City Council studies upcoming budget

Noaki Schwartz

NEWPORT BEACH -- The city’s $126-million budget for the new fiscal year

will remain about the same as last year, in a continuing effort to

replenish reserves depleted during the mid-1990s financial crisis.

“It’s still streamlined quite a bit,” said Administrative Services

Director Dennis Danner, who drafted the proposal. “In terms of raw

dollars, it’s almost the same.”

Overall, the city’s finances have stabilized and even improved in some

areas. The general fund is up 3.27% from last year, because of increases

in the city’s two largest revenue sources: property tax and sales tax.

The biggest changes presented to the City Council at Tuesday’s study

session were a proposal for six new employees and supplemental requests

for additional funding.

Each department was directed to stay within its given budget. Requests

for additional spending were handed to City Manager Homer Bludau for

review.

“No growth forces [department heads] to justify their spending,” Bludau

said, adding that he had approved about half of the requests, amounting

to an extra $645,000.

Requests ranged from adding new staff to upgrading computer equipment in

the Public Works Department.

If approved next month by the council, the added personnel would bump the

staff up to 707. Half of the additions -- in the Fire, Refuse and Library

departments -- would replace part-time employees and not require extra

funding. The other three employees -- an electrician, traffic engineering

technician and marine safety officer -- will total about $175,000, Danner

said.

Until recently, the budget had declined each year to make up for money

lost during a financial crisis five years ago. From 1992 to 1995, the

city suffered severe spending cuts because of an economic downturn and a

diversion of property taxes for education uses.

Newport Beach, which had historically depended on property tax income,

stung from the financial cut.

In the last eight years, Danner said, the city has lost $27 million in

property taxes. The city tightened its belt -- reducing staffing from 767

to 660 and halting larger public projects.

The situation eventually grew so bad that the city spent some of its

reserve money, said Richard C. Kurth, the deputy administrative services

director.

Since then, the economy has buoyed and, with conservative spending

measures, the 2000-2001 financial plan appears to have reached some kind

of equilibrium. But officials are still keeping a close watch on the

numbers.

“We’re going to keep the budget tight to get the money back into the

reserves,” Danner said.

The council will continue reviewing sections of the spending plan this

month and next. A hearing is scheduled at the first council meeting in

June, when residents make make comments and propose changes. The final

budget is expected to be adopted at the following meeting.

A summarized copy of the budget is available at the library, in the

Planning Department and in the Administrative Services area.

2000-2001 QUICK HIGHLIGHTS

* $85.1 million projected in general fund revenues, a $2.7-million

increase, or up 3.27% compared to last year;

* $124.3 million projected in overall city revenues, down slightly from

1999-2000 estimates of $126.5 million;

* $79.5 million proposed general fund expenditures, up 1.3% from last

year’s $78.5 million;

* $134.5 million proposed for overall city expenditures, an increase of

$12.5 million compared to 1999-2000;

* $22 million is expected in property tax revenues, up 3.7% compared to

last year

* $18.7 million is expected in sales tax income, up 3.03%

* $7.2 million is expected in transient occupancy taxes, up 1.62%;

* six more full-time city positions proposed.