3 FTE for one Senior Fiscal Clerk for
added support, and $79,600 for costs related to postage, paper bill presentment, and e-billing presentment. A revision has been made to the “Summary of Beginning and Ending Spendable Fund
Balance by Fund – FY 2024-25” page in the Proposed Budget book. The beginning
estimated spendable fund balances for the Water Enterprise, Wastewater Enterprise, and Wastewater capital funds have been updated.
Prepared and Submitted by: /s/ Shelby Burguan
_____________________________
Shelby Burguan Acting Deputy Finance Director
Attachment(s):
A. FY 2024-25 Proposed Budget Revisions B. Revenue Overview C. Summary of Beginning and Ending Spendable Fund Balance by Fund – FY 2024-25
18
ATTACHMENT A
FY 2024-25 PROPOSED BUDGET REVISIONS
19
Budget
Increase (Decrease)
Expenditures
1 6,681$
2
3
4
5
Total Expenditure Budget Changes 6,681$
Revenue
1 -$ 2
3
Total Revenue Budget Changes -$
Total General Fund Changes:(6,681)$
Budget
Increase (Decrease)
Expenditures
1 180,540$
2 31,860$ 3
4
5
6
Total Expenditure Budget Changes 212,400$
Revenue
1 -$
23
Total Revenue Budget Changes -$
Total Other Fund Changes:(212,400)$
PROPOSED BUDGET REVISIONS
FISCAL YEAR 2024-25
Recommended Transition from Bi-Monthly to Monthly Billing for Utilities - Wastewater
GENERAL FUND
City Clerk Department Assistant to City Manager Administrative Assistant
OTHER FUNDS
Recommended Transition from Bi-Monthly to Monthly Billing for Utilities - Water
20
ATTACHMENT B
REVENUE OVERVIEW
21
DEPARTMENT REVENUE OVERVIEW - ALL FUNDS
Revenue Budget:
ACCOUNT TYPE A FY 21 Actuals FY 22 Actuals FY 23 Actuals FY 24 Adopted FY 24 Revised FY 25 Proposed % Change
42 - LICENSES PERMITS 6,110,936 6,961,349 6,193,755 6,024,177 7,113,184 6,304,852 4.66%
43 - INTERGOVTAL REVENUES 18,896,518 15,380,495 19,366,785 11,908,806 31,537,423 17,606,511 47.84%
44 - PROPERTY TAXES 124,508,683 130,147,636 139,648,228 141,373,233 142,715,981 149,296,403 5.60%
45 - SALES TAX 38,956,275 46,164,860 46,552,459 48,532,772 45,257,552 45,299,626 -6.66%
46 - TRANSIENT OCCUPANCY 16,886,197 26,677,331 30,201,648 31,986,150 31,986,150 32,625,873 2.00%
47 - OTHER TAXES 9,279,839 9,933,659 10,954,458 9,608,562 9,608,562 10,299,201 7.19%
51 - MISC REVENUES 5,867,413 4,204,852 7,470,873 3,306,113 3,596,612 3,420,062 3.45%
52 - SERVICE FEES & CHARG 53,448,277 59,624,802 61,410,202 63,416,941 63,536,941 67,492,977 6.43%
53 - FINES & PENALTIES 4,303,276 4,638,029 4,187,905 4,053,184 4,053,184 4,250,699 4.87%
54 - INVESTMENT EARNINGS 716,205 -8,852,296 5,215,214 4,138,027 4,138,023 4,877,149 17.86%
55 - PROPERTY INCOME 17,575,519 22,299,947 24,405,963 23,031,044 24,332,044 25,834,907 12.17%
55 - PARKING REVENUE 11,639,445 11,470,235 11,472,007 12,378,936 12,378,936 12,996,909 4.99%
56 - DONATIONS & CONTRIBUTIONS 8,933,941 6,266,832 2,541,794 447,300 15,585,885 410,321 -8.27%
57 - INTERNAL REVENUES 32,823,267 31,336,461 36,134,126 37,353,860 37,930,387 40,254,399 7.77%
61 - NON-OPERATING SOURCE 10,874,807 8,605,531 6,555,521 278,047 30,775,389 291,590 4.87%
69 - TRANSFERS 83,268,259 76,061,564 134,515,985 58,859,125 102,936,427 72,312,196 22.86%
Grand Total 444,088,857 450,921,288 546,826,922 456,696,276 567,482,678 493,573,675 8.07%
493,573,675
PROPERTY TAXES, $149.3 M
SALES TAX, $45.3 M
TRANSIENT OCCUPANCY TAX, $39.8
M (Gross) / $32.6 M (Net)
OTHER REVENUES, $194.0 M
TRANSFERS, $72.3 M
FISCAL YEAR 2024-25 PROPOSED REVENUE
PROPERTY TAX
SALES TAX
TRANSIENT OCCUPANCY TAX
OTHER REVENUES
TRANSFERS
22
DEPARTMENT REVENUE OVERVIEW - GENERAL FUND
Revenue Budget:
ACCOUNT TYPE FY 21 Actuals FY 22 Actuals FY 23 Actuals FY 24 Adopted FY 24 Revised FY 25 Proposed % Change
42 - LICENSES PERMITS 5,131,916 6,057,903 5,676,619 5,746,027 5,746,027 5,952,271 3.59%
43 - INTERGOVTAL REVENUES 5,175,738 4,540,267 4,379,680 2,289,407 4,611,356 3,593,906 56.98%
44 - PROPERTY TAXES 123,224,714 128,483,552 138,358,730 141,373,233 142,715,981 149,296,403 5.60%
45 - SALES TAX 38,956,275 46,164,860 46,552,459 48,532,772 45,257,552 45,299,626 -6.66%
46 - TRANSIENT OCCUPANCY 16,886,197 26,677,331 30,201,648 31,986,150 31,986,150 32,625,873 2.00%
47 - OTHER TAXES 8,780,433 9,109,927 10,079,710 8,937,999 8,937,999 9,587,638 7.27%
51 - MISC REVENUES 1,297,646 962,876 2,633,912 -363,054 -115,205 -360,266 -0.77%
52 - SERVICE FEES & CHARG 18,335,909 22,867,500 25,187,124 24,429,291 24,549,291 25,230,457 3.28%
53 - FINES & PENALTIES 4,012,862 4,156,910 3,838,752 3,799,784 3,799,784 3,996,299 5.17%
54 - INVESTMENT EARNINGS 377,519 -2,615,502 1,690,399 1,750,000 1,750,000 1,904,925 8.85%
55 - PROPERTY INCOME 5,094,422 6,791,937 7,530,393 8,125,682 9,426,682 9,625,353 18.46%
55 - PARKING REVENUE 7,074,853 7,237,498 7,420,314 7,900,099 7,900,099 8,271,651 4.70%
56 - DONATIONS & CONTRIBUTIONS 241,871 874,978 142,030 412,300 482,123 375,321 -8.97%
61 - NON-OPERATING SOURCE 118,273 116,292 618,996 118,047 118,047 131,590 11.47%
69 - TRANSFERS 10,335,111 1,284,630 18,428,263 19,020,967 26,477,909 19,767,775 3.93%
Grand Total 245,043,739 262,710,959 302,739,030 304,058,704 313,643,795 315,298,822 3.70%
315,298,822
PROPERTY TAXES, $149.3 M
SALES TAX, $45.3 M
TRANSIENT OCCUPANCY TAX, $39.8 M (Gross) /
$32.6 M (Net)
OTHER REVENUES, $68.3 M
TRANSFERS, $19.8 M
FISCAL YEAR 2024-25 PROPOSED REVENUE
PROPERTY TAX
SALES TAX
TRANSIENT OCCUPANCYTAX
OTHER REVENUES
TRANSFERS
23
ATTACHMENT C - UPDATED
SUMMARY OF BEGINNING AND ENDING SPENDABLE FUND BALANCE BY FUND – FY 2024-25
24
Revenue
Interfund
Loans & Use of
Reserves Transfers In Expenditures
Capital
Improvements
Interfund
Loans &
Reserve Transfers Out
General Funds
General Fund 010 1,584,818 295,531,047 1,250,000 19,767,775 (271,996,346) - - (39,255,611) 6,881,683
General Fund Capital Projects 012 5,744,354 - - 6,500,000 - (11,000,000) - - 1,244,354
SubTotal - General Fund 7,329,172 295,531,047 1,250,000 26,267,775 (271,996,346) (11,000,000) - (39,255,611) 8,126,036
Coastal Commission Funds
Tidelands Operating Fund 100 1,033,650 14,759,487 200,000 12,256,805 (4,811,635) (2,275,000) (248,000) (19,767,775) 1,147,532
Harbor & Beaches Capital Plan Fund 101 32,397,278 6,661,500 5,832,875 - (5,450,000) (1,250,000) - 38,191,654
SubTotal - Coastal Commission Funds 33,430,928 21,420,988 200,000 18,089,680 (4,811,635) (7,725,000) (1,498,000) (19,767,775) 39,339,185
Enterprise Funds
Water Enterprise Fund 701 5,550,178 37,274,460 - - (31,858,694) (400,000) - (6,488,810) 4,077,134
Water Capital Fund 702 - 162,190 - 6,488,810 - (6,651,000) - - -
Wastewater Enterprise Fund 711 762,901 5,566,522 - - (5,289,276) (1,000,000) - - 40,147
Wastewater Capital Fund 712 3,966 41,342 - - - - - - 45,308
SubTotal - Enterprise Funds 6,317,045 43,044,515 - 6,488,810 (37,147,970) (8,051,000) - (6,488,810) 4,162,589
Special Revenue Funds
Asset Forfeiture Fund 105 465,365 - - - (311,000) - - 154,365
SLESF - COPS Fund 111 50,000 250,000 - - (250,000) - - 50,000
CDBG Fund 120 - 690,974 - - (394,134) - - 296,840
State Gas Tax Fund 121 198,055 2,249,516 - - - (1,400,000) - - 1,047,571
Measure M 2 122 678,494 2,879,322 - - - (3,000,000) - - 557,816
Measure M Competitive 123 227 - - - - - - - 227
SB1 Gas Tax RMRA Fund 126 431,948 2,079,842 - - - (2,188,000) - - 323,791
Misc. Cooperative Projects 135 159,296 1,473 - - - - - - 160,769
PCH Relinquishment 137 32,964 1,473 - - - - - - 34,436
Environmental Contributions 138 - 4,100,000 - - - (4,100,000) - - -
Transportation and Circulation Fund 140 400,632 (33,822) - - - - - - 366,810
Building Excise Tax Fund 141 14,732 184,591 - - - (150,000) - - 49,323
AQMD Fund 142 1,453,150 141,772 - - - - - - 1,594,922
Environmental Liability Fund 160 8,133,144 933,801 - - (469,961) (200,000) - - 8,396,984
Fostering Interest in Nature (FiiN) Fund 164 980,297 25,338 - - (223,759) - - 781,877
Oceanfront Encroachment Fund 167 1,055,351 293,787 - - - (750,000) - - 599,138
PEG Fees Fund 168 3,422,537 362,931 - - - - - 3,785,468
Miscellaneous Special Revenues Fund 180 2,167,946 216,749 - - - - - 2,384,695
SubTotal - Special Revenue Funds 19,644,139 14,377,747 - - (1,648,854) (11,788,000) - - 20,585,033
Permanent Funds
Newport Bay Dredging Fund 830 5,466,997 105,966 - - - - - - 5,572,963
Ackerman Donation Fund 831 1,167,509 23,513 - (5,000) - - 1,186,022
SubTotal - Permanent Funds 6,634,506 129,479 - - (5,000) - - - 6,758,984
SUMMARY OF BEGINNING AND ENDING SPENDABLE FUND BALANCES BY FUND - FY 2024-25
Fund
Estimated
Spendable
Fund Balance
06/30/2024
Add: Estimated Resources Less: Budget Requirements Projected
Spendable
Fund Balance
06/30/2025
25
Revenue
Interfund
Loans & Use of
Reserves Transfers In Expenditures
Capital
Improvements
Interfund
Loans &
Reserve Transfers Out
SUMMARY OF BEGINNING AND ENDING SPENDABLE FUND BALANCES BY FUND - FY 2024-25
Fund
Estimated
Spendable
Fund Balance
06/30/2024
Add: Estimated Resources Less: Budget Requirements Projected
Spendable
Fund Balance
06/30/2025
Capital Projects Funds
Civic Center Fund 511 485,365 - - - - - - 485,365
Misc FFP Projects 512 1 - - - - - - - 1
Facilities Financing Plan Fund 513 24,757,572 - - 1,285,152 - - (6,800,000) 19,242,724
Police Facility New 521 654,156 - - - - - - 654,156
Fire Station Rebuild 532 2,512,176 - - 6,800,000 - (9,300,000) - - 12,176
Newport Uptown Undergrounding 534 3,248 - - - - - - 3,248
Balboa Village Parking Mgmt District 535 103,812 - - - - - - 103,812
Neighborhood Enhancement 536 1,235,425 - - - - (1,000,000) - - 235,425
Parks & Community Centers 562 943,117 - - - - (300,000) - - 643,117
Parks Maintenance Fund 570 - - - 2,300,000 - (2,300,000) - - -
Facilities Maintenance Plan (FMP) 571 463,451 - - 2,500,000 - (2,500,000) - - 463,451
SubTotal - Capital Projects Funds 31,158,323 - - 12,885,152 - (15,400,000) - (6,800,000) 21,843,475
Special Districts Funds
Assessment District Projects 663/664/665 3,622,146 - - - - - - 3,622,146
SubTotal - Assessment District Project Funds 3,622,146 - - - - - - - 3,622,146
Debt Service Funds
Debt Service Fund 800 2,188,154 2,068,359 - 8,580,779 (10,741,804) - - 2,095,488
SubTotal - Debt Service Funds 2,188,154 2,068,359 - 8,580,779 (10,741,804) - - - 2,095,488
Internal Service Funds
Other Insurance Fund 748 - 3,191,087 - - (3,175,766) - - -
Uninsured Claims Reserve 749 2,033,995 349,604 - - (1,965,000) - - 418,600
Workers Comp Reserve 750 23,545,331 6,337,249 - - (4,619,303) - - 25,263,276
General Liability Reserve 751 14,916,853 6,449,206 - - (6,811,401) - - 14,554,657
Equipment Maintenance 752 8,333,258 6,750,792 - - (5,200,540) - - 9,883,510
Police Equipment Fund 753 1,762,386 1,029,945 - - (1,486,575) - - 1,305,756
Parking Equipment 755 2,117,389 431,335 - - (400,000) - - 2,148,724
Fire Equipment Fund 756 2,012,539 508,679 - - (142,000) - - 2,379,218
RSS Equipment Replacement Fund 757 914,699 196,870 - - (200,000) - - 911,569
Compensated Absence Fund 760 6,910,554 3,332,558 - - (2,030,000) - - 8,213,112
Retiree Medical Fund 761/762 473,795 7,516,153 - - - (7,510,508) - - - 479,439
Information Technology Fund - Operations 764 1,928,275 6,704,197 - - (6,682,624) - - 1,949,848
Information Technology Fund - Strategic 765 8,526,395 1,891,671 - - (1,361,496) - - 9,056,570
SubTotal - Internal Service Funds 73,475,470 44,689,344 - - (41,585,214) - - - 76,564,280
Total - All Funds 183,799,883 421,261,479 1,450,001 72,312,196 (367,936,823) (53,964,000) (1,498,000) (72,312,196) 183,097,218
26
ITEM NO. 6A1 FISCAL YEAR 2024-25 PROPOSED
BUDGET REVISIONS - UPDATED
ATTACHMENT A
STAFF PRESENTATION – ADDITIONAL MATERIALS RECEIVED
27
FISCAL YEAR 2024-25
PROPOSED BUDGET ADDITIONAL INFORMATION
May 9, 2024
Finance Committee
28
UPDATED PAGES IN THE PROPOSED BUDGET BOOK
2
•Pages 19 & 20 – Revenue overview pages altered to show gross TOT revenue before VNB portion
•Pages 48 & 49 – Fund Balance overview revised to show updated beginning spendable balances for the Water & Wastewater funds, as well as corrected operating budget number for Tidelands Fund
29
CHANGES TO PROPOSED BUDGET
3
General Fund
•Transfer one full-time Department Assistant from the City Clerk’s office to the City
Manager’s office and reclassify to an Administrative Assistant.
•Increase of $6,681 to the General Fund
Water & Wastewater Funds
•Transition from bi-monthly billing to monthly billing
•$81,600 in one-time costs
•$51,200 to increase 0.3 FTE Senior Fiscal Clerk hours
•$79,600 for ongoing operational costs
30
REQUEST FINANCE COMMITTEE ACTION
4
•Endorse or modify the City Manager’s Proposed Budget for
Fiscal Year 2024-25
31
5
Questions?
32
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 6B May 9, 2024
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department Jason Al-Imam, Finance Director/Treasurer 949-644-3123, jalimam@newportbeachca.gov
SUBJECT: Performance Metrics
SUMMARY: The fiscal year 2024-25 budget document will incorporate performance metrics across all
departments, which fulfills one of the elements set forth in the Fiscal Sustainability Plan.
Performance metrics were identified for each department as part of an ongoing effort to ensure high-quality and efficient delivery of city programs and services. RECOMMENDED ACTION:
Review and discuss the performance metrics evaluated in this report and provide any recommendations for consideration by the City Manager and City Council. DISCUSSION:
On January 12, 2010, Resolution 2010-4 was adopted by the Newport Beach City Council establishing the City’s Fiscal Sustainability Plan (FSP). The FSP serves as a policy for the City Council and the City Manager to examine city operations, expenditures, and revenue opportunities. On June 9, 2015, Resolution 2015-47 was adopted and amended
the FSP to include two additional elements. Currently, the FSP is comprised of sixteen
elements. The ninth element declares that the City will “implement a Performance Measurement/Management Strategy as a part of an ongoing effort to ensure high-quality and efficient performance”. The strategy to implement this element is to incorporate performance measurements into the City’s budget documents and report back to the
Council accordingly.
During the Fiscal Year 2024-25 budget preparation process, City management established performance metrics for each department to act in accordance with element
33
Performance Metrics May 9, 2024 Page 2
nine in the FSP. Finance Department staff facilitated workshops with department liaisons to discuss, prepare, and determine performance metrics that aligned with the City’s key goal. This on-going process is intended for measuring and setting goals to provide core
services and required activities, consistent with the desired service level for residents and
other internal and external customers. City management continues to make strategic decisions that support efficient use of resources, intended outcomes of city programs, and continuous improvement of the
services delivered in the interests of the residents of Newport Beach.
Prepared and Submitted by:
/s/ Shelby Burguan _____________________________
Shelby Burguan
Acting Deputy Finance Director
Attachment(s):
A. FY 2024-25 Performance Metrics Summary – Across all departments
34
ATTACHMENT A
FY 2024-25 PERFORMANCE METRICS SUMMARY – ACROSS ALL DEPARTMENTS
35
Department
City Attorney’s Office
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Worked with the City Council Municipal Code and Council Policy Review Committee on a
comprehensive update of the Municipal Code and City Council Policies.
• Worked with the Community Development Department to implement the Housing
Element, which allow for the redevelopment of the housing opportunity sites identified
therein.
• Worked with City staff and the Newport Beach Public Library Foundation on a plan to fund
and build the Library Lecture Hall.
Budget Highlights
• The City Attorney’s Office is requesting that the part-time paralegal position be converted
from a .5 FTE to a .75 FTE (an increase of .25 FTE).
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Ensure that our office supports the Housing Element implementation process.
• Ensure contracts, resolutions and ordinances are completed in a timely manner.
• Ensure that people violating the Municipal Code are deterred from committing future
crimes.
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Percentage (%) of Standard Contracts completed within 10
business days of complete submission.
N/A N/A N/A 100%
Percentage (%) of Standard Misdemeanor Citations filed
within 5 business days of the scheduled arraignment date.
N/A N/A N/A 100%
Percentage (%) of resolutions & ordinances completed by
City Council Staff Report deadline.
N/A N/A N/A 100%
36
Department
City Clerk
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Worked with Netfile to launch an Ethics Training Seminar to meet AB1234 requirements.
• Worked with Netfile to create a Lobbyist application for maintaining Lobbyist Registration
Forms.
• Hosted Operation Christmas to collect toy donations for military families.
Budget Highlights
• City Clerk’s Office goal is to continue staying within budget for FY2024-25.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Host two Citywide Records Management Workshops to train and inform City staff of best
practices.
• Continue to promote transparency by uploading City Council documents to the City’s
website within 3 days of the meeting.
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Public Records Act Requests assigned to City Clerk’s Office responded to within 10-days 100% 100% 100% 100%
Public Records Act Requests completed by City Clerk’s Office within 10 days 90% 95% 85% 100%
Percentage of regular City Council minutes
prepared within 10 days of meeting
100% 100% 100% 100%
Percentage of Fully Complete Council Packets (Staff Reports / Ordinances / Resolutions / Etc.)
Uploaded within 5 days of Meeting
100% 100% 100% 100%
37
Department
Community Development
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Conducted an Accessory Dwelling Unit (ADU) code update, including guidebook and
website for residents.
• Electronic plan review online services were made available to the public.
• Department fee update from the FY22-23 Fee Study Update completed.
• Customer queueing upgrades were made in the Bay C lobby to improve customer
experience.
• Received the Federal Emergency Management Agency (FEMA)’s community rating
system recertification.
• Utilized an ATV for code enforcement beach patrol summer of 2024.
Budget Highlights
• To assist with special programs and high volume of code enforcement cases, the following
code enforcement operational requests were incorporated:
o Full-Time Code Enforcement Officer I
o Conversion of existing .75 Code Enforcement Trainee to full-time Code
Enforcement Officer I
o Reassignment, of two full-time Code Enforcement Officer I positions, from Public
Works to the Community Development Department
o Addition of a seasonal contract employee
• Salary and benefits for the addition of a Full-Time Building Inspector II were included,
reducing related contract staffing funding.
Departmental Goals/Objectives for Upcoming Fiscal Year 24-25
• Continued implementation of the City’s General Plan Housing Element
• Expand online plan checking and permitting to commercial projects.
• Continued refinement on reporting metrics for turnaround times for building, planning and
code enforcement operations.
• Reviewing and implementing numerous changes in State law that affect local zoning
(density bonus, parking, residential streaming, ADUs, etc.)
• Adoption of updated Development Impact Fee Study
• Increase local control, of coastal zone properties, through Section 30613 request
(increased Coastal Development Authority (CDP) authority)
38
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
BUILDING
Percentage of building inspections provided within 1 business day of request 91% 95% 95% 95%
Percentage of 1st plan checks reviewed and completed over the counter 82% 80% 80% 80%
Percentage of 1st plan checks reviewed within 10 days of submittal 95% 90% 90% 90%
CODE ENFORCEMENT
Percentage of first enforcement actions
within 3 days of complaint
90% 90% 90% 90%
Percentage of violations resolved in 30 days or less 75% 65% 65% 65%
PLANNING
Percentage of 1st plan checks reviewed and completed over the counter 92% 80% 80% 80%
Percentage of 1st plan checks reviewed within 10 days of submittal
97% 90% 90% 90%
39
Department
City Manager’s Office
Summary of Notable Accomplishments During Fiscal Year 2023-24
Information Technology Division:
• Increased the City’s cybersecurity posture by completing a systems and network
vulnerability assessment and mitigation.
• Increased the City’s cybersecurity posture by implementing Multi-Factor Authentication,
Data Loss Protection, Mobile Device Management, and Password Policy Enforcement.
• Upgraded the City’s data center to maximize resiliency and increase processing capacity.
• Completed the Advanced Meter Infrastructure data and billing integration.
• Implemented an infrastructure replacement program to better track and account for
system, hardware, audiovisual, and security system replacements.
• Completed a major upgrade of the City’s Enterprise Resource Planning (ERP)
system,Tyler Munis, to take advantage of enhancements and new security features.
• Kicked off the Fire Station Alerting Modernization Project (scheduled to be completed in
August of 2024).
• Implemented source code control and versioning for the City’s custom-developed
applications.
Outreach Division:
• Housed and reunified 19 people in FY 2023-24.
• Added five additional beds at the Costa Mesa Bridge Shelter to increase the availability to
25 beds.
Budget Highlights
Information Technology Division:
• Allocated dedicated funding for cybersecurity to better track the City’s cybersecurity goals
and initiatives.
Outreach Division:
• Good Giving Donations have increased year over year.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
Information Technology Division:
• Reduce the City’s user cybersecurity phish-prone score by 3%.
• Complete the Five-Year IT Strategic Plan.
• Upgrade the Audio/Video (AV) equipment in the Council Chambers.
• Develop an Artificial Intelligence (AI) policy, Business Continuity Plan and Update the
City’s Disaster Recovery Plan.
• Modernize the City’s device deployment process with the implementation of Microsoft
InTune.
• Update our technology inventory practices to better monitor and track device inventory
and retirement.
40
Outreach Division:
• Continue to house or reunify individuals experiencing homelessness into permanent living
conditions.
• Facilitate street exits to shelters, skilled nursing facilities, or recuperative care facilities.
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Information Technology Division
Mobile App Utilization / Impressions 32,800 Impressions 34,000 Impressions 40,000 Impressions 100,000 Impressions
Help Ticket Resolution Time N/A 48 Hours Average Resolution
36 Hours Average Resolution
36 Hours
Cybersecurity Training Effectiveness (phish-
prone score)
9.7% Phish-Prone Score 11.8% Phish-Prone Score 9% Phish-Prone Score 6.1% Phish-Prone Score
System Upgraded & Updated 89% of Systems Upgraded / Updated
92% of Systems Upgraded / Updated
95% of Systems Upgraded / Updated
100% of Systems
Outreach Division Percentage of filled Newport Beach allocated beds at Costa Mesa Bridge Shelter
95% 96% 96% n/a
Increase the number of individuals housed or
reunified through further collaboration with City Contractors
28 individuals housed /
reunified
19 individuals housed /
reunified
25 individuals housed /
reunified
n/a
Number of Street Exits (Housed, Reunified with Family, Placed in Assisted Living/Skilled Nursing or Sheltered)
86 Street Exits 104 Street Exits 52 Street Exits n/a
41
Department
Finance
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Fitch reaffirmed the City’s AAA credit rating (the highest possible rating) in 2023, which
was based, in part, on the well-controlled expenditure framework coupled with a very
solid level of budget management.
• Provided the Finance Committee and City Council with timely quarterly budget updates.
• Updated the City’s City Council Policies F-7 and F-14 to clarify policies and procedures,
and to provide for administrative efficiencies.
• Effectively managed the City’s investment portfolio with a continued goal of maximizing
investment returns while safeguarding principal and remaining sufficiently liquid to meet
future expenditures.
• Implemented Governmental Accounting Standards Board Statement (GASB) No. 96,
Subscription-Based Information Technology Arrangements (SBITAs).
• Finalized the City’s Annual Comprehensive Financial Report (ACFR) in a timely manner
for the most recent fiscal year, which reflected an “unmodified” or clean opinion that the
City’s financial statements were presented fairly and were free of findings.
• Received the Government Finance Officers Association’s “Certificate of Achievement
for Excellence in Financial Reporting” for the most recent fiscal year, which is the
highest form of recognition in governmental accounting and financial reporting.
• Acquired recovery costs due to the Elly Oil Spill (P00547) in October 2021. Recovery
costs encompassed city employee time, contract services, and supplies and materials
dedicated to city response.
Budget Highlights
• Finalize the Fiscal Year 2023-24 GASB No. 75 full Valuation Statement Report for
Postemployment Benefits other than Pensions. In previous years, a partial valuation was
completed. This will be the first year a full valuation will be completed.
Departmental Goals/Objectives for Upcoming Fiscal Year 24-25
• Develop and implement a budget that conforms to the guidelines established by the
GFOA for the “Distinguished Budget Presentation Award Program”, which must excel as
a policy document, financial plan, operations guide, and communication tool.
• Effectively manage the City’s investment portfolio with a continued goal of maximizing
investment returns while safeguarding principal and remaining sufficiently liquid to meet
future expenditures.
• Provide the Finance Committee and City Council with timely quarterly budget updates.
• Conduct fee study assessments for Library, Recreation, and Senior Services.
• Maintain the City’s AAA credit rating by continuing to maintain a well-controlled
expenditure framework.
• Continue to implement the City’s pension paydown strategy with the goal of eliminating
the City’s pension liability in 2032.
42
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Long-term bond rating
issued by Fitch Ratings
AAA AAA AAA AAA
Rate of return on pooled investments compared to the benchmark index
City Return: 1.28% Benchmark: -0.03%
City Return: 4.25% Benchmark: 3.0%
City Return: 3.75% Benchmark: 2.5%
Benchmark or higher
Average wait time on telephone calls made to the revenue division
3 minutes and 20 seconds 2 minutes and 47 seconds 2 minutes and 20 seconds 2 minutes
New vendors registered in the city’s vendor registration and bid management system
809 new vendors 830 new vendors +2.60%
875 new vendors +5.42%
875 new vendors +4.00% from prior year
Average turnaround time from requisitions to
purchase orders
2-5 days 2-4 days 1-3 days Maintain 1-3 days
Obtained an unmodified (“clean”) audit opinion on the city’s financial
statements within six months of year-end
Unmodified (“clean”) audit opinion issued
on 2/6/230F1
Unmodified (“clean”) audit opinion issued
on 12/31/23
Unmodified (“clean”) audit opinion issued
Unmodified (“clean”) audit opinion
issued
% of Continuing Disclosures filed in a timely manner (270
days)
100% 100% 100% 100%
1 An unmodified (“clean”) audit opinion for Fiscal Year 2021-22 was issued on February 6, 2023.
The Fiscal Year 2021-22 audit was delayed due to the implementation of Governmental Accounting Standards Board Statement No. 87 – Leases.
43
Department
Fire Department
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Recent designation as a Class 1 Fire Department with Insurance Services Office (ISO), a
national rating and analytics organization for the property insurance agency. Under their
Public Protection Classification Program (PPC), ISO ranks an agencies’ fire and
emergency response capabilities based on an evaluation of communications, staffing,
water systems, deployment, equipment, response times, training, public education,
investigations, and more. Based on this criterion, a department is given a class ranking;
with Class 1 being the highest. Newport Beach is now one of 3 departments in Orange
County, 45 out of 854 in the State of California, and 498 out of 38,195 ranked agencies in
the United States to attain a rank of Class 1. As a result, residents may see more
competitive insurance rates, as insurance companies use PPC information to establish
fire insurance premiums and may offer lower rates in communities that demonstrate
superior fire service capabilities.
• Implementation of a fourth paramedic rescue ambulance out of the Santa Ana Heights
station (implementation date Feb. 5, 2024) along with six new paramedic positions.
• 40-year anniversary of the Junior Lifeguard program, which coincided with the 100th
anniversary of the of the City’s Lifeguard service (1923-2023). Several events were held
in 2023 to commemorate these anniversaries, including a Centennial Event Banquet,
serving as host to the California Surf Lifesaving Association (CSLSA) regional competition,
and the United State Lifesaving Association (USLA) Junior Lifeguard regional competition.
• Partnering with UCSD and Cal Fire to utilize Artificial Intelligence (AI) monitoring
equipment in our high fire hazard areas and continuing to pursue wildland mitigation
measures via legislation and collaborative work with homeowners and businesses to
enhance safety for the community.
• Hiring and training over 16 new firefighters/paramedics (13% of our total floor personnel),
filling vacancies and increasing our medical effectiveness for our citizens and visitors.
• Installation of vehicle exhaust capture system equipment and an updated station alerting
system in conjunction with Public Works and Information Technology (IT).
• Successful implementation of the first year of the Junior Lifeguard Scholarship program.
The Scholarship program was originally a condition of the California Coastal
Commission’s approval for the new Junior Lifeguard Building and aims to reduce financial
barriers of entry to the Newport Beach Junior Lifeguard Program, providing youth with a
lifechanging experience that may not otherwise be accessible.
• Received a new, replacement Fire engine from the State of California Office of Emergency
Management (Cal-OES).
• Implementation of the Department’s Honor Guard. Currently comprised of 7 sworn
personnel, this ceremonial guard attends various events (including parades, funerals,
44
memorials, and the annual Mayor’s Dinner) in representation of the department and
serves as a tribute to sworn personnel who have fallen in the line of duty.
Budget Highlights
• Procurement of a replacement Lifeguard Rescue Vessel as part of the FY 2024-25 Vehicle
Replacement ISF Schedule; the last vessel replaced was in 2007. The unit to be replaced
is a 1985 model that has far exceeded its service life.
• Continued conversion of Firefighter positions to Firefighter-Paramedics to keep with the
advanced lifesaving capabilities of the Fire Department.
• Increase station maintenance budgets to cover needed repairs and improve preventative
maintenance efforts.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Keep Fire Operations at or above 97% capacity for staffing.
• Temporarily relocate Fire Station 1 in preparation for New Library/Fire Station 1
Construction.
• Streamline software platforms and any issues of program redundancy.
• Continued implementation of various goals and objectives as identified in the 2022 NBFD
Strategic Plan.
o Enhance interdepartmental cooperation in the purchasing process.
o Review the current inventory of equipment and supplies.
o Identify resources that may be shared with regional partners (training, staffing, equipment).
o Review and improve training delivery methods.
o Evaluate department staffing and determine succession planning needs.
45
Department Performance Measures
1 Totals based on preceding calendar year—MetroNet Data based on averages
2 US Lifeguarding Association stat is 1 in 18 million beach visits
3 Total based on preceding calendar year –MetroNet Data 4-26-2024
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Fire Plan Check review
turnaround time (avg time for new construction)
96.07% 95% 90% 90% of all initial
(1st Round) plan check reviews within 15 working days or less
Number of medical transports by non-NBFD ambulances (neighboring agencies provide assistance when all units are
unavailable)0F1
111 97 30 Under 30
Maintain Staffing & Reduce
Overtime
Vacancies
9 OT costs $7M
Vacancies
12 OT Costs $6M
Vacancies
2 OT costs $5M
Within FY Budget
Drowning incidents are below
the USLA statistical average1F2
Yes Yes Yes Drowning
incidents do not exceed USLA statistical average
1st unit on-scene, 90th percentile response time (dispatch to arrival) for medical aid 2F3
5 minutes 33 seconds 5 Minutes, 34 Seconds 5 Minutes 5 Minutes, 90% of the time
46
Department
Harbor
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Implementation and roll-out of the City mooring license program with online
applications
• Submission of the application for the C Mooring Field optimization project to the
California Coastal Commission including a 3000+ page response to request for
additional information
• Significant improvements to the technology used to support operations (calls for
service heat map, online permitting, online guest surveys, more mobile-friendly
reservation process)
• Improved occupancy in all four categories of our visitor serving berthing options
o Slips at Marina Park
o Short-term moorings at Marina Park
o Offshore mooring sub-permits
o Onshore mooring sub-permits
• Exhausted all Surrendered and Abandoned Vessel Exchange (SAVE) grant funding
resulting in the destruction of 30 vessels from Newport Harbor to maintain safe and
clean waterways.
• Completed the conversion and execution of all mooring permits inherited from the
Orange County Sheriffs Harbor Patrol to the approved, new Newport Beach mooring
permit format
• Installation of water quality measuring devices in the Harbor
• Extend hours of operation and increase personnel funding to better respond to
constituent requests and deliver services to the harbor community including:
o attention to early morning noise from the rowing programs
o multiple berthing concerns at various commercial marinas
o monitoring (and correcting when necessary) proper use of the visitor-serving
anchorages
o support for and assistance associated with later arriving guests to the Marina
Park facility or onto moorings
o Continue to identify unpermitted commercial operations and monitor noise and
other nuisances associated with permitted charter operators.
o Collaborate with commercial operators to come into compliance with permitting
requirements and associated permit conditions
Budget Highlights
• Increased Marina Park Maintenance and Repair to accommodate extraordinary
costs for maintaining the crane
• Reclassified Department Assistant to Administrative Assistant
• Increased Capital Accrued for Replacement Patrol Vessel
47
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Implement Latitude/Longitude tracking on Quest requests for service records. Report
on service requests by geographic location using a “heatmap” Geographic
Information System (GIS) tool. Provide heatmap reporting to Harbor Commission
and the public via the GIS dashboard portal
• Upgrade the 2007 patrol boat to ensure it aligns with the city's current standards for
vessel maintenance and replacement.
• Improve water quality by ensuring that all first-time sub-permittees, all new licensees
and all new mooring permittees are dye-tabbed within 72 hours of arrival
• Continue to work with the contractor to ensure water quality device produces quality
data for distribution to the public and the Harbor Commission
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Removal of unseaworthy, unsafe or unsanitary
vessels
22 vessels removed 15 vessels removed 10 vessels removed 15 vessels removed
Improve Occupancy: Marina Park Slips 5,084 nights 5,300 nights +4.25% 5,500 nights +3.78% +10% from Prior Year
Improve Occupancy: Marina Park Moorings 647 nights 700 nights 750 nights +10% from Prior Year
Improve Occupancy: Offshore sub-permits 5,733 nights 6,000 nights +4.66% 6,300 nights 5% +10% from Prior Year
Improve Occupancy: Onshore sub-permits 6,372 nights 6,500 nights +2% 6,600 nights +1.54% +10% from Prior Year
Achieve Occupancy: Mooring License Program N/A 17% 90% 90% Occupancy
Community Engagement: Public appearances at which the audience is
educated on the “clean, safe and well-enjoyed” mission and progress
toward delivering on that mission
6 events 12 events 12 events 6 events
Removal of hazards, debris, and trash removal from the harbor
1,066 1,200 1,200 900 – based on implementation of upper bay trash
interceptor
48
Department
Human Resources
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Implemented five new benefit providers for City-offered dental, vision, employee
assistance program, life, and disability coverages.
• Successfully recruited to fully staff the City’s new ambulance.
• Transitioned to a joint powers authority for City insurance coverage, resulting in a savings
of over $200,000.
• Successfully hired 19 police officers.
• Partnered with the City Council and City labor groups to provide a retention incentive for
the City’s long-term employees.
• Reviewed and updated City insurance requirements for special event permits and
contracts with outside providers.
Budget Highlights
• Research and implement a reference check platform to expedite recruitment and
onboarding
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Transition to paperless PAF processing system
• Compile department videos and photos to increase recruitment efforts on social media
• Augment Human Resources Information System (HRIS) auditing protocols
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Recruitment Length (Non-Continuous; from opening date to first eligible list date; measured in business days)
31 days 32 days 32 days 32 days
Percentage of employees who positively rate workshops being valuable. (Trainings include PowerPoint, Word, Excel, DISC, presentation skills, etc.)
100% 99% 99% 100%
Percentage of hiring managers who positively
rate their experience with the hiring process.
100% 94% 94% 100%
49
Department
Library Services
Summary of Notable Accomplishments During Fiscal Year 2023-24
• There was a 21% increase in reader participation for the Summer Reading Program in
2023. Audience and program attendance saw a 139% increase over 2022.
• A new children’s read-a-long collection was introduced in November of 2023.
• Working with City IT, a new projector was installed in the Friends Meeting Room.
• Construction began on the new Library Lecture Hall at the Central Library in February of
2024. The 299 seat Hall, a private/public partnership between the Newport Beach Public
Library Foundation and the City, is expected to be completed in late 2025.
• Phase IX of the Sculpture Garden will debut in late June 2024 and feature ten new
sculptures.
• The Library hosted four Storytellers Writing Workshops, which were once again at capacity
within hours of opening registration. The popular Genealogy Workshop returned after a
two-year hiatus.
Budget Highlights
• The Library received additional funding for a Part Time Department Assistant in the
Literacy Office.
• The Library anticipates receiving a grant from the California Library Literacy Services
division to help fund the program.
• The Library expects to receive additional funding from the Newport Beach Public Library
Foundation, Friends of the Library, and the Arts Foundation to help fund programs and
materials.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Increase awareness of the Library and its services through continued monthly eBlasts,
outreach events, and mailing new residents welcome to the library postcards.
• Increase use of Library services and materials by promoting library card signups,
programs offered, and marketing library materials to encourage a greater number of
checkouts.
• Continue to advance digital and traditional literacy skills across all ages by offering public
computers; a 24/7 eBranch featuring eBooks and eAudiobooks, streaming movies, digital
magazines, and databases; reading challenges, and checkout of materials across all age
groups.
• Collaborate with the Finance Department for review of Library fees to assess appropriate
fee levels for recovery of costs to Library associated with services provided.
50
Department Performance Measures
Performance Measure Actual
FY 22-23
Estimated
FY 23-24
Projected
FY 24-25
Target
Goal: Increase awareness of the Library
Door Counts 623,295 641,994 661,254 3% increase
Average number of
attendees for Outreach
programs
16 programs
5,146
attendees =
322
attendees at
each
17
programs
with 5,300
attendees =
322
attendees at
each event
18 programs
with 5,459
attendees =
322
attendees at
each event
3% increase
Website Visits 809,975 834,274 859,302 3% increase Mobile app usage 59,203 60,979 62,808 3% increase New eNews subscribers N/A 1,596 1,644 3% increase
Number of New Resident
Postcards Mailed
N/A 1,227
(3 quarters)
N/A This is dependent
on how many
people move into
our service area
Goal: Increase use of Library services and materials
Library cards issued 8,817 9,180 9,271 1% increase
Checkouts 1,172,951 1,193,517 1,205,452 1% increase
Average number of
attendees for all programs
998
programs
with 64,764
attendees =
65
attendees
per program
1,008
programs
with 65,412
attendees =
65
attendees
per program
1,020
programs
with 66,066
= 65
attendees
per program
1% increase
Goal: Advance digital and traditional literacy skills across all ages
Computer Use Sessions 39,863 40,262 40,665 1% increase
Digital Library Use 669,182 675,874 682,633 1% increase
Reading challenge program active participants
2,450 2,475 2,500 1% increase
Checkouts 1,172,951 1,193,517 1,205,452 1% increase
51
Department
Police Department
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Volunteers provided 4,700 hours of service hours:
o Conducting vacation checks at residences
o Distributing community/crime information flyers
o Coordinating community programs
o Providing administrative support for department functions
• Launched Newport Notified community notification system.
• Generated 210 photo and video posts on Instagram, Facebook and X (formerly Twitter).
• Organized and managed 97 community outreach events, from home security inspections
to the Police Appreciation Breakfast.
• Employees were active in at least 20 community organizations or regional/state/national
law enforcement associations.
• Fully replaced legacy in-car video systems with new Axon Fleet 3 systems.
• Received $376,000 in Office of Traffic Safety grant funds to impact traffic safety
priorities.
Budget Highlights
• Added funding for significant technology systems, Flock Automated License Plate
Recognition (ALPR) and Fusus data integration/analysis.
• Added funding from donations and Asset Forfeiture funds to purchase new virtual use-of-
force simulation training system.
• Utilized $50,000 in Asset Forfeiture funding for technology projects to support a new
Crime Information Center (CIC) with real-time crime investigative and proactive crime
analysis capabilities.
• Added funding for three Police Civilian Investigator positions to staff the CIC.
• Repurposed six existing positions (1 Senior Crime Analyst, 1 Police Sergeant and 4
Police Officers) to fully staff the CIC and a directed enforcement unit.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Maintain excellent response times by responding to Priority 1 calls for service within an
average of three minutes, 30 seconds and Priority 2 calls for service within six minutes.
• Increase community outreach efforts – social media posts and crime alerts by 10%.
• Establish the Crime Information Center in the Communications Center.
• Complete the transition to Dodge Durango patrol vehicles and evaluate
effectiveness/efficiency of the vehicle for ongoing patrol use.
52
Department Performance Measures
Performance Measure Actual 2022 Actual 2023 Projected 2024 Target
Percentage of all 911 calls answered within 15 seconds 99.8% 99.8% 99.8% 95%
Average response time for Priority 1 calls 3:21 3:00 3:15 3:30
Average response time for Priority 2 calls 5:40 5:57 5:45 6:00
Number of phone calls handled in Dispatch 172,614 169,371 170,000 170,000
Total calls for service (dispatched and field-initiated) 101,169 101,946 101,000 101,000
Arrests (Workload Indicator) 2,734 2,565 2,600 N/A
Investigative Clearance Rate (percentage of criminal cases closed) N/A 45.7% 45% 45%
Social Media posts 154 210 225 231
Crime Alerts issued 90 94 104 103
53
Department
Public Works
Summary of Notable Accomplishments During Fiscal Year 2023-24
• San Diego Creek Trash Interceptor: Led innovative design solution for collection of trash
and debris within San Diego Creek before entering the Upper Bay. Project was funded
through grants and environmental liability funding. ($3,981,000 construction contract.
Started construction October 2023. Scheduled completion summer 2024.)
• Surfside/Sunset Stage 13 Beach Nourishment: Engaged and provided leadership in this
collaborative local-state-federal funded project to mine and deposit 1.2 million cubic
yards of sand which will migrate to renourish Newport Beach. Also included moving
100,000 cubic yards of sand from the Santa Ana River mouth to the City’s ocean groin
fields. ($23M Federal project. Complete March 2024.)
• Keeping Public Works Efficient Internally: Public Works Administrative staff managed a
$137.6M CIP budget, over 200 active contracts, ran 47 procurements, processed over
300 purchase orders, 88 City Council action items, and thousands of payables.
• 29th Street Public Pier (Rhine Channel and Lafayette Ave.): Designed and permitted a
new public pier to provide vessel tie-up/public access to the commercial district along the
Rhine Channel. ($245,000 construction award by City Council January 2024.)
• Hurricane Hillary/Tropical Storm Beach Preparation: Provided primary planning and
response to exposed ocean beaches and community as the weather event with
predicted 20-foot surf approached. Reinforced and maintained the sand beach berms
and wind-rows well in advance. Distributed 6,500 filled and 2,000 empty sandbags to
residents to protect homes. Although the storm subsided, Newport Beach was prepared.
Budget Highlights
Added additional funding to the following: $1.3M to the Parks Maintenance Master Plan program,
$500,000 to the General Fund Capital Improvement Program (CIP) Fund, $1M to the Harbor
Capital Fund, and $1M to the Facilities Financing Plan Fund.
Added one new Engineering Technician to provide additional support to the Traffic and
Transportation section of the Engineering Division. The Engineering Technician will complete
technical drafting services, perform office and field work, and be a front-line asset providing
assistance and information to the public.
Added additional funding to support anticipated maintenance and repair costs for the newly
constructed Junior Lifeguard and Animal Shelter buildings. Contracted services would include
janitorial cleanings, window/roof cleanings, fire alarm inspections and routine HVAC services. On-
going maintenance and repair would include plumbing, electrical, carpentry, and painting services.
Additional funding was also added to support the cost of locking public restrooms nightly.
54
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Continue to oversee the approval and delivery of the City’s CIP including design and
construction of the large slate of projects and programs identified to be undertaken over
this period.
• Review and identify areas within the Public Works Department that could use operational
or service delivery improvements. Develop, make plans, and implement and/or make
necessary modifications or changes to processes, organization, and/or staffing to effect
desired modifications.
• Continue to consolidate City facilities building maintenance under the management of
Public Works Department to provide improved response, higher cost efficiency and
operational efficiency, while maintaining consistent high-quality service to all facilities.
• Work with neighboring cities, state, and federal partners to develop a regional plan for
sand resiliency, protecting the public beaches, infrastructure, and our city’s residential
investments.
• In collaboration with the Utilities Department, identify potential new water well locations,
then work with Community Development Department Real Property Program to secure
the site and develop designs for the well facilities and infrastructure.
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Percentage of CIP projects completed within 60 days of the Master Schedule N/A 80% 80% 80%
Percentage of CIP projects completed within 10% contingency N/A 80% 80% 80%
Percentage of street closure permits issued within 24 hours 88% 80% 80% 80%
Percentage of PW related Quest (work order) tickets completed within 48 hours N/A 80% 80% 80%
Percentage of refuse collected that is diverted (recycled or composted) 45% 44% 45% 50%
55
Department
Recreation & Senior Services Department
Summary of Notable Accomplishments During Fiscal Year 2023-24
• Completed construction on Newport Beach Junior Guard building and community center.
• Completed construction on Arroyo Park synthetic turf installation, increasing annual
usable hours by 30%.
• Completed construction on the Newport Ridge Pickleball Courts, increasing total number of public courts to 10; expended $231,236 in Prop 68 per capita grant funds.
• Finalized agreements with Boys and Girls Club (Lease at Eastbluff Park), Newport Harbor Lawn Bowling Club (Lease at San Joaquin Hills Park) and Newport Aquatic Center (Ground Lease at North Star Beach).
• Received $34,181 in grant funding from the CA Department of Boating and Waterways to purchase adaptive sailing equipment.
Budget Highlights
• Reintroduced part time Assistant Recreation Coordinator position into the organizational
structure and flexibility staffed all Recreation Leaders to Senior Recreation Leaders for
improved recruitment, staff retention and greater level of service.
• Added new revenue and expenditures to operate the Newport Beach Junior Guard
building and community center from September to April annually.
• Developed year-round league program format for the Newport Coast Pickleball Courts.
• Applied for CA Department of Boating and Waterways grants to fund replacement of
sailing equipment and program enhancements.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Update and improve parks amenities through the Park Maintenance Master Plan fund
• Construct a universally accessible playground at San Miguel Park by June 2025
• Increase pickleball programming revenue by 20%
• Develop a volunteer driving program at OASIS to support the transportation program
• Implement an Adaptive Sailing Program in partnership with Orange Coast College
56
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target
Recreational Program
Attendance/Registrations
341,516 351,761
+3.00% 362,314
+3.00% 373,183
+3.00% from prior year
Senior Transportation Participants 10,048 10,000 -0.48% 10,300 +3.00% 10,609 +3.00% from prior year
Recreational Classes Offered 3,376 3,382 +0.18% 3,480 +2.90% 3,584 +3.00% from prior year
Satisfaction with Recreation Programs (1-5) 4.61 4.65 4.7 4.65
57
Department
Utilities Department
Summary of Notable Accomplishments During Fiscal Year 2023-24
• New 5-year financial plan and rate study for the water and sewer enterprise funds.
• Conversion of all water meters to new digital metering system (Advanced Meter
Infrastructure).
• Implemented a new sewer lateral and cleanout inspection program.
Budget Highlights
• Converting part-time Maintenance Aides to part-time Utilities Specialists will provide
additional support for the Department's production objectives and succession planning
initiatives.
• Added several new on-call contractors to further reduce the maintenance repair backlog
in the water, sewer and storm drain systems.
• Restricted budget increases to only personnel and contractual obligations.
Departmental Goals/Objectives for Upcoming Fiscal Year 2024-25
• Plan a recycled water system expansion into Newport Center.
• Secure a new water well site to enhance reliability for future groundwater needs.
• Fully automate private water leak detections and notifications to residents.
• Maximize groundwater production which will reduce our need to purchase more expensive
imported water.
• Transition oil field operations from our long-time operator to a new contract operator due
to retirement.
Department Performance Measures
Performance Measure Actual FY 22-23 Estimated FY 23-24 Projected FY 24-25 Target/ Goal
Percentage of groundwater pumped 82.7% 81% 85% 85%
Percentage Water Fund cash reserves vs. goal 105% 86% 88% 100%
Percentage of sewer mainlines cleaned annually 60% 70% 75% 75%
Percentage Sewer Fund cash reserves vs. goal 64% 34% 8% 100%
Percentage of streets swept on schedule 95% 95% 98% 100%
Percentage/Number of graffiti incidents removed within 24-hours of notice NA / 3,558 95% / 4,000 95% / 4,000 100% / 4,000
Percentage/Number of street lights repaired within 48-hours of notice NA / 394 95% / 350 95% / 350 100% / 350
58
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 6C May 9, 2024
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department Jason Al-Imam, Finance Director / Treasurer 949-644-3123, jalimam@newportbeachca.gov
SUBJECT: THIRD QUARTER BUDGET UPDATE
SUMMARY:
The Finance Department prepares quarterly financial reports to review the status of revenues and expenditures for the City’s General Fund and to monitor budgetary trends in other City funds. This report contains information on revenues, expenditures, and
estimated fund balance for the third quarter of Fiscal Year 2023-24. The FY 2023-24 third quarter financial report provides an analysis of the City’s financial activity from July 2023 through March 2024. An $8.9 million unrestricted General Fund operating surplus is projected for FY 2023-24 based on information currently available through the end of the third quarter.
RECOMMENDED ACTION: Review and discuss this report and provide any recommendations for consideration by the City Manager and City Council. DISCUSSION: Economic Overview
The unemployment rate in California has steadily increased; in February 2024, unemployment reached 5.3%, marking a 0.8 percentage-point increase year-over-year, and a 0.1 percentage-point increase from the previous month. Additionally, home sales continue to decline amid rising mortgage rates, which has resulted in higher home prices.
The current median price of a single-family residence in Newport Beach is $3,050,000,
which is the highest in Orange County. California’s sales tax receipts have also continued to decline from prior quarters due to a shift in consumer spending from taxable goods to nontaxable items. Sales from autos and transportation (the city’s largest source of sales tax revenue) are lower due to higher interest rates and tighter credit conditions. Luxury
59
Third Quarter Budget Update May 9, 2024 Page 2
vehicle sales in particular are significantly lower as manufacturers intensify incentives, leading to reduced transactional values and impacting tax receipts. This unfavorable trend negatively impacted the City’s tax receipts from the countywide use-tax pool, as funding
distribution among local agencies is based on proportional tax receipts. Although the City
is projecting a decline in sales tax revenue, the economic outlook for Newport Beach remains bright, which is primarily due to consistent and vigorous demand for real estate in Newport Beach that drives assessed property values higher in spite of a slowdown in home sales. For example, the city has never seen a decline in assessed values over the
last twenty years – even during the Great Recession, which is a significant contributor to
the city’s fiscal stability. General Fund Revenues General Fund revenues are projected to be $1.1 million lower compared to the previous
forecast as reported in the second quarter budget update. The decrease in revenue is
primarily due to a decrease in sales tax, transient occupancy tax, and service fees and charges, which is partially offset by an increase in projected investment earnings. The following table summarizes the changes in General Fund revenue projections compared to the previous forecast. Details highlighting the reasons for the material variances follow.
FY 2023-24 Projected General Fund Revenues
*Gross TOT revenues amount to approximately $38.2 million. VNB receives 18% (or approximately $6.9 million) of TOT on a gross basis, which brings projected TOT revenues to $31.3 million, net of amounts remitted to VNB.
A B C = B-A D = C/A
Revenues by Category PY Actual Q2 Projected
Actual
Q3 Projected
Actual Variance %
Variance
Property Taxes 138,358,730 143,556,945 143,556,945 - 0.0%
Sales Tax 46,552,459 43,684,691 43,030,586 (654,105) -1.5%
Transient Occupancy Tax, Net*30,201,648 31,986,150 31,300,000 (686,150) -2.1%
Other Taxes 10,079,710 9,922,292 9,932,047 9,755 0.1%
Service Fees & Charges 25,187,124 24,629,291 23,876,096 (753,195) -3.1%
Parking Revenue 7,420,314 7,900,099 7,670,705 (229,394) -2.9%
Licenses and Permits 5,676,619 5,746,027 5,439,452 (306,575) -5.3%
Property Income 7,530,393 9,565,682 9,526,183 (39,499) -0.4%
Fines & Penalties 3,838,752 3,799,784 3,813,111 13,327 0.4%
Intergovernmental 4,379,680 4,606,840 4,611,356 4,516 0.1%
Investment Earnings 1,690,399 1,750,000 2,700,000 950,000 54.3%
Misc Revenues 3,394,938 437,412 856,000 418,588 95.7%
Operating Transfers In 18,428,263 21,251,267 21,387,159 135,892 0.6%
Total Revenues 302,739,030 308,836,480 307,699,640 (1,136,840) -0.4%
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Third Quarter Budget Update May 9, 2024 Page 3
Property Tax - Property taxes are the City’s single largest General Fund revenue and represent approximately 50% of all General Fund revenues. As reported in the second quarter budget update, property tax revenue was projected to grow to $143.6 million in
FY 2023-24, which reflected $5.2 million in growth or 3.8% over the prior year. The current
forecast for property tax revenue is consistent with the amount previously forecasted. Sales Tax - The second largest funding source for the General Fund is sales tax revenue, making up more than 15% of General Fund revenues. The City’s sales tax base is largely
generated from four industry groups — autos and transportation; general consumer
goods; restaurants/hotels and the State & County Pools. As reported in the second quarter, sales tax revenue was projected at $43.7 million in FY 2023-24, which assumed a 6.2% decrease or $2.9 million over the prior year due in large part to a 14% projected decline in revenues from autos and transportation. The previously reported decrease in
autos and transportation as reflected in the second quarter update was due, in part, to
the temporary closure of a luxury automobile dealership while it is currently undergoing a construction renovation project. However, sales from autos and transportation are now projected to be down 17.1%, which brings total sales tax down by 7.6% over the prior year to $43.0 million, which is $0.7 million less than previously projected. The sales tax
forecast was lowered primarily in light of sales tax data recently received from the State
of California for the quarter ending December 31, 2023, which reflected a 21% decrease in sales on average from auto dealerships located in Newport Beach as manufacturers intensify incentives.
Transient Occupancy Tax – The third largest funding source for the General Fund is
TOT, making up more than 10% of General Fund revenues. Approximately three-fourths of TOT revenue is derived from hotels, with the balance coming from short-term lodging. While TOT receipts from short-term lodging more than doubled over the four-year period from Fiscal Year 2018-19 through Fiscal Year 2022-23, short-term lodging revenue is
projected to be 6% lower over the prior year, whereas 5% growth was reflected in the
original forecast for both short-term lodging and hotels. However, TOT revenue from hotels is projected to be 7% higher, due to robust demand and due to the opening of the Pendry in September 2023. Therefore, TOT revenue in total from both hotels and short-term lodging is projected to be 2.1% (or $0.7 million) lower than the previous forecast.
All Other Revenue – This category includes all other revenue sources other than the top three (property tax, sales tax and TOT). All other revenue is made up of other taxes, service fees and charges, parking revenue, licenses and permits, property income, fines and penalties, intergovernmental revenues, investment earnings, and miscellaneous
revenues. Material changes in projected amounts were made to service fees and charges
and investment earnings:
• Service Fees and Charges consists of plan check fees, recreation classes, emergency medical services fees and numerous other cost-of-service fees. It is
anticipated that fees will come in $0.8 million lower than the second quarter
estimates, primarily due to lower volumes of plan check fees in the Community Development department as well as decreased projections in police emergency
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Third Quarter Budget Update May 9, 2024 Page 4
response fees in the police department, due to a change in the California Highway Patrol (CHP) appeals process. These decreases are offset somewhat by increases to projections for recreation fee-based classes, as well as higher than budgeted
projections for recycling fees.
• Investment Earnings are projected to exceed previous projections by approximately $1.0 million due to elevated interest rates through March 31, 2024.
General Fund Expenditures
The FY 2023-24 General Fund expenditure budget totals $310 million. Spending trends in FY 2023-24 are generally consistent with prior years and do not indicate any cause for concern. Total expenditure savings of $8.3 million are projected at this time due largely to savings from vacancies. In contrast, the second quarter forecast reflected expenditures
savings of $4.7 million.
The following table summarizes the changes to the adopted expenditure budget for FY 2023-24, as well as expenditure savings by budget category. Details highlighting the reasons for the material variances follow.
FY 2023-24 Projected General Fund Expenditures
Significant expenditure budget variances are as follows:
• The revised salary and benefits budget totals $179.2 million. An analysis of salary and benefit activity for quarter three indicates that $7 million in personnel savings
have been realized as of March 31, 2024. These savings are due to vacancies as well as lower than budgeted costs for employee benefits.
A B C = A-B D = C/A
Expenditures by Category
Revised
Budget
Q3 Projected
Actual
Savings
(Overage) % Variance
Salary & Benefits $179,229,633 $172,249,929 $6,979,704 3.9%
Contract Services 33,892,830 32,580,855 1,311,975 3.9%
Grant Operating 1,655,027 1,655,027 - 0.0%
Utilities 4,365,888 4,256,444 109,444 2.5%
Supplies & Materials 4,781,299 4,762,312 18,987 0.4%
Maintenance & Repair 15,299,986 15,485,792 (185,806) -1.2%
Travel & Training 864,271 832,058 32,213 3.7%
General Expenses 3,960,620 3,957,685 2,934 0.1%
Internal Svc Charge 29,422,570 29,422,570 - 0.0%
Capital Expenditures 2,054,300 2,054,300 - 0.0%
Operating Transfers Out 34,489,271 $34,496,983 (7,712) 0.0%
Total Expenditures $310,015,695 $301,753,956 $8,261,740 2.7%
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Third Quarter Budget Update May 9, 2024 Page 5
• The contract services budget is expected to have savings of $1.3 million. Actual year end savings will likely be significantly higher, however, remaining
encumbrances are carried into the new fiscal year, and so savings are not shown
for anticipated carryovers.
• The maintenance and repair budgets are anticipated to exceed the budget due to increased maintenance needs at various city facilities, particularly fire stations.
These overages are expected to be more than offset by savings in other categories
within each department, and are not a cause for concern.
The Recreation and Senior Services budget for contract instructors for fee based classes is estimated to need an additional $210,000 for the remainder of the fiscal year. A budget amendment will be included when this report goes to the City Council
for consideration to appropriate these funds along with fully offsetting additional
revenues. These amounts are built into the projected revenues and expenses included in the tables in this report. An amendment is proposed to transfer $7,712 to the Measure M Competitive Fund,
which is detailed in the Other Funds section of this report.
General Fund Sources, Uses, and Projected Surplus The City continues to be in excellent financial health. Conservative budgeting and sound financial policies have resulted in a trend of General Fund operating surpluses and strong reserve levels for several years. The City is well positioned to continue delivering high
levels of services to the community while targeting surplus resources to key priorities each
year. It is currently projected that unrestricted General Fund resources will total $8.9 million at the end of FY 2023-24. As is the case each year, staff anticipate that additional budget savings will be realized, and the final year-end budget surplus will exceed this amount. Approximately $3.1 million is estimated to be needed to fully fund the
contingency reserve for next fiscal year, which reduces the surplus available for the City
Council to appropriate to $5.8 million. The following table illustrates the prior year sources and uses of funds, current year activity and the projected year-end results.
63
Third Quarter Budget Update May 9, 2024 Page 6
FY 2023-24 Projected General Fund Sources, Uses, and Budget Surplus
Other Funds Staff have evaluated the fiscal condition of the City’s other major operating funds (Tidelands and Water). An analysis of the budget performance for these funds indicates
that no budget adjustments are necessary and variances between budgeted and actual
amounts are within reason. Environmental Contributions Fund The FY 2015-16 Capital Improvement Program (CIP) budget approved the Arches Storm
Drain Dry Weather Diversion project (16X11). This project diverted dry weather flows from
two subwatersheds near Newport Boulevard at Coast Highway to the sanitary sewer system. Grant funding for the diversion project was received from the State Water Resources Control Board (SWRCB) under its Clean Beaches Initiative in the amount of $839,500. Grant funds were budgeted in the Environmental Contribution Fund, however,
not all expenses were booked to the Environmental Contribution Fund, which has caused
excess revenues that need to be moved to the General Fund and Tidelands Fund, where funds were expended. When this report is presented to the City Council for consideration, it will include a budget amendment to transfer $82,345.38 from Environmental
A B C=B-A D=C/A
Category
Revised
Budget
Q3
Projection Variance % Variance
Beginning Fund Balance Reserves 15,254,999$ 15,254,999$ -$ 0.0%
Operating Resources:
Operating Revenues 287,205,525 286,312,480 (893,044)-0.3%
Prior Year Resources Carried Forward 5,465,426 5,465,426 - 0.0%
Transfers In from Other Funds 21,251,266 21,387,159 135,893 0.6%
Repayment of Advances 1,250,000 1,250,000 - 0.0%
Total Operating Resources 315,172,217 314,415,066 (757,151)-0.2%
Operating Uses:
Operating Expenditures 275,526,424 267,256,973 (8,269,452)-3.0%
Transfers Out 34,489,271 34,496,983 7,712 0.0%
Total Operating Uses 310,015,695 301,753,956 (8,261,740)-2.7%
Net Operating Surplus 5,156,522 12,661,110 7,504,588 145.5%
Non-Operating Resources & Uses
Transfers Out (19,043,750)(19,043,750)- 0%
Transfer in ARPA Funds 5,226,643 5,226,643 - -
Transfer out to FFP (5,226,643)(5,226,643)- -
Total Non-Operating Resources & Uses (19,043,750)(19,043,750)- 0.0%
Net Change in Fund Balance (13,887,229)(6,382,640)7,504,588 -54.0%
Ending Fund Balance Reserves 1,367,770$ 8,872,359$ 7,504,588$ 548.7%
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Third Quarter Budget Update May 9, 2024 Page 7
Contributions Fund to Tidelands Fund and $135,892.25 from Environmental Contributions Fund to General Fund to reflect where the funds were expended.
Measure M Competitive
In Fiscal Year 2019-20, the City of Newport Beach received funding from the Orange County Transportation Authority (OCTA) for the Bayview Heights project (15X11) expensed in Fiscal Years 2018-19 and 2019-20. The project cost in the Measure M fund was $274,922, however only $267,210 was received from OCTA. Staff proposes that
$7,712 be transferred from the General Fund in order to balance the revenues and
expenses in the Measure M to reimburse the fund for previously incurred costs, which exceed grant revenues. Conclusion
Staff recommends that the Finance Committee review and discuss this report and provide
any recommendations for city manager and City Council consideration. Prepared and Submitted by:
/s/ Shelby Burguan
____________________________
Shelby Burguan
Acting Deputy Finance Director
65
ITEM NO. 6C1 THIRD QUARTER BUDGET
UPDATE
ATTACHMENT A
STAFF PRESENTATION – ADDITIONAL MATERIALS RECEIVED
66
FISCAL YEAR 2023-24
THIRD QUARTER FINANCIAL REPORT
May 9, 2024
Finance Committee
67
PROJECTED GENERAL FUND REVENUES
2
Revised Budget $ 313.7 million
Second Quarter Projection $ 308.8 million
Third Quarter Projection $ 307.7 million
•Third quarter revenues are projected to be $1.1 million lower compared to the second quarter primarily due to decreases in sales tax, transient occupancy tax, and service fees & charges, which is partially offset by an increase in projected investment earnings.
$0
$50
$100
$150
$200
$250
$300
$350
Revised Budget Q3 Projected
Mi
l
l
i
o
n
s
Property Tax Sales Tax TOT Other Operating Transfers In
68
PROPERTY TAX REVENUE
3
•Property tax revenue is the City’s largest source of revenue and is projected to
increase by $5.2 million (3.8%) over last fiscal year. The current forecast for
property tax revenue is consistent with the amount previously forecasted.
110.7
115.6
123.2
128.5
138.4
143.6
$100
$105
$110
$115
$120
$125
$130
$135
$140
$145
$150
2018-19Actual 2019-20Actual 2020-21Actual 2021-22Actual 2022-23Actual 2023-24Projected
Mi
l
l
i
o
n
s
+4.5%
+6.6%
+4.3%
+7.7%
+3.8%
69
SALES TAX REVENUE
4
•Sales tax revenue is the City’s second largest source of revenue and is projected to
be $0.7 million (1.5%) lower than the amount reported in the second quarter budget
update. However, the forecast is consistent with the amount reported to the Finance
Committee in March 2024.
38.5
36.2
39.0
46.2 46.6
43.0
$30
$32
$34
$36
$38
$40
$42
$44
$46
$48
2018-19Actual 2019-20Actual 2020-21Actual 2021-22Actual 2022-23Actual 2023-24Projected
Mi
l
l
i
o
n
s
-5.9%+7.5%
+18.5%+0.8%
-7.6%
70
SALES TAX REVENUE BY MAJOR INDUSTRY GROUPS
5
Autos &
Transportation
Restaurants
& Hotels
General Consumer
Goods
State & County
Pools
22/23 23/24 22/23 23/24 22/23 23/24 22/23 23/24
FY 2022/23 & FY 2023/24
$14.1
$9.5
$8.6
$7.5
$11.7
$10.1
$8.3
$6.8
$0
$2
$4
$6
$8
$10
$12
$14
Mi
l
l
i
o
n
s
71
SALES TAX REVENUE PER CAPITA
6 72
TRANSIENT OCCUPANCY TAX REVENUE
7
•Transient occupancy tax (TOT) revenue is the City’s third largest source of revenue and is projected to increase by $1.1 million (3.6%) over the prior year, which is $0.7 million lower than previously forecasted.
•Gross TOT revenues are projected at $38.2 million. VNB receives 18% (or approximately $6.9 million), which brings TOT revenues to $31.3 million, net of amounts remitted to VNB.
24.7
20.8
16.9
26.7
30.2 31.3
$10
$15
$20
$25
$30
$35
2018-19Actual 2019-20Actual 2020-21Actual 2021-22Actual 2022-23Actual 2023-24Projected
Mi
l
l
i
o
n
s
+13.2%
-15.6%
-19.0%
+58.0%
+3.6%
73
TRANSIENT OCCUPANCY TAX REVENUE GROWTH RATES
8
19/20 20/21 21/22 22/23 23/24
-20.8%
-29.4%
70.0%
9.8%7.2%14.4%
22.0%
30.6%23.5%
-5.8%
-40%
-20%
0%
20%
40%
60%
80%
74
OTHER GENERAL FUND REVENUES
9
•Other general fund revenues projected to exceed budget by $0.2 million:
•Service Fees and Charges are projected to come in $0.8 million lower than projected at the second quarter due to lower volumes of plan check fees.
•Investment earnings are projected to exceed budgeted amounts by $1 million.
75
GENERAL FUND EXPENDITURES
10
Budget $ 310.0 million
Projected Actual $ 301.7 million
Projected Savings $ 8.3 million
•Savings are primarily in salaries and benefits due to vacancies and lower than budgeted costs for employee benefits
•Proposed budget amendment for increase in revenues and expenditures for contract instructors fee-based classes, Measure M Competitive Fund transfer, transfer of revenues to General Fund and Tidelands from Environmental Contributions
76
GENERAL FUND SOURCES & USES
11
•Current projection of $8.9 million surplus, likely to grow in the fourth quarter
•$3.1 million needed to fund contingency reserve leaving $5.7 million uncommitted
77
RECOMMENDED ACTION
12
Staff recommends that the Finance Committee:
•Review and discuss this report
•Provide any recommendations for consideration by the City Manager and the City Council
78
13
Questions?
79
4/30/24
Scheduled Date Agenda Title Report Type Agenda Description
Tuesday, May 28, 2024 Joint City Council and Finance Committee Study Session Presentation Staff will present the FY 2024-25 proposed budget to the City Council and Finance Committee.
Thursday, May 30, 2024 Financial Statement Auditor's Communication with the Finance Committee acting as the City's Audit Committee Presentation
The City's external auditors, Davis Farr LLP, will provide an overview presentation regarding the audit process and request feedback from the Committee regarding any information that may assist them in their audit of the City's financial statements.
Committee Recommendation to Council for the FY 2024-25 Budget Discussion
Discussion of the Study Session earlier in the week and formulation of any
recommendations to be presented to the City Council at the budget public
hearing in June.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, September 12, 2024
Annual Review of Investment Performance Presentation The City's investment advisor, Chandler Asset Management, will report on the performance of the City's investment portfolio for the fiscal year ending June 30, 2024.
Annual Review of Investment Policy Presentation Staff will provide a presentation regarding any proposed changes to the City's Investment Policy prior to the Investment Policy being approved by the City Council.
Budget Amendments for Quarter Ending June 30, 2024 Receive and File Staff will report on the budget amendments from the prior quarter.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, October 10, 2024
Overview of Public Works Department Budget Presentation Staff will provide the Committee with a presentation covering the budget for the Public Works Department.
Budget Amendments for Quarter Ending September 30, 2024 Receive and File Staff will report on the budget amendments from the prior quarter.
Year-End Budget Results and Surplus Allocation Presentation Staff will provide a presentation regarding the year-end budget results for FY 2023-24 and recommendations for allocation of any year-end budget surplus.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, November 14, 2024
First Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected FY 2024-25 budget performance.
OPEB Actuarial Valuation Report Update Presentation Staff will provide the Committee with an overview of the Fiscal Year 2023-24 actuarial valuation report prepared by the City's actuary.
September 2024
October 2024
November 2024
August 2024
Committee Recess
Newport Beach Finance Committee Work Plan
June 2024
Committee Recess
Committee Recess
July 2024
1
80
4/30/24
Scheduled Date Agenda Title Report Type Agenda Description
Newport Beach Finance Committee Work Plan
CalPERS Update Presentation Staff will provide the Committee with an overview of the data from the latest actuarial reports from CalPERS as well as their impact on prior projections of the paydown of the City's unfunded pension liability.
Internal Audit Program Update Presentation Presentation of internal audit reports, findings, and recommendations from the
FY 2023-24 audit program.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
December 2024
Committee Recess
2
81