HomeMy WebLinkAboutFinance Committee Agenda - May 11, 2015
CITY OF NEWPORT BEACH
FINANCE COMMITTEE AGENDA
NEWPORT COAST CONFERENCE ROOM, BAY 2E
100 CIVIC CENTER DRIVE, NEWPORT BEACH, CA
MAY 11, 2015 6:00 PM
Finance Committee Members:
Keith Curry, Chair / Council Member
Diane Dixon, Mayor Pro Tem
Tony Petros, Council Member
Bill McCullough, Committee Member
Larry Tucker, Committee Member
John Warner, Committee Member
Jack Wu, Committee Member
Staff Members:
Dave Kiff, City Manager
Dan Matusiewicz, Finance Director / Treasurer
Steve Montano, Deputy Director, Finance
Marlene Burns, Administrative Specialist to the
Finance Director
I. CALL MEETING TO ORDER
II. ROLL CALL
III. PUBLIC COMMENTS
Public comments are invited on agenda and non-agenda items generally considered to be within the subject
matter jurisdiction of the Finance Committee. Speakers must limit comments to three (3) minutes. Before
speaking, we invite, but do not require, you to state your name for the record. The Finance Committee has the
discretion to extend or shorten the speakers' time limit on agenda or non-agenda items, provided the time limit
adjustment is applied equally to all speakers. As a courtesy, please turn cell phones off or set them in the silent
mode.
IV. APPROVAL OF MINUTES
Approval of Minutes
Summary:
Approval of the February 26, 2015, Finance Committee Minutes and March 24, 2015, Joint City
Council/Finance Committee Minutes.
Recommended Action:
Approve and file.
V. CURRENT BUSINESS
A. FISCAL SUSTAINABILITY PLAN
Summary:
Staff understands that Mayor Pro Tem Dixon wishes to augment the Fiscal Sustainability Plan to ensure
that infrastructure funding is made an explicit priority. Maintaining a high-quality natural and physical
environment by creating aesthetically pleasing places to live, work, recreate and visit shall remain a key
goal of the City.
Recommended Action:
Staff recommends that the Finance Committee direct staff to bring the attached changes for City Council
approval.
B. FACILITIES FINANCIAL PLANNING TOOL (FFPT)
Summary:
Staff has projected the timing, means of financing, and fiscal impacts associated with funding high-priority
projects recently approved in concept by the City Council during the recent Proposed FY 2015-16 CIP
budget presentation.
Recommended Action:
Staff recommends that the Committee directs staff to bring the Facilities Financial Plan for City Council
approval.
C. FY 2015-16 BUDGET PRESENTATION
Summary:
Staff will present an overview of the City Manager’s Fiscal Year 2015-16 Proposed Budget.
Recommended Action:
Staff recommends that the Committee directs staff to bring the Proposed FY 2015-16 Budget for City
Council Approval.
VI. ADJOURNMENT
This Finance Committee is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that the Finance Committee's agenda be
posted at least seventy-two (72) hours in advance of each regular meeting and that the public be allowed to comment on agenda items before the
Finance Committee and items not on the agenda but are within the subject matter jurisdiction of the Finance Committee. The Finance Committee 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) 644-3005 or cityclerk@newportbeachca.gov .
NEWPORT BEACH
ITEM TITLE: Approval of Minutes
ITEM SUMMARY: Summary:
Approval of the February 26, 2015, Finance Committee Minutes and March
24, 2015, Joint City Council/Finance Committee Minutes.
RECOMMENDED
ACTION:
Recommended Action:
Approve and file.
ATTACHMENTS:
Description
February 26, 2015, Finance Committee Minutes
March 24, 2015, Joint City Council/Finance Committee Minutes
CITY OF NEWPORT BEACH
CITY COUNCIL FINANCE COMMITTEE
FEBRUARY 26, 2015 MEETING MINUTES
I. CALL MEETING TO ORDER
The meeting was called to order at 6:00 p.m. in the City Council Chamber, 100 Civic Center
Drive, Newport Beach, California 92660.
II. ROLL CALL
PRESENT: Council Member Keith Curry (Chair); Mayor Pro Tem Diane Dixon;
Council Member Tony Petros; Committee Member Larry Tucker;
Committee Member John Warner; and Committee Member Jack Wu
ABSENT: Committee Member Bill McCullough
STAFF PRESENT: Finance Director, Dan Matusiewicz; Deputy Finance Director, Steve
Montano; Budget Manager, Susan Giangrande; Revenue Manager,
Evelyn Tseng; IT Manager Rob Houston; and Administrative Specialist
to the Finance Director Marlene Burns
MEMBERS
OF THE PUBLIC:
Jim Mosher and Carl Cassidy
OUTSIDE ENTITIES: Auditor Nitin Patel of White Nelson Diehl Evans LLP
III. PUBLIC COMMENTS
Jim Mosher suggested, and Carl Cassidy agreed, that the three new public members of the
committee may have been illegally appointed as the City did not publicly advertise the opportunity
to serve to the community as a whole. He referenced the Brown Act as it relates to the Finance
Committee.
IV. APPROVAL OF MINUTES
Approval of the November 17, 2014, Finance Committee meeting minutes.
Chair Curry opened public comments.
Chair Curry closed public comments.
The minutes of the Finance Committee meeting of November 17, 2014, were received and filed
by consensus with Committee Member McCullough, absent.
V. CURRENT BUSINESS
A. Fiscal Year 2013-14 Audit Results: In connection with the City’s financial statement audit and
the Single Audit for federally assisted grant programs, the auditors have certain obligations to
communicate the audit results with both City Council and management.
Finance Director Dan Matusiewicz clarified terms and indicated that the objective of the audit
was to understand internal control structures, report significant control deficiencies. Mr.
Finance Committee Meeting Minutes
February 26, 2015
Page 2 of 5
Matusiewicz reported that there were no reportable conditions or management letter
comments this year. With respect to a compliance audit of Federal grants (done through a
single audit), he reported that he failed to disclose an unusual occurrence in this year's audit
regarding and adjustment that resulted in a restatement of fund balance. He provided
elaboration.
Auditor Nitin Patel with White Nelson Diehl Evans LLP, presented a brief Power Point
presentation regarding the audit results including the scope of services, the auditor's opinion,
results of the single audit and communications with those in charge of governance. He
reported new standards for this year will include a requirement for the City to record its
pension liabilities on a Government Wide Statement of Net Position.
In reply to Chair Curry's question, Mr. Patel reported that this is a clean audit. He added
there were no other issues that the Finance Committee should be aware of, related to the
audit.
In response to Committee Member Warner's question, Finance Director Matusiewicz reported
the cost of the audit was approximately $40,000.
Chair Curry asked whether anyone had the need to ask questions of the auditor in the
absence of staff and there was no response.
Chair Curry opened public comments.
Jim Mosher spoke regarding the importance of discussing the substance of the report rather
than the audit letter, the single audit, the City's commitment to rotating auditors and noted
corrections to the staff report.
Carl Cassidy suggested the Finance Committee ask regarding the kind of analysis done, and
findings in terms of contingent liabilities and legal costs. He suggested that the committee
look at capitalization of cost that is or is not being charged to projects that are being
developed as the development of reserves for legal settlement costs.
Chair Curry stated that legal costs are speculative and that the City is insured. In terms of
capitalizing staff time, he reported that the audit must be done in accordance with the
Government Accounting Standards Board, which has detailed rules about how things must
be portrayed.
Finance Director Matusiewicz reported that staff records General Liabilities on a concurrent
basis, each fiscal year.
Chair Curry closed public comments.
Mayor Pro Tem Dixon moved, and Chair Curry seconded to receive and file the Fiscal Year
2013-14 Audit Results. The Committee voted 6 ayes and 0 noes to receive and file the Fiscal
Year 2013-14 Audit Results with Committee Member McCullough, absent.
B. ERP Update: ERP (Enterprise Resource Planning) software is a business management
software system that integrates all of the City’s core functional requirements for financials,
human capital management, citizen services, and revenues. The ERP implementation is
scheduled to take between 25 and 30 months and will consist of four major phases. The City
is currently in Phase 1 (Financials) and began the implementation of Phase 2 (HR/Payroll) in
January 2015. The software provider of the City’s ERP is Tyler Technologies Inc. and this
project is titled “eSAIL,” short for ERP System Administration and Implementation Lineup.
Finance Committee Meeting Minutes
February 26, 2015
Page 3 of 5
Deputy Finance Director Steve Montano provided a brief Power Point presentation regarding
an update on the City's ERP implementation including major benefits of the system, phases,
and work cycle within each phase, modules, validation, and training.
In reply to Committee Member Tucker, Deputy Finance Director Montano reported that
managers oversee the system implementation to make sure that existing internal controls are
in place in the new system. The same processes that are currently in place will continue and
a regular review of the system will take place.
Finance Director Matusiewicz added that the City invested in a business process analysis
and that a review of the system will be an ongoing process. He added that the City has
outside assistance in implementing best practices.
Committee Member Tucker asked if there will be an opportunity to lower the head count and
Deputy Finance Director Montano reported there will be a number of efficiencies but it is
difficult to determine how these will play out. He commented on the number of accounts in
the City's Chart of Accounts.
Council Member Petros inquired whether the City will eventually move to a programmatic
budget and Deputy Finance Director Montano responded that it will have such capability.
Council Member Petros expressed interest in discussing the budget in discrete processes
and programs so that the public can better understand it and it will be more accessible to the
public. He would like to see measurable efficiencies to the public and a measurable
reduction in overall costs.
In response to Mayor Pro Tem Dixon's questions, Deputy Finance Director Montano provided
information regarding the total project budget and reported that it is tracking within budget.
He addressed savings that could be applied toward other areas of the project budget if
necessary.
Mayor Pro Tem Dixon commented on how the new system would better facilitate the
invoicing process from the City’s vendors. Budget Manager Susan Giangrande stated that a
small percentage of vendors provide electronic invoicing and addressed outreach to vendors
to help them know that the City is changing to electronic invoicing. The vendor portal for
them to access the City's data will open in June.
Deputy Finance Director Montano addressed the features of the software that will allow public
access.
Mayor Pro Tem Dixon stressed the importance the public accessing the City's public financial
information in a way that is easy to understand.
In reply to Committee Member Wu's questions, Deputy Finance Director Montano reported
that the system is turn-key, that this vendor has a big and growing presence in California, and
addressed maintenance and upgrade costs as well as the annual maintenance fee. He
added that it is expected that IT costs will decrease as there will be less support in
customization needed in order to make the system work. There will be a parallel in the
operation of both the legacy and new finance systems for a short time to ensure validity.
Committee Warner asked regarding requiring electronic invoicing and Budget Manager
Susan Giangrande stated that is still a ways off.
Chair Curry commented on the merits of program and performance budgeting.
Chair Curry opened public comments.
Finance Committee Meeting Minutes
February 26, 2015
Page 4 of 5
Jim Mosher spoke in support of increased visibility of the budget and transparency.
Carl Cassidy commented on other cities using the system and commended staff and the City
for implementing it.
Chair Curry closed public comments.
Committee Member Wu moved, and Committee Member Tucker seconded to receive and file
the report. The Committee voted 6 ayes and 0 noes to receive and file the report with
Committee Member McCullough, absent.
C. Finance Committee 2015 Work Plan: Staff will present and seek approval of the tentative
Finance Committee agenda topics scheduled for the year. The work plan represents the
planned topics of discussion; however, is subject to change based on the availability of
information and the need to schedule other topics as they arise.
Chair Curry announced a joint Finance Committee and City Council meeting on March 10,
2015, with a study session beginning at 3:30 p.m.
Finance Director Matusiewicz reported there will be a significant time commitment on the part
of Finance staff in preparation of the ERP going live. He noted that the Finance Committee
2015 Work Plan is an aggressive plan and provided details of same. He recommended
going dark in July and August so that staff can focus on the ERP launch and stated that no
meeting will be held in October.
In response to Committee Member Tucker's question, Finance Director Matusiewicz reported
that the work plan comports with the Finance Committee's duties. Although the Finance
Committee is to meet monthly, this is a unique year with implementation of the ERP.
Chair Curry added that the committee has also met "on call" as issues have arisen, over the
past several years. He noted that members have an opportunity to hear the information as it
is presented, ask questions, and provide comments to Council.
Council Member Petros suggested returning to a typical meeting room, after March and April,
where it will be more intimate and informal.
Mayor Pro Tem Dixon agreed with Council Member Petros's comments.
Chair Curry opened public comments.
Jim Mosher commented on the swearing in of the new committee members. He reported
there is a requirement in the resolution for the Finance Committee to make a written
recommendation to Council, as a whole, regarding the budget. He commented on the
Finance Committee's role and spoke regarding increasing the public's awareness of the City's
financial situation.
Carl Cassidy commented positively about meeting in a more collegiate setting, asked that a
memorandum be generated containing an investment review and moving important items
forward.
Chair Curry closed public comments.
Committee Member Warner moved, and Committee Member Wu seconded to receive and
file the report. The Committee voted 6 ayes and 0 noes to receive and file the report with
Committee Member McCullough, absent.
Finance Committee Meeting Minutes
February 26, 2015
Page 5 of 5
VI. ADJOURNMENT
The Finance Committee adjourned at 7:13 p.m.
The agenda for the Regular Meeting was posted on February 23, 2015, at 2:54 p.m., in the binder and on
the City Hall Electronic Board located in the entrance of the Council Chambers at 100 Civic Center Drive.
Attest:
___________________________________ _____________________
Keith Curry, Chair Date
Finance Committee Chair
CITY OF NEWPORT BEACH
City Council Minutes Special Meeting/Joint Meeting of the City Council and Finance Committee March 24, 2015
I. ROLL CALL - 3:30 p.m. Present: Finance Committee Member Dixon, Finance Committee Member Tucker, Finance Committee Member Warner, Finance Committee Chair Curry Present: Council Member Peotter, Council Member Curry, Council Member Duffield, Council Member Muldoon, Mayor Pro Tem Dixon, Mayor Selich Absent: Council Member/Finance Committee Member Petros (excused), Finance Committee Member McCullough (excused), Finance Committee Member Wu (excused) II. CURRENT BUSINESS 1. “Early Look” at the Capital Improvement Program (CIP) (Part 2) [100-2015] Public Works Director Webb provided a PowerPoint presentation, addressing the background and funding. In reply to Mayor Selich's questions, Public Works Director Webb explained the proposed funding amount for Neighborhood Enhancement District A, noting that nothing has been programmed into the budget yet. He addressed suggestions to possibly reduce funding or defer project costs, and recommendations for the Balboa Island Seawall Rehabilitation and the Corona del Mar Fire Station and Branch Library Replacement. Fire Chief Poster reported conducting research on the fire station location placement and indicated that other sites were considered, but they would directly impact the Fire Department's response times in the area. He commented on the long-range solution for the service hole in Newport Coast and believed that there is not another Fire Station included in the Facilities Financing Plan (FFP). Public Works Director Webb discussed suggestions to possibly reduce funding or defer project costs, and recommendations for the Lido Fire Station Replacement. City Manager Kiff noted that the proposed move for the Lido Fire Station will be near its current location. Chief Poster addressed the usage and demand for the Lido Fire Station, and noted that it is the busiest fire station in the City. Public Works Director Webb further discussed suggestions to possibly reduce funding or defer project costs, and recommendations for the Superior Avenue and Pacific Coast Highway Pedestrian/Cyclist Over-Crossings. Finance Committee Member Tucker asked whether staff would still consider a bridge over Superior Avenue if there were a parking lot at Sunset Ridge Park. Public Works Director Webb indicated that it would play into a long-term route and increases safety in the area. Public Works Director Webb addressed the Balboa Village Citizens Advisory Panel Improvements and the Big Canyon Water Quality Improvements and Habitat Restoration Project, reporting that there is approximately $3 million programmed in this year's budget for the Big Canyon project, but there is a shortfall of approximately $10 million. He added that there are a lot of habitat issues that need to be dealt with. He noted that the boundaries shown in the presentation represent the Big Canyon Watershed.
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City of Newport Beach Special Meeting/Joint Meeting of the City Council and Finance Committee
March 24, 2015 Council Member Curry reported that he lives within the watershed, but not near the project area. City Attorney Harp advised that he does not have a conflict of interest. Public Works Director Webb explained that the City received a grant from the Orange County Transportation Authority (OCTA) to address roadway runoff, as well as a settlement that must be used in the area, and an estimate from the Irvine Ranch Conservancy (IRC) to do additional habitat restoration. He provided details regarding the $1.4 million received in the settlement. City Manager Kiff noted that the $10 million represents the end product, including all restoration and potential trail improvements. He stated that details will be presented to Council in the future. He also added that the habitat restoration is always optional and suggested that it be prioritized only when funding becomes available. He emphasized that the water quality portion of the project is mandated and that the $3 million covers most of the water quality component. In response to Mayor Pro Tem Dixon’s question, Public Works Director Webb confirmed that grant funding has been received for the water quality portion of the project and clarified that the remaining funds would be used to conduct downstream habitat restoration. He noted that the City could have other organizations do the habitat restoration part of the project. Council Member Duffield requested and received confirmation from Public Works Director Webb that this area is in a 100-year flood plain and noted that natural habitat will grow back, but there are currently a lot of invasive plants that need to be removed. Public Works Director Webb addressed the Corona del Mar Entryway Improvements Project and confirmed that the project would impact parking on MacArthur Boulevard. He noted that the project would remove eight parking spaces on Pacific Coast Highway, but will replace them elsewhere. Regarding the Semeniuk Slough Dredging project, Public Works Director Webb addressed the dredging technique and possible locations to move the dredged material. Regarding the West Coast Highway Landscape Rehabilitation Project, Deputy Public Works Director Vukojevic provided a status update on the design plans, noting that the project may be ready to go out to bid this summer. Public Works Director Webb addressed the West Newport Community Center. Recreation and Senior Services Director Detweiler addressed programming and amenities for the new center. Recreation and Senior Services Director Detweiler also discussed challenges relative to permanently eliminating existing tennis courts and converting them to pickleball courts and discussed staff’s considerations. She confirmed that staff is looking into installing some on the west side of the City. Finance Committee Member Warner noted that the Big Canyon Country Club has courts that can be used for both tennis and pickleball. In response to Finance Committee Member Warner’s questions, Recreation and Senior Services Director Detweiler discussed the gymnasium near the West Newport Community Center. Finance Committee Member Warner suggested building two gymnasiums rather than a swimming pool. Discussion ensued regarding possibilities for the existing West Newport Community Center and options for reducing the scope of the project. Recreation and Senior Services Director Detweiler noted that pools are very important to the community.
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City of Newport Beach Special Meeting/Joint Meeting of the City Council and Finance Committee
March 24, 2015 Discussion continued regarding the lease agreement with the private school, options to sell, the sale proceeds going towards construction costs, whether there is an estimate of what the property is worth, and trying to get a better utilization of the Utilities Yard in order to keep surface parking. In response to Council Member Duffield's question, City Manager Kiff stated that, if everything is removed from the Utilities Yard site, except for the water treatment and reservoir, housing could be developed and leased at that location. However, staff would need to determine if there are any deed restrictions on the property. Finance Committee Member Warner asked regarding an estimate of the additional overhead to operate the facility. City Manager Kiff reported that the City currently is in a net profit position in terms of the lease to the private school. Recreation and Senior Services Director Detweiler added that many of the City facilities have a 40-50% cost recovery. Finance Committee Member Tucker believed that it would be a good idea to design the facility so that it can be added to later and can be easily expanded. Council Member Curry noted that West Newport needs good facilities and stated that it needs to be done correctly, usable, and something that the City can be proud of. Council Member Peotter asked regarding only allowing Newport Beach residents use of the community center. Recreation and Senior Services Director Detweiler indicated that doing so would be a Council decision, but that no other City facility has that restriction. She noted that the City normally charges a higher non-resident rate for City programs. Mayor Selich noted that the City of San Marino tried to have resident-only parks, but the attempt backfired. City Manager Kiff suggested that the City of Costa Mesa might be interested in contributing to the funding of the proposed community site if they could use it. Mayor Pro Tem Dixon concurred that a mutual benefit agreement with Costa Mesa might be possible. Public Works Director Webb reported on the project’s next steps and noted that it still needs to be submitted to the Coastal Commission for approval. Regarding the Balboa Boulevard Landscape Improvements Project, Mayor Pro Tem Dixon pointed out the importance of this project, but supports deferring it for two or three years. Public Works Director Webb addressed the Balboa Village Fine Arts Center and expressed concerns that the whole City is not in support of the project. Council Member Muldoon asked regarding the fair market value of the property and City Manager Kiff stated that staff has not been instructed to conduct an appraisal. Discussion followed regarding the price paid for the property and its zoning. Mayor Pro Tem Dixon stated that she supports a continued community use of the property, but also a free market in helping to make the decision about selling the property. She expressed support for putting the property on the market, but to creatively analyze its sale by assigning points if a buyer proposes community-supported uses. In response to Council Member Duffield's questions, Public Works Director Webb reported that the property is approximately 6,000 square feet and backs up to a small alley with a hotel on the other side of the alley.
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City of Newport Beach Special Meeting/Joint Meeting of the City Council and Finance Committee
March 24, 2015 Public Works Director Webb addressed the Corona del Mar Traffic By-Pass Project, consolidation of City Corporate Yards, and development of a future dog park. Regarding a future dog park, discussion ensued regarding the cost, the reason for the high cost, other potential locations, and parking. Mayor Selich believed that $1.6 million for a dog park is a misnomer since the project involves other amenities. He added that the cost just for the dog park should be calculated. Regarding the Lower Castaways Park Project, Council Member Muldoon asked whether the concept includes a paved parking lot and stated that he would like to see something that conforms more to the natural environment, such as gravel or dirt. Council Member Duffield commented on the property being a Marine Protected Area (MPA), but suggested allowing small crafts to be launched and retrieved under the bridge. He suggested looking at inexpensive ways to improve the property so it can be used sooner than later. Public Works Director Webb addressed the Newport Pier Building Rehabilitation and commented on a preliminary Request for Proposal (RFP). Mayor Pro Tem Dixon noted that the Pier needs rehabilitation, the highest priority is to keep the area clean, and added that she would like to see something there that would produce revenue for the City. In response to Council Member Peotter's questions, Public Works Director Webb commented on the possibility of having a tenant build a shell, do tenant improvements, and having a revenue-sharing lease rather than a fixed lease. Additionally, he provided an estimate for repairing the Pier. Mayor Selich reported that a Coastal Development Permit (CDP) would be needed to demolish the building and suggested going before the Coastal Commission with a plan that includes both the demolishing of the existing building and the building of the new one. Brief discussion followed regarding proposals received so far and ensuring that the pilings and structure are stable. Public Works Director Webb addressed Newport Boulevard Landscaping. Mayor Pro Tem Dixon suggested pushing the project several more years. City Manager Kiff presented a list of projects that will be moved forward but for which grants will be sought, projects that will be done as soon as funds become available, and projects for which staff recommends no further pursuit. In response to Mayor Pro Tem Dixon's question, City Manager Kiff noted that, with the elimination of the Fine Arts Center, the City may pursue some projects in the FFP earlier. He believed that the biggest benefit would be, if the property is sold, the money could be used towards one of the projects that has yet to be funded. Mike Johnson expressed concerns regarding accidents and injuries occurring at the intersection of Superior Avenue and Coast Highway, and commented regarding prioritizing parking for Sunset Ridge Park. Ralph Rodheim stated that one pool at the West Newport Community Center is not adequate and that pools in the City are used early in the morning and late at night. Regarding Balboa Village, he stated that Council has an opportunity to take the lead and suggested that Council
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City of Newport Beach Special Meeting/Joint Meeting of the City Council and Finance Committee
March 24, 2015 consider parking, a shuttle system, and the fate of the Balboa Theater. He suggested keeping some of the money in Balboa Village. Additionally, he recommended that the City consider installing a plaque or some sort of recognition for all the residents who supported the Balboa Theater. Bernie Svalstad, Corona del Mar BID, provided a background regarding the Corona del Mar Entryway Project. He asked that the City come up with $400,000 for the project, and believed it was unfair to ask the Corona del Mar BID to contribute 50%. He urged the City to complete the project this year. W. R. Dildine believed that the Balboa Village area is going downhill, even though businesses are trying to improve the area. He expressed support for the City selling the Theater. Kennie Jo Rizzo addressed the need for better parking in the West Newport area and commented positively on the plans for a new Community Center. She suggested building two pools and getting help with fundraising from people and organizations that would use the pools. She pointed out that this community is built around water. She expressed hope that the City will consider selling the Theater property. Jim Mosher believed that it would have been more helpful to provide a report about how the budget approval process works. He commented on the role of the Finance Committee and the requirement for them to provide a written recommendation relative to the budget. Additionally, he stated that he was unable to find the Gas Tax Fund in the document and wondered about the "Proposed Amount" column. He discussed the Semeniuk Slough and suggested collecting data to inform residents regarding decisions about Public Works projects. Gina Lesley discussed the Newport Shores Swim Team and expressed the need for a City pool. She addressed the Semeniuk Slough, noting that it was promised more than 10 years ago, that Hoag Hospital had provided $400,000 for the project, and that the U.S. Army Corps of Engineers already did their part on the project. She indicated that she is upset that the City may not do it. Additionally, she addressed the West Newport Landscaping Project and pointed out that the area is an entry to the City. Council Member Curry commented on the need to give direction. City Manager Kiff noted that the matter will be presented to Council during a regular evening session. Council Member Peotter reported that the next Finance Committee meeting is scheduled for April 16, 2015, and suggested having them meet on April 2, 2015 to review the FFP only and develop recommendations to present to Council at the April 14, 2015, City Council meeting. III. PUBLIC COMMENTS ON NON-AGENDA ITEMS - None IV. ADJOURNMENT – 5:20 p.m.
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City of Newport Beach Special Meeting/Joint Meeting of the City Council and Finance Committee
March 24, 2015 The agenda for the Adjourned Special Meeting (Joint Meeting with the Finance Committee) was posted on the City's website and on the City Hall Electronic Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive on March 19, 2015, at 4:00 p.m. ___________________________________________ Recording Secretary ___________________________________________ Mayor _____________________________________ City Clerk
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NEWPORT BEACH
ITEM TITLE: FISCAL SUSTAINABILITY PLAN
ITEM SUMMARY: Summary:
Staff understands that Mayor Pro Tem Dixon wishes to augment the Fiscal
Sustainability Plan to ensure that infrastructure funding is made an explicit
priority. Maintaining a high-quality natural and physical environment by
creating aesthetically pleasing places to live, work, recreate and visit shall
remain a key goal of the City.
RECOMMENDED
ACTION:
Recommended Action:
Staff recommends that the Finance Committee direct staff to bring the
attached changes for City Council approval.
ATTACHMENTS:
Description
Fiscal Sustainability Plan - Staff Report
Fiscal Sustainability Plan
CITY OF NEWPORT BEACH
FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 5A
May 11, 2015
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: FINANCE DEPARTMENT
Dan Matusiewicz, Finance Director
(949) 644-3123 or DanM@NewportBeachCA.gov
SUBJECT: Fiscal Sustainability Plan
DISCUSSION:
The City of Newport Beach has remained a fiscally responsible municipality since its
inception in 1906, carefully balancing its budget year-to-year despite changes in the
regional and national economy. The Great Recession that began in December 2007 and
ended in June 2009 impacted the City’s General Fund operations in a significant manner,
causing reductions in sales tax and hotel bed tax revenue, among other sources of
revenue.
On January 12, 2010, the City Council adopted fifteen (15) elements of a Fiscal
Sustainability Plan and directed that the Plan be the policy of the City Council going
forward into 2010 and beyond. The Plan has not been significantly changed since it was
adopted over five years ago. While the City and the region have returned to a period of
economic growth, the City is cognizant of its responsibility to continuously improve the
organization and its services to maximize efficiency and cost-effectiveness.
RECOMMENDATIONS:
Staff understands that Mayor Pro Tem Dixon wishes to augment the Fiscal Sustainability
Plan to ensure that infrastructure funding is made an explicit priority. Maintaining a high-
quality natural and physical environment by creating aesthetically pleasing places to live,
work, recreate and visit shall remain a key goal of the City. Staff recommends that the
Finance Committee direct staff to bring the attached changes for City Council approval.
Submitted and Prepared by:
/s/ Steve Montano
Steve Montano
Deputy Finance Director
Attachment: Fiscal Sustainability Plan
NEWPORT BEACH
ITEM TITLE: FACILITIES FINANCIAL PLANNING TOOL (FFPT)
ITEM SUMMARY: Summary:
Staff has projected the timing, means of financing, and fiscal impacts
associated with funding high-priority projects recently approved in concept by
the City Council during the recent Proposed FY 2015-16 CIP budget
presentation.
RECOMMENDED
ACTION:
Recommended Action:
Staff recommends that the Committee directs staff to bring the Facilities
Financial Plan for City Council approval.
ATTACHMENTS:
Description
Facilities Financial Planning Tool - Staff Report
FFP-Capital Planning Tool 2015
CITY OF NEWPORT BEACH
FINANCE COMMITTEE
STAFF REPORT
Agenda Item No. 5B
May 11, 2015
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department
Dan Matusiewicz, Finance Director
(949) 644-3123, danm@newportbeachca.gov
SUBJECT: Facilities Financial Planning Tool (FFPT)
DISCUSSION:
City Council Policy F-28, Facilities Financing Plan (FFP), requires that staff prepare an
update to the long-term facilities replacement plan annually. Each year, as part of the
budget process, staff shall prepare an update of the Facilities Financial Planning Tool for
review, modification, and approval by the City Council.
Staff has projected the timing, means of financing, and fiscal impacts associated with
funding high-priority projects recently approved in concept by the City Council during the
recent FY 2015-16 CIP budget presentation.
Staff recommends that the Committee directs staff to bring the attached Facilities
Financial Plan for City Council approval.
Prepared and submitted by:
/s/Dan Matusiewicz
Dan Matusiewicz
Finance Director
Attachment: FFP Tool
5/6/2015
Start Start
Est. Project Date Date
Priority Projects Cost (Design)(Construction)
Marina Park 39,500,000 2011 2014
Bonita Creek - Artificial Turf 2,000,000 2014 2015
FS 2 - Lido 6,750,000 2015 2016
FS 5 - CDM & Library 6,757,500 2015 2016
FS 6 - Mariners (apparatus bay only)1,200,000 2015 2016
Sunset View Park w/Ped Bridges & Dog Park 10,450,000 2016 2018
West Newport Comm Ctr (incl pool)25,000,000 2015 2018
Utilities/Corporate Yard Merge- Phase I 4,000,000 2018 2020
FS 1 - Peninsula & Library 6,757,500 2017 2020
FS 3 - Santa Barbara 4,387,500 2022 2025
Police Station at Corporate Yard 48,000,000 2022 2025
1 2 ********
Total 154,802,500
2016 2018
Marina Park Completion Sunset View Park w/Ped Bridges & Dog Park
Bonita Creek - Artificial Turf West Newport Comm Ctr (incl pool)
FS 2 - Lido
FS 5 - CDM & Library
FS 6 - Mariners (apparatus bay only)
2020 2025
Utilities/Corporate Yard Merge- Phase I FS 3 - Santa Barbara
FS 1 - Peninsula & Library Police Station at Corporate Yard
3 4 FS 3 - Santa Barbara
Key Metric Target Max
Debt Svc as % of Revenues NA < 8.0%
Minimum FFP Reserve Balance (000's)8,194$ NA
Key Statistics Min Max Avg
GF Contribution to FFP (000's)8,000 14,080 11,382
Debt Service (000's)7,443 8,194 7,706
GF Contributions to FFP as % Rev 4.43%5.0%4.9%
Debt Svc as % of Revenues 2.64%4.6%3.4%
5 6 FFP Balance (000's)9,128$ 44,654$ 25,335$
Project Balance (000's)0$ 3,917$ 484$
Key Statistics Min Max Avg
GF Contribution to FFP (000's)8,000 20,691 14,437
Debt Service (000's)- 8,194 6,804
GF Contributions to FFP as % Rev 4.43%5.0%5.0%
Debt Svc as % of Revenues 0.00%4.6%2.6%
FFP Reserve Balance (000's)9,128$ 225,583$ 68,093$
Project Balance (000's)0$ 4,543$ 652$
7 8
Remaining Debt Capacity (Dbt. Svc < or = 8% of GF Rev):95,394,437$
30 Year
Council Debt Mgmt Policy (F-6)
15 Year
Scenario Highlights
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
GF Contribution to FFP
as a Percent of GF Revenue
GF Contribution % Budget Debt Service - as % of Revenues
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
GF Contribution to FFP Compared
to Debt Service
GF Contribution to FFP Debt Service
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
FFP Reserve Balance
-
10,000,000
20,000,000
30,000,000
40,000,000
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
Project Funding
Cash Funded Construction Debt Funded Construction
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
Project Expenditures
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
Debt Service Capacity
Max Debt Service - 8% of Revenues Debt Service
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
20
1
5
20
1
7
20
1
9
20
2
1
20
2
3
20
2
5
20
2
7
20
2
9
20
3
1
20
3
3
20
3
5
20
3
7
20
3
9
20
4
1
20
4
3
20
4
5
Debt Service as % of GF Revenues
Debt Service - as % of Revenues
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
2015 2016 2017 2018 2019
Annual GF Contributions
Periodic GF or One-time Transfers
Private Contributions
Interest Earnings
Cash Contributions
Project Total Interest
Debt Service Description Year Proceeds COI Issue Rate Term Maturity
2010 Civic Center COPs 2011 123,000,000 1,289,442 124,289,442 4.4%30 2041
Traunch 2 0 - - 5.0%30 30
Traunch 3 0 - - - 5.0%30 30
1 of 7
5/6/15
FFP PROJECT PLANNING
FY FY FV Net
YR Current Repl Est $Current Age:Useful Years to Cost Est.Project Design Start Const Start Cost Est @ Private Proposed
ProjNo Function Project Built Sq Ft Sq Ft /Sq Ft 2016 Life Start Date Estimate Year Year 2.5% Growth Contribtions Cost
1 Gen Gov Civic Center 2013 100,000 100,000 675 3 60 57 Jun-13 67,500,000 2070 2073 - -
4 Gen Gov Council Chambers 2013 29,000 29,000 675 3 60 57 Jun-13 19,575,000 2070 2073 - -
41 Gen Gov Civic Center Parking Structure 2013 450 450 16,000 3 60 57 Jun-13 7,200,000 2070 2073 - -
2 Police Police Station at Corporate Yard 1973 48,000 60,000 800 43 50 9 N/A 48,000,000 2022 2025 59,945,423 59,945,423
39 Municipal Operations Utilities/Corporate Yard Merge- Phase I 138,185 **50 4 May-12 4,000,000 2018 2020 4,415,252 4,415,252
40 Municipal Operations Big Canyon Aux. Yard 2015 9,000 9,000 550 1 50 51 May-12 1,400,000 2062 2065 -
Fire FS 1 - Land Purchase **1,500,000 2017 2017 1,500,000 1,500,000
3 Fire FS 1 - Peninsula & Library 1962 3,423 8,500 795 54 50 4 Mar-14 6,757,500 2017 2020 7,459,016 7,459,016
5 Fire FS 2 - Lido 1952 9,953 10,000 675 64 50 0 Mar-14 6,750,000 2015 2016 6,750,000 6,750,000
6 Fire FS 3 - Santa Barbara 1971 13,605 6,500 675 45 50 9 Mar-14 4,387,500 2022 2025 5,479,386 5,479,386
7 Fire FS 4 - Balboa Island 1994 4,597 4,400 675 22 50 28 Mar-14 2,970,000 2041 2044 5,929,590 5,929,590
8 Fire FS 5 - CDM & Library 1950 2,495 8,500 795 66 50 0 Mar-14 6,757,500 2015 2016 6,757,500 6,757,500
9 Fire FS 6 - Mariners (apparatus bay only)1957 2,926 1,500 675 59 50 0 Mar-14 1,200,000 2015 2016 1,200,000 1,200,000
10 Fire FS 7 - SAH 2007 11,027 6,500 675 9 50 41 Mar-14 4,387,500 2054 2057 12,075,236 12,075,236
11 Fire FS 8 - Npt. Coast 1995 11,027 11,027 675 21 50 29 Mar-14 7,443,225 2042 2045 15,231,871 15,231,871
12 Fire Lifeguard HQ Replacement 6,167 7,725 675 **25 48 Mar-14 5,214,375 2061 2064 17,058,773 17,058,773
13 Fire Newport Jr. Guard Building (1)0 **50 5 Mar-14 - 2018 2021 - - -
15 Library Library-Balboa (See FS 1 Above)1962 5,566 2,500 550 54 50 46 Jan-12 - 2059 2062 - -
16 Library Library-CDM (See FS 5 Above)1958 4,323 2,500 550 58 50 46 Jan-12 - 2059 2062 - -
17 Library Library-Mariners 2006 15,305 15,305 550 10 50 40 Jan-12 6,845,355 2053 2056 18,380,215 18,380,215
18 Library Library-Central 1997 50,930 65,000 550 19 50 36 Jan-12 35,750,000 2049 2052 86,963,138 86,963,138
19 Rec Facility Marina Park Girl Scout House( Las Arenas Park)1956 4,200 4,000 550 60 50 0 Jan-12 2,200,000 2011 2016 - - -
20 Rec Facility Marina Park 2015 22,000 550 1 50 -2 Jan-12 39,500,000 2011 2014 37,500,000 37,500,000
21 Rec Facility Newport Coast Ctr 2007 16,865 16,865 550 9 50 41 Jan-12 9,275,750 2054 2057 25,528,630 25,528,630
22 Rec Facility Newport Thearter Arts Center 1973 8,042 12,000 550 43 50 14 Jan-12 6,600,000 2027 2030 9,325,627 4,662,814 4,662,814
23 Rec Facility OASIS Sr. Ctr 2010 36,467 43,232 550 6 60 44 Jan-12 23,777,600 2057 2060 70,472,243 70,472,243
24 Rec Facility Sunset Ridge (2)2014 **NA 2 ∞-2 Jan-12 7,688,000 2014 2014 8,500,000 8,500,000
25 Rec Facility Sunset View Park w/Ped Bridges & Dog Park 0 **NA **∞2 Mar-14 10,450,000 2016 2018 10,979,031 5,000,000 5,979,031
26 Rec Facility West Newport Comm Ctr (incl pool)2017 11,980 25,000 550 -1 50 2 Jan-12 25,000,000 2015 2018 26,265,625 26,265,625
27 Rec Facility Pedestrian Bridge at Superior/PCH 2017 -1 2 Mar-14 2015 2018 - -
29 Rec Facility Bonita Creek - Artificial Turf 2015 160,000 NA 12 1 15 -1 Jan-12 2,000,000 2014 2015 1,951,220 1,951,220
31 Rec Facility Lower Castaways - Phase II(3) 2019 **NA -3 ∞-2016 Mar-14 - - -
33 Rec Facility Community Youth Center (CYC) - Grant Howald 1988 5,146 5,146 550 28 50 16 Jan-12 2,830,300 2029 2032 4,201,596 4,201,596
34 Rec Facility Caroll Beek Center 1980 1,555 1,555 550 36 50 17 Jan-12 855,250 2030 2033 1,301,364 1,301,364
35 Rec Facility Bonita Creek Community Ctr.1988 2,876 2,876 550 28 50 22 Jan-12 1,581,800 2035 2038 2,723,182 2,723,182
36 Rec Facility Cliff Drive Community Room 1960 750 750 550 56 50 20 Jan-12 412,500 2033 2036 675,929 675,929
37 Rec Facility Girls & Boys Club (East Bluff Park)1965 11,800 11,800 550 51 50 4 Jan-12 6,490,000 2017 2020 7,163,746 7,163,746 -
38 Rec Facility Lawn Bowling Facility (San Joaquin Hills Park)1974 2,750 2,750 550 42 50 23 Mar-14 1,512,500 2036 2039 2,668,974 2,668,974
43 Rec Facility Balboa Fine Arts Center (4) (Remove)6,500 650 **50 -1 Oct-15 - 2015 2015 - -
42 Neighborhood Enhancement BVAC Master Plan Projects(7)-1 - 2015 2015 - -
44 Rec Facility Newport Pier - Phase I (5)NA **50 1 Feb-15 - 2017 2017 - -
45 Rec Facility Newport Pier - Phase II (6) NA **50 1 Feb-15 - 2018 2017 - -
46 - -
382,119,854 462,710,764 445,884,205
(1) Newport Jr Guard Building to be funded by community donations
(2) Sunset Ridge - ( Construction is $5.2 m)
(3) Lower Castaways current concept design cost: ~$5.5m
(4) Balboa Fine ARTS Center Cost estimate as of 3/2015: $5.8 m
(5) Newport Pier Phase I: Funded by Tidelands
(6) Newport Pier Phase II: Expected tenant improvement
(7) Funded By Balboa Village Parking Management District
2 of 7
1 2 3 4 5 6 7 8 9 10 11 12 13
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
AFFORDABILITY ASSUMPTIONs
General Fund Revenues 180,000,000 191,750,000 197,502,500 203,427,575 209,530,402 215,816,314 222,290,804 228,959,528 235,828,314 242,903,163 250,190,258 257,695,966 265,426,845
Growth Assumption 3.20%6.53%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%3.00%
GF Annual Contribution %4.44%4.43%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%
Debt Service as % of GF Revenues 4.55%4.26%4.05%3.93%3.81%3.69%3.38%3.28%3.18%3.08%2.98%2.89%2.81%
FFP SOURCES
Beginning FFP Balance 11,606,070 44,654,402 32,881,816 25,875,860 25,313,468 27,302,594 19,213,134 18,815,429 19,879,170 25,219,244 31,048,458 35,459,588 24,963,185
Sources
Annual GF Contributions 8,000,000 8,500,000 9,875,125 10,171,379 10,476,520 10,790,816 11,114,540 11,447,976 11,791,416 12,145,158 12,509,513 12,884,798 13,271,342
Periodic GF or One-time Transfers
Private Contributions 34,166,741 6,352,989 4,126,912 364,723 15,996,218 551,701 634,378 651,018 666,939 683,846 5,301,238 19,378,269 737,370
Interest Earnings 87,046 558,180 493,227 452,828 506,269 546,052 384,263 376,309 397,583 504,385 620,969 709,192 499,264
Total Sources:42,253,787 15,411,169 14,495,264 10,988,930 26,979,007 11,888,569 12,133,181 12,475,303 12,855,938 13,333,389 18,431,720 32,972,259 14,507,976
Uses
Debt Service (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864) (7,493,175) (7,459,589) (7,457,662) (7,457,661)
Other Fiscal Charges (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000)
Less: Cash Proj Funding (1,000,000) (19,000,000) (13,500,000) (3,550,000) (17,000,000) (12,000,000) (5,000,000) (3,888,578) - - (6,550,000) (36,000,000) (22,874,809)
Total Uses:(9,205,455) (27,183,755) (21,501,221) (11,551,321) (24,989,881) (19,978,030) (12,530,886) (11,411,562) (7,515,864) (7,504,175) (14,020,589) (43,468,662) (30,343,470)
Projected FFP Balance 44,654,402 32,881,816 25,875,860 25,313,468 27,302,594 19,213,134 18,815,429 19,879,170 25,219,244 31,048,458 35,459,588 24,963,185 9,127,690
PROJECT SOURCES
Beginning Balance 21,091,028 400,265 645,396 3,917,406 15,316 178,658 1,798,263 267,416 0 0 0 7,519 23,874
CASH FUNDING FROM FFP 1,000,000 19,000,000 13,500,000 3,550,000 17,000,000 12,000,000 5,000,000 3,888,578 6,550,000 36,000,000 22,874,809
PRIVATE CONTRIBUTIONS - - - - - - - - - - - - -
DEBT FUNDING -
2010 Civic Center COPs - - - - - - - - - - - - -
TOTAL DEBT FUNDING - - - - - - - - - - - - -
Interest on Debt Proceeds - - - - - - - - - - - - -
TOTAL PROJECT RESOURCES 22,091,028 19,400,265 14,145,396 7,467,406 17,015,316 12,178,658 6,798,263 4,155,993 0 0 6,550,000 36,007,519 22,898,683
PROJECT USES
Const Start
Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Fire FS 1 - Peninsula & Library 2020 - - - - - (745,902) (4,102,459) (2,610,655) - - - - -
Fire FS 2 - Lido 2016 (250,000) (675,000) (3,712,500) (2,112,500) - - - - - - - - -
Fire FS 3 - Santa Barbara 2025 - - - - - - - - - - (547,939) (3,013,662) (1,917,785)
Fire FS 4 - Balboa Island 2044 - - - - - - - - - - - - -
Fire FS 5 - CDM & Library 2016 - (675,750) (3,716,625) (2,365,125) - - - - - - - - -
Fire FS 6 - Mariners (apparatus bay only)2016 - (660,000) (540,000) - - - - - - - - - -
Fire FS 7 - SAH 2057 - - - - - - - - - - - - -
Fire FS 8 - Npt. Coast 2045 - - - - - - - - - - - - -
Fire Lifeguard HQ Remodel 2064 (260,055) - - - - - - - - - - - -
Fire Newport Jr. Guard Building 2021 - - - - - - - - - - - - -
Library Library-Mariners 2056 - - - - - - - - - - - - -
Library Library-Central 2052 - - - - - - - - - - - - -
MOD Utilities/Corporate Yard Merge 2020 - - - - - (441,525) (2,428,388) (1,545,338) - - - - -
MOD Big Canyon Aux. Yard 2065 (1,400,000) - - - - - - - - - - - -
Police Police Station @ Current Cite.2025 - - - - - - - - - - (5,994,542) (32,969,982) (20,980,898)
Rec Facility Marina Park Girl Scout House( Las Arenas Park)2016 - - - - - - - - - - - - -
Rec Facility Marina Park 2014 (15,590,000) (15,670,948) - - - - - - - - - - -
Rec Facility Newport Coast Ctr 2057 - - - - - - - - - - - - -
Rec Facility Newport Thearter Arts Center 2030 - - - - - - - - - - - - -
Rec Facility OASIS Sr. Ctr 2060 - - - - - - - - - - - - -
Rec Facility Sunset Ridge 2014 (3,475,946) - - - - - - - - - - - -
Rec Facility Sunset View Park 2018 - - - (597,903) (2,690,564) - - - - - - - -
Rec Facility West Newport Comm Ctr (incl pool)2018 (250,000) - - (2,376,563) (14,446,094) (9,192,969) - - - - - - -
Rec Facility Pedestrian Bridge at Superior/PCH 2018 - - - - - - - - - - - - -
Rec Facility Parking Structure at Superior/PCH 2019 - - - - - - - - - - - - -
Rec Facility Bonita Creek - Artificial Turf 2015 (195,122) (1,073,171) (682,927) - - - - - - - - - -
Rec Facility Lower Castaways 0 (300,000) - - - 300,000 - - - - - - - -
Rec Facility Eastbluff Park Extension 2016 - - - - - - - - - - - - -
Rec Facility Community Youth Center (CYC) - Grant Howald 2032 - - - - - - - - - - - - -
Rec Facility Caroll Beek Center 2033 - - - - - - - - - - - - -
Rec Facility Bonita Creek Community Ctr.2038 - - - - - - - - - - - - -
Rec Facility Cliff Drive Community Room 2036 - - - - - - - - - - - - -
Rec Facility Girls & Boys Club (East Bluff Park)2020 - - - - - - - - - - - - -
Rec Facility Lawn Bowling Facility (San Joaquin Hills Park)2039 - - - - - - - - - - - - -
**
Rec Facility Balboa Fine Arts Center 2015 - - - - - - - - - - - - -
Newport Pier - Phase I (Demo)2017 - - (1,575,938) - - - - - - - - - -
Newport Pier - Phase II (Structure)2017 - - - - - - - - - - - - -
Dog Park 2 (2 acres) (2) 0 - - - - - - - - - - - - -
TOTAL PROJECT EXPENDITURES (21,690,763) (18,754,869) (10,227,990) (7,452,091) (16,836,658) (10,380,395) (6,530,847) (4,155,994) - - (6,542,481) (35,983,645) (22,898,683)
ENDING BALANCE OF PROJECT RESOURCES - 400,265 645,396 3,917,406 15,316 178,658 1,798,263 267,416 0 0 0 7,519 23,874 0
Sources and Uses Proforma
3 of 7
AFFORDABILITY ASSUMPTIONs
General Fund Revenues
Growth Assumption
GF Annual Contribution %
Debt Service as % of GF Revenues
FFP SOURCES
Beginning FFP Balance
Sources
Annual GF Contributions
Periodic GF or One-time Transfers
Private Contributions
Interest Earnings
Total Sources:
Uses
Debt Service
Other Fiscal Charges
Less: Cash Proj Funding
Total Uses:
Projected FFP Balance
PROJECT SOURCES
Beginning Balance
CASH FUNDING FROM FFP
PRIVATE CONTRIBUTIONS
DEBT FUNDING
2010 Civic Center COPs
TOTAL DEBT FUNDING
Interest on Debt Proceeds
TOTAL PROJECT RESOURCES
PROJECT USES
Const Start
Year
Fire FS 1 - Peninsula & Library 2020
Fire FS 2 - Lido 2016
Fire FS 3 - Santa Barbara 2025
Fire FS 4 - Balboa Island 2044
Fire FS 5 - CDM & Library 2016
Fire FS 6 - Mariners (apparatus bay only)2016
Fire FS 7 - SAH 2057
Fire FS 8 - Npt. Coast 2045
Fire Lifeguard HQ Remodel 2064
Fire Newport Jr. Guard Building 2021
Library Library-Mariners 2056
Library Library-Central 2052
MOD Utilities/Corporate Yard Merge 2020
MOD Big Canyon Aux. Yard 2065
Police Police Station @ Current Cite.2025
Rec Facility Marina Park Girl Scout House( Las Arenas Park)2016
Rec Facility Marina Park 2014
Rec Facility Newport Coast Ctr 2057
Rec Facility Newport Thearter Arts Center 2030
Rec Facility OASIS Sr. Ctr 2060
Rec Facility Sunset Ridge 2014
Rec Facility Sunset View Park 2018
Rec Facility West Newport Comm Ctr (incl pool)2018
Rec Facility Pedestrian Bridge at Superior/PCH 2018
Rec Facility Parking Structure at Superior/PCH 2019
Rec Facility Bonita Creek - Artificial Turf 2015
Rec Facility Lower Castaways 0
Rec Facility Eastbluff Park Extension 2016
Rec Facility Community Youth Center (CYC) - Grant Howald 2032
Rec Facility Caroll Beek Center 2033
Rec Facility Bonita Creek Community Ctr.2038
Rec Facility Cliff Drive Community Room 2036
Rec Facility Girls & Boys Club (East Bluff Park)2020
Rec Facility Lawn Bowling Facility (San Joaquin Hills Park)2039
**
Rec Facility Balboa Fine Arts Center 2015
Newport Pier - Phase I (Demo)2017
Newport Pier - Phase II (Structure)2017
Dog Park 2 (2 acres) (2) 0
TOTAL PROJECT EXPENDITURES
ENDING BALANCE OF PROJECT RESOURCES -
Sources and Uses Proforma 14 15 16 17 18 19 20 21 22 23 24 25
2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
273,389,650 281,591,340 290,039,080 298,740,252 307,702,460 315,395,021 323,279,897 331,361,894 339,645,941 348,137,090 356,840,517 365,761,530
3.00%3.00%3.00%3.00%3.00%2.50%2.50%2.50%2.50%2.50%2.50%2.50%
5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%5.00%
2.72%2.64%2.56%2.48%2.41%2.35%2.29%2.23%2.17%2.11%2.06%2.01%
9,127,690 16,275,399 24,002,141 32,331,293 41,633,813 49,612,734 57,174,844 66,327,965 76,720,069 88,845,015 101,680,204 115,244,415
13,669,483 14,079,567 14,501,954 14,937,013 15,385,123 15,769,751 16,163,995 16,568,095 16,982,297 17,406,855 17,842,026 18,288,077
756,155 775,437 795,230 1,152,167 1,183,121 1,214,931 1,247,622 890,355 995,113 1,024,966 1,055,715 1,087,387
182,554 325,508 480,043 646,626 832,676 992,255 1,143,497 1,326,559 1,534,401 1,776,900 2,033,604 2,304,888
14,608,192 15,180,512 15,777,226 16,735,805 17,400,920 17,976,937 18,555,114 18,785,009 19,511,811 20,208,721 20,931,345 21,680,351
(7,449,483) (7,442,771) (7,437,073) (7,422,286) (7,410,998) (7,403,827) (7,390,993) (7,381,905) (7,375,865) (7,362,532) (7,356,134) (7,346,100)
(11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000) (11,000)
- - - - (2,000,000) (3,000,000) (2,000,000) (1,000,000) - - - (1,904,008)
(7,460,483) (7,453,771) (7,448,073) (7,433,286) (9,421,998) (10,414,827) (9,401,993) (8,392,905) (7,386,865) (7,373,532) (7,367,134) (9,261,108)
16,275,399 24,002,141 32,331,293 41,633,813 49,612,734 57,174,844 66,327,965 76,720,069 88,845,015 101,680,204 115,244,415 127,663,659
0 0 500,000 3,000,000 435,452 383,308 942,293 755,984 1,300,507 1,232,914 861,153 352,260
2,000,000 3,000,000 2,000,000 1,000,000 1,904,008
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
0 0 500,000 3,000,000 2,435,452 3,383,308 2,942,293 1,755,984 1,300,507 1,232,914 861,153 2,256,267
2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - (466,281) (2,564,547) (1,631,985) - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - (420,160) (2,310,878) (1,470,559) - - - - -
- - - - - (130,136) (715,750) (455,477) - - - -
- - - - - - - - - - (272,318) (1,497,750)
- - - - - - - - (67,593) (371,761) (236,575) -
- - - - - - - - - - - -
- - - - - - - - - - - (266,897)
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - - - - - - - - - - -
- - (466,281) (2,564,547) (2,052,144) (2,441,014) (2,186,309) (455,477) (67,593) (371,761) (508,893) (1,764,647)
0 0 33,719 435,452 383,308 942,293 755,984 1,300,507 1,232,914 861,153 352,260 491,620
4 of 7
DEBT SERVICE Avg 0 0 0 0 1 1 2 3 4 5 6 7 8 9
Debt 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Project Total Interest Service
Debt Service Description Year Proceeds COI Issue Rate Term Maturity (Net)
2010 Civic Center COPs 2011 123,000,000 1,289,442 124,289,442 4.4%30 2041 (7,614,280) - (682,755) (8,165,374) (6,740,633) (9,389,091) (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864)
Traunch 2 0 - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 3 0 - - - 5.0%30 30 - - - - - - - - - - - - - -
Traunch 4 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 5 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 6 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 7 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 8 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 9 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 10 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
Traunch 11 0 - - - 5.0%30 30 - - - - - - - - - - - - - - -
TOTAL DEBT (7,614,280) - (682,755) (8,165,374) (6,740,633) (9,389,091) (8,194,455) (8,172,755) (7,990,221) (7,990,321) (7,978,881) (7,967,030) (7,519,886) (7,511,985) (7,504,864)
5 of 7
DEVELOPMENT AGREEMENTS AND PRIVATE CONTRIBUTIONS General TOTAL Non FFP
Public Park Public Arts FFP Traffic
Agreement REF Developer Description Trigger Benefit Benefit & Culture BENEFIT Circulation Total
Hoag OASIS Pledge Hoag May 12, 2009 Pledge Letter Payment Schedule 500,000 - - 500,000 - 500,000 500,000 OK
Hoag OASIS Pledge Hoag May 12, 2009 Pledge Letter Payment Schedule 500,000 - - 500,000 - 500,000 500,000 OK
Hoag OASIS Pledge Hoag May 12, 2009 Pledge Letter Payment Schedule 1,500,000 - - 1,500,000 - 1,500,000 1,500,000 OK
2,500,000 - - 2,500,000 - 2,500,000
Friends of Oasis Pledge Friends of Oasis Oasis Construction Restricted for Oasis Only 2,000,000 - - 2,000,000 - 2,000,000 2,000,000 OK
North Newport Center 4.1 TIC In Lieu Park Fees Paid within 5 Days of Award of OASIS Contract - 5,600,000 5,600,000 5,600,000 5,600,000 OK
North Newport Center 4.1 TIC In Lieu Park Fees 430 $$26,046.51 Milestone Pmts - 5,600,000 5,600,000 5,600,000 5,600,000 OK
North Newport Center T2 4.1 94 Units x $26,046.51 Milestone Pmts 2,448,372 2,448,372 2,448,372 2,448,372 OK
North Newport Center 4.2 TIC 1 Issuance of First Building Permit 13,545,000 - 13,545,000 13,545,000 13,545,000 OK
North Newport Center 4.2 TIC Public Benefit Fee - 430 Units @ $31,500 Issuance of remaining 430 Residential Building Permits 13,545,000 - (270,900) 13,274,100 13,274,100 13,274,100 OK
North Newport Center T2 Amended Agrmt Public Benefit Fee - 94 Units @ $63,000 Issuance of 431 st permit - 524 th permit 5,922,000 (118,440) 5,803,560 5,803,560 5,803,560 OK
North Newport Center 4.4 TIC Street Widening and Traffic Signals Within 30 Days of Reimbursement Request - - 2,500,000 2,500,000 - OK
North Newport Center Amended Agrmt Bayside Drive Walkway Connection Within 90 Days of written notice after award of contract 200,000 200,000 200,000 200,000 OK
33,212,000 13,648,372 (389,340) 46,471,032 2,500,000 48,971,032
The Dart Development (24 units)(PA2012-146) - 600,875 600,875 600,875 600,875 OK
Newport Bay Marina (27 units) (PA2001-210)- 186,147 186,147 186,147 186,147 OK
Via Lido Mixed Use(2 units) (PA2010-081)- 104,500 104,500 104,500 104,500 OK
2218 Channel Rd.Abell John & Helou Carol - 26,125 26,125 26,125 26,125 OK
Plaza CDM (6 Units) (PA2010-061) - 104,500 104,500 104,500 104,500 OK
214 Narcissus (1 Units) (PA2011-192)- - - - OK
604 Acacia Ave (PA2012-005) - 26,125 26,125 26,125 26,125 OK
610 Larkspur LLC (NP2013-003)- 26,125 26,125 26,125 26,125 OK
416 Orchid Ave.- 26,125 26,125 26,125 26,125 OK
Cohen Galina - 309 Goldenrod - 26,125 26,125 26,125 26,125 OK
819 W. Balboa NP2012-010 26,125 26,125 26,125 26,125 OK
Friend of the Oasis 35,000 35,000 35,000 35,000 OK
35,000 1,152,772 - 1,187,772 - 1,187,772
Hoag DA # 5 8.2 Hoag Semeniuk Slough Study $200K Fee Eliminated with with DA amendment in 2008 - - - - - - - OK
Hoag DA # 5 8.2 Hoag Reimb City related to Superior Ave Medians Completion of Project Expenditures - - - - 1,500,000 1,500,000 - OK
Hoag DA # 5 8.2 Hoag Public Benefit (Park or Pub Safety)Paid June 2009 Xfred to Facilities Reserve 1,500,000 - - 1,500,000 - 1,500,000 1,500,000 OK
Hoag DA # 5 8.4 Hoag Sunset View Park, Shrub & Groundcover Pending Improvements - 150,000 - 150,000 - 150,000 150,000 OK
1,500,000 150,000 - 1,650,000 1,500,000 3,150,000
Santa Barbara Condos - - - -
Santa Barbara Condos Section 3.3 of MOA New Home Co.Unrestricted Public Benefit Concurrent with Certificate of Occupancy 1,645,566 - (32,911) 1,612,655 - 1,612,655 1,612,655 OK
Santa Barbara Condos Section 3.3 of MOA New Home Co.Unrestricted Public Benefit Concurrent with Certificate of Occupancy 3,354,434 - (67,089) 3,287,345 - 3,287,345 3,287,345 OK
Santa Barbara Condos (NP2005-014)Section 3.2 of MOA New Home Co.79 Units x $26,046.51 Fee due at building permit issue 2,061,834 - 2,061,834 - 2,061,834 2,061,834 OK
5,000,000 2,061,834 (100,000) 6,961,834 - 6,961,834
Banning Ranch Section 3.1 Lennar => 1375 x 30,909 - Coastal Commission Status?Each Building Permit 42,499,875 - - 42,499,875 - 42,499,875 - UNKNOWN
Newport Uptown $32,500/Unit - 1,244 Units - - - - -
Phase I - 680 Units a) 460 b)PRIOR TO EACH BUILDING PERMIT 22,100,000 (442,000) 21,658,000 966,665 22,624,665 17,185,584 UNKNOWN
Phase II - 544 Units PRIOR TO EACH BUILDING PERMIT 17,680,000 (353,600) 17,326,400 631,456 17,957,856 18,659,200 UNKNOWN
In Lieu Park Fees - Phase I PRIOR TO EACH BUILDING PERMIT-Less Park Credits - 10,143,361 10,143,361 10,143,361 3,200,000 UNKNOWN
In Lieu Park Fees - Phase II PRIOR TO EACH BUILDING PERMIT-Less Park Credits - 10,550,389 10,550,389 10,550,389 4,600,000 UNKNOWN
39,780,000 20,693,750 (795,600) 59,678,150 1,598,121 61,276,271
NB Country Club 3.1 54,819 x 10.00 Golf Club Clubhouse Issuance of First Building Permits 562,196 - (11,244) 550,952 - 550,952 550,952 OK
Dunes Settlement Section C(e)Restaurant on Parcel B2 Issuance of Building Permit 50,000 - (1,000) 49,000 - 49,000 49,000 OK
Dunes Settlement Section C(f)Family Inn Issuance of Building Permit 100,000 - (2,000) 98,000 - 98,000 98,000 OK
Dunes Settlement Section C(g)Family Inn Prior to Occupancy 410,402 - (8,208) 402,194 - 402,194 402,194 OK
560,402 - (11,208) 549,194 - 549,194
Golf Reality Fund (GRF)3.1 Tennis Club Reconstruction 3,725 x $10.00 Issuance of Building Permit 37,250 (745) 36,505 - 36,505 36,505 OK
Golf Reality Fund (GRF)3.1 Single Family Homes $5 x $93,000 Single Family Homes 465,000 (9,300) 455,700 - 455,700 455,700 OK
502,250 - (10,045) 492,205 - 492,205
Land Re Use Decisions
Monrovia Property Sale Actual 5,639,096 5,639,096 OK
Lido House Hotel Lease Lease Ground Lease > of Base Rent or Percent Rents - - - Annual Annual
Police Facility Concord Estimated Annual Financial Benefit Not Used 1,706,000 1,706,000 - 1,706,000 - UNKNOWN
West Newport Gym - Lease Lease Ground Lease 289,055 289,055 - 289,055 5,957,684 Annual
1,995,055 - - 1,995,055 - 1,995,055
130,146,778 37,706,728 (1,317,437) 166,536,069 5,598,121 172,134,190 162,765,917
CHECK CELLS
6 of 7
DEVELOPMENT AGREEMENTS AND PRIVATE CONTRIBUTIONS
Agreement
Hoag OASIS Pledge
Hoag OASIS Pledge
Hoag OASIS Pledge
Friends of Oasis Pledge
North Newport Center
North Newport Center
North Newport Center T2
North Newport Center
North Newport Center
North Newport Center T2
North Newport Center
North Newport Center
The Dart Development (24 units)(PA2012-146)
Newport Bay Marina (27 units) (PA2001-210)
Via Lido Mixed Use(2 units) (PA2010-081)
2218 Channel Rd.Abell John & Helou Carol
Plaza CDM (6 Units) (PA2010-061)
214 Narcissus (1 Units) (PA2011-192)
604 Acacia Ave (PA2012-005)
610 Larkspur LLC (NP2013-003)
416 Orchid Ave.
Cohen Galina - 309 Goldenrod
819 W. Balboa NP2012-010
Friend of the Oasis
Hoag DA # 5
Hoag DA # 5
Hoag DA # 5
Hoag DA # 5
Santa Barbara Condos
Santa Barbara Condos
Santa Barbara Condos
Santa Barbara Condos (NP2005-014)
Banning Ranch
Newport Uptown
NB Country Club
Dunes Settlement
Dunes Settlement
Dunes Settlement
Golf Reality Fund (GRF)
Golf Reality Fund (GRF)
Land Re Use Decisions
Monrovia Property Sale
Lido House Hotel Lease
Police Facility
West Newport Gym - Lease
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
5,600,000
- -
13,274,100
5,803,560
200,000
600,875
150,000
1,612,655
3,287,345
1,384,625
1,858,384 15,327,200
18,659,200
400,000 2,800,000
4,600,000
550,952
49,000
98,000
402,194
36,505
455,700
5,639,096
75,000 150,000 250,000 328,303 338,152 348,868 358,746 369,488 380,594 392,011 403,772 415,885 428,361 441,212 791,069 814,801 839,245 864,422
151,754 206,385 210,513 214,723 219,018 223,398 296,226 302,150 308,193 314,357 320,644 327,057 333,598 340,270 347,076 354,017 361,098 368,320 375,686 383,200
34,166,741 6,352,989 4,126,912 364,723 15,996,218 551,701 634,378 651,018 666,939 683,846 5,301,238 19,378,269 737,370 756,155 775,437 795,230 1,152,167 1,183,121 1,214,931 1,247,622
7 of 7
NEWPORT BEACH
ITEM TITLE: FY 2015-16 BUDGET PRESENTATION
ITEM SUMMARY: Summary:
Staff will present an overview of the City Manager’s Fiscal Year 2015-16
Proposed Budget.
RECOMMENDED
ACTION:
Recommended Action:
Staff recommends that the Committee directs staff to bring the Proposed FY
2015-16 Budget for City Council Approval.
ATTACHMENTS:
Description
Budget Presentation - Staff Report
CITY OF NEWPORT BEACH
FINANCE COMMITTEE
STAFF REPORT
Agenda Item No. 5C
May 11, 2015
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department
Dan Matusiewicz, Finance Director
(949) 644-3123, danm@newportbeachca.gov
SUBJECT: FY 2015-16 Budget Presentation
SUMMARY:
The City Manager’s Fiscal Year 2015-16 Proposed Budget will be reviewed with a
PowerPoint presentation.
RECOMMENDED ACTION:
Staff recommends that the Committee directs staff to bring the FY 2015-16 Proposed
Budget for City Council Approval.
DISCUSSION:
Staff is pleased to present an overview of the City Manager’s Fiscal Year 2015-16
Proposed Budget. Budget highlights include:
• Budget is balanced
• Revenues remain strong
• No use of reserves for operations
• Sound debt position
• Sustained progress toward pension obligations
• Continued focus on enhancing the community’s quality of life and safety
Copies of the budget documents were distributed to the City Council and the Finance
Committee on April 30, 2015. The City Council will review the budget during their Study
Session on May 12, 2015, and the budget will be adopted at their regular meeting on
May 26, 2015.
Prepared and Submitted by:
/s/ Dan Matusiewicz
_____________________________
Dan Matusiewicz
Finance Director
FY 2015-16 PROPOSED BUDGET
City of Newport Beach
Finance Committee
May 11, 2015
Item No. C1
FY 2015-16 BUDGET PRESENTATION
Staff Presentation
May 11, 2015
FY 2015-16 Highlights
•Budget is balanced
•Revenues remain strong
•No use of reserves for operations
•Sustained progress toward pension
obligations
•Continued focus on enhancing the
community’s quality of life and safety
2
Revenues & Expenditures
3
Budget Principles
Budget emphasizes:
•Providing a Municipal Government that
Residents Demand
•Providing a Safe and Secure Neighborhood
•Keeping Newport Beach Looking Great
•Maintaining a Prosperous, Fiscally
Sustainable, and Economically Viable City
4
Charter Requirements
•Requires Budget submittal to Council at
least 35 days prior to July 1
•Requires public notice and public hearing
•Council shall adopt budget on or before
June 30
5
REVENUES
Fiscal Year 2015-16
6
FY 2015-16 General Fund Revenue Chart
(millions)
7
47%
20%
11%
4%
19% Property Taxes $87.9
Sales Tax (includes in-Lieu) $37.0
Transient Occupancy Tax $20.0
Other Taxes $8.0
All Other Sources $37.0
FY 2015-16 General Fund Revenue
Assumptions (Millions)
Note: Net of a one-time $2.7 million receipt expected in 2015-16, the budget
assumes Sales Taxes are expected to grow 4.73% during 2015-16.
Revenue Source
2014-15
Adopted
Revenue
2014-15
Revised
Revenue
2015-16
Proposed
Revenue
%Incr/(Decr) Over
PY Revised
Property Taxes $82.6 $84.0 $87.9 4.65%
Sales Tax $31.7 $32.7 $37.0 12.98%
Transient Occupancy Tax $18.3 $19.4 $20.6 6.39%
All Other Revenue $41.7 $44.8 $46.3 3.31%
Total General Fund Revenue $174.3 $180.9 $191.7 6.01%
8
Assessed Valuation
9
Sales Tax
Major Sales Tax Industry
Groups
Year-Over-Year
Change
Autos and Transportation 4.3%
General Consumer Goods 5.6%
Restaurants and Hotels 7.7%
Business and Industry 24.1%
Food and Drugs 6.7%
Fuel and Service Stations -2.6%
Building and Construction 21.7%
10
Transient Occupancy Tax
Hoteliers can command higher room rates due to higher demand
for Newport Beach as a travel and tourist destination.
11
GUIDING PRINCIPLES
Fiscal Year 2015-16
12
Principle #1: Provide the Municipal Government that
Our Residents Demand
CDD – Online permitting & electronic plan review
Finance, IT & HR – continued implementation of new
Enterprise Resource Planning (ERP) system
New Parks & Community Centers
Services that are better, faster and less expensive
13
Principle #2: Provide Safe and Secure Neighborhoods
Police Department:
•3 new Police Officers,
•1 new Police Sergeant and
•1 new Civilian Investigator
Fire Department:
•Implementation of Automatic
Vehicle Location program
•Increased staffing of part-time
seasonal lifeguards
Community Development:
•Implementation of special code
enforcement programs relating
to property maintenance
14
Principle #3: Keep Newport Beach
Looking Great
Maintain a high-quality natural
and physical environment by
creating aesthetically pleasing
places in which to live, work,
recreate, and visit
Capital Improvements Projects (CIPs)
Newly Proposed Projects $25 million
Re-budgeted Projects $42 million
Encumbered Funds (Estimated) $33 million
Total Community Reinvestment (Estimated) $100 million
15
Principle #4: Maintain a Prosperous, Fiscally
Sustainable, and Economically Viable City
•Responsible and Affordable Debt Levels
•Strong Financial Profile
•Strong Fiscal Management and Discipline
Cash funding of big projects – Marina Park, CdM,
& Mariners Fire Stations, Bonita Creek Imprvmts.
$22 Million to address Pension Shortfall
Manageable OPEB Liability – Retiree Insurance
$44 Million Contingency Reserve
16
EXPENDITURES
Fiscal Year 2015-16
17
FY 2015-16 Budgeted Expenditures
by Function
(Millions)
9%
54% 6%
20%
11%
0.2%
General Government $15.5
Public Safety $95.5
Community Development $11.0
Public Works $35.5
Community Services $20.4
Non Departmental $0.3
18
General Fund Expenditure Summary
by Function
(Millions)
19
Budgeted Expenditures by Department
All Funds (Millions)
$1.1
$0.7
$3.0
$2.6
$2.3
$7.3
$52.2
$43.2
$10.5
$29.3
$26.2
$9.7
$7.5
$11.4
City Council
City Clerk
City Manager
Human Resoruces
City Attorney
Finance
Police
Fire
Community Development
Municipal Operations
Muni. Operations - Utilities
Public Works
Library Services
Recreation & Sr. Svcs.
20
General Fund Expenditures
by Type
(Millions)
65%
27%
3% 6%
Salaries & Benefits $124.8
Maintenance & Operation $53.4
Capital Improvement Projects $5.3
Transfers $12.4
21
(Savings for Future Capital Expenditures)
Savings for Future Needs(Millions)
This budget also includes nearly $30 million of forced savings that
fund long-term liabilities and capital replacement plans.
Prefunding/Capital Savings 14-15 15-16 Change
Facilities Financial Plan - Transfers $8.0 $8.5 $0.5
Facilities Maintenance Plan - Transfers 0.4 1.5 1.1
Vehicle Replacement Plans – Department Cost 3.3 3.3 -
Emergency Communication System - Transfers 1.0 1.0 -
Other Equipment (Safety, IT, Parking & Rec) 1.3 1.6 0.3
Workers Compensation – Department Cost 2.8 2.8 -
General Liability – Department Cost 3.1 4.1 1.0
Compensated Absences – Department Cost 2.3 2.5 .2
Retiree Insurance (OPEB) – Department Cost 3.4 2.8 -0.6
Total $25.6 $28.1 $2.5
22
Changes in Full-time Staffing
Downsizing efforts continue offset by additional
Police and Marina Park staffing
FY 16 Full-time Position Changes
(1)Deputy Human Resources Director
1 Civilian Investigator
1 Police Sergeant
3 Police Officer
1 Recreation Manager
1 Recreation Supervisor
1 Office Assistant
1 Facilities Maintenance Worker II
(2)Refuse Worker
(1)Utilities Specialist
(1)Inventory Assistant
4 Net Change in Positions as printed
(1)Librarian II
3 Net Change in Positions with Checklist
23
Salaries & Benefits
Most significant changes
•Unfunded Pension Liability payment increased $9 Million or
68% ($7.7 million included in 2014-15 amended budget)
•Salaries increased 2% or $1.2 Million
(includes 3 net new employees)
•Employee Contributions to PERS increased $826 Thousand
to $8.3 Million per year.
Typical Employee (non-safety)
•Earns $75,500 in wages
•City pays $19,800 towards purchase of health insurance
•City pays $12,341 or 16.73% towards pension
•Employee pays $9,239 or 12.35% towards pension
24
Already Accelerated PERS Payment
Schedule Significantly
Saves $129 million over 30 Years
Saves $47million in today’s dollars
25
Other Post Employment Benefits
(OPEB – Retiree Insurance)
Legacy Retiree Insurance Benefit:
•Provided Life Time Annuity of $400 - $425 Monthly Benefit
•Closed to new participants - January 1, 2006
Current Plan:
•Defined Contribution limited to employer contribution to Health
Reimbursement Account (HRA) during active employment
(similar to 401k)
•Statutory obligation to make minimum employer contribution to retiree health
plan, currently $122/Month
Unfunded Obligation:
$25 Million, $2.8 million per year, 13 years remaining
New Actuarial Standard (ASOP 6) will increase OPEB liability ~$10 million and
increase required contribution $1 million per year – Not currently budgeted
26
Maintenance & Operations
Most significant changes
•Litigation costs - $5 million (mostly one-time)
•City beautification & maintenance efforts - $1.2 (mostly one-time)
(Contracts for Medians, Parks, Trees, Beaches & Storm Drains)
•Imported Water and Groundwater expense - $1.1 million
•General Liability - Internal Charges $1 million
•Information Technology - Internal Charges - $800K
•Marina Park Operations (not including payroll) - $400K
27
Capital Improvement Program
Capital Improvements Projects (CIPs)
Newly Proposed Projects $25 million
Re-budgeted Projects (Estimated) $42 million
Encumbered Funds (Estimated) $33 million
Total Community Reinvestment (Estimated) $100 million
28
A BALANCED APPROACH
Fiscal Year 2015-16
29
How much debt to we pay down relative
to current amenities and services?
Debt Reduction Efforts
30
Recommendation:
Balanced Approach to Surpluses
50% Community
Benefit – Today
•New Neighborhood Enhancement Fund (NEF)
A funding mechanism for:
Quality of Life Projects
Save today for community
prioritized enhancements
50% Long-term Stewardship
•Retiree Insurance (OPEB) Liability
A change in actuarial standards will soon impact how OPEB
liabilities are measured.
Liability will increase $10 million
Increasing expected contribution by $1 million per year
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Checklist Items – Administrative
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Checklist Items – Revenue Estimates
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Checklist Items – Personnel
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Checklist Items – CIP Additions
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How to Balance Proposals – Some Ideas…
More Police Officers on
Peninsula
Harbor
Improvements?
Lower Mooring
Fees
Reduce CIP?
Increase Parking
Rates?
Add paid parking in
CdM along PCH? CdM Entryway
Project
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Additional Policing on the Peninsula
Objective: Better manage unruly evening crowds on the
Peninsula
Proposal: Add 1 Sergeant, 3 Police Officers with vehicles
and equipment
Approximate Cost: $800,000
Funding Proposal (Included in Proposed Budget):
•Raise parking rates to defray some costs to visitors
•Residents with annual passes less impacted
•98% of parking spaces would increase 0-25 cents/hour
•65 business area parking spaces would incur 50/hour
premium after 2 hours
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Unfunded CdM Entryway Project
Objective:
Fund CdM Entryway Project
Funding Proposal (For Discussion-Not included in proposed budget):
Add paid parking on PCH between Avocado and Poppy
Additional Benefits:
Generate adequate parking turnover in commercial area
Consistent with CdM Parking Management Plan recommendation #9
Creates ongoing funding source for neighborhood enhancements, further
parking strategies and BID recommendations
Timed parking already enforced so residential spillover should be minimal
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Proposed Mooring Rent Reduction
Incremental Rents previously pledged to repay $15
million General Fund advance
Project Advance
Lower Bay Dredging $5,443,1445
Rhine Channel Dredging 4,202,784
Linda Isle Dredging 30,730
Marina Park Marina 6,132,190
Total $15,809,559
Projects at Risk Harbor Fund
Grand Canal Dredging $500,000
Harbor Piers & Gangway Maint. $551,600
Lower Castaways $200,000
Harbor Dredging Permit $75,000
Proposed Mooring
Rent Reduction may
cost $750,000/Year
leaving very little to
fund projects after
repaying advance
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CONCLUSION
Fiscal Year 2015-16
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FY 2015-16 Budget Highlights
•Balanced Budget
•Additional public safety staffing
•New CIP Investment = $25 million
•Continued Effort to reduce unfunded
Pension Obligation
•Conservative debt level = 4.3% of
General Fund Revenues
•Continued high quality Credit Rating AAA
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A Virtuous Cycle
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What’s next?
•5/12/15 Council Study Session Budget
Council Meeting set the date for the
public hearing on budget appropriation.
•5/26/15 Public hearing and adoption of
FY 2015-16 GANN Appropriations limit.
•7/1/15 Fiscal Year 2015-16 begins.
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Questions & Comments
City’s budget documents can be accessed at:
www.newportbeachca.gov/budget
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