HomeMy WebLinkAbout05/26/2020 - Special MeetingCITY OF NEWPORT BEACH
City Council Minutes
Special Joint Meeting with the Finance Committee
May 26, 2020
I. CALL MEETING TO ORDER - 4:00 p.m
II. ROLL CALL
Present: Mayor Will O'Neill, Mayor Pro Tem Brad Avery, Council Member Diane Dixon, Council
Member Duffy Duffield, Council Member Jeff Herdman, Council Member Kevin Muldoon
(arrived at 4:28 p.m.), Council Member Joy Brenner, Finance Committee Member William
Collopy, Finance Committee Member John Reed (via Zoom), Finance Committee Member
Joseph Stapleton, Finance Committee Member Larry Tucker (via Zoom)
III. CURRENT BUSINESS
1. Review of the Proposed Fiscal Year 2020-21 Budget [100-2020]
Finance Director Matusiewicz utilized a presentation to detail various components of the proposed
budget, including measures for maintaining service levels and short-term budgetary solutions.
Regarding General Fund sources and uses, Mayor O'Neill discussed a $30 million decrease in revenue,
transfers in, total sources and total uses, and how the City bridged the $33 million gap. In response
to his question, Finance Director Matusiewicz explained the use of a contingency reserve for pension
payments. Mayor O'Neill noted the City is fortunate to be able to make additional pension payments.
In response to Council Member Dixon's question, Finance Director Matusiewicz reported the
contingency reserve is currently at about 24% of the General Fund operating budget, close to the 25%
policy target.
Finance Director Matusiewicz continued with the presentation by discussing revenues and the top
three revenue categories.
In response to Council Member Dixon's questions, Finance Director Matusiewicz stated that staff
makes no assumptions based on the split roll and will know if the assessed value increased at the
anticipated rate at the end of June or early July.
Finance Director Matusiewicz reviewed expenditures and increases in actuals. Mayor O'Neill clarified
that the reason FY 2018-19 appears low is because the City budgets for 100% staffing, despite vacant
positions.
In response to Council Member Herdman's questions, Finance Director Matusiewicz indicated the
utilities savings is mostly due to streetlights and building.
Council Member Muldoon arrived at 4:28 p.m.
Finance Director Matusiewicz continued the presentation with a review of the COVID-19 impacts to
other funds.
City Manager Leung and Finance Director Matusiewicz reviewed proposed program enhancements,
project adjustments, and staffing levels in the Harbor Department, Public Works Department, and
Utilities Department.
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City of Newport Beach
Special Joint Meeting with the Finance Committee
May 26, 2020
Mayor O'Neill noted a smaller percentage of funding for the Capital Improvement Program budget
comes from the General Fund, and much of it comes out of designated restricted funds.
In response to Council Member Dixon's question, City Manager Leung advised that the maintenance
service level for Balboa Village will continue at its current level.
Finance Director Matusiewicz completed the presentation by reporting on the next budget milestones.
Mayor O'Neill thanked Finance Committee members and staff for continuing the same services the
public expects at the levels they expect.
Jim Mosher believed adding a transmittal letter in the budget book would be helpful, questioned
whether the City has a $29 million deficit, and inquired whether the proposal relates to the budget
book or the budget book and the proposed budget revisions.
Mayor O'Neill indicated that Mr. Mosher referred to the total of all City funds net of internal
premiums and the total of all City operations net of internal charges. Finance Director Matusiewicz
clarified that, outside the General Fund, there are a lot of capital resources that the City is saving
over time and will spend down for capital projects.
2. Discussion of the Fee Schedule Update for Fiscal Year 2020-21 [100-20201
Senior Accountant Schweitzer used a presentation to review Newport Beach Municipal Code Chapter
3.36, the timeline, and fee study changes.
Mayor O'Neill related that the City seeks to recover only the amount of cost directly attributable to a
specific service, and the cost study is showing what the City would have to increase in order to offset
that in the budget minus any subsidies.
Council Member Dixon noted that the Municipal Code mandates 100% cost recovery and that a third -
party consultant identifies every step of the cost to perform a discretionary service. Senior Accountant
Schweitzer added that the fee study is based on budgeted expenditures.
In response to Council Member Herdman's question, Senior Accountant Schweitzer explained that .
volume statistics help staff calculate how much money the City will recover.
In response to Council Member Duffield's question, Senior Accountant Schweitzer advised that the
Harbor Department will be studied next year.
In response to Council Member Muldoon's questions, Senior Accountant Schweitzer reported the
City's consultant, MGT America, conducts a fee study every year, and the study costs about $30,000
for the Community Development Department, Police Department, and Fire Department. Council
Member Muldoon referred to Newport Beach Municipal Code Chapter 3.36, indicated the City does
a study every year instead of every five years at an extra expense of about $120,000 to ensure the
City gets every penny and believed this item should be continued for maybe two years because the
economy is currently in a decline. Senior Accountant Schweitzer clarified that fee studies are
staggered over a three to five-year rotation.
In response to Mayor Pro Tem Avery's question, Senior Accountant Schweitzer indicated the
Community Development Department's fees reflect building and planning fees. Mayor Pro Tem Avery
commended the Community Development Department for contributing to an incredible community.
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City of Newport Beach
Special Joint Meeting with the Finance Committee
May 26, 2020
Senior Accountant Schweitzer continued with the presentation by reviewing three options for Council
consideration and the pros and cons of each.
Mayor O'Neill suggested that the Council bring back the fee schedule for further review.
Council Member Muldoon indicated he will be voting against the item as he did on expenditures for
repaving well -paved roads. He believed now is the time for Council to be wise with spending and limit
the burden on residents and taxpayers. Mayor O'Neill advised that the funds for road paving were
restricted funds, not General Fund.
Council Member Dixon stated that she has reviewed these fees and remains convinced that they are
discretionary services, noted her support for bringing the item back for further consideration.
Jim Mosher asked, if the item comes back at the June 9, 2020 City Council meeting, will the fee
schedule be different than what was presented at the March 24, 2020 City Council meeting.
City Manager Leung and Senior Accountant Schweitzer noted that the fee schedule will be the same
as presented in March but with the implementation dates pushed out.
JT Clark advised that we are in a pandemic which has really scared him and suggested renaming a
space station after Tom Cruise.
Mayor O'Neill conducted straw polls for (1) bringing the item back at the June 9, 2020 City Council
meeting, which Council Members supported 6-1, with Council Member Muldoon voting "no;"
(2) postponing fee study updates but allowing Consumer Price Index (CPI) adjustments, which no
Council Members supported; and (3) not approving the fee study update, which no Council Members
supported, except for Council Member Muldoon.
IV. PUBLIC COMMENTS
Chad Kroeger described the effects of the pandemic on his life, noted Tom Cruise's next movie will be
made in space, and suggested he be honored by having the International Space Station named after him,
as the Tom Cruise Space Station.
An unidentified speaker requested the City's assistance in pushing the Newport Beach Police Department
to issue citations and tow illegally parked vehicles.
V. ADJOURNMENT - 5:15 p.m.
The special meeting agenda was posted on the City's website and on the City Hall Electronic
Bulletin Board located in the entrance of the City Council Chambers at 100 Civic Center Drive
on May 21, 2020, at 4:00 p.m.
Will O'Neill
Mayor
Leilani I. Bro
City Clerk
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