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Home My WebLink About01 - Proposed Operating Budget - PowerPointMay 24, 2022 Item No. 1 City Council and Finance Committee Joint Meeting May 24, 2022 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: • Continued emphasis on elimination of the City's long-term liabilities • Ensuring proper funding of long-term infrastructure maintenance and replacement • Addressing key City Council priorities identified at the January 29, 20225 City Council Planning Session City of Newport Beach — Finance Department Thursday, January 13, 2022 Saturday, January 29, 2022 Tuesday, March 8, 2022 Thursday, March 10, 2022 Thursday, April 14, 2022 Tuesday, May 24, 2022 Tuesday, May 24, 2022 Thursday, May 26, 2022 Tuesday, June 14, 2022 Finance Committee Meeting Special City Council Meeting City Council Study Session Finance Committee Meeting Finance Committee Meeting Joint City Council / Finance Committee Studv Session City Council Study Session Finance Committee Meeting City Council Public Hearing Long -Range Financial Forecast (LRFF) update City Council Planning Session Early Look at the Capital Improvement Program Overview of FY 2022-23 Revenue Projections Proposed FY 2022-23 Expenditure Budget Review FY 2022-23 Operating Budget Review FY 2022-23 Capital Improvement Budget Review Finalize Recommendations to City Council Adoption of FY 2022-23 Budget City of Newport Beach — Finance Department 3 FY 2021-22 Third Quarter Budget Update City of Newport Beach — Finance Department • Positive projected revenue variance $300 of $19 million ° • Revenues are now above the $250 historical trendline $200 • $6 million of projected expenditure $150 savings • Additional year-end savings typical $100 • $18 million budget surplus projected $50 to be available at year-end beyond the required contingency reserve $_ Adopted ■ Property Tax ■ Sales Tax Third Quarter TOT Other City of Newport Beach — Finance Department All Funds Budget Overview City of Newport Beach — Finance Department • 12.5% growth in operating budget, primarily due to: • Tidelands Fund presentation format change • Increase in proposed CaIPERS UAL payment to $40 million • Higher internal service fund charges based on recent project to review rates • Adjustment to Police Department and Fire Department overtime budgets to align with Tidelands Fund format change • Significant additional capital spending from FY 2020-21 budget surplus and ARPA funds Operating Budget 291,709,382 304,005,215 307,759,024 309,114,306 347,850,330 12.5% CIP New Appropriations 46,807,906 45,686,890 31,377,224 35,506,078 70,580,292 98.8% Total Budget 338,517,288 349,692,105 339,136,248 344,620,384 418,430,622 21.4% City of Newport Beach — Finance Department • The table below presents the historical budget trend with prior years' Tidelands Fund expenditures restated to the current presentation format • Reduces operating budget growth from 12.5% to the real growth of 6.6 % • Subsequent all funds tables and charts reflect this restated presentation format for clarity Operating Budget 307,558,578 319,962,314 324,888,178 326,415,030 347,850,330 6.6% CIP New Appropriations 46,807,906 45,686,890 31,377,224 35,506,078 70,580,292 98.8% Total Budget 354,366,484 365,649,204 356,265,402 361,921,108 418,430,622 15.6% City of Newport Beach — Finance Department 75 $370 $350 $330 $310 $290 $270 $250 + 5.9% + 3.0% $280.7 + 2.7% $306.2 + 3.6% $314.5 + 6.6% + 0.1% $347.9 $325.9 $326.4 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Actual Actual Actual Actual Actual Adopted Proposed City of Newport Beach — Finance Department Wastewce 1.4% City of Newport Beach — Finance Department 10 • General Fund growth of 8.1 % to be discussed in more detail • Wastewater Fund growth of 23.4% (15.6% versus FY 2020-21) • Improved insurance ISF allocation methodology • Updated administrative charge calculation General Fund 208, 745, 822 219,111, 935 219, 859, 038 225, 963, 632 244,186, 089 8.1 % Tidelands 19,148, 353 18, 502, 088 20, 084, 234 20, 436, 962 20, 978, 717 2.7% Water 24,669,005 26,584,151 27,969,925 27,933,241 28,404,922 1.7% Wastewater 3,824,713 3,966,734 4,284,105 3,956,840 4,884,150 23.4% Other 51,170, 686 51, 797, 406 52, 690, 876 48,124, 354 49, 396, 451 2.6 % Total Operating Budget 307,558,579 319,962,315 324,888,178 326,415,030 347,850,329 6.6% City of Newport Beach — Finance Department 11 • Fluctuations in capital spending are routine • Appropriation of prior year surplus funds and ARPA resources has facilitated significant additional capital investment, including: • Central Library Lecture Hall • Balboa Peninsula Fire Station and Library Replacement • Balboa Island Drainage Improvements — Phase 1 • Junior Lifeguards Building CIP New Appropriations CIP Estimated Rebudgets 46,807,906 30,757,550 45,686,890 47,562,633 31,377,224 55,774,942 35,506,078 39,441,387 70,580,292 98.8% 32,353,321 -18.0% Total Budget $ 77,565,456 $ 93,249,523 $ 87,152,166 $ 74,947,465 $ 102,933,613 37.3% City of Newport Beach — Finance Department 12 General Fund Revenue Projections City of Newport Beach — Finance Department 13 M Property Taxes $ 131.4 M Sales Tax $ 46.5 M Transient Occupancy Tax $ 27.8 M Other Taxes $ 12.2 M ■ Charges for Services $ 27.9 M Property Income $ 12.1 M ■ All Other Sources $ 7.2 M 4.6% 4.6% 2.7% City of Newport Beach — Finance Department 14 $270 c $260 $250 $240 $230 $220 $210 $200 $190 $265.0 $253.4 $259.6 $241.1 $251.3 $234.7 $228.5 � $235.9 $216.5 $228.5 $204.4 $219.1 ` T $199.6 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Actual Actual Actual Actual Actual Projected Projected Pre-Covid Projection Initial Post-Covid Projection Actual and Current Projection City of Newport Beach — Finance Department 15 • The City receives 17.2% of the 1 % property tax • Each City's percentage of the 1 % varies, with Newport Beach having the third highest share of the property tax in Orange County behind Santa Ana and Laguna Beach • The City's assessed valuation is projected to be $69 billion in FY 2022-23, the second largest in Orange County behind Irvine and ahead of Anaheim in third place • Having a higher percentage of the total tax and higher assessed values than many surrounding cities is a significant contributor to the City's fiscal stability 1 City of Newport Beach ■ County of Orange ■ Schools ■ Special Districts 2013 1,093 $2,314,160 $1,800,000 22.03% 2014 962 $2,404,919 $1,894,500 525% 2015 1,023 $2,604,978 $1,975,000 425% 2016 1,064 $2,778,741 $2,150,000 8.86% 2011 1,114 $3,121,157 $2,400,000 11.63% 2018 952 $3,283,684 $2,517,000 4.88% 2019 949 $3,177,617 $2,435,000 -3.26% 2020 1,142 $3,461,580 $2,587,500 626% 2021 1,359 $4,073,683 $3,150,000 21.74% 2n22 160 $4,356,479 $3,5n7,000 13_n7% City of Newport Beach — Finance Department 16 • Represents approximately 50% of General Fund revenues • Growth has been accelerating based on strong assessed value growth and sales activity • 6.4% growth projected for FY 2022-23 across all categories of property tax revenue U) o $135 $125 $115 $105 $95 $85 +6.4% +3.6% $131.4 +5.2% $123.4 +4.s°i° $119.2 +6.7% $113.3 +7.7% $108.4 $101.6 $94.4 2016-17 2017-18 2018-19 2019-20 2020-21 Actual Actual Actual Actual Actual 2021-22 2022-23 Projected Projected City of Newport Beach — Finance Department 17 $140 M $120 M $100 M $60 M $40 M $M 13.4% _,) i o/ 5.6% 5.0% 1.8% -0.4% -0.1 % 8.0% 6.7% 5.2% 4.6% 6.4% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY 23 City of Newport Beach — Finance Department • The City receives 1.00% of the 7.75% sales tax • Historically most of the City's sales tax revenue comes from: • Autos & Transportation • Restaurants & Hotels • General Consumer Goods • Auto dealers and Fashion Island retailers account for 17 of the City 's top 25 sales tax producers ■ City of Newport Beach ■ State General Fund ■ County of Orange Proposition 172 OCTA City of Newport Beach — Finance Department 19 • 2.5% growth anticipated for FY 2022-23 • Current year growth projections have been revised as multiple quarters of significant growth have now been recorded • Revenue from auto sales remains strong, with inventory decline impacts offset by price increases • Restaurant & hotel and brick & mortar retail receipts have now exceeded pre -pandemic levels +2.5% $46 '- +16.5% $45.4 $46.5 $42 +7.5% $ 3 8 -5.9% $39.0 +9.9% +4.0% $38.5 $34 $36.2 $33.7 $35.0 $30 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Actual Actual Actual Actual Actual Projected Projected City of Newport Beach — Finance Department 20 $50 M $45 M $40 M $35 M $30 M $25 M $20 M $15 M $10 M $5 M $M 1C 0 4.6% 14.9% 12.6%7.6 /o ■ -13.6% = 0 1 12.0% L �A% 16.5% 2.5% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY 23 City of Newport Beach — Finance Department 21 • The City charges a 10% tax • Same rate as 41 % of California jurisdictions • Lower than 32% of California jurisdictions • Higher than 27% of California jurisdictions • Revenue is generated from commercial (hotel) and residential (short-term rental) stays • The City has access to a variety of data sources to monitor trends that impact leisure and business travel ® MARCH 02, 2022 WEEKLY REPORT NL-'WPOR 1 NEWPORT BEACH & COMPANY EWPO COVID-19 ECONOMIC RECOVERY DASHBOARD BEACH &com—Y EXECUTIVE SUMMARY Recovery Research Dashboard - February 2022 Visit California and third party data sets 100.0% 79.8% 7B.7°I 75.5% 81.2% S5.9% 81.8% 76.2% 78.7% 80 0% 69n2!9.6% 71.$% ��' 87�$% Pr7.396 {LLI% $2.$ 81.7°JG 58.196 59. 60.0% 6$47.7° 52AM 53A% w Iw .5% Q 40.0% 22 44.2% 43.9% 45-2% r20.0% 30.09� 37.5% 38.296 34.396 d 27.6°� 25.0% z 00 0.0% 13.5% JAN FES MAR APR MAY JUN JUL AUG SEP OCT NOV DEC t2021 -.o--2020 --e-M9 SOURCE: JAfVE)ARY 20, 2022, 9TR C OM MQMTHL Y 0ITA THRC!q fi DECEMBER 2021 City of Newport Beach — Finance Department 22 • 4.6% growth projected for FY 2022-23, including 3.0% for residential revenue and 5.0% for hotel revenue, after taking into account a $1.0 million reduction in the prior year's projection for timing concerns • Hotel -related revenues are projected to exceed pre -pandemic levels and short- term rental -related revenues are growing well beyond the already -reached record high level of revenue • Projections do not account for any impact from the VEA Newport Beach reopening and assume the Pendry Newport Beach will not open until FY 2023-24 $30 +s.7% c $26 +s.2% +2.4% -15.6% +51.4% $27.8 $22000 $24.7 -19.0% $25.6 $22.3 $22.8 $18 $20.8 $14 $16.9 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Actual Actual Actual Actual Actual Projected Projected City of Newport Beach — Finance Department 23 • Hotel -related TOT revenues through the third quarter of the current fiscal year are still trailing 2019 by 8.6% • However, excluding VEA and the Pendry hotel -related TOT revenues are up 13.7% versus 2019 • Occupancy rates are still 25% below 2019 levels, but rates continue to climb - up 12% year- to-date • Residential TOT is more than offsetting the lagging hotel TOT revenues, with an 86.4% rate of growth in the last three fiscal years that has generated an additional $3.2 million versus FY 2018-19 this fiscal year to date Hotel Only TOT Revenue Through Third Quarter of Fiscal Year $20,000,000 + 13.7% $16.7 M $15,000,000 =.7 M $14.6 M ■ $10,000,000 $8.3 M $5,000,000 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 ■ No VEA or Pendry Residential TOT Revenue Through Third Quarter of Fiscal Year $8,000,000 + 86.4% $6.9 M $6,000,000 $ $4.5 M 5.0 M $4,000,000 $3.7 M $2,000,000 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 ■ STR Agents ■ STR Owners City of Newport Beach - Finance Department 24 $30 M $25 M $20 M $15 M 13.2% 15.7% 12.4% 0.7% $10 M $5 M $M 12.0% 3.5% 10.2% 12.0% 5.8% 2.4% 8.2% -15.6% -19.0% 51.4% 8.7% FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 City of Newport Beach — Finance Department 25 General Fund Budget Overview City of Newport Beach — Finance Department 26 ■ Salaries & Benefits $163AM ■ Maintenance & Operations $79.6M ■ Capital Outlay $1.2M ■ Transfers $29.6M City of Newport Beach — Finance Department 27 (n $250 _° $240 75 $230 $220 $210 $200 $190 $180 + 6.7% $202.8 $190.1 $208.7 $219.1 $219.9 $226.0 $244.2 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Adopted Adopted Adopted Adopted Adopted Adopted Proposed City of Newport Beach — Finance Department • Over the last year, staff has comprehensively evaluated opportunities to improve the accuracy of the City's budgeting • Changes to Tidelands Fund subsidy recognition • Comprehensive evaluation of internal service fund charges and allocation methodologies • Comprehensive review of capital transfers (FFP, HBMP, and FMMP) • Comprehensive review of the City's cost allocation plan • Evaluation of the adequacy of the overtime and utilities budgets • Identification of accounts that need periodic inflationary adjustments • Reduction in the use of surplus vehicles City of Newport Beach — Finance Department 29 The growth in the General Fund operating budget is primarily being driven by the proposed increased UAL payment, increased transfers to ISFs, removal of the vacancy factor, and budget accuracy -related adjustments Program Enhancements Be Well OC Contract Continuation (program enhancement) Other Miscellaneous Adjustments (COLAs, Contract CPIs, etc.) Increase to $40 Million UAL Payment Police and Fire Overtime Adjustment Increased Internal Service Charges I $ 2,187,000 $ 1,000,000 $ 1,534,000 $ 4,813,000 $ 2,958,000 $ 2,904,000 1.0% 0.4% 0.7% Z. 2.1 % 1.3% 1.3% Removal of Vacancy Factor $ 2,000,000 0.9% Utilities Budget Adjustments (electricity and water) $ 826,000 City of Newport Beach — Finance Department 30 • In November 2019, the Finance Committee endorsed staff's recommendation to anticipate a future drop in the discount rate • $35 million base contribution to the unfunded liability to remain in place as part of the baseline budget • Additional $5 million per year contribution to be added for five years with a $2 million per year contribution thereafter • The Finance Committee and City Council revisit this strategy as part of each year's budget process • Given the City's recent revenue growth, staff is now recommending maintaining a $40 million per year payment from the baseline budget until the unfunded liability is eliminated • Staff also recommends maintaining an additional annual discretionary contribution at a minimum level of $5 million from year-end budget surplus per City Council Policy F-5 City of Newport Beach — Finance Department 31 • As can be seen in the chart, projections change from year to year, primarily as a result of market performance • With five years of increased $45.0 million annual payments, the City's unfunded liability would be eliminated a year sooner in FY 2027-28, with a reduced $34.5 million payment due that year 105.0% 100.0 95.0% 90.0% 85.0% 80.0% 75.0% 70.0% 65.0% 60.0% 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 — 2019 Projection 2020 Projection — 2021 Projection — Budget Recommendation City of Newport Beach — Finance Department 32 c\`=107 • City Council — Internal service charges • City Clerk — Election costs • City Attorney — Outside counsel budget relocation • City Manager — Homeless services • Police — Overtime adjustment • Fire — Overtime adjustment • Public Works — equipment purchases and water • Utilities — Insurance charges and electricity • Miscellaneous — property insurance allocation • Vacancy factor elimination City Council 834,796 881,199 848,125 841,003 909,554 8.2% City Clerk 1,131,339 1,065,439 1,206,539 1,080,305 1,256,209 16.3% City Attorney 2,593,143 2,623,784 2,708,230 2,725,458 2,350,264 -13.8% City Manager 3,022,380 3,344,155 3,543,321 4,571,940 5,992,008 31.1% Human Resources 3,142,478 3,293,238 3,423,267 3,448,725 3,437,449 -0.3% Finance 9,157,560 9,461,368 9,573,969 9,667,618 9,982,311 3.3% Police 62,627,537 66,040,641 67,002,345 67,401,926 71,566,966 6.2% Fire 50,514,086 53,193,484 54,790,911 55,861,885 60,153,871 7.7% Community Development 12,834,324 12,952,728 12,525,476 12,772,405 13,775,980 7.9% Library 9,021,784 9,265,651 9,559,849 9,655,108 9,387,194 - 2.8 Recreation and Senior Services 13,624,221 13,853,165 13,325,836 13,360,496 13,569,635 1.6% Public Works 35,774,140 38,255,532 37,274,177 41,305,237 44,359,521 7.4% Utilities 4,336,136 4,759,656 5,033,549 5,144,631 5,649,416 9.8% Miscellaneous Non -Operating 131,896 121,896 1,043,444 126,896 1,795,710 1315.1% Vacancy Factor - - (2,000,000) (2,000,000) - -100.0% SubTotal 208,745,820 219,111,935 219,859,038 225,963,632 244,186,089 8.1% Transfers Out 24,909,000 31,900,252 6,000,000 20,200,000 31,597,269 56.4% Total 233,654,820 251,012,187 225,859,038 246,163,632 275,783,358 12.0% City of Newport Beach — Finance Department 33 General Fund CIP transfer reduced by $700,000 for one-time transfer in prior year of Oceanfront Encroachment Reserve funds and includes $530,000 in the current year for a program enhancement • Increases to FFP, HBMP, and FMMP per recent Finance Committee discussion Addition of Tidelands subsidy transfer per recent Finance Committee discussion • $379,452 transfer to Fire Equipment Fund for a program enhancement General Fund CIP 5,525,000 5,220,000 5,000,000 5,700,000 5,530,000 -3.0% Facilities Financing Plan (FFP) 8,500,000 10,020,333 - 8,500,000 8,600,000 1.2% Harbor & Beaches Master Plan 4,000,000 5,500,000 - 4,500,000 4,600,000 2.2% Facilities Maintenance Plan (FMP) 1,000,000 2,500,000 1,000,000 1,500,000 2,500,000 66.7% Tidelands Operating Fund - - - - 9,987,817 - 800MHz Radio Fund 534,000 500,000 - - - - Other One -Time Transfers 5,350,000 8,159,919 - - 379,452 - Total 24, 909, 000 31, 900, 252 6,000,000 20, 200, 000 31, 597, 269 56.4% City of Newport Beach — Finance Department 34 General Fund Reserves and Surplus City of Newport Beach — Finance Department 35 • The current year projected surplus of $17.9 million will need to be partially allocated to maintain the contingency reserve at 25% • $14.4 million is projected to remain • Elimination of restricted revenues • The significant reduction in transfers out is the result of the expenditure of the prior year surplus during FY 2021-22 • The FY 2022-23 budget as currently proposed includes a structural surplus of $7.8 million 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 Resources Carried Forward to FY 2021-22 Addition to 25% Contingency Reserve TOTAL USES 31,178,957 14,421,264 (16,757,693) 253,370,149 265,030,502 11,660,353 IN 128.5131 - 1 1,128, 513 3,072,666 - (3,072,666) 1220000 - (1,220,000) 10,492,133 18,550,724 8,058,591 267,026,435 283,581,226 16,554,791 233,302,236 244,186,089 10,883,853 47,030,300 31,597,269 (15,433,031) 3451592 - (3,451,592) 283,784,128 275,783,358 (8,000,770) ENDING UNRESTRICTED FUND BALANCE 14,421,264 22,219,132 7,797,868 City of Newport Beach — Finance Department 36 • The budget as proposed reflects a $7.8 million structural surplus in addition to the projected FY 2021-22 unallocated surplus of $14.4 million, for a total of $22.2 million • Proposed Budget Revisions on June 14 are anticipated to total $334,000 • The structural surplus can be utilized to address additional City Council priorities in a manner comparable to the direction under City Council Policy F-5 • The Finance Committee recommends allocating the remaining $7.5 million of structural surplus funds as follows: • $5.0 million to prefund the typical year-end CalPERS UAL additional payment for FY 2021-22 • $1.0 million to establish an initial fund balance for the Recreation Facilities Financing Plan • $1.5 million set aside for FY 2023-24 CIP • The Finance Committee recommends allocating the full $14.4 million projected FY 2021-22 year-end surplus to FY 2023-24 CIP projects in October, and waiving the 50/50 requirement in City Council Policy F-5 at that time, as was done last fiscal year City of Newport Beach — Finance Department 37 Program Enhancements and Staffing Changes City of Newport Beach — Finance Department 38 • Police Department body worn camera program, taser replacement program, and enhanced internal service fund allocation • Subscription -based program costs rather than a lump sum • Net General Fund impact of a $288,000 increase to the annual ISF transfer • $105,000 for one additional Community Services Officer position • $1,000,000 additional General Fund commitment to homeless services • Ongoing funding for the Be Well OC program City of Newport Beach — Finance Department • Capital purchases • $530,000 to fully fund the Fire Department station alerting system project • $379,000 to fund installation of the vehicle ventilation system in the remaining fire stations • $251,000 for the purchase of a sidewalk sweeper and a Bobcat track loader to enhance the Public Works Department's sand management capabilities and improve response times • Other material miscellaneous enhancements include • $298,000 of one-time funds for Community Development Department professional services in support of contract plan check, planning studies, and other temporary workload demands • $189,000 to reduce the use of surplus vehicles for full-time staff • $100,000 for a wastewater rate study • $50,000 to increase the budget for the purchase of library materials • $24,800 for enhanced lifesaving equipment for the Harbor Department's patrol boats City of Newport Beach - Finance Department 40 • In an effort to address recruitment and retention challenges associated with certain part-time positions that are eligible for CaIPERS membership, staff propose a small number of conversions to full-time positions • Since all but one of these positions are already participating in CaIPERS, the material fiscal impact is limited to providing the full cafeteria plan contribution afforded to full-time staff Community Development Limited Term Planning Technician None $ 29,700 Community Development Department Assistant None $ 22,200 Community Development Building Inspector (Combination) (0.50) ($ 24,500) City Manager Management Analyst 0.20 $ 42,100 Finance Buyer None $ 16,900 Finance / Recreation Senior Fiscal Clerk (Combination) None $ 28,300 Recreation Office Assistant 0.10 $ 33,700 These positions are not currently in CaIPERS. City of Newport Beach — Finance Department 41 • Other staffing requests have been limited in the proposed budget to the most critical needs • Contract Conversions • As was the case last year, staff continue to monitor whether in-house staff are more cost effective than contract staff • One Public Works Inspector position is proposed at a cost of $129,000 that is fully offset by reduced contract expenditures of $170,000 • After a successful first phase of implementation in the current fiscal year, adding 2.02 part-time FTEs in Public Works to further increase the pool of Maintenance Aide hours that are being utilized in lieu of contract staff to improve the City's standards relative to portering and maintenance services • Recreation and Senior Services requests the addition of a part-time 0.45 FTE Facilities Maintenance Worker position to bring certain specialized maintenance work in-house City of Newport Beach — Finance Department 42 • New positions • Staff continues to make every effort to be efficient with existing resources and avoid adding new full-time staff unless absolutely necessary • Staff is proposing the addition of one Community Services Officer in the Police Department to manage the body worn camera program • Staff is proposing the addition of one Associate Civil Engineer in the Public Works Department to help facilitate the timely delivery of the City's increasing level of capital improvement projects • Staff is proposing an increase of part-time Associate Civil Engineer hours in Public Works of 0.60 FTE to address the same workload demands • One additional FTE was added mid -year in FY 2021-22 for the Management Fellowship program • Reclassifications • Various reclassifications and salary adjustments have been included in the budget to address departmental reorganizations and salary studies • The fiscal impact associated with these changes is minimal City of Newport Beach — Finance Department 43 • Overall, 11 additional full-time positions are proposed in the budget, of which only two positions are new additions • Seven conversions of part-time positions • One contract conversion • One prior year addition Prior Fiscal Year Mid -Year Additions + 1.00 --- + 1.00 New Positions + 2.00 + 0.60 + 2.60 Staff Realignment + 7.00 - 7.20 - 0.20 Contract Conversions EN + 1.00 + 2.47 + 3.47 City of Newport Beach — Finance Department 44 c\`=107 F/T PIT FIT P/T F/T P/T F/T P/T F/T P/T F/T P/T General Fund City Clerk 5.00 1.00 5.00 1.00 5.00 1.00 5.00 1.00 5.00 1.00 City Attorney 7.00 1.00 7.00 1.60 7.00 1.60 7.00 1.60 7.00 1.60 - City Manager 6.00 1.50 6.00 1.30 6.00 1.30 6.00 1.30 8.50 0.50 2.50 (0.80) Human Resources 11.00 0.50 11.00 1.25 11.00 1.25 11.00 1.25 11.00 1.25 - Finance 32.00 4.26 32.00 4.55 33.00 4.55 33.00 4.55 35.00 3.05 2.00 (1.50) Police 231.00 14.87 232.00 14.87 232.00 14.87 232.00 14.87 233.00 14.87 1.00 Fire 143.90 42.17 143.90 43.12 143.80 43.12 143.80 42.56 143.80 42.56 - Community Development 50.10 8.37 50.10 10.22 49.20 10.20 50.20 10.20 53.20 6.70 3.00 (3.50) Library 36.00 22.83 36.00 22.83 36.00 22.83 36.00 22.83 35.00 22.83 (1.00) - Recreation and Senior Services 42.00 37.96 42.00 38.00 42.00 38.00 42.00 39.43 43.50 38.48 1.50 (0.95) Public Works 90.50 5.08 85.50 5.68 85.50 5.67 85.50 10.63 87.50 12.25 2.00 1.62 Utilities 1.00 - 9.50 - 9.50 - 9.50 - 9.50 - - - Total 655.50 139.54 660.00 144.42 660.00 144.39 661.00 150.22 672.00 145.09 11.00 (5.13) Harbor (Tidelands) 3.00 9.39 3.00 9.39 - Information Technology 15.50 0.50 15.50 0.50 Utilities (Water Fund) 33.25 2.73 33.25 2.73 - 70.50 11.46 68.00 13.79 68.00 15.73 Utilities (Wastewater Fund) 10.75 1.23 10.75 1.23 - - Public Works (Equipment Fund) 6.50 0.80 6.50 0.80 - - Public Works (Environmental Liability) - - - 1.00 - 1.00 Grand Total 726.00 151.00 728.00 158.21 728.00 160.12 730.00 164.87 741.00 160.74 11.00 (4.13) Total Full -Time Equivalents 877.00 886.21 888.12 894.87 901.74 6.87 City of Newport Beach - Finance Department 45 • Program enhancements General Fund City Manager Additional Homeless Services Funding 1,000,000 of $4.2 million address: Police Body Worn Camera, Taser, and ISF Funding 393,000 Fire Vehicle Ventilation and Station Alerting Systems 909,000 • Key City Council Community Development One -Time Professional Services Funding 298,000 priorities Library Additional Funding for Materials Purchases 50,000 Public Works Equipment for Sand Management 251,000 • Maintaining adequate Various New Vehicles to Reduce Surplus Vehicle Utilization 189,000 Various Miscellaneous Personnel Budget Changes 647,000 service levels Miscellaneous Non -Personnel Budget Changes 359,000 • Enhanced budgeting Total General Fund 4,096,000 accuracy Tidelands Harbor Lifesaving Equipment for Patrol Boats 25,000 Wastewater Utilities Rate Study 100,000 • Previously identified Various Various Miscellaneous Personnel Budget Changes 21,000 personnel Total Other Funds 146,000 adjustments These enhancements are budgeted as transfers out of the General Fund and are not included in the earlier table showing the components of the 8.1 % operating budget variance. City of Newport Beach — Finance Department 46 ✓Strong budget surplus for FY 2021-22 ✓Record General Fund revenues for FY 2022-23 ✓Proposed General Fund budget is balanced ✓Increased budget accuracy ✓Updated and comprehensive savings plans for long-term needs ✓Increased pension UAL payment of $45.0 million resulting in paydown of the liability one year earlier than previously planned ✓Structural General Fund budget surplus of $7.8 million subject to the Council's direction as to possible additional resource allocations City of Newport Beach — Finance Department 47 City of Newport Beach — Finance Department 48