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Home My WebLink About01 - Review of the Proposed FY 21-22 Operating Budget - PowerPointMay 25, 2021 Special Meeting City Council and Finance Committee Joint Meeting May 25, 2021 Budget Emphasizes: • Providing high quality municipal services that residents expect • Providing a safe and secure neighborhood • Keeping Newport Beach looking great • Maintaining a prosperous, fiscally sustainable, and economically viable city Additional Focus: • Restoring budget cuts made due to the COVID-19 Pandemic • Addressing key City Council priorities identified at the January 30, 2021) City Council Planning Session City of Newport Beach — Finance Department • A strong budget surplus is still projected for FY 2020-21 • Proposed actions would restore, as needed, the remaining reductions to the FY 2020-21 budget • The FY 2021-22 budget is balanced • Property tax revenue continues growth at a steady pace • Sales tax and transient occupancy tax revenues remain on a strong recovery trajectory • Proposed expenditures remain relatively flat, with additional funding allocated to key City Council priorities • Continued strategy of allocating $35 million to reducing the unfunded pension liability, with additional funding allocations likely at year-end • Continued funding of capital improvement projects, including neighborhood enhancement projects, with additional funding allocations likely at year-end City of Newport Beach — Finance Department 3 Source and Use Projections Personnel Budget Development Departmental CIP Preparation Departmental Budget Preparation City Manager Review Finance Committee Review City Council Review Budget Adoption Budget Implementation Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep City of Newport Beach — Finance Department Datea Meeting Type Saturday, January 30, 2021 Special City Council Meeting Thursday, February 18, 2021 Finance Committee Meeting Tuesday, March 9, 2021 I City Council Study Session Thursday, March 11, 2021 Thursday, April 15, 2021 Thursday May 13, 2021 Tuesday May 25, 2021 Thursday May 27, 2021 Tuesday, June 8, 2021 Finance Committee Meeting Finance Committee Meeting Finance Committee Meeting Joint City Council / Finance Committee Study Session Finance Committee Meeting City Council Meeting Meeting Purpose City Council Planning Session Long -Range Financial Forecast (LRFF) update Early look at Capital Improvement Program Review of revenue budget assumptions Review of proposed budget Opportunity for questions on proposed budget Joint review of proposed budget Finalize recommendations to City Council Public hearing and adoption of budget City of Newport Beach — Finance Department Updated FY 2020-21 Budget Information City of Newport Beach — Finance Department Positive revenue variance of $20.6 million Projections show sustained improvement in $250 $225 revenues $200 Still under the historical trendline $175 $150 c $125 $1.3 million of projected expenditure savings 2 $100 $75 $50 $30.6 million of projected excess reserves $25 Adopted Projected $30.2 of budget cuts not yet restored ■ Property Tax ■ Sales Tax TOT Other City of Newport Beach — Finance Department c9�1FORN�P • $33.0 million of reductions approved • $2.8 million of reductions restored in the first quarter • $4.8 million of tier 1 and tier 2 reductions in spending achieved • $15.4 million of reductions recommended for restoration • Restoration of the remaining $10.1 million of reductions is not required Professional and Contract Svcs. $ 1,621,760 $ $ $ $ $ 1,621,760 Other Non -Personnel Budgets 1,136,807 1,136,807 Personnel Services - 2,000,000 2,000,000 Transfers Out - 18,477,137 500,000 18,977,137 Capital Budgets 2,500,000 - 2,500,000 Insurance 2,000,000 2,000, 000 Equipment Replacement 2,500,000 2,500,000 Contingency Reserve Draw - 2,304,399 2 304 399 �� t Quarter Cuts Re7Restored (500,000) (2,304,399) (2,804,399) Cuts To Transfer to FFP (8,500,000) (811,111,500,000) Transfer to Harbor Capital (4,500,000) (4,500,000) Neighborhood Enhancement(2,366,000)1 (2,366,000) Restoration Not Required r (2,758,567) (2,000,000) (5,611,137) (4,500,000 (14,869,704) City of Newport Beach — Finance Department C Restoration of $15.4 Million • $8.5 million contribution to Facilities Financial Plan (FFP) • $4.5 million contribution to Harbor CIP • $2.4 million of Neighborhood Enhancement projects Restoration Not Required of $10.1 Million • $5.6 million of CIP projects that are not ready to move forward • $2.0 million of fund balance returned from insurance funds • $2.0 million of fund balance returned from information technology fund • $500,000 contribution to facilities maintenance plan With these restorations, all FY 2020-21 budget reductions will be addressed. City of Newport Beach — Finance Department All Funds Budget Overview City of Newport Beach — Finance Department 10 • Minimal growth in operating expenditures of 0.40% • Routine fluctuations in capital spending • 1.58% growth in overall budget Operating Budget CIP New Appropriations Total Budget $ 282, 068,157 $ 291, 709, 382 $ 304, 005, 215 $ 307, 759, 024 $ 309, 002, 305 0.40% 25, 724, 200 46, 807, 906 45, 686, 890 31, 377, 224 35, 506, 078 13.16% $ 307, 792, 357 $ 338, 517, 288 $ 349, 692,105 $ 339,136, 248 $ 344, 508, 383 1.58% City of Newport Beach — Finance Department 11 $350 M $325 M $300 M $275 M $250 M $282,068,157 FY 18 Adopted $291,709,382 FY 19 Adopted $304,005,215 FY 20 Adopted City of Newport Beach — Finance Department $307,759,024 $309,002,305 FY 21 Adopted FY 22 Proposed MA n ,c_ 9�f FpRN�J Wastewa- 1% Tidelands 1% City of Newport Beach — Finance Department 13 • Minimal growth in operating expenditures of 0.40% • General Fund growth under 3%, including program enhancements General Fund Tidelands Water Wastewater Other Total Operating Budget $ 202,757,357 $ 208,745,822 $ 219,111,935 $ 219,859,038 $ 225,851,633 2.73% 3,138,803 3,299,157 2,544,989 2,955,080 3,136,238 6.13% 22,606,550 24,669,005 26,584,151 27,969,925 27,933,241 -0.13% 3,592,976 3,824,712 3,966,734 4,284,105 3,956,840 -7.64% 49,972,471 51,170,686 51,797,406 52,690,876 48,124,354 -8.67% $ 282,068,157 $ 291,709,382 $ 304,005,215 $ 307,759,024 $ 309,002,306 0.40% City of Newport Beach — Finance Department 14 • Fluctuations in capital spending are routine • Nearly $75 million budgeted for continued capital investment • Annual General Fund transfers in support of capital spending to the CIP Fund, Facilities Financial Plan, and Harbor & Beaches Masterplan have been restored CIP New Appropriations $ 25,724,200 $ 46,807,906 $ 45,686,890 $ 31,377,223 $ 35,506,078 13.16% CIP Estimated Rebudgets 35,194,809 30,757,550 47,562,633 55,774,942 39,341,387 -29.46% Total Budget $ 60,919,009 $ 77,565,456 $ 93,249,523 $ 87,152,165 $ 74,847,465 -14.12% City of Newport Beach — Finance Department 15 General Fund Revenue Projections City of Newport Beach — Finance Department 16 SEW Po �,T O � u >, r F r9�1sO ANSA $270 $260 $250 $241 $240 $235 - $230 Cn $23 �$2 o $220 � $210 $219 $220 $217 $200 $204 $200 $190 $180 $170 $233 2016-17 Actual 2017-18 Actual 2018-19 Actual 2019-20 Actual 2020-21 2021-22 Pre-COVID Projection Initial Post-COVID Projection Projected Projected Actual and Current Projection City of Newport Beach — Finance Department 17 n ■ Other Revenue Charges for Services Other Taxes TOT ■ Sales Tax ■ Property Tax 100% 75% 50% 25% 0% FY 18 FY 19 FY 20 City of Newport Beach — Finance Department n IF FY 21 FY 21 Proj. FY 22 a96] Property Taxes 99,878,340 104,366,653 113,601,474 117,508,227 117,508,227 122,229,980 4.02% Sales Taxes 35,932,370 34,678,282 35,697,090 28,690,831 34,540,800 40,275,670 16.60% Transient Occupancy Tax 24,327,966 22,713,484 24,458,131 6,434,115 15,209,156 19,027,493 25.11% Other Taxes 8,316,956 11,955,000 11,597,886 9,652,973 11,501,162 10,815,117 -5.97% Charges for Services 19,806,377 20,139,328 21,316,081 17,350,903 15,900,048 19,046,329 19.79% Other Revenue 21,058,307 21,746,297 22,500,690 19,946,855 25,548,405 22,336,553 -12.57% $ 209,320,316 $ 215,599,044 $ 229,171,352 $199,583,904 $ 220,207,798 $ 233,731,142 6.14% City of Newport Beach — Finance Department 19 ■ Property Taxes $122.2 Sales Tax $40.3 Transient Occupancy Tax $19.0 Other Taxes $10.8 Charges for Services $19.0 All Other Sources $22.3 City of Newport Beach — Finance Department 20 • The City receives approximately 17.2% of the 1% property tax • 67.2% to K-12 Schools and Community Colleges • 7.0% to the County of Orange • 8.6% to various special districts • Assessed valuation for FY 2020-21 was $63.7 billion, the second largest in Orange County behind Irvine at $90.1 billion and ahead of Anaheim at $51.1 billion • Property tax is 52.5% of FY 2021-22 General Fund revenue • Includes different categories such as secured, unsecured, supplemental • Most of the revenue (85%) is from secured property City of Newport Beach ■ Schools ■ County of Orange Special Districts City of Newport Beach — Finance Department 21 $140 M - $120 M - $80 M - $60 M $40 M $20 M $M 5.0% 1.8% -0.4% -0.1% FY09 8.0% 13.4% -2.1% �0 6.2% FY11 FY13 FY15 FY17 City of Newport Beach — Finance Department 4.6% 6.7% � 7.7% FY19 3.7% 4.0% FY21 22 • Projecting 4.0% growth in property tax revenue $125 • Proposition 13 inflation $115 factor was set at 1.036% by the Board of $105 Equalization rather than o the 2% maximum typically $95 seen $85 • October to October statewide CPI change $75 • Because of the City's large assessed valuation, a 1 % change requires $637 million of additional assessed valuation $97 T -- $122 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Actual Actual Actual Actual Projected Projected Pre-Covid Projection Actual and Projection +Post-Covid Projection City of Newport Beach — Finance Department 23 • The City receives 1.00% of the 7.75% sales tax • 3.94% to the State General Fund • 1.81 % to the County of Orange (various purposes) • 0.50% to Proposition 172 Public Safety Funding • 0.50% to the Orange County Transportation Authority • Sales tax is 17.3% of FY 2021-22 General Fund revenue • Historically most of the City's sales tax revenue comes from: • Autos & Transportation • Restaurants & Hotels • General Consumer Goods City of Newport Beach ■ State General Fund ■ County of Orange Proposition 172 OCTA City of Newport Beach — Finance Department 24 $45 M $40 M - $35 M - $30 M - $25 M - $20 M - $15 M - $10 M - $5 M - $M ° 7.6% 4.60 i 14.9 /0 12.6% 0 -13.6% M , 12.0% 4.0% 8.4% FY09 FY11 FY13 FY15 FY17 City of Newport Beach — Finance Department 9.9% . -5.9% _4.7% FY19 FY21 16.6% 25 • Projecting 16.6% growth in sales tax revenues • Would surpass $38.5 million of peak revenue in FY 2018- 19 • Continued growth in Autos & Transportation and Building & Construction • Restaurants back to approximately 93% of peak • Consumer Goods recovering, with changed shopping habits (internet sales) $45 $43 $41 $39 $37 o $35 2 $33 $31 $29 $27 $25 $29 $40 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Actual Actual Actual Actual Projected Projected tPre-Covid Projection Post-Covid Projection Actual and Projection City of Newport Beach — Finance Department :to • The City charges a 10% tax on commercial (hotel) and residential (STR) stays • TOT is 8.2% of FY 2021-22 General Fund revenue • Most heavily impacted revenue source during the pandemic • April at 63% of 2019 occupancy, and average daily rates are up 100.0% W 79.8% 7$.70/0 ° 75.5.6 �? 80.0% 69.1% 71.8% W W 60A% 00� 68.67% 74. 47.7° 38.5% 40.06 % 29.9.6% 20.0% 30.0% 27.6 0.0% 13.5% JAN FEB MAR APR MAY SOURCE. MAY 19, 2021, STR. COM 2021 -0-2020 --9-2019 81.20/-D 85.90/0 81.8% 76.2% 78-7"/- 67.6% $.7%67.6°x6 67.3% 37.3% 38.2% 44.2% 43.9% 45.2% ,� 34.3% 25.6°.6 JUN JUL AUG SEP OCT NOV DEC City of Newport Beach - Finance Department 27 $30 M $25 M $20 M $15 M $10 M $5 M $M -12.4%0.7% FY09 5.8% 2.4% 12.0% 3.5% ■ . 10.2% 12.0% 13.2% 15.7% M 8.2% -15.6% -27.0% FY11 FY13 FY15 FY17 FY19 FY21 City of Newport Beach — Finance Department 25.1% • Projecting 25.1% growth in TOT revenue • Would still be below the pre - pandemic level of revenue by approximately 23% • Beginning the year at 60% of pre -pandemic revenue • Ending the year at 80% of pre -pandemic revenue • Residential TOT above pre - pandemic level of revenue • Amounts are net of payments to Visit Newport Beach $30 $25 2 $20 0 $10 $5 $26 $15 $6� $19 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Actual Actual Actual Actual Projected Projected Pre-Covid Projection +Post-Covid Projection -o--Actual and Projection City of Newport Beach — Finance Department 29 General Fund Budget Overview City of Newport Beach — Finance Department 30 ■ Salaries & Benefits $151.7 ■ Maintenance & Operations $73.4 Capital Outlay $0.8 ■ Transfers $20.2 City of Newport Beach — Finance Department 31 Police 60,632,280 62,627,537 66,040,641 67,002,345 67,401,926 0.60% Fire 48,353,522 50,514,086 53,193,484 54,790,911 55,861,885 1.95% Public Works 34,323,356 35,774,140 38,255,532 37,274,177 41,193,237 10.51% Recreation and Senior Services 13,549,465 13,624,221 13,853,165 13,325,836 13,360,496 0.26% Community Development 12,616,114 12,834,324 12,952,728 12,525,476 12,772,405 1.97% Finance 9,070,922 9,157,560 9,461,368 9,573,969 9,667,618 0.98% Library 8,638,644 9,021,784 9,265,651 9,559,849 9,655,108 1.00% Utilities 4,164,163 4,336,136 4,759,656 5,033,549 5,144,631 2.21% City Manager 3,112,978 3,022,380 3,344,155 3,543,321 4,571,940 29.03% Human Resources 3,130,353 3,142,478 3,293,238 3,423,267 3,448,725 0.74% City Attorney 2,526,908 2,593,143 2,623,784 2,708,230 2,725,458 0.64% City Clerk 1,043,415 1,131,339 1,065,439 1,206,539 1,080,305 -10.46% City Council 1,008,533 834,796 881,199 848,125 841,003 -0.84% Misc Non Op 586,704 131,896 121,896 1,043,444 126,896 -87.84% Vacancy Factor - - - (2,000,000) (2,000,000) 0.00% $ 202, 757, 357 $ 208, 745, 820 $ 219,111, 935 $ 219, 859, 038 $ 225, 851, 633 2.73% City of Newport Beach — Finance Department 32 $ 240 M $230 M $220 M $208,745,820 $210 M $202,757,357 $200 M $190 M $219,859,038 $219,111,935 .� $225,851,633 $180 M FY 18 FY 19 FY 20 FY 21 FY 22 Adopted Adopted Adopted Adopted Proposed City of Newport Beach — Finance Department 33 • All routine General Fund transfers in support of capital spending have been restored • 800 MHz Radio Fund transfer no longer required General Fund CIP $ 5,397,520 $ 5,525,000 $ 5,220,000 $ 5,000,000 $ 5,000,000 0.0% Facilities Financing Plan (FFP) 8,500,000 8,500,000 10,020,333 8,500,000 8,500,000 0.0% Harbor & Beaches Capital Plan 6,000,000 4,000,000 5,500,000 4,500,000 4,500,000 0.0% Facilities Maintenance Plan (FMP) 1,000,000 1,000,000 2,500,000 1,000,000 1,500,000 50.0% 800 MHz Radio Fund 500,000 534,000 500,000 - - - Other One -Time Transfers * 400,000 5,350,000 8,159,919 3,876,073 700,000 -81.9% Total $ 21,797,520 $ 24,909,000 $ 31,900,252 $ 22,876,073 $ 20,200,000 -11.7% FY 22 amount is a transfer out of the Oceanfront Encroachment Reserve City of Newport Beach — Finance Department 34 • Increase in vehicle replacement charges to recommended level of funding • Decrease in insurance charges to draw down excess fund balance Information Technology Vehicle Replacement Equipment Replacement 5,756,155 5,964,619 7,149,139 7,232,902 7,307,210 1.03% 2,778,697 2,906,655 2,906,655 3,420, 827 4,084,061 19.39% 2,838,467 2,853,036 3,086,604 3,351,330 3,330,552 -0.62% Insurance 6,822,155 9,992,921 11,224,997 11,225,000 8,961,000 -20.17% O P E B 8,085,678 3,834,916 3,852,251 4,924,163 4,924,163 0.00% Compensated Absences 2,509,457 2,549,427 2,625,002 2,669,045 2,713,272 1.66% Total $ 28,790,610 $ 28,101,574 $ 30,844,648 $ 32,823,267 $ 31,320,257 -4.58% City of Newport Beach — Finance Department 35 iH 832 M 792 763 752 736 728 730 724 726 726 728 728 7 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fiscal Year City of Newport Beach — Finance Department we c9�1FORN�P F/T FTE General Fund City Clerk 4.00 2.71 City Attorney 7.00 1.00 City Manager 6.50 1.00 Human Resources 11.00 0.50 Finance 32.50 3.02 Police 229.00 13.43 Fire 143.10 41.42 Community Development 49.90 4.10 Library 36.00 22.83 Recreation and Senior Services 42.50 36.86 Public Works 92.50 4.08 Utilites 1.00 - Total 655.00 130.95 Other Funds 70.00 9.84 Grand Total 725.00 140.79 City of Newport Beach - Finance Department 37 F/T FTE F/T FTE F/T FTE F/T FTE 5.00 1.00 5.00 1.00 5.00 1.00 5.00 1.00 7.00 1.00 7.00 1.60 7.00 1.60 7.00 1.60 6.00 1.50 6.00 1.30 6.00 1.30 6.00 1.30 11.00 0.50 11.00 1.25 11.00 1.25 11.00 1.25 32.00 4.26 32.00 4.55 33.00 4.55 33.00 4.55 231.00 14.87 232.00 14.87 232.00 14.87 232.00 14.87 143.90 42.17 143.90 43.12 143.80 43.12 143.80 42.56 50.10 8.37 50.10 10.22 49.20 10.20 50.20 10.20 36.00 22.83 36.00 22.83 36.00 22.83 36.00a94 42.00 37.96 42.00 38.00 42.00 38.00 42.00 90.50 5.08 85.50 5.68 85.50 5.67 85.50 1.00 - 9.50 - 9.50 - 9.50 - 655.50 139.54 660.00 144.42 660.00 144.39 661.00 149.06 70.50 11.46 68.00 13.79 68.00 15.73 69.00 15.23 726.00 151.00 728.00 158.21 728.00 160.12 730.00 164.29 City of Newport Beach - Finance Department 37 Staffing Changes and Program Enhancements City of Newport Beach — Finance Department 38 • Harbor Department • Full-time Permit Technician • Community Development • Full-time Senior Civil Engineer position to replace contract staffing (offset by reduction) • Public Works • 3.0 part-time Maintenance Aides to replace contract staffing (mostly offset by reduction) • 0.3 part-time Associate Engineer for utility undergrounding projects • Recreation and Senior Services • 1.43 part-time FTEs approved during FY 2020-21 for the Marina Park Community Boating Program City of Newport Beach — Finance Department 39 • Anticipated refuse / recycling contract increase and related additional revenue included in the base budget and not listed as a program enhancement • Net General Fund impact of $1.5 million • $500,000 General Fund commitment to the Costa Mesa Homeless Shelter • 20 beds allocated to Newport Beach in a 5 -year agreement • Capital contribution of $1.6 million funded from Affordable Housing Reserve and Hoag Development Agreement • Remaining funding this year coming from accumulated funds from the Hoag 10 -year contribution of $300,000 per year • Some additional ongoing funding will be required in future years City of Newport Beach — Finance Department 40 • $123,760 for additional after hours and weekend contract hours for Code Enforcement • Funding for seven days per week from July to September and four days per week for the rest of the fiscal year to augment City staff at times when additional enforcement is required • $200,000 for the Police Department's Boardwalk Ambassador Program • Two 2 -person teams, including a supervisor, staffed through a private contractor • Focus is to improve the quality of life for residents and visitors to the peninsula • $107,463 for a full-time Permit Technician in the Harbor Department • Will provide a subject matter expert for support and technical assistance for permittees • Enhanced focus on recordkeeping including inspections, registration, and insurance • Will free up the Code Enforcement Supervisor's time for enforcement activities City of Newport Beach — Finance Department 41 Fund Department -A General Fund City Manager Costa Mesa Homeless Shelter Operating Costs 500,000 Police Boardwalk Ambassador Program 200,000 Community Development Increase Code Enforcement Contract Staffing 123,760 Various Miscellaneous Personnel Budget Changes 266,261 Miscellaneous Non -Personnel Budget Changes 129,887 Total General Fund 1,219,908 Tidelands Harbor Full -Time Permit Technician 107,463 Water Utilities Camera / Security Upgrade at Big Canyon Reservoir 40,000 Total Other Funds 147,463 Total FY 22 Program Enhancements 1,367,371 City of Newport Beach — Finance Department 42 Unfunded Pension Liability City of Newport Beach — Finance Department 43 �9Q roPL • Maintain $35 million minimum contribution • Intention to fund an additional $5 million contribution toward CaIPERS investment loss mitigation from FY 2020-21 year-end budget surplus • Final decision would be made as part of year-end budget analysis Minimum Payment Base Annual Discretionary Payment CaIPERS Investment Loss Mitigation Total Planned UAL Payment City of Newport Beach — Finance Department 44 $400 97% 99% 100% 0 89% 91% 93% 95% 0 84% 86/ 0 75% 77% 79% 80% 82/0 $300 73/0 $200 . ' $329 $299 $283 $267 $249 $231 $100 $211 $189 . _ $166 $142 $115 $85 $52 $16 $38 S38 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 UAL Balance (Mil) Payment (Mil) Funded Status Source: CalPERS Pension Outlook Overview tool Assumed 7% investment return City of Newport Beach — Finance Department 45 General Fund Summary and Surplus Allocation City of Newport Beach — Finance Department 46 • Historically year-end surplus funds have been held over until the end of the following fiscal year for allocation • Staff propose shifting this discussion to September — October after the books are closed • Allows for more timely utilization of excess resources, including for purposes outlined in City Council Policy F-5 • Decisions would be made in September — October regarding additional funding toward the City's unfunded pension liability and neighborhood enhancement projects / infrastructure consistent with City Council Policy F-5 City of Newport Beach — Finance Department 47 • The projected $30.6 million FY 2020-21 year-end surplus includes $24.1 million of carried forward surplus from FY 2018-19 and FY 2019-20 • Surplus allocations totaling $19.8 million are recommended with adoption of the FY 2021-22 budget • FY 2020-21 tiered budget reduction restorations of $15.4 million • Permanent Supportive Housing allocation of $1.0 million • General Plan Update allocation of $650,000 • Business License Waiver Program allocation of $252,000 • Contingency Reserve growth of $2.7 million • $10.8 million remaining for use consistent with City Council Policy F-5 when the year end results are presented in September — October • $5 million additional CalPERS unfunded liability allocation • $5.8 million remaining for infrastructure / neighborhood enhancements • Additional year-end budget savings will likely increase this amount City of Newport Beach — Finance Department 48 The budget is balanced with BEGINNING UNRESTRICTED FUND BALANCE $ 10,754,961 sources and uses of $246.1 million $10.8 million unrestricted fund balance will be increased by any additional FY 2020-21 year-end savings and reduced by any year- end appropriations pursuant to City Council Policy F-5 SOURCES: Operating Revenues Less: Restricted Revenues Prior Year Resources Carried Forward Release of Restricted Funds Transfers In from Other Funds TOTAL SOURCES USES: Operating Expenditures Transfers Out TOTAL USES ENDING UNRESTRICTED FUND BALANCE City of Newport Beach — Finance Department 233,731,142 (1,128,513) 251,847 1,220,000 11, 977,157 246, 051,633 225,851,633 20,200,000 246, 051,633 $ 10,754,961 Wel • The City expects to receive approximately $10.1 million from the $130.2 billion allocated to cities and counties in the American Rescue Plan • Significantly smaller allocation than many of our neighbors due to the allocation methodology, which is based on the CDBG allocation formula • Funds will be received over two fiscal years, with half expected before the end of the current year in June • Very limited guidance is available at this time regarding eligible uses • Staff expect that the entire amount can be transferred to the General Fund as an offset to revenue losses, but this will depend on the definition of revenue losses in the finalized guidance • Staff is not recommending any action regarding utilizing the funds until the finalized guidance is available City of Newport Beach — Finance Department 50 ✓Strong budget surplus for FY 2020-21 ✓ Elimination of reductions to the FY 2020-21 budget ✓ Balanced budget for FY 2021-22 ✓ Revenue recovering, but remains below pre -pandemic trendline ✓Continued focus on reducing the City's unfunded pension liability and funding capital improvement projects City of Newport Beach — Finance Department 51 k ��W PpRT r) 2!n� Lq FORN��A Questions? City of Newport Beach — Finance Department 52 BEGINNING UNRESTRICTED FUND BALANCE SOURCES: Operating Revenues Less: Restricted Revenues Prior Year Resources Carried Forward Release of Restricted Funds Transfers In from Other Funds TOTAL SOURCES USES: Operating Expenditures Transfers Out Appropriations from Excess Operating Reserves Addition to 25% Contingency Reserve TOTAL USES ENDING UNRESTRICTED FUND BALANCE $ 23,119,513 $ 24,081,225 $ 24,081,225 $ 10,754,961 229,953,017 220,207,798 220,207,798 233,731,142 (2,785,622) (815,145) (815,145) (1,128,513) 1,744,227 2,075,632 2,075,632 251,847 2,492,301 3,645,023 3,645,023 1,220,000 12,970,571 18,574,821 18,574,821 11,977,157 244,374,494 243,688,129 243,688,129 246,051,633 211,066,539 32,346,243 - - 226,794,867 10,422,340 - - 226,794,867 10,422,340 17,127,920 1 2,669,266 2 225,851,633 20,200,000 - - 243,412,782 237,217,207 257,014,393 246,051,633 $ 24,081,225 $ 30,552,147 $ 10,754,961 $ 10,754,961 la Previously discussed restoration of budget reductions of$ 15,366,0001ess Neighborhood Enhancements fund balance on hand of$26,986. lb$1,650,OOOfor Permanent Supportive Ho using Project ($1,000,000) and General Plan ($650,000), less CIP fund balance of$112,941. 1c $251,847 to offset revenue reduction due to Business Tax Waiver Program. 2 Required increase to 25% Contingency Reserve due to growth in FY2021-22 budget. City of Newport Beach — Finance Department 53