Loading...
HomeMy WebLinkAboutFinance Committee - April 25, 2019CITY OF NEWPORT BEACH FINANCE COMMITTEE AGENDA - Final 100 Civic Center Drive - Crystal Cove Conference Room, Bay 2D Thursday, April 25, 2019 - 3:00 PM Finance Committee Members: Will O'Neill, Chair / Mayor Pro Tem Diane Dixon, Mayor Joy Brenner, Council Member William Collopy, Committee Member John Reed, Committee Member Joe Stapleton, Committee Member Larry Tucker, Committee Member Staff Members: Grace K. Leung, City Manager Dan Matusiewicz, Finance Director / Treasurer Steve Montano, Deputy Director, Finance Marlene Burns, Administrative Specialist to the Finance Director The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that the Finance Committee 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 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. The City of Newport Beach’s goal is 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, we will attempt to accommodate you in every reasonable manner. Please contact Dan Matusiewicz, Finance Director, 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) 644-3123 or dmatusiewicz@newportbeachca.gov. 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 Department 24 hours prior to the scheduled meeting. I.CALL MEETING TO ORDER II.ROLL CALL III.PUBLIC COMMENTS ON CONSENT CALENDAR 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.CONSENT CALENDAR April 25, 2019 Page 2 Finance Committee Meeting MINUTES OF MARCH 14, 2019A. Recommended Action: Approve and file. DRAFT MINUTES 031419 V.CURRENT BUSINESS PROPOSED FY2019-20 BUDGET OVERVIEWA. Summary: Staff will provide an overview of the Proposed FY 2019-20 Operating Budget. Recommended Action: Receive and file. BUDGET AMENDMENTS FOR QUARTER ENDING MARCH 31, 2019B. Recommended Action: Summary: Staff will report on the budget amendments for the prior quarter. Recommended Action: Receive and file. STAFF REPORT ATTACHMENT A WORK PLAN REVIEWC. Summary: Staff will review with the Committee the agenda topics scheduled for the remainder of the calendar year. Recommended Action: Receive and file. ATTACHMENT A VI.FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) VII.ADJOURNMENT Finance Committee Meeting Minutes March 14, 2019 Page 1 of 10 CITY OF NEWPORT BEACH FINANCE COMMITTEE MARCH 14, 2019 MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 3:00 p.m. in the Crystal Cove Conference Room, Bay 2D, 100 Civic Center Drive, Newport Beach, California 92660. II. ROLL CALL PRESENT: Mayor Pro Tem/Chair Will O’Neill, Mayor Diane Dixon, Council Member Joy Brenner, Committee Member William Collopy, Committee Member John Reed, Committee Member Joe Stapleton, and Committee Member Larry Tucker ABSENT: None STAFF PRESENT: City Manager Grace K. Leung, Assistant City Manager Carol Jacobs, Finance Director/Treasurer Dan Matusiewicz, Senior Accountant/Finance Theresa Schweitzer, Budget Manager/Finance Susan Giangrande, Accounting Manager/Finance Rukshana Virany, Evelyn Tseng, Revenue Manager, Harbormaster Kurt Borsting and Administrative Specialist to the Finance Director Marlene Burns OTHER ENTITIES: None MEMBERS OF THE PUBLIC: Jim Mosher, Jennifer MacDonald, Jean Watt, and Allen Cashion Prior to public comments, Chair O’Neill welcomed Committee Member John Reed to the Finance Committee. He also announced that the City Council passed the restructuring of the unfunded pension liability unanimously at the last City Council meeting and thanked the City Council, Finance Committee and Finance Department for their work in moving the item forward. III. PUBLIC COMMENTS Chair O’Neill opened public comments. Noting there were no other members of the public who elected to speak, Chair O’Neill closed public comments. IV. CONSENT CALENDAR A. MINUTES OF FEBRUARY 14, 2019 Recommended Action: Approve and file. MOTION: Committee Member Stapleton moved, and Committee Member Tucker seconded, to approve the minutes. The motion carried 5 ayes – 0 noes, 2 abstentions (Brenner, Reed). V. CURRENT BUSINESS A. REVIEW OF OPERATING BUDGET (HARBOR DEPARTMENT) Summary: Finance Committee Meeting Minutes March 14, 2019 Page 2 of 10 The goal of this presentation will be to familiarize members of the Finance Committee with the elements of the FY 2018-19 Harbor Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. Recommended Action: Receive and file. Chair O’Neill introduced the item and advised that the Harbor Department review will replace the Public Works review. Chair O’Neill provided the Finance Committee’s history of reviewing the operating budget of specific departments annually with the goal of better understanding their needs before preparing the annual City budget. Harbormaster Kurt Borsting introduced himself to the Finance Committee and reviewed his previous experience with the City of Long Beach. He provided the historical background of the Harbor Department, which began with the City assuming responsibility of the City’s moorings from the Orange County Sheriff’s Department in July 2017. In July 2018, the City Council created a stand-alone Harbor Department. Harbormaster Borsting reported the Harbor Department would like to provide a customer- focused approach, with the team acting as “Harbor Ambassadors”, which allows patrons to have a fun and safe experience while using the Harbor. He also noted the Harbor is an active environment with people who live on the water and visit the water so they hope to strike a balance to address all issues such as noise, nuisance abatement, and environmental concerns. Harbormaster Borsting reported organizationally, the Harbor Department falls underneath the City Manager with a dotted line response to the Harbor Commission, and provided details on the full-time and part-time staffing. He noted Harbor Capital Projects, such as infrastructure projects, are still under the administration of Public Works. Additionally, Public Works is working on the federal advocacy to obtain funds to bring the Harbor to its design depth. City Manager Grace Leung clarified Public Works handles Capital Projects and Non-Recurring projects. Chair O’Neill advised Harbor Resources Manager Chris Miller is also under Public Works. Harbormaster Borsting presented the Harbor Department’s goal to engage in public information, market the brand, and include stakeholder meetings. He would like to use existing tools such as the City’s social media platform to provide messages regarding safety and programming including partnerships with the U.S. Coast Guard. Another information tool will be to improve signage on the water that will visibly display the principles of a no-wake Harbor, shared use of the public docks, and other information, which is clear to visitors. Harbormaster Borsting discussed the goal of promoting effective Harbor Code Enforcement that will include promoting fairness, promoting safety, protecting the environment including wildlife, safeguarding property and reinforcing community standards. He advised the Harbor Commission is looking to break up the Title 17 community reviews into several topic areas with April 8, 2019, being the first opportunity for Title 17 community feedback in response to Chair O’Neill’s inquiry. Assistant City Manager Carol Jacobs advised proposed changes for Title 17 would be provided to City Council in a study session in June or July. Harbormaster Borsting noted that while code enforcement is an important aspect, code education is equally important. They will be working with the community to ensure Harbor users are in compliance and operating safely. In response to Committee Member Stapleton’s inquiry, Harbormaster Borsting advised the City has received $125,000 in grant funding for derelict vessels through the Division of Boats and Waterways, Surrendered and Abandoned Vessel Exchange (SAVE) program, and is pursuing the next grant cycle. Finance Committee Meeting Minutes March 14, 2019 Page 3 of 10 Committee Member Collopy noted that there are two line items in the budget for $100,000 for derelict vessels for a total of $200,000, and inquired if the $125,000 grant offset the costs. Harbormaster Borsting advised $90,000 of the $125,000 has been allocated. Chair O’Neill opened public comments. Jim Mosher inquired regarding the division of labor between Public Works and the Harbor Department. He believes any Harbor construction requires Coastal Commission approval and prior to approval, requires an “approval-in concept” by Public Works. Assistant City Manager Jacobs affirmed this is the correct process. Harbormaster Borsting advised the Harbor Department would be expanding seasonal operation hours and developing an after-hours arrival programs similar to what would be found at an RV park. Additionally, they would like to expand the use of the City’s online services to assist Harbor customers. Harbormaster Borsting added that another goal is the review Title 17 of the Municipal Code and the Department is working very closely with the Harbor Commission, stakeholder groups, City Attorney’s Office, and ultimately City Council, to solicit their input. Harbormaster Borsting advised the Harbor Department manages the Marina Park guest slip rental, in response to Mayor Dixon’s inquiry. He reported the slips have been at half capacity during the winter months. Mayor Dixon noted the revenue would be important information for City Council review. Assistant City Manager Jacobs reported revenue for the FY 16-17 at $133,000. The amount of $146,000 has been collected to date, surpassing the projection. Harbormaster Borsting advised that an additional goal will be to assess the Marina Activities Permits process, which is a permit required for businesses conducting their activities in the Harbor, and will help ensure operators are operating safely to protect public safety. Mayor Dixon inquired regarding the charter boat passenger fee and was advised an outside vendor has been contracted to conduct an audit of all the charter boat companies. City Manager Leung noted that there is a plan in place for conducting revenue audits. Harbormaster Borsting reported City Council recently adopted an updated Harbor fees and rents schedule after a market analysis was conducted. The Harbor Department is committed to actively marketing these services to help achieve revenue targets. Chair O’Neill noted it is important to understand the charter boat passenger fee is, in fact, a tax and will need to go to the voters as a ballot measure to adopt a tax increase. Any charter boat company which does not report correctly can be assessed a penalty. In response to Mayor Dixon’s inquiry, Revenue Manager Evelyn Tseng mentioned that Revenue Auditor Hortensia Mato conducted an audit of one of the charter boat operators a few years ago and penalties were assessed. Harbormaster Borsting reported the final goal is Mooring Holder and Live Aboard information, which will ensure proper records are maintained, including DMV registration, current insurance certificates, and mooring service dates. Additionally, they are meeting with the “live-aboards” annually to discuss sanitation requirements to maintain the health of the Harbor. In response to Committee Member Collopy’s inquiry, Finance Director/Treasurer Dan Matusiewicz advised that Marine Charter tax revenue is estimated to be $335,000 for this fiscal year, with last year’s actual revenue being $284,000, with a per head tax at $1.25. He further advised any increase to the tax would require a ballot measure. Finance Committee Meeting Minutes March 14, 2019 Page 4 of 10 Chair O’Neill noted the Marine Charter Tax increase discussion comes up every year and has not been advanced by any member of City Council. He believes the most difficult component would be to initiate a proposed ballot measure. Harbormaster Borsting advised that there is currently a $100,000 allocation to upgrade a patrol vessel and work boat, which would allow the Department to be better equipped. He presented an overview of the Harbor Department budget and noted the proposed budget is relatively flat for next year. Committee Member Stapleton noted that the City is spending $1.2 million for the Harbor Department, but receiving more services since the City is no longer paying Harbor Patrol for their services. Mayor Dixon noted fees have been adjusted to market rate as well, but they were always being received by the City. Assistant City Manager Jacobs advised that there was a significant increase in expenses in creating the Harbor Department but feels there will also be a significant increase in revenue given the way the fees were adjusted. Harbormaster Borsting described that there are two program enhancements as part of the request, which includes $82,500 for property management fees associated with Balboa Yacht Basin Marina, and $100,000 for the acquisition for the previously referenced work boat. Committee Member Stapleton inquired if the City could do a better job in managing the Basin Marina. Harbormaster Borsting advised it may be possible to manage it in the future should capacity increase within the Department. In response to Mayor Dixon’s inquiry, Harbormaster Borsting advised a third party is paid $13,600 per month to manage the oversight for Basin Marina, and the $82,000 covers six months of the payment. The request is for an additional six months. Assistant City Manager Jacobs reported the line item was in the Public Works budget and when the Harbor Department was set up there was some thought the operation could be taken over for six months. It is just not feasible at this time given the Harbor Department’s current capacity. In response to Committee Member Tucker’s inquiry, Assistant City Manager Jacobs advised the County Board of Supervisors were setting and collecting the fees and then forwarding them to the City. Harbormaster Borsting continued to review the Harbor Department budget and noted the largest portion is dedicated to salaries and benefits. In response to Committee Member Tucker’s inquiry, Harbormaster Borsting reported the County Board of Supervisors recently met to assess and set the fees. He advised a market analysis was conducted to help set those fees. He cited an example of mooring fees, which were $16.00 per night, regardless of the size of the boat. After the market analysis was conducted, they were $1.25 per-square-foot of the boat. Senior Accountant Theresa Schweitzer advised that the fees would be reviewed every three to five years. Harbormaster Borsting reviewed the maintenance and repairs expenditures in the budget, which includes auto services, Marina Park maintenance, and Marina maintenance. In response to Mayor Dixon’s inquiry, Assistant City Manager Jacobs responded that a thorough analysis was completed of all the tasks, and as more services are provided to the community, the fee structure can be analyzed. She noted that the fees went into effect February 22, 2019, and some time will be required to realize the impact. Finance Committee Meeting Minutes March 14, 2019 Page 5 of 10 Mayor Dixon inquired about the current lifeboat and asked if it could be repurposed. Harbormaster Borsting advised that he has not researched this possibility, but will explore them. In response to Committee Member Stapleton’s inquiry, Harbormaster Borsting reported a life jacket is required to be attached for a paddleboard rental. He hopes to create educational opportunities for the operators and the public so they can make better safety decisions. Committee Member Collopy inquired about the potential of navigation buoy lights in the Back Bay. Harbormaster Borsting advised he would be discussing the topic with the Coast Guard. Jim Mosher suggested, pursuant to an approved ballot measure, the Marine Charter Tax, currently set at $1.25 per head, should be a percentage instead of a flat amount so that it can automatically be increased in the future. He also suggested that clear net-costs be provided during the budget process of new services versus old services to provide a true comparison of services before and after the inception of the Harbor Department. Chair O’Neill thanked Harbormaster Borsting for his detailed presentation. There was no further action taken on this item. B. APPOINTMENT OF FINANCE SUBCOMMITTEE TO REVIEW THE BEACON BAY MARKET STUDIES Summary: At the February 12, 2019, City Council Study Session, the City Council requested the Finance Committee create a subcommittee of citizen members to review/reconcile the Beacon Bay market studies prepared by the City’s consultant, Keyser Marston Associates and the resident proponent study. The subcommittee will report back to the full City Council with its recommendations. Recommended Action: Receive and file. Chair O’Neill introduced this item. Committee Member Stapleton recused himself and left the meeting. Committee Member Collopy inquired about the expectations of the subcommittee from Chair O’Neill and from the Finance Committee. Chair O’Neill advised he would expect the subcommittee members watch the video from the study session item. His expectation would be that the subcommittee would review the study that the residents had prepared and presented to the City Council. He noted the City reached out to the State Lands Commission for a review and prepared an analysis of the cost to the City in terms of revenue should it move forward with the proposed rate schedule the residents presented. The residents do not agree with the conclusions, which have been reached by outside consultants. Chair O’Neill advised this subcommittee would be reporting directly back to City Council on this item, given the nature of where it may eventually lead. The initial process would be to try and reconcile the differences between what the residents propose and what the consultants recommend, and to determine what is correct. The second objective would be to complete an appraisal as required by the State Lands Commission before they would consider a modification. He believes it will be a lengthy process given the direction the City has been given from the State Lands Commission. Committee Member Tucker suggests a subcommittee be appointed for review of the information and report back to the Finance Committee for further direction. He noted that there is a huge difference between what homeowners think the revenue loss will be versus what the Finance Committee Meeting Minutes March 14, 2019 Page 6 of 10 consultant is reporting. He feels the subcommittee members should understand the framework and hear concerns from staff’s standpoint. Chair O’Neill clarified the subject is lease revenue from the Beacon Bay leases, in response to Mayor Dixon’s inquiry. Chair O’Neill opened public comments. Jim Mosher raised concern with the subcommittee reporting directly to the full City Council, rather than to the Finance Committee, and believes the subcommittee should be presenting at the regular publicly noticed Finance Committee meetings. City Manager Leung stated that Community Development Director Seimone Jurjis would be the Staff Liaison. MOTION: Chair O’Neill moved, with Committee Member Tucker seconding the motion, to form the subcommittee comprised of Committee Members Tucker, Collopy, and Reed, with the subcommittee presenting its findings to City Council and ending with the completion of the task. The motion carried 6 ayes – 0 noes, 1 abstention (Stapleton). There was no further action taken on this item. C. REVIEW OF REVENUE ASSUMPTIONS Summary: Staff will provide of an overview for revenue assumptions for the FY 2019-20 Proposed Budget. Recommended Action: Receive and file. Finance Director/Treasurer Matusiewicz introduced the item and introduced Accounting Manager Rukshana Virany, Budget Manager Susan Giangrande, Revenue Manager Evelyn Tseng and Senior Accountant Theresa Schweitzer. He advised the budget calendar begins as early as November with revenue estimates due back at the end of November each year. Senior Accountant Schweitzer meets with each of the Department Directors to review their assumptions. Senior Accountant Schweitzer presented a review of the General Fund, Tidelands and Tidelands Capital Funds, Water and Water Capital Funds, Wastewater and Wastewater Capital Funds. She reported FY20 General Fund Revenue projections are $228 million, with the top three being Property Tax, Sales Tax, and Transient Occupancy Tax, making up 76% of the total revenue. Senior Accountant Schweitzer presented the detailed General Fund Revenues depicting the FY18 actuals, FY19 estimate, FY20 projection and Year on Year (YOY) change. For YOY, she estimates a 3% increase for FY19 and just under 2% for FY20, which is a conservative estimate. She presented the Property Taxes and reported the City received about 17.15% of the 1% collected, which equates to 17 cents on the dollar. Property taxes make up 50% of the City’s General Fund Revenues and include a variety of categories. Secured property taxes make up 85% of our total revenues within property tax. For FY20, the City is projecting a 5% increase over FY19 mid-year estimates. Senior Accountant Schweitzer stated the City works with HDL Consultants to assist with Property Tax and Sales Tax forecasting, in response to Committee Member Tucker’s inquiry on how the 5% growth number was calculated. She also noted HDL is typically conservative in their estimates. Finance Committee Meeting Minutes March 14, 2019 Page 7 of 10 Senior Accountant Schweitzer presented the Sales Tax category and reported the City receives 1% of the 7.75% sales tax paid, which equates to 15.7% of General Fund Revenues. There are a handful of industry groups the City collects sales tax on, but Autos and Transportation is the City’s largest, coming in at 30%. The City’s mid-year estimate and FY20 projection are provided by the City’s sales tax consultant, HDL. They complete a very thorough analysis based on actual receipts and remove any anomalies, such as one-time payments or misallocations, and add back in anything that may be missing. HDL then completes an analysis- by-industry group, specific to Newport Beach and applies a growth factor. Finance Director/Treasurer Matusiewicz noted that sales tax is collected based on point-of- sale and the registration tax is collected based on where the owner resides, in response to Committee Member Tucker’s inquiry regarding sales tax revenues for vehicles purchased in Newport Beach. Senior Accountant Schweitzer reported Sales Tax is a more volatile revenue source. For FY20, the City is projecting Sales Tax growth at a much slower rate than prior years. She also advised cars are not selling the way they used to, with less brick and mortar sales and more online sales. FY19 estimates include some increased sales due to Tesla backfilling the Model 3. She noted it is important to mention Tesla just recently announced its online-only sales strategy, which will impact the City if point-of-sale is no longer conducted in Newport Beach and rather in Palo Alto. Finance Director/Treasurer Matusiewicz advised the FY19 increase looks dramatic but will flat line, and noted there was a lot of Sales Tax unreported in FY18 that will hit in FY19. City Manager Leung reported the trend for Sales Tax is to receive a share of the County pool adjustment. Senior Accountant Schweitzer described the percentage breakdown and advised Newport Beach is sixth in the County. The City receives 5% of the 1% the County receives. Senior Accountant Schweitzer reported on Transient Occupancy Tax (TOT) and advised the City collected 10% of rent, which makes up almost 11% of General Fund Revenues. She reported the totals depicted include both hotel and residential, less the 18% payment to Visit Newport Beach. The City is projecting over a 4% increase for FY20. Finance Director/Treasurer Matusiewicz stated TOT comparisons are made with other Orange County cities annually, in response to Mayor Dixon’s inquiry regarding the frequency of the study. He noted the City is lower than other cities and a ballot measure would be needed for any proposed increase. Senior Accountant Schweitzer reported TOT’s in surrounding cities include Laguna Beach at 12%, Santa Monica at 14%, Anaheim at 15%, and City of Los Angeles at 15%. Chair O’Neill requested the TOT survey be placed along with meeting materials so members of the public can review. Finance Director/Treasurer Matusiewicz reported that the City is ramping up efforts to enforce TOT on short-term rental properties. Chair O’Neill advised the Ninth Circuit Court of Appeals had a recent ruling requiring short-term rentals be licensed by the City. Finance Director/Treasurer Matusiewicz advised that the City is using an outside service to identify and collect approximately $500,000 per year in TOT revenue. Additional part-time City Code Enforcement staff help to identify properties and initiate the first citation. Council Member Brenner inquired if there is an online method to see which properties are permitted for short-term rentals and Mayor Dixon advised the information is, in fact, available online. Finance Committee Meeting Minutes March 14, 2019 Page 8 of 10 Council Member Brenner was interested in self-reporting and compliance and Finance Director/Treasurer Matusiewicz reported that the Host-Compliance service helps identify non- compliant rentals but Revenue Division staff does the heavy lifting collecting unpaid taxes due to the City. Senior Accountant Schweitzer stated that Visit Newport Beach (VNB) receives 18% of every 10% collected. Finance Director/Treasurer Matusiewicz advised that VNB receives a Tourism Business Improvement District (TBID) pass-through of 3%. Senior Accountant Schweitzer presented Other Taxes, which makes up 5.1% of General Fund revenues, and noted that the property transfer tax is down considerably from FY18, and the number of sales is going down. Senior Accountant Schweitzer presented Intergovernmental Revenues, which make up .8% of General Fund Revenue and includes the public safety half-cent sales tax. The City does not budget the revenue until it is awarded or known. For this reason, FY20 could be higher than projected. She advised that this includes refunds from CAL FIRE in response to Committee Member Collopy’s inquiry. Budget Manager Susan Giangrande reported CALFIRE is not billed 100% of the unfunded pension liability in response to Committee Member Collopy’s inquiry regarding billing. She also advised the City is backfilling Fire personnel through overtime and there are mutual aid agreements in place. Senior Accountant Schweitzer presented Charges for Services Revenues, which make up 9% of the General Fund. The City is estimating a slight increase over FY19. Senior Accountant Schweitzer presented Fines, Forfeitures and Penalties Revenues, which make up 1.5% of General Fund Revenue. She noted without the one-time bump, the City would be looking at a 2.7% increase for FY20. Senior Accountant Schweitzer presented Use of Money and Property Revenue Use of Money, which includes parking lot and parking permit revenues, as well as rental property revenues and investment income. The City is projecting a 4% increase for FY20. Senior Accountant Schweitzer presented Other Revenues, which includes sale of maps and publications, damage to city property, donations and contributions, and bad debt. The City is projecting a decrease for FY20. Senior Accountant Schweitzer presented Tideland Fund Revenues and reported 99% of revenue within the Tidelands fund comes from Use of Money and Property. It also includes parking meter revenue, lease of properties, onshore and offshore moorings, and Marina Park slip revenues. A handful of the accounts within Tidelands are capped and anything over an established baseline goes into the Harbor Capital Fund to help fund capital improvements within the Harbor. Senior Accountant Schweitzer presented Tideland Fund Capital Fund Revenues, which shows healthy growth estimates for this year and next. She reported in FY18, a resolution was adopted related to rent charged for commercial uses, which phased in the increase. FY19 includes the fully phased-in rates. FY20 shows an increase in guest mooring rental rates. Senior Accountant Schweitzer presented the Water Fund Revenues, with 98% of revenue from Charges for Services and includes sale of water, both fixed and usage charges, meter turn-on, and connection charges. Chair O’Neill reported the City Council recently approved the hiring of a water rate consultant who will likely provide a report through the Finance Committee. Finance Committee Meeting Minutes March 14, 2019 Page 9 of 10 Committee Member Collopy inquired about the differentiation of Tidelands from Uplands and inquired if it was due to sharing of the revenue with the State. Finance Director/Treasurer Matusiewicz clarified if the property is Upland (e.g., not in the Tidelands trust), it is deposited into the General Fund. If the revenue is derived from property in the Tidelands trust, it is deposited into one of the Tidelands funds. He also noted if the revenues exceed the expenses in the Tidelands operating fund, the City would be required to remit the excess revenue to the State Lands Commission. However, revenues deposited into the Tidelands Capital fund could be accumulated to fund future capital improvement projects. Chair O’Neill further clarified this is due to legislation going back 80 years which states the City is the steward of the Harbor on behalf of the State Lands Commission. Committee Member Tucker inquired about the order in which unrestricted monies, such as sales tax, TOT, and property income, are listed and would like to see the report segregated in a fashion where fee based revenues are split out. For the benefit of new Committee Members Finance Director/Treasurer Matusiewicz explained that there are several types of revenues such as taxes, rents, and fees but noted that fees are limited to the cost of the services provided. Chair O’Neill is hoping the advance-metering infrastructure will help the City obtain more data for collecting wastewater revenues. Chair O’Neill opened public comments. Noting there were no members of the public who elected to speak, Chair O’Neill closed public comments. There was no further action taken on this item. D. WORK PLAN REVIEW Summary: Staff will review with the committee the agenda topics scheduled for the remainder of the calendar year. Recommended action: Receive and file. Chair O’Neill stated that the May 30, 2019, meeting is to be included in the Work Plan. He reported it is now budget season and the draft proposed budget will be reviewed on April 25, 2019, and will continue to the following meeting on May 16, 2019. Chair O’Neill added that a Joint City Council and Finance Committee Special Meeting will be held May 28, 2019, during the City Council meeting study session. Chair O’Neill noted that the Finance Committee is scheduled to make a recommendation for the proposed budget at the May 30, 2019, meeting. He noted the Committee will make a determination at the May 30 meeting as whether to conduct a meeting on June 27. Finance Director/Treasurer Matusiewicz requested the City Auditors be invited to the May 16, 2019, meeting to provide a report. Committee Member Collopy requested Finance Director/Treasurer Matusiewicz present the Budget Calendar process at the Finance Committee’s first budget meeting. VI. FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON- DISCUSSION ITEM) Finance Committee Meeting Minutes March 14, 2019 Page 10 of 10 Council Member Brenner would like to see a report regarding the value of the properties rented for charitable purposes. Mayor Dixon advised that Community Development Director Jurjis is currently completing a market analysis of the Boys and Girls Club. Council Member Brenner would like to see a Finance Policy on how often the City should conduct a market analysis of the leased properties. Chair O’Neill recommended an item be placed on the first agenda in September to discuss a potential F-Policy update and requested a discussion with Community Development Director Jurjis and Real Property Administrator Lauren Wooding. Council Member Tucker requested an item be placed on a future agenda to discuss preparing a simple document that explains Unfunded Pension Liability. Chair O’Neill placed the item on the May 30, 2019, agenda. VII. AJOURNMENT The Finance Committee adjourned at 4:59 p.m. to the next regular meeting of the Finance Committee. Filed with these minutes are copies of all materials distributed at the meeting. The agenda for the Regular Meeting was posted on March 7, 2019, at 4:10 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: ___________________________________ _____________________ Will O’Neill, Chair Date Finance Committee Finance Committee Meeting Minutes March 14, 2019 Page 5 of 10 Mayor Dixon inquired about the current lifeboat and asked if it could be repurposed. Harbormaster Borsting advised that he has not researched this possibility, but will explore them. In response to Committee Member Stapleton’s inquiry, Harbormaster Borsting reported a life jacket is required to be attached for a paddleboard rental. He hopes to create educational opportunities for the operators and the public so they can make better safety decisions. Committee Member Collopy inquired about the potential of navigation buoy lights in the Back Bay. Harbormaster Borsting advised he would be discussing the topic with the Coast Guard. Jim Mosher suggested, pursuant to an approved ballot measure, the Marine Charter Tax, currently set at $1.25 per head, should be a percentage instead of a flat amount so that it can automatically be increased in the future. He also suggested that clear net-costs be provided during the budget process of new services versus old services to provide a true comparison of services before and after the inception of the Harbor Department. Chair O’Neill thanked Harbormaster Borsting for his detailed presentation. There was no further action taken on this item. B. APPOINTMENT OF FINANCE SUBCOMMITTEE TO REVIEW THE BEACON BAY MARKET STUDIES Summary: At the February 12, 2019, City Council Study Session, the City Council requested the Finance Committee create a subcommittee of citizen members to review/reconcile the Beacon Bay market studies prepared by the City’s consultant, Keyser Marston Associates and the resident proponent study. The subcommittee will report back to the full City Council with its recommendations. Recommended Action: Receive and file. Chair O’Neill introduced this item. Committee Member Stapleton recused himself and left the meeting. Committee Member Collopy inquired about the expectations of the subcommittee from Chair O’Neill and from the Finance Committee. Chair O’Neill advised he would expect the subcommittee members watch the video from the study session item. His expectation would be that the subcommittee would review the study that the residents had prepared and presented to the City Council. He noted the City reached out to the State Lands Commission for a review and prepared an analysis of the cost to the City in terms of revenue should it move forward with the proposed rate schedule the residents presented. The residents do not agree with the conclusions, which have been reached by outside consultants. Chair O’Neill advised this subcommittee would be reporting directly back to City Council on this item, given the nature of where it may eventually lead. The initial process would be to try and reconcile the differences between what the residents propose and what the consultants recommend, and to determine what is correct. The second objective would be to complete an appraisal as required by the State Lands Commission before they would consider a modification. He believes it will be a lengthy process given the direction the City has been given from the State Lands Commission. Committee Member Tucker suggests a subcommittee be appointed for review of the information and report back to the Finance Committee for further direction. He noted that there is a huge difference between what homeowners think the revenue loss will be versus what the Item No. 4A1 Draft Minutes of March 14, 2019 Proposed by Committee Member Tucker Correspondence April 25, 2019 Finance Committee Meeting Minutes March 14, 2019   Page 9 of 10 Committee Member Collopy inquired about the differentiation of Tidelands from Uplands and inquired if it was due to sharing of the revenue with the State. Finance Director/Treasurer Matusiewicz clarified if the property is Upland (e.g., not in the Tidelands trust), it is deposited into the General Fund. If the revenue is derived from property in the Tidelands trust, it is deposited into one of the Tidelands funds. He also noted if the revenues exceed the expenses in the Tidelands operating fund, the City would be required to remit the excess revenue to the State Lands Commission. However, revenues deposited into the Tidelands Capital fund could be accumulated to fund future capital improvement projects. Chair O’Neill further clarified this is due to legislation going back 80 years which states the City is the steward of the Harbor on behalf of the State Lands Commission. Committee Member Tucker noted that much of the City’s revenue comes to the City without the City delivering any goods or services for that moneyinquired about the order in which unrestricted monies, such as property taxes, sales taxes, TOT, business license fees and income from financial assets and property holdings. income, Other sources of income are generated by the City providing goods or services with the charges intended to recoup costs the City incurs in providing such goods and services. Committee Member Tucker suggested that the revenue streams generated that are unrelated to provision of goods or services be grouped (and sub-totaled) so the decision makers can easily see the revenue generated by so called “unrestricted” sources as compared to revenue generated by the provision of goods and services. are listed and would like to see the report segregated in a fashion where fee based revenues are split out. For the benefit of new Committee Members Finance Director/Treasurer Matusiewicz explained that there are several types of revenues such as taxes, rents, and fees but noted that fees are limited to the cost of the services provided. Chair O’Neill is hoping the advance-metering infrastructure will help the City obtain more data for collecting wastewater revenues. Chair O’Neill opened public comments. Noting there were no members of the public who elected to speak, Chair O’Neill closed public comments. There was no further action taken on this item. D. WORK PLAN REVIEW Summary: Staff will review with the committee the agenda topics scheduled for the remainder of the calendar year. Recommended action: Receive and file. Chair O’Neill stated that the May 30, 2019, meeting is to be included in the Work Plan. He reported it is now budget season and the draft proposed budget will be reviewed on April 25, 2019, and will continue to the following meeting on May 16, 2019. Chair O’Neill added that a Joint City Council and Finance Committee Special Meeting will be held May 28, 2019, during the City Council meeting study session. Chair O’Neill noted that the Finance Committee is scheduled to make a recommendation for the proposed budget at the May 30, 2019, meeting. He noted the Committee will make a determination at the May 30 meeting as whether to conduct a meeting on June 27. Finance Director/Treasurer Matusiewicz requested the City Auditors be invited to the May 16, 2019, meeting to provide a report. Finance Committee Meeting Minutes March 14, 2019   Page 10 of 10 Committee Member Collopy requested Finance Director/Treasurer Matusiewicz present the Budget Calendar process at the Finance Committee’s first budget meeting. VI. FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON- DISCUSSION ITEM) Council Member Brenner would like to see a report regarding the value of the properties rented for charitable purposes. Mayor Dixon advised that Community Development Director Jurjis is currently completing a market analysis of the Boys and Girls Club. Council Member Brenner would like to see a Finance Policy on how often the City should conduct a market analysis of the leased properties. Chair O’Neill recommended an item be placed on the first agenda in September to discuss a potential F-Policy update and requested a discussion with Community Development Director Jurjis and Real Property Administrator Lauren Wooding. Council Member Tucker requested an item be placed on a future agenda to discuss preparing a background non-technical explanation ofsimple document that explains Unfunded Pension Liability for future use by new members of the Finance Committee. Chair O’Neill placed the item on the May 30, 2019, agenda. VII. AJOURNMENT The Finance Committee adjourned at 4:59 p.m. to the next regular meeting of the Finance Committee. Filed with these minutes are copies of all materials distributed at the meeting. The agenda for the Regular Meeting was posted on March 7, 2019, at 4:10 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: ___________________________________ _____________________ Will O’Neill, Chair Date Finance Committee April 25, 2019, Finance Committee Agenda Comments These comments on an item on the Newport Beach City Council Finance Committee agenda are submitted by: Jim Mosher ( jimmosher@yahoo.com ), 2210 Private Road, Newport Beach 92660 (949-548-6229) Item IV.A. MINUTES OF MARCH 14, 2019 Changes to the draft minutes passages shown in italics are suggested in strikeout underline format. Page 2, line 2 from end: “… the City has received $125,000 in grant funding for derelict vessels through the Division of Boats Boating and Waterways, Surrendered and Abandoned Vessel Exchange (SAVE) program, …” Page 3, paragraph 4: “Harbormaster Borsting advised the Harbor Department would be expanding seasonal operation hours and developing an after-hours arrival programs program similar to what would be found at an RV park.” Page 3, paragraph 5: “Harbormaster Borsting added that another goal is the review of Title 17 of the Municipal Code …” Page 3, paragraph 6: “In response to Mayor Dixon’s inquiry, Harbormaster Borsting advised the Harbor Department manages the Marina Park guest slip rental, in response to Mayor Dixon’s inquiry.” Page 3, paragraph 7: “Harbormaster Borsting advised that an additional goal will be to assess the Marina Marine Activities Permits process, …” Page 4, paragraph 3 from end: “In response to Committee Member Tucker’s inquiry, Harbormaster Borsting reported the County Board of Supervisors City Council recently met to assess and set the fees.” [?? This appears to be a reference to the Council setting new harbor fees as Item 11 at their January 22, 2019, meeting.] Page 5, paragraph 1, sentence 2: “Harbormaster Borsting advised that he has not researched this possibility, but will explore them it.” Page 6, last paragraph: “In response to Committee Member Tucker’s inquiry on how the 5% growth number was calculated, Senior Accountant Schweitzer stated the City works with HDL Consultants to assist with Property Tax and Sales Tax forecasting, in response to Committee Member Tucker’s inquiry on how the 5% growth number was calculated.” Page 7, paragraph 2: “In response to Committee Member Tucker’s inquiry regarding sales tax revenues for vehicles purchased in Newport Beach, Finance Director/Treasurer Matusiewicz noted that sales tax is collected based on point-of-sale and the registration tax is collected based on where the owner resides, in response to Committee Member Tucker’s inquiry regarding sales tax revenues for vehicles purchased in Newport Beach.” Item No. 4A2 Draft Minutes of March 14, 2019 Correspondence April 25, 2019 April 25, 2019, Finance Committee Item IV.A comments - Jim Mosher Page 2 of 2 Page 8, paragraph 4, last sentence: “In response to Committee Member Collopy’s inquiry, she She advised that this includes refunds from CAL FIRE in response to Committee Member Collopy’s inquiry.” Page 8, paragraph 5, first sentence: “In response to Committee Member Collopy’s inquiry regarding billing, Budget Manager Susan Giangrande reported CALFIRE is not billed 100% of the unfunded pension liability in response to Committee Member Collopy’s inquiry regarding billing.” Page 9, paragraph 5: “Chair O’Neill is hoping the advance advanced-metering infrastructure will help the City obtain more data for collecting wastewater revenues.” [Was “wastewater” intended to read “water”? The amounts charged for both are based on the water meter reading.] Page 9, paragraph 3 from end of Item D: “He noted the Committee will make a determination at the May 30 meeting as to whether to conduct a meeting on June 27.” FY 2 0 1 9 - 2 0 P r o p o s e d B u d g e t Ci t y o f N e w p o r t B e a c h F i n a n c e C o m m i t t e e Ap r i l 2 5 , 2 0 1 9 ww w . n e w p o r t b e a c h c a . g o v / b u d g e t It e m N o . 5 A 1 Pr o p o s e d F Y 2 0 1 9 - 2 0 B u d g e t O v e r v i e w St a f f P r e s e n t a t i o n Ap r i l 2 5 , 2 0 1 9 Pr i n c i p l e s U s e d i n t h e D e v e l o p m e n t o f t h e F Y 2 0 1 9 - 2 0 2 0 B u d g e t Bu d g e t E m p h a s i z e s : • Pr o v i d i n g H i g h Q u a l i t y Mu n i c i p a l S e r v i c e s t h a t Re s i d e n t s E x p e c t • Pr o v i d i n g a S a f e a n d S e c u r e Ne i g h b o r h o o d • Ke e p i n g N e w p o r t B e a c h Lo o k i n g G r e a t • Ma i n t a i n i n g a P r o s p e r o u s , Fi s c a l l y S u s t a i n a b l e , a n d Ec o n o m i c a l l y V i a b l e C i t y 2 St r a i g h t t o t h e P o i n t • Bu d g e t i s b a l a n c e d • Bu d g e t a s s u m e s s t r o n g p r o p e r ty t a x g r o w t h r a t e w h i l e m o s t o t h e r r e v e n u e s l o w i n g • Pr o p o s e d E x p e n d i t u r e s r e m a i n r e l a t i v e l y f l a t • Ad h e r e d t o C o u n c i l g u i d a n c e r e g a r d i n g th e u s e o f F Y 2 0 1 7 - 1 8 b u d g e t s u r p l u s • Co n t i n u e d a g g r e s s i v e p a y m e n t s c h e d u le o f u n f u n d e d p e n s i o n l i a b i l i t y • Co n t i n u e d f o c u s o n e n h a n c i n g t h e c o m m u n i t y ’ s q u a l i t y o f l i f e a n d s a f e t y • Co n t i n u e d f u n d i n g o f i n f r a s t r u c t u r e m a s t e r pl a n s a n d n e i g h b o r h o o d e n h a n c e m e n t p r o j e c t s • Ge n e r a l P l a n U p d a t e F u n d e d • Fu n d e d A i r p o r t G r o w t h C o n t r o l E f f o r t s • Ro b u s t I n t e r n a l a n d E x t e r n a l A u d i t P r o g r a m s 3 Bu d g e t D e v e l o p m e n t T i m e l i n e So u r c e a n d U s e P r o j e c t i o n s Pe r s o n n e l B u d g e t D e v e l o p m e n t De p a r t m e n t a l C I P P r e p a r a t i o n De p a r t m e n t a l B u d g e t P r e p a r a t i o n Ci t y M a n a g e r R e v i e w Fi n a n c e C o m m i t t e e R e v i e w Ci t y C o u n c i l R e v i e w Bu d g e t A d o p t i o n Bu d g e t I m p l e m e n t a t i o n Oc t            No v              De c              Ja n                          Fe b                      Ma r                    Ap r                  Ma y                Ju n              Jul         Aug          Sep De t a i l e d B u d g e t D e v e l o p m e n t T i m e l i n e Da t e R e s o u r c e A c t i o n I t e m Th u r s d a y , O c t o b e r 1 8 , 2 0 1 8 Fi n a n c e C o m m i t t e e St a t u s o f I n s u r a n c e R e s e r v e ( G e n e r a l L i a b i l i t y a n d Wo r k e r s ’ C o m p e n s a t i o n ) F u n d Fr i d a y , N o v 2 , 2 0 1 8 Fi n a n c e / D e p a r t m e n t s FY 2 0 1 9 - 2 0 R e v e n u e i n s t r u c t i o n s d i s t r i b u t e d – D u e Da t e F r i N o v 3 0 t h Th u r s d a y , N o v 1 5 , 2 0 1 8 Fi n a n c e / D e p a r t m e n t s R e v e n u e b u d g e t w o r k s h o p f r o m 9 - 1 2 i n E O C Th u r s d a y , N o v e m b e r 2 9 , 2 0 1 8 Fi n a n c e C o m m i t t e e Re v i e w f u n d e d s t a t u s , l a t e s t v a l u a t i o n a n d c o n s i d e r FY 2 0 p e n s i o n f u n d i n g r e c o m m e n d a t i o n Fr i d a y , N o v 3 0 , 2 0 1 8 De p a r t m e n t s R e v e n u e e s t i m a t e s d u e t o F i n a n c e Tu e s d a y , D e c 4 , 2 0 1 8 Fi n a n c e / D e p a r t m e n t s FY 2 0 e x p e n d i t u r e i n s t r u c t i o n s e m a i l e d o u t a n d pr o j e c t i o n s a v a i l a b l e i n M u n i s f o r d e p a r t m e n t re v i e w / i n p u t . Ex p e n d i t u r e B u d g e t W o r k s h o p f r o m 9 - 1 2 i n E O C Fr i d a y , J a n 1 1 , 2 0 1 9 De p a r t m e n t s Co n t r a c t C P I A d j u s t m e n t f o r m s d u e Bu d g e t T r a n s f e r F o r m s d u e Th u r s d a y , J a n 1 7 , 2 0 1 9 Fi n a n c e C o m m i t t e e A c o n s i d e r a t i o n o f p e n s i o n a c c r u e d l i a b i l i t y b a s i c s a n d it s a p p l i c a t i o n t o N e w p o r t B e a c h p e n s i o n l i a b i l i t y Ja n 1 4 – 1 8 , 2 0 1 9 Re v e n u e / D e p a r t m e n t s Me e t w i t h R e v e n u e d i v i s i o n t o r e v i e w r e v e n u e b u d g e t su b m i t t a l s Tu e s d a y , J a n 2 2 , 2 0 1 9 Co u n c i l S t u d y S e s s i o n B e a c o n E c o n o m i c s E c o n o m i c F o r e c a s t Fr i d a y , J a n 2 5 , 2 0 1 9 De p a r t m e n t s D e p a r t m e n t P r o g r a m E n h a n c e m e n t R e q u e s t s d u e Sa t u r d a y , F e b 2 , 2 0 1 9 Sp e c i a l C o u n c i l M e e t i n g C o u n c i l G o a l S e t t i n g W o r k s h o p De t a i l e d B u d g e t D e v e l o p m e n t T i m e l i n e Da t e R e s o u r c e A c t i o n I t e m Th u r s d a y , F e b 1 4 , 2 0 1 9 Fi n a n c e C o m m i t t e e L o n g - r a n g e F i n a n c i a l F o r e c a s t ( L R F F ) U p d a t e Fe b 1 9 – M a r c h 1 , 2 0 1 9 Ci t y M a n a g e r / D e p t s . Me e t w i t h C i t y M a n a g e r t o d i s c u s s d e p a r t m e n t bu d g e t s & P r o g r a m E n h a n c e m e n t R e q u e s t s Tu e s d a y , M a r c h 1 2 , 2 0 1 9 Ci t y C o u n c i l S t u d y S e s s i o n E a r l y L o o k C I P B u d g e t Th u r s d a y , M a r c h 1 4 , 2 0 1 9 Fi n a n c e C o m m i t t e e D i s c u s s r e v e n u e a s s u m p t i o n s Fr i d a y , M a r c h 1 5 , 2 0 1 9 Ci t y M a n a g e r / F i n a n c e F i n a l i z e C i ty M a n a g e r p r o p o s e d b u d g e t d e c i s i o n s Ma r c h 1 8 – 2 9 , 2 0 1 9 Fi n a n c e / P u b l i c W o r k s P r e p a r e & p r i n t p r o p o s e d b u d g e t d o c u m e n t s Th u r s d a y , A p r i l 1 1 , 2 0 1 9 Ci t y M a n a g e r Su b m i t p r o p o s e d b u d g e t d o c u m e n t s t o C i t y C o u n c i l & Fi n a n c e C o m m i t t e e Th u r s d a y , A p r i l 2 5 , 2 0 1 9 Fi n a n c e C o m m i t t e e R e v i e w p r o p o s e d o p e r a t i n g b u d g e t Tu e s d a y , M a y 1 4 , 2 0 1 9 Ci t y C o u n c i l C o u n c i l r e v i e w o f p r o p o s e d o p e r a t i n g b u d g e t Tu e s d a y , M a y 2 8 , 2 0 1 9 Ci t y C o u n c i l / F i n a n c e C o m m i t t e e J o i n t S t u d y S e s s i o n C o u n c i l r e v i e w o f p r o p o s e d C I P Th u r s d a y , M a y 3 0 , 2 0 1 9 Fi n a n c e C o m m i t t e e Ma k e f i n a l r e c o m m e n d a t i o n t o t h e C i t y C o u n c i l o n t h e pr o p o s e d F Y 2 0 1 9 - 2 0 O p e r a t i n g B u d g e t Tu e s d a y , J u n e 1 1 , 2 0 1 9 Ci t y C o u n c i l M e e t i n g Pu b l i c h e a r i n g a n d a d o p t i o n o f F Y 2 0 b u d g e t a n d GA N N l i m i t Mo n d a y , J u l y 1 , 2 0 1 9 FY 2 0 B e g i n s Su m m a r y o f A l l F u n d s 7 20 1 7 ‐18 2 0 1 8 ‐19 2 0 1 9 ‐20 RE V I S E D R E V I S E D P R O P O S E D EX P E N D I T U R E S E X P E N D I T U R E S E X P E N D I T U R E S $  VAR %  VAR OP E R A T I N G  BU D G E T 2 9 4 , 5 7 6 , 3 8 8   29 8 , 9 5 9 , 5 7 6   30 3 , 7 5 2 , 6 8 8   4, 7 9 3 , 1 1 2  1.6% CI P  PR O J E C T S Ne w  Ap p r o p r i a t i o n s 4 1 , 0 6 9 , 5 3 8   52 , 3 2 5 , 7 9 2   44 , 4 9 1 , 1 0 0   (7 , 8 3 4 , 6 9 2 ) ‐15.0% Re b u d g e t / C a r r y  Fo r w a r d 3 5 , 1 9 4 , 8 0 9   30 , 7 5 7 , 5 5 0   51 , 7 2 4 , 1 1 0   20 , 9 6 6 , 5 6 0  68.2% 76 , 2 6 4 , 3 4 7   83 , 0 8 3 , 3 4 2   96 , 2 1 5 , 2 1 0   13 , 1 3 1 , 8 6 8  15.8% TO T A L  BU D G E T $     37 0 , 8 4 0 , 7 3 5   $     38 2 , 0 4 2 , 9 1 8   $     39 9 , 9 6 7 , 8 9 8   $     17 , 9 2 4 , 9 8 0  4.7% Ge n e r a l F u n d R e v e n u e ( i n m i l l i o n s ) 8 49 % 16 % 11 % 5% 19 % Pr o p e r t y T a x e s $ 1 1 3 . 6 Sa l e s T a x $ 3 5 . 7 Tr a n s i e n t O c c u p a n c y T a x $ 2 4 . 5 Ot h e r T a x e s $ 1 1 . 6 Al l O t h e r S o u r c e s $ 4 4 . 0 Ge n e r a l F u n d R e v e n u e 9 FY  18 ‐19 F Y  19 ‐20 Re v i s e d P r o p o s e d $  VA R %  VAR Pr o p e r t y T a x e s 10 6 , 7 2 3 , 6 2 9        11 3 , 6 0 1 , 4 7 4        6, 8 7 7 , 8 4 5        6.4% Sa l e s T a x e s 36 , 9 9 7 , 6 4 8            35 , 6 9 7 , 0 9 0            (1 , 3 0 0 , 5 5 8 )    ‐ 3.5% Tr a n s i e n t O c c u p a n c y T a x 23 , 3 9 6 , 1 0 3            24 , 4 5 8 , 1 3 1            1, 0 6 2 , 0 2 8        4.5% Ot h e r T a x e s 11 , 2 8 5 , 7 6 4            11 , 5 9 7 , 8 8 6            31 2 , 1 2 2              2.8% Li c e n s e s a n d P e r m i t s 5, 0 2 1 , 4 5 1                  4, 9 1 8 , 4 1 2                  (1 0 3 , 0 3 9 )            ‐ 2.1% In t e r g o v e r n m e n t a l 2, 3 3 4 , 8 0 2                  1, 8 4 2 , 7 6 7                  (4 9 2 , 0 3 5 )            ‐ 21.1% Ch a r g e s f o r S e r v i c e s 20 , 1 5 0 , 7 3 8            21 , 5 0 6 , 6 3 1            1, 3 5 5 , 8 9 3        6.7% Fi n e s & P e n a l t i e s 3, 9 4 2 , 6 1 7                  3, 4 7 5 , 4 2 8                  (4 6 7 , 1 8 9 )            ‐ 11.8% Us e o f M o n e y & P r o p e r t y 10 , 5 6 6 , 8 6 8            11 , 6 9 3 , 4 7 0            1, 1 2 6 , 6 0 2        10.7% Ot h e r R e v e n u e s 99 3 , 4 3 8                        60 0 , 8 7 1                        (3 9 2 , 5 6 7 )            ‐ 39.5% To t a l G e n e r a l F u n d 22 1 , 4 1 3 , 0 5 8 $  22 9 , 3 9 2 , 1 6 0 $  7, 9 7 9 , 1 0 2 $  3.6% Pr o p e r t y T a x 10 4. 1 % 2. 7 % -0 . 5 % -0 . 1 % 14 . 1 % -2 . 1 % 5. 3 % 6. 4 % 8. 3 % 4. 8 % 5. 0 % 6.4% $ - $ 2 0 , 0 0 0 , 0 0 0 $ 4 0 , 0 0 0 , 0 0 0 $ 6 0 , 0 0 0 , 0 0 0 $ 8 0 , 0 0 0 , 0 0 0 $ 1 0 0 , 0 0 0 , 0 0 0 $ 1 2 0 , 0 0 0 , 0 0 0 Pr o p e r t y T a x Fi s c a l Y e a r Sa l e s T a x 11 -1 4 . 9 % -1 3 . 6 % 12 . 6 % 7. 6 % 4. 6 % 10 . 8 % 6. 5 % 12 . 3 % -8 . 7 % 4. 0 % 5. 6 % -3.5% $ - $ 5 , 0 0 0 , 0 0 0 $ 1 0 , 0 0 0 , 0 0 0 $ 1 5 , 0 0 0 , 0 0 0 $ 2 0 , 0 0 0 , 0 0 0 $ 2 5 , 0 0 0 , 0 0 0 $ 3 0 , 0 0 0 , 0 0 0 $ 3 5 , 0 0 0 , 0 0 0 $ 4 0 , 0 0 0 , 0 0 0 Sa l e s T a x Fi s c a l Y e a r -1 2 . 4 % 0. 7 % 39 . 5 % 12 . 7 % 11 . 9 % -8 . 3 % 12 . 1 % 2. 8 % 6. 9 % 2. 0 % 2. 5 % 4.5% $ - $ 5 , 0 0 0 , 0 0 0 $ 1 0 , 0 0 0 , 0 0 0 $ 1 5 , 0 0 0 , 0 0 0 $ 2 0 , 0 0 0 , 0 0 0 $ 2 5 , 0 0 0 , 0 0 0 $ 3 0 , 0 0 0 , 0 0 0 Tr a n s i e n t O c c u p a n c y T a x Tr a n s i e n t O c c u p a n c y T a x ( T O T ) 12 Fi s c a l Y e a r Ge n e r a l F u n d S o u r c e s a n d U s e s 13 20 1 8 ‐19 F Y 1 9 ‐20 Re v i s e d P r o p o s e d   Bu d g e t B u d g e t $  VAR %  VAR SO U R C E S UN R E S T R I C T E D  FU N D  BA L A N C E FY  16 ‐17  Su r p l u s 1 2 , 0 9 0 , 7 4 3 $                         ‐ $                                                       (1 2 , 0 9 0 , 7 4 3 ) $                   ‐100.0% FY  17 ‐18  Su r p l u s ‐                                                            13 , 0 2 0 , 3 3 3                              13 , 0 2 0 , 3 3 3                            NA Us e  of  FY 1 7 ‐18  Su r p l u s 1 , 4 2 8 , 8 8 5                                    (1 , 4 2 8 , 8 8 5 )                                (2 , 8 5 7 , 7 7 0 )                              ‐200.0% FY  18 ‐19  Su r p l u s ‐                                                            2, 4 6 2 , 6 9 2                                    2,462,692                                NA                                                      RE V E N U E S 22 1 , 4 1 3 , 0 5 8                          22 9 , 3 9 2 , 1 6 1                          7,979,103                                3.6% Le s s :    Re s t r i c t e d  Re v e n u e s ( 7 7 5 , 7 3 5 )                                        (6 7 2 , 0 0 0 )                                        103,735                                        ‐13.4% Us e  of  Re s t r i c t e d  Re v e n u e s  an d  En c u m b r a n c e s 1 , 8 7 8 , 7 4 4                                    20 , 0 0 0                                              (1 , 8 5 8 , 7 4 4 )                              ‐98.9% Tr a n s f e r s ‐In 8 , 1 4 0 , 5 9 5                                    9, 4 7 5 , 2 3 6                                    1,334,641                                16.4% TO T A L  SO U R C E S 2 4 4 , 1 7 6 , 2 9 0 $                     25 2 , 2 6 9 , 5 3 7 $                     8,093,247 $                           3.3% US E S Op e r a t i n g  Ex p e n d i t u r e s 2 1 1 , 8 5 3 , 3 6 7 $                     21 8 , 6 8 9 , 3 2 9 $                     6,835,962 $                           3.2% Tr a n s f e r s  Ou t 2 6 , 3 3 7 , 8 8 5                              31 , 6 8 0 , 2 5 2                              5,342,367                                20.3%  Co n t i n g e n c y  Re s e r v e  In c r e a s e ( D e c r e a s e ) 3 , 5 2 2 , 3 4 6                                    ‐                                                            (3 , 5 2 2 , 3 4 6 )                              ‐100.0% TO T A L  US E S 2 4 1 , 7 1 3 , 5 9 8 $                     25 0 , 3 6 9 , 5 8 1 $                     8,655,983 $                           3.6% UN R E S T R I C T E D  RE S O U R C E S 2 , 4 6 2 , 6 9 2 $                             1, 8 9 9 , 9 5 6 $                             (562,736) $                               ‐ 22.9% Pr o p o s e d G e n e r a l F u n d S u r p l u s A l l o c a t i o n 14 Ne a r  Te r m L o n g ‐Te r m   Im p r o v e m e n t s   Ob l i g a t i o n s   TOTAL Ha r b o r  & Be a c h e s  Ma s t e r  Pl a n $            2, 0 0 0 , 0 0 0   $    2,000,000   Ne i g h b o r h o o d  En h a n c e m e n t  Pr o j e c t s $          6, 5 0 0 , 0 0 0   6,500,000  * Fa c i l i t i e s  Fi n a n c i n g  Pl a n 1 , 5 2 0 , 3 3 3   1,520,333   Wo r k e r s '  Co m p e n s a t i o n 3 , 0 0 0 , 0 0 0   3,000,000   $           6, 5 0 0 , 0 0 0   $           6, 5 2 0 , 3 3 3   $ 13,020,333   49 . 9 % 5 0 . 1 % * $1 , 4 2 8 , 8 8 5  of  FY  17 ‐18  Su r p l u s  wa s  us e d  in  FY  18 ‐19  SC E  20 A  Cr e d i t s Op e n B u d g e t Ci t i z e n T r a n s p a r e n c y P o r t a l • Ea s y p u b l i c a c c e s s v i a a n y i n t e r n e t b r o w s e r d y n a m i c d a t a fo r F Y 1 9 a n d h i s t o r i c a l s e a r c h e s • Tr a n s a c t i o n d e t a i l s f o r g r a n u l a r i n q u i r i e s • Da t a e x p o r t o p t i o n s v i a E x c e l , P D F o r i m a g e f i l e s ww w . n e w p o r t b e a c h c a . g o v /openbudget 15 In c l u d e s P r o p o s e d F Y 2 0 1 9 / 2 0 co m p a r i s o n t o F Y 2 0 1 8 / 1 9 B u d g e t 16 17 Ad d a f o o t e r 18 Ge n e r a l F u n d E x p e n d i t u r e s ( i n m i l l i o n s ) 19 53 % 33 % 4% 10 % Sa l a r i e s & B e n e f i t s $ 1 7 3 . 2 Ma i n t e n a n c e & O p e r a t i o n $ 1 0 8 . 3 Ca p i t a l O u t l a y $ 1 1 . 4 Tr a n s f e r s $ 3 3 . 8 IN C O R R E C T S L I D E , P L E A S E R E F E R T O A D D I T I O N A L M A T E R I A L S R E C E I V E D I T E M N O . 5 A 2 F O R C O R R E C T E D S L I D E Ge n e r a l F u n d E x p e n d i t u r e s b y D e p a r t m e n t 20 FY  17 ‐18   FY  18 ‐19   FY 1 9 ‐20   Ac t u a l s R e v i s e d P r o p o s e d $ VAR %  VAR Ge n e r a l  Go v e r n m e n t Ci t y  Co u n c i l 1 , 0 3 2 , 2 3 5   96 9 , 6 3 9   88 1 , 1 9 9   (88,440)‐9.1% Ci t y  Cl e r k 9 9 8 , 2 7 7   1, 1 3 3 , 0 8 2   1, 0 6 5 , 4 3 9   (67,643)‐6.0% Ci t y  Ma n a g e r 2 , 4 7 1 , 2 7 0   3, 1 3 0 , 6 0 5   3, 4 4 4 , 1 5 5   313,550  10.0% Hu m a n  Re s o u r c e s 2 , 8 6 7 , 3 8 9   3, 1 7 8 , 0 9 0   3, 4 3 2 , 7 9 5   254,705  8.0% Ci t y  At t o r n e y 2 , 2 3 3 , 5 1 0   2, 5 9 3 , 2 9 8   2, 6 2 3 , 7 8 4   30,486  1.2% Fi n a n c e 6 , 4 7 9 , 6 6 8   6, 8 9 7 , 2 5 5   7, 1 5 6 , 4 4 8   259,193  3.8% To t a l  Ge n e r a l  Go v e r n m e n t $        16 , 0 8 2 , 3 4 9   $       17 , 9 0 1 , 9 6 9   $       18 , 6 0 3 , 8 2 0   $ 1,819,620  10.2% Pu b l i c  Sa f e t y Po l i c e  De p a r t m e n t 5 9 , 3 2 2 , 5 4 9   62 , 9 3 9 , 2 2 8   66 , 0 8 3 , 9 8 5   3,144,757  5.0% Fi r e  De p a r t m e n t 4 9 , 9 7 7 , 7 1 3   51 , 0 4 8 , 0 1 0   53 , 1 9 0 , 7 0 4   2,142,694  4.2% To t a l  Pu b l i c  Sa f e t y $  10 9 , 3 0 0 , 2 6 2   $ 11 3 , 9 8 7 , 2 3 8   $ 11 9 , 2 7 4 , 6 8 9   $ 5,287,451  4.6% Ge n e r a l F u n d E x p e n d i t u r e s b y D e p a r t m e n t c o n t . 21 FY  17 ‐18   FY  18 ‐19   FY 1 9 ‐20   Ac t u a l s R e v i s e d P r o p o s e d $  VAR %  VAR Co m m u n i t y  De v e l o p m e n t Co m m u n i t y  De v e l o p m e n t 1 1 , 6 4 4 , 4 1 8   12 , 9 1 6 , 6 3 6   12 , 8 7 1 , 2 2 8   (45,408)‐0.4% Pu b l i c  Wo r k s ‐Wa t e r  Qu a l i t y 7 4 4 , 7 0 1   78 1 , 1 8 7   1, 2 4 3 , 2 8 6   462,099  59.2% To t a l  Co m m u n i t y  De v e l o p m e n t $        12 , 3 8 9 , 1 1 9   $       13 , 6 9 7 , 8 2 3   $       14 , 1 1 4 , 5 1 4   $     416,691  3.0% Pu b l i c  Wo r k s Pu b l i c  Wo r k s  ‐ Mu n i c i p a l  Op e r a t i o n s 2 4 , 3 9 4 , 0 5 0   26 , 3 9 3 , 8 6 0   26 , 9 0 7 , 9 2 7   514,067  1.9% Pu b l i c  Wo r k s 7 , 8 1 7 , 9 4 7   9, 0 4 4 , 9 5 9   9, 8 1 8 , 3 7 4   773,415  8.6% Ut i l i t i e s 3 , 9 9 5 , 1 6 3   4, 3 3 6 , 1 4 2   4, 4 4 8 , 7 5 0   112,608  2.6% To t a l  Pu b l i c  Wo r k s $        36 , 2 0 7 , 1 6 0   $       39 , 7 7 4 , 9 6 1   $       41 , 1 7 5 , 0 5 1   $ 1,400,090  3.5% Co m m u n i t y  Se r v i c e s Re c r e a t i o n  & Sr .  Se r v i c e s 1 2 , 4 2 8 , 0 2 8   13 , 6 5 6 , 2 1 9   13 , 8 4 9 , 8 5 9   193,640  1.4% Li b r a r i e s  & Ar t s 8 , 9 0 1 , 6 4 6   9, 6 7 0 , 0 6 5   9, 2 4 4 , 5 7 9   (425,486)‐4.4% Fi n a n c e  ‐ Pa r k i n g  Me t e r s 1 , 7 5 4 , 7 9 8   3, 0 3 3 , 1 9 6   2, 3 0 4 , 9 2 1   (728,275)‐24.0% To t a l  Co m m u n i t y  Se r v i c e s $        23 , 0 8 4 , 4 7 2   $       26 , 3 5 9 , 4 8 0   $       25 , 3 9 9 , 3 5 9   $   (960,121)‐3.6% Ge n e r a l  Fu n d  No n  De p t  Ex p 2 6 4 , 2 9 7   13 1 , 8 9 6   12 1 , 8 9 6   (10,000)‐7.6% Ge n e r a l  Fu n d  Op e r a t i n g  Ex p e n d i t u r e s $  19 7 , 3 2 7 , 6 5 9   $ 21 1 , 8 5 3 , 3 6 7   $ 21 8 , 6 8 9 , 3 2 9   $ 6,835,962  3.2% Ge n e r a l F u n d T r a n s f e r s 22 In t e r n a l S e r v i c e F u n d C h a r g e s 23 FY  17 ‐18 F Y  18 ‐19 F Y  19 ‐20 Re v i s e d A d o p t e d P r o p o s e d $  VA R %  VAR Ge n e r a l  Li a b i l i t y 4 , 0 6 8 , 2 3 4   6, 2 3 9 , 0 0 0   6, 6 1 5 , 0 0 0   376,000  6.0% Wo r k e r ' s  Co m p e n s a t i o n 2 , 7 5 3 , 9 2 1   3, 7 5 3 , 9 2 1   4, 6 1 0 , 0 0 0   856,079  22.8% Co m p e n s a t e d  Ab s e n c e s 2 , 5 0 9 , 5 4 7   2, 5 3 3 , 6 4 9   2, 6 2 5 , 0 0 2   91,353  3.6% IT  Op e r a t i o n s  & Eq u i p m e n t 5 , 7 5 6 , 1 5 5   5, 9 6 4 , 6 1 9   7, 1 4 9 , 1 3 6   1, 1 8 4 , 5 1 7  19.9% Ve h i c l e  Ma i n t  & Re p l a c e m e n t 4 , 8 1 6 , 2 7 1   4, 9 5 8 , 7 9 8   5, 0 9 7 , 7 2 4   138,926  2.8% Ot h e r  Eq u i p m e n t  Re p l a c e m e n t 8 0 0 , 8 9 3   80 0 , 8 9 3   89 5 , 5 3 5   94,642  11.8% Re t i r e e  In s u r a n c e  or  OP E B 4 , 0 4 2 , 8 3 8   3, 8 3 4 , 9 1 6   3, 8 5 2 , 2 5 1   17,335  0.5% To t a l $    24 , 7 4 7 , 8 5 9   $   28 , 0 8 5 , 7 9 6   $   30 , 8 4 4 , 6 4 8   2, 7 5 8 , 8 5 2  9.8% Ac c e l e r a t e d P E R S P a y m e n t H i s t o r y ( A l l F u n d s ) 24 Fu n d e d S t a t u s 25 70 . 1 % 74 . 2 % 71 . 6 % 67 . 9 % 70 . 3 % 71 . 7 % 79 . 8 % 62 . 7 % 65 . 6 % 64 . 5 % 60 . 8 % 62 . 8 % 64 . 3 % 73 . 1 % 0. 0 % 10 . 0 % 20 . 0 % 30 . 0 % 40 . 0 % 50 . 0 % 60 . 0 % 70 . 0 % 80 . 0 % 90 . 0 % 20 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 Mi s c e l l a n e o u s Sa f e t y Ca l P E R S P r o j e c t i o n As s u m i n g 7 . 0 % a n n u a l r e t u r n an d n o f u r t h e r A D P s 15 Y e a r P a y d o w n o f U n f u n d e d P e n s i o n L i a b i l i t y 15 Y e a r A m o r t i z a t i o n a s s u m e s a l l f u t u r e A c t u a r i a l A s s u m p t i o n s a r e b e i n g m e t i n c l u d i n g 7 % a s s u m e d i n v e s t m e n t r e t u r n . 26 $- $5 0 , 0 0 0 , 0 0 0 $1 0 0 , 0 0 0 , 0 0 0 $1 5 0 , 0 0 0 , 0 0 0 $2 0 0 , 0 0 0 , 0 0 0 $2 5 0 , 0 0 0 , 0 0 0 $3 0 0 , 0 0 0 , 0 0 0 $3 5 0 , 0 0 0 , 0 0 0 $4 0 0 , 0 0 0 , 0 0 0 20 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 4 2 0 3 5 7% I n v e s t m e n t R e t u r n 6% I n v e s t m e n t R e t u r n $- $5 0 , 0 0 0 , 0 0 0 $1 0 0 , 0 0 0 , 0 0 0 $1 5 0 , 0 0 0 , 0 0 0 $2 0 0 , 0 0 0 , 0 0 0 $2 5 0 , 0 0 0 , 0 0 0 $3 0 0 , 0 0 0 , 0 0 0 $3 5 0 , 0 0 0 , 0 0 0 $4 0 0 , 0 0 0 , 0 0 0 20 2 0 2 0 2 1 2 0 2 2 2 0 2 3 2 0 2 4 2 0 2 5 2 0 2 6 2 0 2 7 2 0 2 8 2 0 2 9 2 0 3 0 2 0 3 1 2 0 3 2 2 0 3 3 2 0 3 4 2 0 3 5 7% I n v e s t m e n t R e t u r n 6% I n v e s t m e n t R e t u r n Ca l P E R S T i e r S u m m a r y 0 10 0 20 0 30 0 40 0 50 0 60 0 70 0 80 0 90 0 FY 1 3 F Y 1 4 F Y 1 5 F Y 1 6 F Y 1 7 A c t i v e E m p l o y e e s Fi s c a l Y e a r CA L P E R S T I E R S SU M M A R Y O V E R T I M E Cl a s s i c Ti e r 2 PEPRA MI S C E L L A N E O U S Gr o u p  Na m e B e n e f i t Ac t i v e   Em p l o y e e s Pa y r o l l   FY 1 9 ‐20 % of  To t a l Ti e r  12 . 5 %  @  55 3 7 2 $ 3 3 , 3 4 8 , 0 3 9 8 0 % Ti e r  22 . 0 %  @  60 2 9 2 , 7 1 3 , 6 0 1                                        6% PE P R A 2 . 0 %  @  62 1 1 3 5 , 7 6 4 , 9 8 9                                        14 % TO T A L 5 1 4 $ 4 1 , 8 2 6 , 6 2 9 SA F E T Y Gr o u p  Na m e B e n e f i t Ac t i v e   Em p l o y e e s Pa y r o l l   FY 1 9 ‐20 % of  To t a l Ti e r  13 . 0 %  @  50 2 1 2 $ 2 7 , 0 0 6 , 4 9 8 8 5 % Ti e r  2 3. 0 %  @  55  (P D ) 2. 0 %  @  50  (F D ) 27 2 , 6 4 8 , 5 9 9                                        8% PE P R A 2 . 7 %  @  57 2 5 2 , 0 4 3 , 0 8 5                                        6% TO T A L 2 6 4 $ 3 1 , 6 9 8 , 1 8 2 28 29 Ch a n g e s i n F u l l - T i m e S t a f f i n g 2 0 0 9 - 2 0 2 0 30 Ba r g a i n i n g U n i t D a t e s 31 Ba r g a i n i n g U n i t Nu m b e r o f Bu d g e t e d F T E Po s i t i o n s C o n t r a c t E n d D a t e Ne w p o r t B e a c h L i f e g u a r d M a n a g e m e n t As s o c i a t i o n 1 3 . 2 5 D e c e m b e r 3 1 , 2 0 1 8 Pa r t T i m e E m p l o y e e s A s s o c i a t i o n o f N e w p o r t Be a c h 1 1 7 . 4 0 D e c e m b e r 3 1 , 2 0 1 8 Ne w p o r t B e a c h C i t y E m p l o y e e s A s s o c i a t i o n 9 4 D e c e m b e r 3 1 , 2 0 2 1 Ne w p o r t B e a c h E m p l o y e e s L e a g u e 1 0 6 D e c e m b e r 3 1 , 2 0 2 1 Ne w p o r t B e a c h F i r e f i g h t e r s A s s o c i a t i o n 1 1 8 D e c e m b e r 3 1 , 2 0 2 1 Ne w p o r t B e a c h P r o f e s s i o n a l & T e c h n i c a l As s o c i a t i o n 7 7 D e c e m b e r 3 1 , 2 0 2 1 Ne w p o r t B e a c h F i r e M a n a g e m e n t A s s o c i a t i o n 4 J u n e 3 0 , 2 0 1 9 Ne w p o r t B e a c h P o l i c e A s s o c i a t i o n 1 9 3 J u n e 3 0 , 2 0 2 1 Ne w p o r t B e a c h P o l i c e M a n a g e m e n t A s s o c i a t i o n 3 3 J u n e 3 0 , 2 0 2 1 As s o c i a t i o n o f N e w p o r t B e a c h Oc e a n L i f e g u a r d s 3 6 . 8 7 J u n e 3 0 , 2 0 2 1 Pr o g r a m E n h a n c e m e n t s 32 Ge n e r a l F u n d S o u r c e s a n d U s e s 33 20 1 8 ‐19 F Y 1 9 ‐20 Re v i s e d P r o p o s e d   Bu d g e t B u d g e t $  VAR %  VAR SO U R C E S UN R E S T R I C T E D  FU N D  BA L A N C E FY  16 ‐17  Su r p l u s 1 2 , 0 9 0 , 7 4 3 $                         ‐ $                                                       (1 2 , 0 9 0 , 7 4 3 ) $                   ‐100.0% FY  17 ‐18  Su r p l u s ‐                                                            13 , 0 2 0 , 3 3 3                              13 , 0 2 0 , 3 3 3                            NA Us e  of  FY 1 7 ‐18  Su r p l u s 1 , 4 2 8 , 8 8 5                                    (1 , 4 2 8 , 8 8 5 )                                (2 , 8 5 7 , 7 7 0 )                              ‐200.0% FY  18 ‐19  Su r p l u s ‐                                                            2, 4 6 2 , 6 9 2                                    2,462,692                                NA                                                      RE V E N U E S 22 1 , 4 1 3 , 0 5 8                          22 9 , 3 9 2 , 1 6 1                          7,979,103                                3.6% Le s s :    Re s t r i c t e d  Re v e n u e s ( 7 7 5 , 7 3 5 )                                        (6 7 2 , 0 0 0 )                                        103,735                                        ‐13.4% Us e  of  Re s t r i c t e d  Re v e n u e s  an d  En c u m b r a n c e s 1 , 8 7 8 , 7 4 4                                    20 , 0 0 0                                              (1 , 8 5 8 , 7 4 4 )                              ‐98.9% Tr a n s f e r s ‐In 8 , 1 4 0 , 5 9 5                                    9, 4 7 5 , 2 3 6                                    1,334,641                                16.4% TO T A L  SO U R C E S 2 4 4 , 1 7 6 , 2 9 0 $                     25 2 , 2 6 9 , 5 3 7 $                     8,093,247 $                           3.3% US E S Op e r a t i n g  Ex p e n d i t u r e s 2 1 1 , 8 5 3 , 3 6 7 $                     21 8 , 6 8 9 , 3 2 9 $                     6,835,962 $                           3.2% Tr a n s f e r s  Ou t 2 6 , 3 3 7 , 8 8 5                              31 , 6 8 0 , 2 5 2                              5,342,367                                20.3%  Co n t i n g e n c y  Re s e r v e  In c r e a s e ( D e c r e a s e ) 3 , 5 2 2 , 3 4 6                                    ‐                                                            (3 , 5 2 2 , 3 4 6 )                              ‐100.0% TO T A L  US E S 2 4 1 , 7 1 3 , 5 9 8 $                     25 0 , 3 6 9 , 5 8 1 $                     8,655,983 $                           3.6% UN R E S T R I C T E D  RE S O U R C E S 2 , 4 6 2 , 6 9 2 $                             1, 8 9 9 , 9 5 6 $                             (562,736) $                               ‐ 22.9% Pr o p o s e d B u d g e t R e v i s i o n s ( f o r m e r l y C h e c k l i s t ) Pe r s o n n e l R e l a t e d 34 Pr o p o s e d B u d g e t R e v i s i o n s ( f o r m e r l y C h e c k l i s t ) Op e r a t i o n s R e l a t e d & T o t a l 35 Th e G o o d N e w s 36 • Re v e n u e s a n d r e s e r v e s a r e s t r o n g • Pr o p o s e d e x p e n d i t u r e s i n c r e a s e m o d e s t l y • Fu l l - t i m e p o s i t i o n s a r e g e n e r a l l y f l a t • Re a c h e d a g r e e m e n t w i t h a l m o s t a l l b a r g a i n i n g u n i t s • Co n t i n u a t i o n o f a g g r e s s i v e p e n s i o n p a y m e n t p l a n • Ma i n t a i n l o n g - t e r m f u n d i n g o f i n f r a s t r u c t u r e s a v i n g s p l a n s • Fu l l p l a t e o f C I P s f u n d e d • Fu n d i n g f o r C i t y p r i o r i t i e s : h o m e l e s s n e s s , a i r p o r t , G e n e r a l Pl a n u p d a t e Wa t c h i n g s a l e s t a x a n d T O T t r e n d s c l o s e l y • Re t a i l p u r c h a s i n g i s c h a n g i n g a n d w i l l c o n t i n u e t o c h a n g e Pe n s i o n f u n d e d s t a t u s h i g h l y s e n s i t i v e t o i n v e s t m e n t p e r f o r m a n c e • Si g n i f i c a n t e c o n o m i c d o w n t u r n l i k e l y t o i m p a i r p e n s i o n f u n d e d s t a t u s Ag i n g I n f r a s t r u c t u r e w i l l c o n t i n u e t o r e q u i r e a d d i t i o n a l i n v e s t m e n t • An d r e s o u r c e s t o e x e c u t e a n d c o m p l e t e t h e p r o j e c t s 37 Th e C h a l l e n g i n g N e w s : Qu e s t i o n s 38 Pr o g r a m E n h a n c e m e n t s Pr o p o s e d S t o p p i n g P o i n t Fo r R e f e r e n c e o r 2 nd Pr e s e n t a t i o n i f n e c e s s a r y 39 Pr o g r a m E n h a n c e m e n t s Ci t y A t t o r n e y • In c r e a s e p a r t - t i m e P a r a l e g a l p o s i t o n f r o m 1 . 0 t o 1 . 6 F T E ( $ 5 3 . 7 k ) Ci t y C o u n c i l • Ad d $ 3 0 k f o r C r y s t a l C o v e C o n s e r v a n c y Ci t y M a n a g e r • Ad d $ 4 7 5 k f o r a i r p o r t r e l a t e d i s s u e s * • In c r e a s e p a r t - t i m e A d m i n A n a l y s t p o s i t i o n f r o m 0 . 5 F T E t o 0 . 8 F T E an d r e m o v e p a r t - t i m e O f f i c e A s s i s t a n t 0 . 5 F T E ( s a v i n g s o f $ 5 3 7 ) 40 * S u b s e q u e n t l y r e v i s e d d o w n w a r d . Pr o g r a m E n h a n c e m e n t s - C o m m u n i t y D e v e l o p m e n t • In c r e a s e o v e r t i m e b u d g e t b y $ 2 0 k t o m e e t w o r k l o a d d e m a n d s • In c r e a s e P l a n n i n g a n d B u i l d i n g i n t e r n s F T E f r o m 0 . 3 t o 0 . 6 ( $ 2 2 . 8 k ) 41 Pr o g r a m E n h a n c e m e n t s – F i n a n c e D e p a r t m e n t • Po s i t i o n R e c l a s s i f i c a t i o n ( $ 6 . 5 k ) • In c r e a s e a n n u a l p a r k i n g e q u i p m e n t c o n t r i b u t i o n ( $ 4 5 k ) • In c r e a s e 0 . 2 8 F T E F i s c a l C l e r k t o s u p p o r t R e v e n u e D i v i s i o n ( $ 1 0 k ) • In c r e a s e o u t s i d e a u d i t s e r v i c e s f o r T O T a n d C h a r t e r T a x ( $ 1 1 0 k ) 42 Pr o g r a m E n h a n c e m e n t s – F i r e D e p a r t m e n t • Me d i c a l s c r e e n i n g s e r v i c e s ( $ 5 3 k ) • Pa r a m e d i c S c h o o l – t w o p e r s o n n e l , i n c l u d i n g o v e r t i m e t o b a c k f i l l po s i t i o n s ( $ 2 0 0 . 3 k ) • Li f e g u a r d s t a f f i n g f o r L i d o B r i d g e ( $ 2 4 k ) • Li f e g u a r d s t a f f i n g f o r r e s c u e b o a t s ( $ 2 2 k ) • Li f e g u a r d s t a f f i n g f o r M a r i n a P a r k ( $ 4 . 6 k ) • EM S e q u i p m e n t r e p l a c e m e n t ( $ 1 1 0 k ) • Me t r o N e t J P A ( j o i n t d i s p a t c h s e r v i c e s ) m e m b e r s h i p i n c r e a s e ($ 1 4 7 . 7 k ) • 80 0 M H z c o m m u n i c a t i o n s y s t e m m e m b e r s h i p i n c r e a s e ( $ 1 1 . 4 k ) 43 Pr o g r a m E n h a n c e m e n t s Li b r a r y • Pu r c h a s e u p g r a d e d s e l f - c h e c k o u t s t a t i o n ( $ 1 1 k ) Ha r b o r D e p a r t m e n t • Co n t r a c t s e r v i c e s f o r B a l b o a Y a c h t B a s i n ( $ 8 2 . 5 k ) • Ad d i t i o n a l p a t r o l b o a t ( $ 1 0 0 k f r o m c u r r e n t y e a r s u r p l u s ) 44 Pr o g r a m E n h a n c e m e n t s – H u m a n R e s o u r c e s • Ad d P / T H R A n a l y s t ( $ 1 3 . 7 k ) • In c r e a s e s f o r G e n e r a l L i a b i l i t y , P r o p e r t y , a n d W o r k e r s Co m p e n s a t i o n i n s u r a n c e ( $ 2 9 3 k ) • In c r e a s e C i t y w i d e t r a i n i n g b u d g e t ( $ 3 0 k ) • In c r e a s e P r o f e s s i o n a l S e r v i c e s ( c o n s u l t a n t s ) b u d g e t ( $ 5 0 k – c o v e r e d th r o u g h s a l a r y s a v i n g s ) 45 Pr o g r a m E n h a n c e m e n t s – P o l i c e D e p a r t m e n t • Ci t y N e t h o m e l e s s s e r v i c e s ( $ 2 0 0 k ) • In c r e a s e a n i m a l s h e l t e r s u p p l i e s ( $ 1 8 k ) • De c r e a s e H e l i c o p t e r b u d g e t ( - $ 5 5 0 k ) 46 Pr o g r a m E n h a n c e m e n t s – P u b l i c W o r k s • Co n v e r t P / T i n t e r n t o P / T O f f i c e A s s i s t a n t ( $ 2 4 k ) • Ad d 0 . 3 P / T A s s o c i a t e C i v i l E n g i n e e r s ( $ 3 0 . 2 k ) • El e c t r i c v e h i c l e c h a r g i n g s t a t i o n m a i n t e n a n c e a n d r e p a i r ( $ 1 1 . 5 k ) • 80 0 M H z c o m m u n i c a t i o n s y s t e m m e m b e r s h i p i n c r e a s e ( $ 1 5 k ) • Co u n t y N e w p o r t B a y W a t e r s h e d p r o g r a m ( $ 6 k ) • Ne w p o r t B a y / S a n D i e g o C r e e k S e d i m e n t m o n i t o r i n g a n d ma i n t e n a n c e ( $ 4 . 2 k ) 47 Pr o g r a m E n h a n c e m e n t s - R e c r e a t i o n • Co n v e r t F T E R e c C o o r d ( . 9 0 F T E ) t o F T R e c C o o r d i n a t o r ( $ 2 2 . 1 k ) • Fl a g f o o t b a l l r e v e n u e i n c r e a s e ( $ 4 6 . 2 k ) • Fa c i l i t y r e v e n u e i n c r e a s e ( $ 3 6 k ) • In c r e a s e i n c o n t r a c t c l a s s e x p e n d i t u r e ( $ 1 2 . 3 k , o f f s e t w i t h r e v e n u e ) 48 Pr o g r a m E n h a n c e m e n t s - U t i l i t i e s • Ad d 1 F u l l T i m e M & O S p e c i a l i s t a n d b u c k e t t r u c k ( $ 1 1 1 k ) • Ad d 1 . 0 F T E U t i l i t i e s S p e c i a l i s t ( $ 6 0 . 3 k ) • SC A D A p r o f e s s i o n a l a n d t e c h n i c a l p r o g r a m c o n s u l t a n t ( $ 5 0 k ) • Wa t e r c a p i t a l e q u i p m e n t ( $ 1 3 0 k ) • Ad d P / T M a i n t e n a n c e A i d e ( $ 3 1 . 8 k ) • Ha z a r d o u s m a t e r i a l s d i s p o s a l ( $ 2 0 k ) 49 Pr o g r a m E n h a n c e m e n t s – U t i l i t i e s ( c o n t . ) • As b e s t o s h a n d l i n g t r a i n i n g ( $ 9 . 5 k ) • Pu m p a n d m o t o r r e p a i r ( $ 3 9 k ) • Al i g n t e l e p h o n e u t i l i t y b u d g e t w i t h a c t u a l e x p e n s e ( $ 5 k ) 50 Ge n e r a l F u n d E x p e n d i t u r e s 1 71 % 28 % <1 % Sa l a r i e s & B e n e f i t s $1 5 5 , 5 6 0 , 2 2 8 Ma i n t e n a n c e & O p e r a t i o n $6 2 , 3 1 6 , 9 5 5 Ca p i t a l O u t l a y $ 8 1 2 , 1 4 6 It e m N o . 5 A 2 Pr o p o s e d F Y 2 0 1 9 - 2 0 B u d g e t O v e r v i e w Ad d i t i o n a l M a t e r i a l s R e c e i v e d Ap r i l 2 5 , 2 0 1 9 CO R R E C E T E D S L I D E T O S T A F F P R E S E N T A T I O N CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT Agenda Item No. 5B April 25, 2019 TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE FROM: Finance Department Dan Matusiewicz, Finance Director 949-644-3123 or danm@newportbeachca.gov SUBJECT: BUDGET AMENDMENTS (QUARTER ENDED MARCH 31, 2019) EXECUTIVE SUMMARY The purpose of this memorandum is to report on the budget amendments for the third quarter of Fiscal Year 2018-19. All budget amendments are in compliance with City Council Policy F-3, Budget Adoption and Administration. DISCUSSION City Council Policy F-3, Budget Adoption and Administration, identifies how appropriations can be transferred, increased or reduced. The Finance Committee reviews a quarterly report of City Council and City Manager budget amendments including their effect on fund balance. Please find the list of budget amendments for the quarter ending March 31, 2019, as Attachment A. Prepared by: Submitted by: /s/ Susan Giangrande /s/ Dan Matusiewicz Susan Giangrande Dan Matusiewicz Budget Manager Finance Director Attachment: A. Budget Amendments Fiscal Year 2018-19 Quarter Ending March 31, 2019 ATTACHMENT A BUDGET AMENDMENTS FISCAL YEAR 2018-19 QUARTER ENDING MARCH 31, 2019 Date Amount Amendment Type Fund Net Effect on Fund Balance Increase/(Decrease)Department Explanation 1/8/2019 $389,811.50 City Council General Fund (389,811.50) Fire To increase salaries and benefit expenditure appropriations from General Fund unappropriated fund balance to provide funding levels commensurate with the Newport Beach Firefighters Memorandum of Understanding with the City. The budget amendment provides the additional funding needed for the first six months of the contract. The Fiscal Year 2019-20 budget will be developed to include the full cost increases associated with the contract. 1/8/2019 $19,711.00 City Council General Fund - Library To transfer expenditure appropriations from the Cultural Arts Professional and Technical Services account to the Cultural Arts Contract Services account to provide sufficient funding for the project. General Fund (56,237.36)Various Water Fund (29,339.42)Utilities Waste Water Fund (10,347.43)Utilities Equipment Maintenance Fund (7,497.17)Public Works 2/12/2019 $69,409.42 City Council General Fund (69,409.42) Police To increase salaries and benefit expenditure appropriations from the General Fund unappropriated fund balance to provide funding levels commensurate with the Newport Beach Police Management Association Memorandum of Understanding with the City. The budget amendment provides the additional funding needed for the first three months of the contract. The Fiscal Year 2019-20 budget will be developed to include the full cost increases associated with the contract. 3/12/2019 $58,333.33 City Council General Fund (58,333.33) Police To increase expenditure appropriations from the General Fund unappropriated fund balance to cover costs associated with the CityNet Contract in an effort to provide assistance with outreach and engagement with homeless residents. General Fund (475,080.60) Various Water Fund (9,302.44) Utilities Information Technology (38,179.46) City Manager $522,562.503/12/2019 To increase salaries and benefit expenditure appropriations from General Fund, Water, and Information Technology unappropriated fund balance to provide funding levels commensurate with the new Memorandum of Understanding with the City Employees Association and Professional Technology Association. The budget amendment provides the additional funding needed for the first 7.5 pay periods of the contract. The Fiscal Year 2019-20 budget will be developed to include the full cost increases associated with the contract. City Council To increase salaries and benefit expenditure appropriations from General Fund, Water, Wastewater, and Equipment unappropriated fund balance to provide funding levels commensurate with the new Newport Beach League Memorandum of Understanding with the City. The budget amendment provides the additional funding needed for the first six months of the contract. The Fiscal Year 2019-20 budget will be developed to include the full cost increases associated with the contract. City Council$103,421.391/22/2019 City of Newport Beach Budget Amendments Fiscal Year 2018-19 Quarter Ending March 31, 2019 Page 1 of 2 Date Amount Amendment Type Fund Net Effect on Fund Balance Increase/(Decrease)Department Explanation City of Newport Beach Budget Amendments Fiscal Year 2018-19 Quarter Ending March 31, 2019 3/26/2019 $92,000.00 City Council Water Cap - CIP To transfer expenditure appropriations from the Spill Control Valve / Tipping Floor project (18W14) to the Spyglass Hill Reservoir Mixing System project (19W15). Tidelands 210,275.45 General Fund (210,275.45) 1/14/2019 $5,000.00 City Manager General Fund (5,000.00) City Council To increase expenditure appropriations from the General Fund unappropriated fund balance and allocate $5,000 in Community Programs Grant dollars to Second Change Orange County. This motion was carried by City Council at the November 27, 2018 meeting. 1/17/2019 $10,000.00 City Manager General Fund - Library To increase revenue estimates and expenditure appropriations to record donation from the Newport Beach Arts Foundation. These funds will be used to help fund phase IV of the Sculpture Garden. 1/17/2019 $10,000.00 City Manager General Fund - Library To increase revenue estimates and expenditure appropriations to record donation from the Samueli Foundation. These funds will be used to support City Arts Commission programming. 2/7/2019 $30,000.00 City Manager General Fund - City Attorney To transfer expenditure appropriations from salary savings to professional services to fund temporary contract staffing in the City Attorney's Office. 2/15/2019 $4,689,725.00 City Manager General Fund 4,689,725.00 Finance To increase revenue estimates based on mid-year update. 3/1/2019 $2,400.00 City Manager General Fund - Police To increase revenue estimates and expenditure appropriations to record rebate from Cardio Partners for trade-in programs of AEDs. 3/13/2019 $5,778.00 City Manager General Fund - Fire To increase revenue estimates in Start Video Sales from 017- 241043 and increase expenditure appropriations to be used for Mass Casualty Incident (MCI) supplies. 3/15/2019 $10,000.00 City Manager General Fund - Library To increase revenue estimates and expenditure appropriations to accept donations from the Literacy Services Special Deposit Account. Funds will be allocated to Literacy Programming, Literacy Office Supplies, and Literacy Library Materials. 1/14/2019 $210,275.45 To transfer expenditure appropriations and amend the staffing structure in Public Works by eliminating one Harbor Resources Manager position and one Harbor Resources Technician position and designating one Administrative Manager position and one Permit Technician I/II position. Harbor; Public WorksCity Manager Page 2 of 2 4/18/19 Scheduled Date Agenda Title Agenda Description Council Policy F-7, Income Property, Review A subcommittee of the Finance Committee was appointed to review and recommend changes if deemed necessary to select financial policies. In continuation from the December 13, 2018, meeting, the subcommittee working with staff has made additional edits to Council Policy F-7, Income Property, in order to align policy with current practice. Pension Accrued Liability Basics The City’s CalPERS actuary, Kerry Worgan, will present the major components, assumptions and plan experience considered during the development of the pension accrued liability. Section 115 Discussion An investment advisor and major provider of Section 115 pension prefunding trusts, PFM, will discuss the pros and cons; risks and benefits; and other considerations when considering the establishment of a Section 115 pension benefit trust. Budget Amendements (Quarter Ended December 31, 2018 Receive and file a staff report on the budget amendments for the prior quarter. Work Plan Review Staff will review with the Committee the agenda topics scheduled for the remainder of the calendar year. Discuss Items for Future Agendas Tuesday, January 22, 2019 CITY COUNCIL STUDY SESSION Beacon Economics will present its bi-annual economic and top revenue forecast for the City of Newport Beach. Saturday, February 02, 2019 CITY COUNCIL OFF-SITE PLANNING SESSION Staff will present status and funding of major programs planned for the calendar year. Harbor and Beaches Master Plan Update Review Harbor and Beaches Master Plan for financial solvency based on known Council priorities. Facilities Financial Plan Update Review Facilities Financial Plan for financial solvency based on known Council priorities. Long-Range Financial Forecast (LRFF)Staff will provide an update to the latest version of the LRFF. Work Plan Review Staff will review with the Committee the agenda topics scheduled for the remainder of the calendar year. Review of Operating Budget (Harbor Department) The goal of this presentation will be to familiarize members of the Finance Committee with the elements of the FY 2018-19 Harbor Department budget, provide opportunity for questions, and to gain clarity in the funding allocations for departmental programs. Appointment of Finance Subcommittee to Review Beacon Bay Market Studies At the February 12, 2019, City Council Study Session, the City Council requested the Finance Committee create a subcommittee of citizen members to review/reconcile the Beacon Bay market studies prepared by the City’s consultant, Keyser Marston Associates and the resident proponent study. The subcommittee will report back to the full City Council with its recommendations. Review of Revenue Assumptions Staff will provide of an overview for revenue assumptions for the FY 2019-20 Proposed Budget. Work Plan Review Staff will review with the Committee the agenda topics scheduled for the remainder of the calendar year. Thursday, April 25, 2019 Proposed FY 2019-20 Budget Overview Staff will provide an overview of the Proposed FY 2019-20 Operating Budget. Budget Amendments for Quarter Ending March 31, 2019 Staff will report on the budget amendments for the prior quarter. Thursday, May 16, 2019 FY 2017-18 Audit Review (with Auditor)The City’s external audit firm, White Nelson Diehl Evans LLP will meet with the Finance Committee to discuss the audit findings for the fiscal year ending 6/30/2018. The committee will have an opportunity to discuss any potential areas of concern and the auditors can discuss any changes in accounting standards or disclosures that were relevant for the audit year. Proposed FY 2019-20 Budget Overview Staff will provide an overview of the Proposed FY 2019-20 Operating Budget and or CIP. Tuesday, May 28, 2019 JOINT CITY COUNCIL/FINANCE COMMITTEE MEETING Thursday, May 30, 2019 Recommendation FY 2019-20 Budget Make final recommendation to the City Council on the proposed FY 2019-20 Operating Budget and or CIP. Unfunded Pension Liability - Primer for Members of the Public Staff will explain how defined benefit pension programs in California work, the drivers that impact the City's unfunded liabiltiy, and solutions implemented to lower pension costs to the taxpayer. Thursday, June 27, 2019 TBD TBD, if needed. City of Newport Beach Finance Committee Work Plan 2018-19 January February March April Thursday, March 14, 2019 Thursday, February 14, 2019 Thursday, January 17, 2019 June May I:\Users\FIN\Shared\Admin\Finance Committee\WORKPLAN\2019\2019 FC Workplan 1