HomeMy WebLinkAboutFinance Committee Agenda Packet - January 23, 2025CITY OF NEWPORT BEACH
FINANCE COMMITTEE AGENDA - Final
COMMUNITY ROOM
100 CIVIC CENTER DRIVE, NEWPORT BEACH
Thursday, January 23, 2025 - 3:00 PM
Finance Committee Members:
Joe Stapleton, Mayor / Chair
Robyn Grant, Council Member
Sara J. Weber, Council Member
Allen Cashion, Committee Member
William Collopy, Committee Member
Staff Members:
Grace K. Leung, City Manager
Jason Al-Imam, Finance Director/Treasurer
Shelby Burguan, Deputy Finance Director
Vicky Nguyen, Assistant Management Analyst
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
Director/Treasurer 24 hours prior to the scheduled Finance Committee meeting.
NOTICE REGARDING PUBLIC PARTICIPATION
Questions and comments may also be submitted in writing for the Finance Committee’s consideration by sending them
to Jason Al-Imam, Finance Director/Treasurer, at jalimam@newportbeachca.gov. To give the Finance Committee
adequate time to review your questions and comments, please submit your written comments by no later than 5 p.m.
the day prior to the Finance Committee meeting. All correspondence will be made part of the record.
NOTICE TO THE PUBLIC
The Finance Committee meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires that
their agenda be posted at least twenty-four (24) hours in advance of each special 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.
It is the intention of the City of Newport Beach 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, the
City of Newport Beach will attempt to accommodate you in every reasonable manner. If requested, this agenda will be
made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in
implementation thereof. Please contact the City Clerk’s Office 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) 644-3127 or
jalimam@newportbeachca.gov.
1
January 23, 2025
Page 2
Finance Committee Meeting
I.CALL MEETING TO ORDER
II.ROLL CALL
III.PLEDGE OF ALLEGIANCE
IV.PUBLIC COMMENTS
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.
V.CONSENT CALENDAR
MINUTES OF NOVEMBER 14, 2024A.
Recommended Action:
Approve and file.
DRAFT MINUTES OF NOVEMBER 14, 2024
VI.CURRENT BUSINESS
FINANCIAL STATEMENT AUDIT RESULTS AND RELATED
COMMUNICATION FOR THE FISCAL YEAR ENDING JUNE 30, 2024
A
Summary:
Davis Farr, an independent public accounting firm of licensed public accountants, has
completed its audit for the fiscal year ending June 30, 2024. Marc Davis, the audit partner,
will meet with the Finance Committee to discuss the results of the audit.
Recommended Action:
Receive and file and forward to the City Council.
STAFF REPORT
ATTACHMENT A
ATTACHMENT B
ATTACHMENT C
6A PRESENTATION
OVERVIEW OF UTILITIES DEPARTMENT BUDGETB.
Staff will provide the Committee with a presentation covering the budget for the
Utilities Department.
Recommended Action:
Receive and file.
STAFF PRESENTATION
2
January 23, 2025
Page 3
Finance Committee Meeting
GENERAL FUND AND TIDELANDS FUND LONG RANGE FINANCIAL
FORECAST UPDATE
C.
Staff will brief the Committee regarding the results of the updated LRFF.
Recommended Action:
Receive and file.
STAFF REPORT
ATTACHMENT A
ATTACHMENT B
6C1 STAFF PRESENTATION
BUDGET AMENDMENTS FOR QUARTER ENDING DECEMBER 31, 2024D.
Summary:
Staff will report on the budget amendments from the prior quarter.
Recommended Action:
Receive and file.
STAFF REPORT
ATTACHMENT A
WORK PLAN REVIEWE.
Summary:
Staff and Finance Committee to review the proposed work plan and identify matters
that members would like placed on a future Agenda for discussion, action, or report.
Recommended Action:
Receive and file.
WORK PLAN
VII.ADJOURNMENT
3
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 1 of 7
I. CALL MEETING TO ORDER
The meeting was called to order at 3:01 p.m. by Mayor Pro Tem/Chair Stapleton.
II. ROLL CALL
PRESENT: Joe Stapleton, Mayor Pro Tem/Chair
Will O’Neill, Mayor (excused at 3:32 p.m.)
Allen Cashion, Committee Member
Keith Curry, Committee Member
Nancy Scarbrough, Committee Member
William Collopy, Committee Member
ABSENT: Noah Blom, Councilmember (excused)
STAFF PRESENT: Grace K. Leung, City Manager
Jason Al-Imam, Finance Director/Treasurer
Shelby Burguan, Deputy Finance Director
Marlene Burns, Buyer
Raymund Reyes, Administrative Manager
Abigail Marin, Budget Analyst
Trevor Power, Accounting Manager
Vicky Nguyen, Senior Fiscal Clerk
Jessica Kan, Finance Manager
Jennifer Anderson, Purchasing and Contracts Administrator
Jessica Nguyen, Senior Budget Analyst
Theresa Schweitzer, Finance Administrator Manager
Jeff Boyles, Chief of Fire
Sabrina Mesropian, Management Fellow
MEMBERS OF THE Jim Mosher
PUBLIC: Larry Tucker
III. PLEDGE OF ALLEGIANCE
Committee Member Nancy Scarbrough led the Pledge of Allegiance.
IV. PUBLIC COMMENTS
A. ADDITIONAL MATERIALS RECEIVED
Mayor Pro Tem/Chair Stapleton opened public comments.
Mayor Pro Tem/Chair Stapleton closed public comments.
V. CONSENT CALENDAR
A. MINUTES OF OCTOBER 10, 2024
Recommended Action: Approve and file.
MOTION: Committee Member Keith Curry moved to approve the minutes of October 10, 2024,
as amended, seconded by Committee Member Nancy Scarbrough. The motion carried as
follows:
AYES: Cashion, Collopy, Curry, Scarbrough, Stapleton
NOES: None
4
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 2 of 7
ABSENT: Blom (excused)
ABSTAIN: O’Neill
VI. CURRENT BUSINESS
A. INTERNAL AUDIT PROGRAM UPDATE
Recommended Action: Receive and file.
Finance Director/Treasurer Jason Al-Imam provided a presentation describing the Internal
Audit Program findings by the Pun Group.
The policy regarding payroll is nearing completion and it is recommended that there be a policy
update to address the timeliness and improve the manual journal entry process, chart of
account maintenance, and the timeliness and accuracy of bank reconciliations. The objective
of the audit included an assessment of the year end close process.
Committee Member William Collopy inquired if a policy update is needed versus a desk
procedure.
Finance Director/Treasurer Al-Imam explained that a policy would ensure the journal entries
are approved and entered in a timelier manner. The City agreed with the three findings
regarding the journal entries process, account maintenance, timeliness and accuracy of bank
reconciliations and is preparing a formal procedure to include timelines.
Eide Bailly was retained to examine the budgeting function, which involved a comprehensive
assessment of all aspects of the budget process. Four findings were related to budget
development efficiencies, long-range financial forecasting, budget validation and accounts
payable processing, and performance measurement. The City agreed with all four findings.
Additionally, regarding performance management, it was recognized that this was the first year
the City implemented performance measures, and Newport Beach received the GFOA award
for its effort. The City is working to fine-tune those performance measures.
The recommendation for the Long-Range Financial Forecast (LRFF) is that the Tidelands Fund
include more detailed analysis and be incorporated into the LRFF to better reflect the fiscal
impact on the General Fund due to the significant transfers made each year to cover Tidelands
operations.
Eide Bailly also examined the customer service activity of the Revenue Division within the
Finance Department. This assessment involved a comprehensive review of the division’s
structure, resource allocation, staffing levels, and documented or undocumented policies and
procedures. The assessment recommended improvements in performance measures,
documentation, manual processing, and utility and general billing. The City agreed with all four
findings.
The current internal audit program was initiated in 2020 with an enterprise risk assessment and
an initial evaluation of internal control risks. These processes served as the primary building
blocks to inform and develop an internal audit work plan. Since the final remaining item on the
2020 internal audit work plan will be completed by a consultant specializing in business
continuity and disaster planning assessments, it is recommended that a new enterprise risk
assessment and evaluation of internal control risks be performed in 2025.
Finance Director Jason Al-Imam indicated that if the Finance Committee supports embarking
on a new internal audit risk assessment and evaluation of internal control risks, an informal
request for proposals will be sent to Eide Bailly and The Pun Group in 2025.
5
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 3 of 7
Committee Member William Collopy requested that staff provide an enterprise risk assessment
matrix to the Committee for review and consideration, which will assist in developing an internal
audit work plan.
Finance Director/Treasurer Al-Imam responded that staff could do that.
Committee Member Allen Cashion questioned who manages cash offsite and what the largest
cash transaction is.
Finance Manager Jessica Kan reported a large amount of utility is collected at City Hall as a
lot of the offsite locations won’t take large transactions, such as classes and citations, a lot of
which are credit card transactions. Whittier is the third-party lockbox for payments. There is
also a post office box in Newport Beach that receives checks.
Mayor Pro Tem/Chair Stapleton opened public comments.
Mr. Jim Mosher, Newport Beach resident, commented about the policies and procedures being
revised and asked if they were part of the City Manager’s administrative policy manual or
something separate, and inquired why the policies are not posted on the website to provide
more transparency.
Finance Director/Treasurer Al-Imam responded that certain policies are already embedded in
the Administrative Manual; others are more nuanced such as manual journal entry preparation,
which is more of a Finance Department desk procedure and not necessarily required in the
manual. The Administrative Manual policies and documents are available upon request.
Mayor Pro Tem/Chair Stapleton closed public comment.
Mayor Pro Tem/Chair Stapleton thanked Finance Director/Treasurer Al-Imam and filed and
received the report.
B. OPEB ACTUARIAL VALUATION REPORT UPDATE
Recommended Action: Receive and file.
Finance Director/Treasurer Jason Al-Imam provided a presentation to the Committee, which
included an update on the Other Post-Employment Benefits (OPEB) for the city. The discussion
included a review of the most recent actuarial valuation and the status of funding the OPEB
liability, which is currently fully funded. Key highlights include a description of retiree medical
benefits offered through three categories: the Legacy Defined Benefit Plan (closed to new
employees after 2005), the Defined Contribution Retiree Health Savings Plan (for employees
hired from 2006 onward), and the CalPERS Minimum Required Contribution (MRC). A portion
of the City’s OPEB liability is in the form of an implicit rate subsidy, which results from the
pooling of non-Medicare retirees and active employees for premium purposes. Although
retirees are solely responsible for the cost of their health insurance, retirees receive the benefit
of a lower rate. The difference between these amounts is the implicit rate subsidy. The
accounting standards require that the value of the implicit subsidy be included in the City’s
OPEB liability, even though these costs will be paid on a pay-as-you-go basis in the future in
the form of higher premiums for active employees. However, the cost associated with the
implicit subsidy is covered by the City’s cafeteria plan contribution and is paid from the City’s
operating budget. Therefore, the targeted funding level is based on the value of the explicit
subsidy associated with the legacy defined benefit plan and the CalPERS MRC.
In 2008, the City established a Section 115 OPEB Trust with California Employers’ Retiree
Benefit Trust (CERBT), which is managed by CalPERS. However, in March of 2022, CalPERS
approved changes to the asset class allocations for CERBT, which resulted in lower returns
and an increase in volatility. The additional risk did not appear to be commensurate with the
6
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 4 of 7
expected return. Therefore, the City evaluated other alternatives. Public Agency Retirement
Services or PARS manages $6 billion of pension & OPEB assets for 500 public agencies
throughout the U.S. A distinctive benefit to PARS is that public agencies are permitted to create
a customized investment strategy for their PARS OPEB Trust, which allows for greater control
of investment risk.
In January 2024, the Finance Committee directed staff to bring an item forward for City Council
consideration to establish an OPEB Trust with PARS. It was recommended that PARS Trust
assets be invested in the “balanced” strategy, which has an expected return of 6.27%
(compared to 6.0% for CERBT) net of fees and has lower volatility. In March of 2024, the City
Council approved establishing an OPEB Trust with PARS, and therefore, funds were
transferred from CERBT to PARS in May 2024.
Committee Member William Collopy inquired if there was any private equity in the City’s PARS
OPEB Trust. Keith Stribling from PARS confirmed the City’s OPEB Trust does not include any
private equity, and currently there is no intention to invest in private equity.
Finance Director/Treasurer Al-Imam reported the annualized net rate of return of 5.6% from
2008-2024. The City has contributed nearly $28 million to the trust which has earned just over
$18 million in investment income. The OPEB Trust reserve balance was $46 million dollars as
of June 30, 2024, which exceeded the explicit portion OPEB liability currently valued at $39.7
million. An actuarial valuation is completed once every two years. The most recent actuarial
report was completed in 2024, which had a measurement date of June 30, 2023 and reflected
a long-term expected rate of return of 6.0%. It was pointed out that the next valuation report
will use a higher discount rate of 6.27%, which is consistent with the long-term expected return
for the City’s OPEB Trust, which is invested in the balanced strategy.
Finance Director/Treasurer Al-Imam explained further that City Council Policy F-2 (Reserve
Policy) requires the “new plan” be 100% funded and that the explicit portion of the “old plan”
be funded over a 20-year amortization period (or less) based on the annual required
contribution determined by a biennial actuarial review. The explicit liability is comprised of the
CalPERS required minimum contribution and Legacy Liability which is a closed plan and is split
50/50 between the Legacy Liability Plan and the CalPERS minimum required contribution.
Council Policy F-2 does not directly address whether funds should be set aside for the implicit
subsidy. However, since the cost associated with the implicit subsidy is covered by the City’s
cafeteria plan contribution and is paid from the City’s operating budget, the targeted funding
level has been based on the value of the explicit subsidy associated with the legacy defined
benefit plan and the CalPERS MRC.
In October 2023, the City Council approved allocating $5.8 million of the General Fund’s
operating surplus for Fiscal Year 2022-23 towards paying down the City’s OPEB liability. The
explicit subsidy is fully funded as of June 30, 2024. Council Policy F-2 does not directly address
funding for the explicit subsidy; however, it is recommended that the City not fund the explicit
subsidy for the reasons already mentioned, which is consistent with predominant practices.
Since the OPEB liability is fully funded, it results in annual savings totaling approximately $4
million are expected to accrue due to the elimination of the OPEB liability.
Mayor O’Neill congratulated staff and stated this was something he was really quite proud of
the City for accomplishing.
Mayor Pro Tem/Chair Stapleton opened public comments, there were none.
C. CALPERS UPDATE
Recommended Action: Receive and file.
7
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 5 of 7
Finance Director/Treasurer Al-Imam moved into the CalPERS update and reported that in July
the net return on investments was 9.3% for the fiscal year 2023-2024. The funded status
jumped from 72% funded to 75% funded, but it is not an apples-to-apples comparison, as not
all agencies across California are a full service City like Newport Beach. The 2023 valuation
reports set the contribution rates for FY2025-26. Fiscal Year 2022-23 investment return was
6.1%, underperforming the 6.8% target. Total unfunded liability decreased from $348 million to
$341 million whereas the total funded ratio increased from 70.9% to 72.5%. The funded status
improved due to the City’s aggressive pension paydown strategy, despite investment returns
falling short of the 6.8% target.
In 2015, CalPERS approved the Funding Risk Mitigation Policy, which included a provision that
automatically triggered a decrease in the discount rate when the actual investment return for a
fiscal year exceeded the assumed rate of return by at least 2%. The two percent trigger
intended to use a portion of unexpected gains to de-risk the portfolio. However, in April 2024,
CalPERS approved a change to the policy, which eliminated the automatic change in the
discount rate and instead requires board discussion on the discount rate when investment
returns exceed 6.8% by 2% or more in a given year. The return for FY 23-24 exceeded the
expected rate of return by 2.5%, which prompted board discussion. However, the board
decided to leave the discount rate at 6.8%. However, it was pointed out that CalPERS will
embark on a new Asset Liability Management study next year, which will include a review of
the discount rate, which happens once every four years.
Committee Member Collopy inquired if the discount rate changed other than every four years.
Finance Director/Treasurer Al-Imam explained that every two years they review the discount
rate, but the four year review does a deeper dive and showed the comparison chart for other
Orange County cities.
Finance Director/Treasurer Al-Imam explained that the funded status for all agencies in Orange
County increased in 2024 due to the investment return of 9.3%. It was pointed out that the
comparison of the funded status for agencies in Orange County is not an apples-to-apples
comparison since not every city is a full-service city like Newport Beach. For example, cities
like Tustin, Irvine and Santa Ana contract with the County for fire services. Therefore, the
pension liability for fire services is on the balance sheet of the County. Nonetheless, the cost
associated with pensions for fire services is charged to each contract city. In addition, some
agencies have issued pension obligation bonds in prior years. However, the debt for those
bonds is not reflected in the funded status.
Committee Member Curry noted the other thing that’s not considered is a city’s ability to pay
their liability.
Finance Director/Treasurer Al-Imam continued and explained the pension paydown strategy is
revisited annually. In 2024, the Finance Committee and City Council approved the continuation
of an aggressive pension paydown strategy, and approved staff’s recommendation to make a
payment of $40 million to CalPERS as part of the budget with the intent to allocate an additional
$5 million from the FY 2024-25 budget surplus.
Committee Member Collopy inquired if the same pension paydown strategy would be used in
the upcoming year. City Manager Grace Leung responded that the City would continue to
include $40 million in the baseline for paying down the pension liability. In addition, at fiscal
year-end, half of the surplus would be allocated towards paying down the pension liability,
which would bring the total paid to CalPERS up to $45 million.
Finance Director/Treasurer Al-Imam indicated that the Actuarial Valuation for the year ending
June 30, 2024 will not be available until August 2025. However, the CalPERS Pension Outlook
tool has been utilized to estimate the City’s projected funded status as of June 30, 2024, which
reflects the impact associated with the 9.3% investment gain. The previous forecast projected
8
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 6 of 7
the City’s pension liability being paid off in FY 2032-33, which was dependent on CalPERS
earning 6.8% over the long-term. The impact of the 9.3% return in 23-24 resulted in a projection
that shows the City paying off the pension liability a few months sooner than previously
projected.
Finance Director/Treasurer Al-Imam indicated that the City’s pension funded status is projected
to be 90% funded in the next four to five years and fully funded within the next eight years.
Committee Member Collopy asked if they were using a different discount rate than CalPERS
for the City’s contribution, and for an estimate for the total unfunded balance. Finance
Director/Treasurer Al-Imam stated they use the same discount rate as CalPERS for forecasting
purposes.
Mayor Pro Tem/Chair Stapleton opened public comments.
Seeing none, Mayor Pro Tem/Chair Stapleton closed public comments and received and filed
the report.
D. FIRST QUARTER BUDGET UPDATE
Recommended Action: Review and discuss the report on the first quarter of Fiscal Year 2024-
25 and provide any recommendations for consideration by the City Manager and City Council.
Deputy Finance Director Shelby Burguan provided the presentation of the first quarter budget
update for 2024-2025. The revised General Fund Expenditure budget totals 325.8 million
dollars and the projected year end expenses are estimated at $323.4 million which reflects an
expenditure budget savings of $2.5 million dollars. Savings are in the salary and benefits
category, largely due to vacancies. There are also a few proposed budget amendments
described in the staff report that impact both the revenue and expenditure budget by minor
amounts. It is currently projected that unrestricted General Fund resources will total $5.0 million
at the end of FY 2024-25. As is the case each year, staff anticipate that additional budget
savings will be realized, and the final year-end budget surplus will grow in future quarters. Staff
recommend that the Finance Committee review and discuss this report and provide any
recommendations for city manager and City Council consideration.
Committee Member Collopy inquired if the savings were only based on vacancies to-date and
whether they assumed full-staffing going forward. Deputy Finance Director Shelby Burguan
confirmed that was correct.
Mayor Pro Tem/Chair Stapleton opened public comments.
Seeing none, Mayor Pro Tem/Chair Stapleton closed public comments and received and filed
the report.
E. WORK PLAN REVIEW
Recommended Action: Receive and file.
Mayor Pro Tem/Chair Stapleton reported that looking at the Work Plan and January 9, 2025
will not have the current Council seated.
City Manager Leung stated that the mayor’s appointment takes place on January 14. There
would be one vacancy, the suggestion is to move the Finance committee meeting date past
the mayoral appointment. Current suggested date is January 23, 2025, which is a Thursday.
Mayor Pro Tem/Chair Stapleton summarized that January 23rd will be the overview of the utility
department, financial statement audit results, long range financial forecast budget amendments
and another workplan review. Feb will have FFP, and March bill begin the budget.
9
Finance Committee Regular Meeting Minutes
November 14, 2024
Page 7 of 7
Mayor Pro Tem/Chair Stapleton opening public comments.
Mr. Larry Tucker commented on the City’s reserve levels and indicated that it might be
advantageous for the Committee to review what is actually needed in the reserves.
Finance Director/Treasurer Al-Imam responded they have a Contingency reserve policy that is
25% of operating expenses. It was further pointed out that the FFP reserve and utilities
reserves are set based on fiscal policy and reserve targets.
Committee Member Collopy stated that years ago the Finance Committee performed a
comprehensive analysis that found they have a very good handle on how the reserves are
established.
Mayor Pro Tem/Chair Stapleton opened public comments.
Seeing none, Mayor Pro Tem/Chair Stapleton closed public comments and received and filed
the report.
VII. ADJOURNMENT
The Finance Committee meeting adjourned at meeting at 4:06 p.m.
Attest:
___________________________________ _____________________
Joe Stapleton, Mayor Pro Tem/Chair Date
Finance Committee
10
CITY OF NEWPORT BEACH
FINANCE COMMITTEE
STAFF REPORT
Agenda Item No. 6A
January 23, 2025
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Finance Department
Jason Al-Imam, Finance Director/Treasurer
949-644-3213, jalimam@neportbeachca.gov
SUBJECT: FINANCIAL STATEMENT AUDIT RESULTS AND RELATED
COMMUNICATION FOR THE FISCAL YEAR ENDING JUNE 30, 2024
SUMMARY:
The City is audited annually by an independent auditing firm, presently Davis Farr LLP.
The audit process takes several months, beginning after the books are closed (typically
in September) and concluding several months later once the financial statements have
been prepared. The financial statement audit for the fiscal year ended June 30, 2024 has
been completed by Davis Farr LLP, which reflects an “unmodified”, or clean opinion that
the City’s financial statements for the fiscal year are presented fairly.
RECOMMENDED ACTION:
Receive and file.
DISCUSSION:
The financial statement audit for the fiscal year ended June 30, 2024 has been completed,
which reflects an unmodified or “clean” audit opinion, meaning that the financial
statements are presented fairly, in all material respects, and in conformity with generally
accepted accounting principles.
The auditors reported no significant unusual transactions, no significant difficulties
encountered in connection with the performance of the audit, no material corrected and
uncorrected misstatements, no disagreements with management, and no other audit
findings or issues. In addition, the auditors did not identify any deficiencies in internal
11
Financial Statement Audit Results and Related Communication for the Fiscal Year Ending June 30, 2024
January 23, 2025
Page 2
control that would need to be communicated to the Committee, nor did they identify any
instances of noncompliance or other matters to report.
The Single Audit, a compliance audit of federally assisted grant programs, is still ongoing.
While no audit findings are anticipated as a result of the Single Audit, staff will
communicate any findings, should they occur, to the Finance Committee at a future
meeting.
Representatives of Davis Farr LLP will be present for the Finance Committee meeting and
will make a presentation regarding the results of their audit of the City’s financial
statements. Staff and the auditors will then be available for questions from the Committee
and the public. Additionally, should the Committee wish to discuss any matters related to
the Fiscal Year 2023-24 Audit with the auditors without staff present, such an opportunity
can be afforded at the conclusion of the item.
Prepared by: Submitted by:
/s/ Trevor Power
/s/ Jason Al-Imam
Trevor Power Jason Al-Imam
Accounting Manager Finance Director/Treasurer
ATTACHMENTS:
Attachment A – Fiscal Year 2023-24 Financial Statement
Attachment B – Required Audit Communications
Attachment C – Report on Internal Control and Other Matters
12
ATTACHMENT A
Fiscal Year 2023-24 Annual Comprehensive Financial Report
13
CITY OF NEWPORT BEACH
CALIFORNIA
FISCAL YEAR ENDED JUNE 30, 2024
ANNUAL
COMPREHENSIVE
FINANCIAL REPORT
14
15
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2024
Prepared by the Finance Department
Jason Al-Imam, Finance Director/Treasurer
16
The City of Newport Beach was incorporated September 1, 1906
The present City Seal was adopted July 22,1957
17
IN
T
R
O
D
U
C
T
O
R
Y
S
E
C
T
I
O
N
18
This page left blank intentionally.
19
CITY OF NEWPORT BEACH
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2024
TABLE OF CONTENTS
INTRODUCTORY SECTION
(Unaudited)
Table of Contents ..................................................................................................................... 1
Letter of Transmittal ................................................................................................................. 5
GFOA Certificate of Achievement for Excellence in Financial Reporting ................................ 19
List of City Officials ................................................................................................................ 20
Organization Chart ................................................................................................................. 21
FINANCIAL SECTION
Independent Auditor's Report .......................................................................................... 25
Management’s Discussion and Analysis ......................................................................... 31
(Required Supplementary Information)
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Position .............................................................................................. 53
Statement of Activities ................................................................................................... 54
Fund Financial Statements:
Governmental Funds:
Balance Sheet ............................................................................................................ 60
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ..................................................................................... 63
Statement of Revenues, Expenditures and Changes in Fund Balances ..................... 64
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............. 66
Proprietary Funds:
Statement of Net Position ........................................................................................... 70
Statement of Revenues, Expenses and Changes in Net Position ............................... 71
Statement of Cash Flows ............................................................................................ 72
Fiduciary Funds:
Statement of Fiduciary Net Position ............................................................................ 76
Statement of Changes in Fiduciary Net Position ......................................................... 77
Notes to the Financial Statements .................................................................................... 80
Required Supplementary Information
Defined Benefit Plan For Miscellaneous Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 146
Schedule of Contributions............................................................................................ 148
Defined Benefit Plan For Safety Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 150
1
20
Schedule of Contributions............................................................................................ 152
Post-Employment Health Care Benefits (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios ............................ 154
Schedule of Contributions............................................................................................ 156
Budgetary Comparison Statements:
General Fund ............................................................................................................. 158
Tide and Submerged Land – Operating Fund .............................................................. 160
Tide and Submerged Land – Harbor Capital Fund ...................................................... 161
Notes to Required Supplementary Information ............................................................... 162
Supplementary Schedules
Other Governmental Funds:
Combining Balance Sheet ........................................................................................... 170
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances ............................................................................................................ 176
Budgetary Comparison Schedules:
State Gas Tax Fund .................................................................................................... 184
SB1 Gas Tax RMRA Fund ........................................................................................... 185
Asset Forfeiture Fund ................................................................................................. 186
OTS DUI Grant Fund ................................................................................................... 187
Circulation and Transportation Fund ............................................................................ 188
Building Excise Tax Fund ............................................................................................ 189
Community Development Block Grant Fund ................................................................ 190
Air Quality Management District Fund ......................................................................... 191
Environmental Liability Fund ........................................................................................ 192
Supplemental Law Enforcement Services Fund .......................................................... 193
Opioid Remediation Fund ............................................................................................ 194
Contributions Fund ...................................................................................................... 195
FIIN Fund .................................................................................................................... 196
Restricted Programs Fund ........................................................................................... 197
Measure M Fund ......................................................................................................... 198
Oceanfront Encroachment Fund .................................................................................. 199
American Rescue Plan Act Fund ................................................................................. 200
Miscellaneous Grants Fund ......................................................................................... 201
PEG Fees Fund ........................................................................................................... 202
Internal Service Funds:
Combining Statement of Net Position .......................................................................... 206
Combining Statement of Revenues, Expenses and Changes in Net Position .............. 207
Combining Statement of Cash Flows ........................................................................... 208
Custodial Funds:
Combining Statement of Fiduciary Net Position ........................................................... 212
Combining Statement of Changes in Fiduciary Net Position ........................................ 213
STATISTICAL SECTION (Unaudited)
Financial Trends:
Net Position by Component ............................................................................................... 218
2
21
Changes in Net Position .................................................................................................... 220
Fund Balances of Governmental Funds ............................................................................ 222
Changes in Fund Balance of Governmental Funds ........................................................... 224
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property .................................... 228
Property Tax Rates, Direct and Overlapping Governments ............................................... 229
Principal Property Taxpayers ............................................................................................ 230
Property Tax Levies & Collections ..................................................................................... 231
Debt Capacity:
Ratios of Outstanding Debt by Type .................................................................................. 235
Ratios of General Bonded Debt ......................................................................................... 236
Schedule of Direct and Overlapping Debt .......................................................................... 237
Computation of Legal Debt Margin .................................................................................... 238
Demographic and Economic Information:
Demographic and Economic Statistics .............................................................................. 242
Principal Employers........................................................................................................... 243
Operating Information:
Full-Time City Employees by Function .............................................................................. 247
Operating Indicators by Function ....................................................................................... 248
Capital Asset Statistics by Function ................................................................................... 250
Water Sold by Customer Type .......................................................................................... 252
Utility Rates ....................................................................................................................... 253
Major Water Customers .................................................................................................... 254
3
22
This page left blank intentionally.
4
23
Finance Department
CITY OF NEWPORT BEACH
100 Civic Center Drive
Newport Beach, California 92660
949 644-3127 | 949 644-3339 FAX newportbeachca.gov/finance
December 30, 2024
Honorable Mayor, Members of the City Council, and Residents of the City of Newport Beach, California
The City Charter and California state law require that the City of Newport Beach (City) issue a complete set of financial statements annually and that an independent firm of
certified public accountants audit this report in conformance with generally accepted auditing standards (GAAS). The Annual Comprehensive Financial Report (ACFR) of the City of Newport Beach for the year ended June 30, 2024 is hereby submitted.
The ACFR was prepared in conformance with generally accepted accounting principles
(GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). This report consists of City management’s representations concerning the finances of the City of Newport Beach. Responsibility for the accuracy and completeness of the data presented rests with the City. Management of the City is also responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the
government are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control
should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. We believe the information presented in this report is complete and accurate in all material respects, and that it is reported in a manner designed to fairly present the financial position and results of operations of the various activities of the City of Newport Beach.
The City of Newport Beach’s financial statements have been audited by DavisFarr LLP, a firm of licensed certified public accountants. The goal of the audit was to provide reasonable assurance that the financial statements of the City of Newport Beach for the Fiscal Year (FY) ended June 30, 2024 are free of material misstatement. The independent
audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Newport
Beach’s financial statements for the year ended June 30, 2024 are fairly presented in
5
24
conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.
A narrative introduction, overview, and analysis accompany the basic financial statements
in the form of the Management’s Discussion and Analysis (MD&A). The letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Newport Beach MD&A can be found immediately following the report of the independent auditors and will provide further information regarding the format and content
of this report.
PROFILE OF THE CITY
Newport Beach is a community located in the coastal center of Orange County, in the
heart of Southern California, with Los Angeles County to the north and San Diego County to the south. There are currently 34 cities within the county. In terms of population, Orange County is the third largest county in California trailing Los Angeles and San Diego. It is the sixth largest county in the nation.
The general vicinity of Newport Beach and Orange County relative to the counties of Los Angeles, San Bernardino, Riverside, and San Diego is illustrated on the map below:
6
25
Newport Beach surrounds Newport Bay, well known for its picturesque islands and one of the greatest recreational harbors in the world, accommodating about 9,000 recreational and sports charter boats docked within its 21-square-mile harbor. The bay and the ten
miles of ocean beach offer outstanding fishing, swimming, surfing, and aquatic sports
activities. The City has a permanent population of 82,419, which typically grows to well over 100,000 during the summer months, including 20,000 to 100,000 or more tourists daily. There are fine residential areas, modern shopping facilities, and a quality school system. The University of California, Irvine, is located immediately adjacent to the city,
and several other colleges are within a 30-mile radius.
The following map illustrates the communities within Newport Beach; the upper bay, the recreational harbor, and beachfront topography; and the city’s location relative to the bordering cities of Costa Mesa to the north, Irvine to the east, and Laguna Beach to the
south.
Newport Beach was incorporated on September 1, 1906. The City Charter was originally adopted in 1954 but has been updated and amended over time. The City is governed by
seven Council Members, and operates under a Council-Manager form of government. Council Members are elected by district but voted on by the population as a whole, and serve four-year staggered terms. The Mayor is selected by the City Council from among its membership and serves a one-year term. The City Council is responsible for, among
7
26
other things, policy-making, passing local ordinances, adopting the budget, appointing committees, and hiring the City Manager, City Attorney, and City Clerk. The City Manager is responsible for carrying out the policies and ordinances of the City Council, for
overseeing the day-to-day operations of the City, and for appointing heads of
departments.
The City of Newport Beach is a full service city providing its residents and visitors with the following functional services: general governance, legal, financial, information
technology, and administrative management; police, fire, paramedic, lifeguard, and
emergency medical transport services; engineering, construction, and maintenance of public facilities, public streets, beaches, and parks; planning, zoning, and economic development services; building inspection, plan check, and code enforcement services; libraries and cultural and arts services; recreation and senior services; and water,
wastewater, and street light utility services. The City provides water and wastewater
service to most areas within the city limits, but it does not provide gas, cable television, electrical, or other utility services. Public elementary and secondary education is provided by the Newport-Mesa Unified School District and the Laguna Beach Unified School District.
Component Unit: The City’s financial statements present the financial activity of the City of Newport Beach (the primary government) and the Newport Beach Public Facilities Corporation (a component unit of the City). The Corporation is blended into the City’s financial statements because of its operational and financial relationship with the City.
Even though it is a legally separate organization, City of Newport Beach elected officials
are accountable for fiscal matters of the Corporation. Additional information about the Newport Beach Public Facilities Corporation and the reporting entity in general can be found in Note (1a) of the Notes to the Financial Statements.
DEMOGRAPHICS
Reflective of a mature community, vacant land has become increasingly scarce and the city is relatively built-out. Currently at 82,419, the population has been very stable as indicated by the following chart.
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Fiscal Year
Population
8
27
The effective buying income and median household income are generally higher in Newport Beach than in other areas of the State and the U.S. overall. As illustrated by the
table below, Newport Beach’s median household income is higher than the median
household income in the County of Orange and the State of California.
The leading industries here include professional services, scientific services, healthcare,
finance, insurance, legal services, and travel and tourism. Unemployment in the City increased to 3.6% as of October 2024 which is consistent with the statewide and national trends. Jobs grew at a slower rate than the previous year due to a slowing economy and more workers joining or re-joining the labor force. However, the City’s unemployment rate is still lower compared to the state’s 5.3%, and the county’s 4.1%, as illustrated in the
following chart.
More detailed information concerning the City’s demographics and statistics are contained within the Statistical Section of this report.
LOCAL ECONOMY
The economic outlook in Newport Beach remains strong, largely due to continued growth in property values, which has driven the median price of detached single-family homes to
nearly $4 million. Despite elevated interest rates resulting in high borrowing costs and
slower home sales, property tax revenue—the City’s largest source of revenue—remains strong and stable.
City of Newport Beach $156,434
Orange County 110,042
California 95,521
USA 77,719
Source: U.S. Census Bureau, 2023
2023 Median Household Income
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024*
Calendar Year
Historical Unemployment Rates
(Rates are not seasonally adjusted)
Newport Beach
Orange County
California
* through October 31, 2024
9
28
Sales tax and transient occupancy tax (TOT) revenue, the City’s second and third largest revenue sources, respectively, are directly influenced by consumer behavior. A significant portion of the City’s tax revenue depends on luxury markets, such as automobile
dealerships, fine dining, and luxury hotels, making it sensitive to economic headwinds like
high interest rates and shifts in consumer preferences. Nonetheless, growth in sales tax and TOT revenue is projected, though at a slower pace than in previous years.
TOP THREE REVENUE SOURCES
Most General Fund revenue categories performed at or higher than their budgeted levels for the fiscal year due to more favorable economic conditions than anticipated when the budget was developed in April 2023. Actual revenues were $8.3 million or 2.9% higher than final anticipated estimates, and $11.8 million or 4.1% higher than previous fiscal
year. As discussed in more detail below, the primary positive variances were in property
tax and transient occupancy taxes.
The top three individual revenue sources, Property Taxes, Sales Taxes and Transient Occupancy Taxes, represent 74.6% of all General Fund revenues. Tax revenues in total,
including business licenses, franchise fees, and other taxes represent 78.1% of all General Fund revenues, while only 21.9% is generated from other revenue sources.
Property Taxes
Unlike many cities, property taxes, not sales taxes, are the number one source of revenue
for the City of Newport Beach, representing almost half (49.3%) of all General Fund
revenues. Due to the limited supply of scenic coastal property and the unique access to Newport Bay, the Newport Beach community has developed into affluent residential neighborhoods and high-end commercial districts. Consistent and vigorous demand for coastal property has allowed the City to enjoy long-term growth trends with its number
one revenue source. Property tax revenues for Fiscal Year 2023-24 came in $7.8 million
10
29
or 5.6% higher than the prior year due to an increase in assessed property values related to the annual inflation adjustment that is allowed under Proposition 13 and due to changes in ownership and price appreciation.
Detached single-family residential property values increased 3.2% in 2024, as illustrated in the following table. Home sales rebounded slightly from the previous year even though interest rates increased slightly. Newport Beach’s estimated median price for a detached single-family residence is currently $4.0 million, which far exceeds the countywide
estimated median value of $1.3 million. Higher assessed values are projected to continue
due to strong demand, which is expected to support continued growth in future property tax revenues.
After Californians passed Proposition 13 in 1978, assessed property value is reassessed to market value only when the property changes ownership. Otherwise, the assessed value (AV) grows by no more than two percent per year. This practice creates a constant
lag and buffer between assessed and market values, effectively insulating the tax base from more market volatility. While property tax growth rates fell sharply during the Great Recession, the City has experienced positive AV growth during each of the past 30 years (see chart below with
the past 15 years of AV growth demonstrated). This positive growth occurred while many other cities experienced decreases in their AV during 2008 through 2011. Note that while growth slowed, the assessed value never declined throughout the recession.
Calendar Median Median %
Year Sales Price Change
2015 1,023 1,975,000$ 5.25%
2016 1,064 2,150,000$ 8.86%
2017 1,114 2,400,000$ 11.63%
2018 952 2,517,000$ 4.88%
2019 949 2,435,000$ -3.26%
2020 1,143 2,595,000$ 6.57%
2021 1,409 3,200,000$ 23.31%
2022 834 3,730,750$ 16.59%
2023 689 3,845,000$ 3.06%
2024*530 3,968,000$ 3.20%
Source: HdL Coren & Cone
*Data through October 2024
CITY OF NEWPORT BEACHDetached Single Family Residential Full Value Sales
Median Price
11
30
Value changes in Newport Beach show continued appreciation in property values in Fiscal Year 2023-24. Over the past 10 years, assessed valuation increased an average of 6.0% per year and 5.7% over a twenty-year period. Newport Beach’s assessed property values increased 6.4%, with a local assessed value of $75.9 billion for Fiscal
Year 2023-24.
Sales Tax
The second largest funding source for the General Fund is sales tax revenue, making up
about 14.6% of General Fund revenues. The City’s sales tax base is largely generated
from three industry categories – autos and transportation, general consumer goods, and restaurants/hotels. Most of these industries are also heavily impacted by tourism. To generate additional sales tax revenue over the long term while encouraging economic development, the City has historically entered into sales tax abatement agreements with
local automobile dealerships. These agreements include covenants requiring the
dealerships to operate within the City for a specified period of time and to maximize the City as the point-of-sale. During the current fiscal year, the City had one such agreement with a luxury automobile dealership, which expired on June 30, 2024.
Sales tax revenue was down 6.7% during the current fiscal year. Consistent with results
across the State of California, sales from all industry groups were down, except for sales from restaurants and hotels, which were up 6.1%. Sales were down in the current year due to a shift in consumer spending from taxable goods, such as new car sales, to nontaxable items, such as travel, leisure, and entertainment. For example, sales from
autos and transportation (the city’s largest source of sales tax revenue) were down 18%,
partly due to a decrease in demand for new vehicles, which is largely related to higher interest rates. The decrease in auto sales was also exacerbated by the temporary closure of a luxury automobile dealership, which is currently undergoing a construction renovation project.
5.3%
7.1%
0.2%1.0%2.9%5.2%5.7%5.9%6.5%6.6%
7.3%5.3%
6.4%
$-
$10,000,000,000
$20,000,000,000
$30,000,000,000
$40,000,000,000
$50,000,000,000
$60,000,000,000
$70,000,000,000
$80,000,000,000
$90,000,000,000
20
1
0
-
1
1
20
1
1
-
1
2
20
1
2
-
1
3
20
1
3
-
1
4
20
1
4
-
1
5
20
1
5
-
1
6
20
1
6
-
1
7
20
1
7
-
1
8
20
1
8
-
1
9
20
1
9
-
2
0
20
2
0
-
2
1
20
2
1
-
2
2
20
2
2
-
2
3
20
2
3
-
2
4
20
2
4
-
2
5
Total Assessed Property Value Growth
4.5%4.8%
12
31
Sales tax revenue is projected to increase by 4.1% next fiscal year, largely due to an increase in demand for general consumer goods and online purchases. In addition, sales from restaurants and hotels are projected to rise by 3.5% next year, which is a lower
growth rate than the previous year. This is due to menu price increases that have
impacted consumer behavior, as foot traffic to restaurants has been down recently. Transient Occupancy Tax (TOT)
TOT accrues to the City at a rate of 10% of room charges with 18% of this collection going
to the local destination marketing organization (Visit Newport Beach) to promote Newport Beach as a tourist destination. The City distinguishes its transient occupancy taxpayers in two broad property type categories, commercial and residential property. The commercial category is composed of approximately 21 hotels and resorts and accounts
for approximately 76% of TOT revenues. The residential category is made up of approximately 1,550 vacation rentals representing 24% of TOT revenue. TOT revenue from short-term residential stays has more than doubled over the past five years, while hotel TOT revenue has increased by only 14% over the same five-year period.
In the current fiscal year, TOT revenue from short-term residential stays decreased by 5%, while hotel TOT revenue increased by 9%. The decline in revenue from short-term
rentals is due to the cap placed on the number of residential permits. This year, the
number of active residential permits dropped below the cap of 1,550 for the first time since the cap was enacted several years ago. The increase in revenue from hotels is partly due to the opening of the Pendry, which opened in September 2023.
LONG TERM FINANCIAL PLANNING
The City continues to be in excellent financial health due to its strong underlying tax base, disciplined fiscal decisions, and stable governance. Conservative budgeting and sound financial policies have resulted in a trend of General Fund operating surpluses and strong
13
32
reserve levels. The City annually completes a Long-Range Financial Forecast covering the next 20 years pursuant to City Council Policy F-3 – Budget Adoption and Administration. That forecast shows positive General Fund results in each of the next 20
years and does not indicate any long-term financial trends of concern. The City’s long-
term financial planning has been guided by its strong financial policies, prudent budgeting decisions, and proactive planning in such critical areas as facilities replacement and pensions. These policies are regularly evaluated and updated as conditions and needs change.
Financial Policies The City Council has adopted prudent fiscal policies concerning its investments, reserves, budget administration, revenue initiatives, competitive contracting, facility replacement planning, and more. The budget surplus utilization policy directs the use of surplus funds
resulting from unrestricted General Fund annual revenues exceeding total actual expenditures, encumbrances, and commitments for that year. Roughly fifty percent of the budget surplus is used to address long-term obligations such as pension liabilities, other post-employment benefits, bonded debt, lease obligations, and other long-term needs. The remaining surplus is used to address one-time infrastructure or neighborhood capital
improvements, guided by a philosophy that these expenditures improve the community’s safety, aesthetics, transportation, or quality of life. The City’s debt policy establishes criteria for the issuance of debt and assures that the amount of any debt is affordable and cost effective. The City’s debt policy was recognized by the California Debt and Investment Advisory Commission as one of only 14 counties and cities in California
whose policies have 20 or more debt management best practice elements. The City’s debt and other financial policies can be found on the City’s website in the City Council section under City Government at:
www.newportbeachca.gov/policies
Annual Budget The annual budget serves as the foundation for the City of Newport Beach’s financial planning and control and allows the City Council to prioritize City expenditures so that
they are aligned with core community values. Per current policy, appropriations for operating expenditures are balanced in relation to current revenue sources and do not rely on one-time revenue sources or reserves. When significant uncertainty exists concerning revenue volatility or threatening/pending obligations, the City Council and City Manager reserve the right to impose any special fiscal control measures, including
personnel hiring freezes, and other spending controls, as was the case in FY 2019-20 and in the development of the FY 2020-21 budget. As a result of early retirement plans, attrition, outsourcing, and lay-offs implemented in the years following the onset of the Great Recession, the full-time work force was reduced by approximately 4% between FY 2012-13 and FY 2016-17 as depicted in the chart below. In the years since, thoughtful
additions to the City’s workforce have been implemented with a continued focus on fiscal discipline and maintaining balanced budgets.
14
33
The City has traditionally taken a conservative approach to forecasting revenues, often assuming only modest growth. This fiscal conservatism has created a stable financial base. As a result, even in a downturn, the City of Newport Beach is able to maintain its
services at a high level, while reducing expenses to accommodate reduced revenues.
The City’s fiscal discipline has allowed it to prepare balanced budgets and to save, both during prosperous and difficult economic periods. As the economy continues to improve, these trends are likely to continue.
The City Council may authorize the use of contingency reserves during emergency
situations as set forth by the Council Reserve Policy. Current policy requires that the contingency reserve equal 25 percent of the General Fund annual “Operating Budget.” Credit rating agencies consider a high level of available “fund balance” to be a credit strength. In 2024, Moody’s rating agency reaffirmed the City’s AAA credit rating noting the City’s extensive tax base, a very strong wealth and income profile, and a robust
financial position. It also noted the well-controlled expenditure framework coupled with a
very solid level of budget management. Additionally, FitchRatings rating agency also reaffirmed the City’s AAA credit rating noting the City’s consistent tax base and well-controlled expenditure framework coupled with conservative financial management would enable the City to maintain financial stability and solid reserves in a potential moderate
economic downturn. The City has also employed an aggressive strategy to paydown its
unfunded pension liability. The City has committed to a pension paydown plan that requires $45 million in annual contributions towards its unfunded pension liability, which is $15 million more than the amount required to be paid, as further described in the Pension section below. This paydown strategy is anticipated to result in eliminating the
City’s pension liability in 2033.
15
34
Facilities Financial Plan (FFP) Commitment & Major Construction Initiatives
The City’s FFP is a comprehensive master facilities replacement schedule that projects
the timing of construction of facility projects; projects the schedule of any planned debt
issuance; includes all relevant revenue sources and expenditures on a yearly, project-by-project basis; and determines the long-term “level funding” annual budget commitment that is required to support the program. The FFP was the winner of the prestigious “Helen Putnam Award – Internal Administration” category from the League of California Cities in
2008.
The City continued its financial commitment to the Facilities Financial Planning Reserve (FFPR) in FY 2023-24 by allocating resources to a new library lecture hall, to update and modify fueling support facilities and a transfer station, to finalize construction of a new
Junior Lifeguard building, and to replace a public restroom.
Overall, the FFPR balance decreased by $4.4 million from the prior fiscal year.
Pensions
As of the actuarial valuation date of June 30, 2023, the City had an Unfunded Accrued Liability (UAL) of $341 million. The City has taken a number of actions in recent years to mitigate the impact of rising pension costs including:
• Established lower benefit formulas for new hires.
• Eliminated the Employer Paid Member Contribution (EPMC).
• Through negotiated cost sharing, saw employees contribute 51.9% of the Normal Cost of the plan, or $11.2 million in Fiscal Year 2023-24.
Beginning Balance 7/1/23 24,800,492$
Sources
Licenses, Permits and Fees 68,617
Donations 37,951
Transfer In from General Fund 11,072,033
Investment Income 765,875
Net increase in fair value of investments 516,408
Total Sources 12,460,884
Uses
Library Lecture Hall (10,748,980)
Parks and Community Centers (850,000)
Jr. Guard Capital Project (286,361)
Fueling Facilities and Transfer Station (4,940,281)
Total Uses (16,825,622)
Ending Balance 6/30/24 20,435,754$
Facilities Financial Planning Reserve Fund
16
35
• Adopted a fixed and shorter amortization period for the unfunded liability.
• Made Additional Discretionary Payments (ADPs)
• Contributed no less than Actuarial Determined Contribution (ADC) each and every year.
• Analyzed the schedule of amortization bases annually in an effort to avoid negative
amortization.
• Amortized all gains/losses no longer than a 20-year closed period.
• Avoided asset smoothing or “rate phase-in” schedules if possible. Otherwise, the
City’s goal is to not exceed 5 years for any one smoothing cycle.
• Established a General Fund Surplus Utilization Policy F-5 to set aside one-half of any annual budget surplus to fund debts such as the pension liability.
• Maintained a contingency reserve to protect against economic recessions and to avoid negative impacts of asset smoothing and rate phased-in schedules.
Local governments with pensions have a total pension liability, which is the obligation to pay deferred pension benefits in the future. When the total pension liability is greater than
the pension plan’s assets there is a net pension liability, also known as unfunded pension liability. As required by GASB 68, the City reports the net pension liability in the government-wide financial statements, as well as in the proprietary fund statements, in the ACFR – see Note (11) of Notes to the Financial Statements.
The City implemented GASB 75 in fiscal year 2017-18, which requires local governments offering other post-employment health care benefits (“OPEB”) to report net OPEB liability in the government-wide financial statements, as well as in the proprietary fund statements, in the ACFR – see Note (12) in the Notes to the Financial Statements. When the total OPEB liability is greater than the OPEB plan’s assets there is a net OPEB liability,
also known as unfunded OPEB liability. As with past practice, the City will continue to fund its pension and OPEB obligations at an amount equal to or greater than the minimum employer contribution rate. The City has not and will never intentionally short-fund its pension and OPEB obligations. Annually the
City evaluates the cost and benefits of paying down the unfunded pension and OPEB liabilities on a faster schedule. Currently, the City Council has committed to a fixed $45 million per year contribution toward the unfunded pension liability, which is approximately $15 million more than is required by CalPERS. Fiscal year 2023-24 represented five years in a row the City Council appropriated additional funding towards an accelerated payment
of the unfunded liability from year-end budget surplus funds. The $45 million paydown
strategy is anticipated to result in eliminating the City’s pension liability in 2033. Additionally, in fiscal year 2023-24 City Council approved a one-time payment of $5.8 million towards paying down the City’s OPEB liability. As a result, beginning in fiscal year 2024-25, the OPEB liability is fully funded and the City is expecting to accrue $4 million
of annual savings.
17
36
AWARDS AND ACKNOWLEDGMENTS
The City has prepared an Annual Comprehensive Financial Report for the past 31 years.
The City has received awards for excellence in financial reporting in each of those years.
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Newport Beach for its Annual Comprehensive Financial Report for the fiscal year ended
June 30, 2023. In order to be awarded a Certificate of Achievement, a government unit
must publish an easily readable and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current
Annual Comprehensive Financial Report continues to conform to the Certificate of Achievement program requirements and we are submitting it to GFOA to determine its eligibility for another certificate.
Acknowledgments: Preparation of this report was accomplished through the efficient and
dedicated services of everyone in the City’s Accounting Division. In addition, the Finance Department staff would like to thank the City Manager, the Mayor, and the City Council for their interest in and support of planning and conducting the financial operations of the City in a responsible and progressive manner. We would also like to thank our auditors, DavisFarr LLP, for their time and assistance in the preparation of the report.
Grace K. Leung City Manager Jason Al-Imam Finance Director/Treasurer
18
37
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Newport Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
19
38
Newport Beach City Officials
Sara J. Weber
Councilmember
District 7
Lauren Kleiman
Mayor Pro Tem
District 6
Michelle Barto
Councilmember
District 2
Erik Weigand
Councilmember
District 3
Noah Blom
Councilmember
District 5
Robyn Grant
Councilmember
District 4
City Councilmembers
City Executive Staff
Grace Leung
City Manager
Aaron Harp
City Attorney
Leilani Brown
City Clerk
Tara Finnigan .......................................................................................................................... Assistant City Manager
Seimone Jurjis ........................................................................................................................ Assistant City Manager
Jason Al-Iman ................................................................................................................... Finance Director/Treasurer
Jeff Boyles .................................................................................................................................................... Fire Chief
Paul Blank ............................................................................................................................................. Harbormaster
Barbara Salvini ................................................................................................................. Human Resources Director
Melissa Hartson.................................................................................................................... Library Services Director
Dave Miner .................................................................................................................................... Acting Police Chief
Dave Webb ............................................................................................................................... Public Works Director
Sean Levin ....................................................................................................... Recreation & Senior Services Director
Mark Vukojevic ................................................................................................................................. Utilities Director
Joe Stapleton
Mayor
District 1
20
39
Board of
Library Trustees
Building & Fire
Code of Appeals
City Arts
Commission
Civil Service Board
Harbor Commission
Parks, Beaches &
Recreation Commission
Planning
Commission
ELECTORATE
CITY
MANAGER
MAYOR &
COUNCIL
CITY
CLERK
CITY
ATTORNEY
Community
Development
Finance
Fire
Human
Resources
Harbor
Library
Services
Public
Works
Utilities
Police
Recreation &
Senior Services
City
Committees
21
40
This page left blank intentionally.
22
41
23
42
This page left blank intentionally.
24
43
INDEPENDENT AUDITOR’S REPORT
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of
Newport Beach (the “City”), as of and for the year June 30, 2024, and the related notes to
the financial statements, which collectively comprise the City’s basic financial statements as
listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City, as of June 30,
2024, and the respective changes in financial position and, where applicable, cash flows
thereof for the year then ended in accordance with accounting principles generally accepted
in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Statements section of our report. We are required to be
independent of the City and to meet our other ethical responsibilities, in accordance with the
relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States
of America, and for the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City’s
25
44
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
ability to continue as a going concern for twelve months beyond the financial statement date,
including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements
are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City’s internal control. Accordingly,
no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City’s ability to continue as a going
concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, Budgetary Comparison Schedules for the General
Fund and each major special revenue fund, Schedules of Changes in the Net Pension Liability
and Related Ratios, Schedules of Contributions, Schedule of Changes in the Net OPEB Liability
and Related Ratios and Schedule of OPEB Contributions be presented to supplement the basic
26
45
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
financial statements. Such information is the responsibility of management and, although
not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in
accordance with GAAS, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City’s basic financial statements. The Combining and Individual
Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are presented for
the purpose of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial
statements.
The Combining and Individual Nonmajor Fund Financial Statements and Budgetary
Comparison Schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with GAAS. In our opinion, the Combining and
Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are
fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive
Financial Report. The other information comprises the Introductory Section and Statistical
Section but does not include the financial statements and our auditor’s report thereon. Our
opinions on the financial statements do not cover the other information, and we do not
express an opinion or any form of assurance thereon. In connection with our audit of the
basic financial statements, our responsibility is to read the other information and consider
whether a material inconsistency exists between the other information and the financial
statements, or the other information otherwise appears to be materially misstated. If, based
on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 30, 2024, on our consideration of the City’s internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the
27
46
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control over
financial reporting and compliance.
Irvine, California
December 30, 2024
28
47
MANAGEMENT’S DISCUSSION AND ANALYSIS
29
48
This page left blank intentionally.
30
49
MANAGEMENT’S DISCUSSION AND ANALYSIS
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents management’s discussion and analysis of the City’s financial performance during the
fiscal year that ended on June 30, 2024. This analysis should be read in conjunction with the Transmittal Letter at the front of this report and the accompanying Basic Financial Statements. OVERVIEW OF THE FINANCIAL STATEMENTS The financial section of the Annual Comprehensive Financial Report contains the following information: Independent Auditors’ Report, Management’s Discussion and Analysis (this section), the Basic Financial Statements, the Required Supplementary Information, and the Supplementary
Information section, an optional section that presents combining and budgetary schedules for individual non-major funds. The Basic Financial Statements are comprised of three components:
1) Government-wide Financial Statements, 2) Fund Financial Statements, and 3) Notes to the
Financial Statements. Management’s Discussion and Analysis is intended to be an introduction to the Basic Financial Statements.
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements – The Government-wide Financial Statements use the economic resources measurement focus and accrual basis of accounting, which is similar to the accounting standard used by private sector companies. The Government-wide Financial Statements are intended to provide a “Big Picture” view of the City. With the economic resources measurement focus and accrual basis of accounting, changes in net position are recognized as soon as the event occurs regardless of the timing of related cash flows. The Statement of Net Position includes all the City’s assets (including non-spendable assets like streets, roads, and land rights), deferred outflows of resources, liabilities (including long-term liabilities that may be paid over twenty years), and deferred inflows of resources. All the current
year revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid.
The Government-wide Financial Statements report the City’s net position and how net position has changed. Net position – the difference between the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources – is one way to measure the City’s financial
health. Over time, increases or decreases in the City’s net position are an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the City, one should also consider additional non-financial factors such as changes in the City’s property tax base and the condition of its facilities and other major infrastructure. The Government-wide Financial Statements of the City are divided into two categories: Governmental Activities – This category depicts the extent to which programs are self-supporting and the net amount provided by property taxes and other general revenues. Most of the City’s basic services are included in this category such as public safety, public works, community development, community services, and general administration. Taxes
and other general revenues finance most of these activities.
31
50
Business-type Activities – The City accounts for its Water and Wastewater utilities as
business enterprises. The City charges fees to customers to recover the cost of providing Water and Wastewater services. Fund Financial Statements – A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements such as State and Federal law or bond covenants. Other funds are utilized simply to control and manage resources intended for particular purposes. The Fund Financial Statements provide more detailed information about the City’s most significant funds (major funds) but not the City as a whole. Fund Financial Statements have a short-term focus measuring inflows of current, spendable assets. The resulting net difference between current financial assets and deferred outflows of resources, and current financial liabilities and deferred inflows of resources, otherwise known as
fund balance (or net working capital in the private sector) is a measure of the City’s ability to finance activities in the near term.
The City utilizes three broad categories of funds: Governmental Funds – Unlike Government-wide Financial Statements, Governmental
Fund Financial Statements utilize the current financial resources measurement focus and thus concentrate on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Consequently, the Governmental Fund Financial Statements provide a detailed short-term view that helps a reader determine whether there are more or fewer financial resources that can be spent in the near future to finance City programs. Also included in the Governmental Funds are Permanent Funds. These funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support City programs.
Proprietary Funds – Business-like services that receive significant financial support from user fees and charges are generally reported in Proprietary Funds (Enterprise Funds and
Internal Service Funds). Like the Government-wide Financial Statements, these funds provide both long and short-term financial information utilizing the economic resources measurement focus. The City’s Enterprise Funds (Water and Wastewater Funds) provide
goods or services mostly to non-government users and are the individual funds represented in the combined presentation of Business-type Activities in the Government-wide Financial Statements. The individual fund presentation provides more detailed
information about each business segment, its operating statements, and statements of cash flow. The City also uses Internal Service Funds that are utilized to report and allocate the cost of certain centrally managed and operated activities (e.g., fleet and other equipment maintenance, risk management, retiree insurance, telecommunications systems, information technology services, etc.). Because the Internal Service Funds primarily serve government users, they are reported with Governmental Activities, rather
than the Business-type Activities, in the Government-wide Financial Statements.
Fiduciary Funds – The City utilizes Fiduciary Funds to account for assets held by the City
in a trustee capacity, or as an agent for other governmental entities, private organizations, or individuals. All the City’s fiduciary activities are reported in a separate statement of
32
51
fiduciary net position, and a statement of changes in fiduciary net position. We exclude these activities from the City’s Government-wide Financial Statements because the City
cannot use these assets to finance its operations. Notes to the Financial Statements – The financial statements also include the Notes to the
Financial Statements that provide important narrative details about the information contained in the financial statements. Information contained in the Notes to the Financial Statements is critical to a reader’s full understanding of the Government-wide and Fund Financial Statements. Required Supplementary Information – In addition to the Basic Financial Statements, we have included a Required Supplementary Information section, which includes Budgetary Comparison Schedules for the General Fund and two other major funds, the Schedule of Changes in Net Pension Liability and Related Ratios, the Schedule of Changes in Net Post-Employment Health Care Benefits (OPEB) Liability and Related Ratios, and the related Schedules of Contributions for the Pension and OPEB plans.
Supplementary Information – In addition to the required elements of the Basic Financial Statements, we have also included a Supplementary Information section, which includes budgetary and combining schedules that provide additional details about the City’s Other
Governmental Funds, Internal Service Funds, and Fiduciary Funds. ANALYSIS OF GOVERNMENT-WIDE FINANCIAL STATEMENTS The Government-wide Financial Statements provide long-term and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole. Net Position Discussion
As shown in Figure 1, the City’s combined net position for the fiscal year ended June 30, 2024 was $2.6 billion, increasing $65.8 million or 2.6% over the prior year. Net position can serve as an important indicator of whether the City’s overall financial condition is improving or deteriorating over time.
Current and other assets increased $60.6 million. This increase is primarily due to a combined $55.0 million increase in cash and investments and restricted cash and investments with fiscal agent mostly related to the receipt of contributions for operating activities and capital improvement
projects and the issuance of limited obligation improvement bonds for two assessment districts. The remaining $5.6 million increase is attributable to an increase in account receivables most of which is related to a future contribution for the construction of a new library lecture hall, offset by
decreases in other receivables such as lease receivables, intergovernmental receivables, and a public-private partnership receivable. Capital assets increased $19.7 million, of which $10.9 million is related to additions to infrastructure and work in progress, and $7.3 million is due to
additions to land and structures.
Current liabilities increased $18.3 million primarily due to increases in accounts payable offset by a decrease in unearned revenue.
Long-term liabilities increased $2.5 million. The increase is primarily due to increases in insurance related liabilities and lease liabilities, offset by decreases in outstanding certificates of participation and decreases in the City’s net pension liability and net OPEB liability as investment returns in
33
52
both plans finished better than expected. See Note (11) and Note (12) of the Notes to the Financial Statements for more information.
Figure 1 Net Position June 30 (in thousands)
The largest portion of the City’s net position, at $2.4 billion of net position, reflects the net
investment in capital assets (e.g., land, right of way, street trees, buildings, infrastructure, equipment, and intangibles) less accumulated depreciation, accumulated amortization, and any related outstanding debt used to acquire those assets. The City uses these capital assets to
provide services to residents. Therefore, they do not represent a financial resource to the City and consequently are not readily available for funding current obligations.
Restricted net position totaled $123.4 million of net position, an increase of $44.3 million from the prior fiscal year, primarily due to increased restricted net position related to public works and community services. Public works’ increase is mainly from new limited obligation improvement bond proceeds restricted for use on two assessment districts not being completely spent during the fiscal year, while Community services’ increase is mainly from tidelands property related revenues not being spent during the fiscal year as resources are being accumulated for future
large scale capital improvement projects related to the harbor.
As of June 30, 2024, unrestricted net position was $48.2 million, an increase of $1.4 million from the prior fiscal year, primarily due to the receipt of unrestricted revenues such as property taxes and sales taxes that were not spent or restricted by the end of the fiscal year.
Governmental Activities Business-Type Activities Total
2023 2024 2023 2024 2023 2024
Current and other assets 633,179$ 699,910$ 36,647$ 30,548$ 669,826$ 730,458$ Capital assets 2,372,769 2,391,089 135,267 136,639 2,508,036 2,527,728
Total assets 3,005,948 3,090,999 171,914 167,187 3,177,862 3,258,186
Deferred outflows of resources 141,903 145,027 5,319 5,341 147,222 150,368
Current liabilities 41,327 58,840 4,245 4,986 45,572 63,826
Long-term liabilities 479,521 482,299 15,170 14,928 494,691 497,227
Total liabilities 520,848 541,139 19,415 19,914 540,263 561,053
Deferred inflows of resources 271,428 268,341 101 79 271,529 268,420
Net position
Net investment in capital assets 2,256,306 2,275,100 131,016 132,332 2,387,322 2,407,432
Restricted 79,152 123,445 - - 79,152 123,445
Unrestricted 20,117 28,001 26,701 20,203 46,818 48,204
Total net position, before restatement 2,355,575 2,426,546 157,717 152,535 2,513,292 2,579,081
Restatement - - (1,595) 1 - (1,595) 1 -
Total net position 2,355,575$ 2,426,546$ 156,122$ 152,535$ 2,511,697$ 2,579,081$
1 Prior year net position was restated due to unbilled receivables adjustment in Fiscal Year 2022-23. See note (20) of the Notes to the Financial Statements for more information.
34
53
GOVERNMENTAL ACTIVITIES Governmental activities are generally financed through taxes, intergovernmental revenues, and other non-exchange revenues. The Statement of Activities is intended to illustrate how the cost of governmental activities is financed and determines the annual change in net position. Figure 2 Changes in Net Position For the Years Ended June 30 (in thousands)
Revenues Associated with Governmental Activities Discussion Figure 2 illustrates in detail how the $395.4 million in Governmental Activities revenue was derived. Figure 3 summarizes this revenue by major source. As shown on Figures 2 and 3, $81.5 million, or 20.6%, of the revenues were recovered from those who directly benefited from the programs as a charge for service. Another $70.1 million, or 17.7%, of the revenues were generated by contributions and grants received from governmental organizations, developers, and property owners for both capital and operating activities. The remaining $243.8 million, or
61.7%, represented general revenues of the City including taxes, intergovernmental revenues, and other miscellaneous revenues.
Governmental Activities Business-Type Activities
2023 2024 2023 2024 2023 2024
Revenues:
Program revenues:
Charges for services 74,454$ 81,473$ 36,700$ 39,117$ 111,154$ 120,590$
Operating grants and contributions 20,132 34,498 - 115 20,132 34,613
Capital grants and contributions 5,810 35,647 - - 5,810 35,647
Total program revenues 100,396 151,618 36,700 39,232 137,096 190,850
General revenues:Taxes:
Property taxes 138,359 146,137 - - 138,359 146,137
Sales tax 46,552 43,445 - - 46,552 43,445 Transient occupancy taxes 30,202 31,737 - - 30,202 31,737
Other taxes 10,080 10,252 - - 10,080 10,252
Investment related income 2,520 9,368 258 1,462 2,778 10,830
Other 5,552 2,855 - - 5,552 2,855
Total general revenues 233,265 243,794 258 1,462 233,523 245,256
Total revenues 333,661 395,412 36,958 40,694 370,619 436,106
Expenses:
General government 26,912 28,392 - - 26,912 28,392 Public safety 121,310 151,626 - - 121,310 151,626
Public works 75,904 88,360 - - 75,904 88,360
Community development 13,048 16,814 - - 13,048 16,814 Community services 27,937 33,034 - - 27,937 33,034
Interest 6,666 6,215 - - 6,666 6,215
Water - - 30,702 37,322 30,702 37,322
Wastewater - - 5,344 6,959 5,344 6,959
Total expenses 271,777 324,441 36,046 44,281 307,823 368,722
Increases in net position 61,884 70,971 912 (3,587) 62,796 67,384
Net position at beginning of year 2,293,691 2,355,575 156,805 157,717 2,450,496 2,513,292
Restatement - - - (1,595) 1 - (1,595) 1
Net position at beginning of year, as restated 2,293,691 2,355,575 156,805 156,122 2,450,496 2,511,697
Net position at end of year 2,355,575$ 2,426,546$ 157,717$ 152,535$ 2,513,292$ 2,579,081$
1 Prior year net position was restated due to unbilled receivables adjustment in Fiscal Year 2022-23. See note (20) of the Notes to the Financial Statements for more information.
Total
35
54
Figure 3 Governmental Activities Revenue Sources For the Year Ended June 30, 2024
As illustrated in Figure 2, program revenues related to Governmental Activities increased $51.2 million from the prior year. This increase was primarily attributable to an increase in capital grants and contributions, most of which was due to the issuance of limited obligation improvement bonds for two assessment districts. Additionally, operating grants and contributions increased mainly due to earning American Rescue Plan Act grant revenue by spending part of the grant money on reimbursing the City for public safety services incurred on fire operations and on the City’s Junior Lifeguard building. The City also received and earned a portion of private contributions from the Newport Beach Public Library Foundation and Junior Guard Foundation for a library lecture hall and the aforementioned Junior Lifeguard program.
The City’s general revenues related to Governmental Activities increased about $10.5 million from the prior year primarily due to increases in property taxes, transient occupancy taxes, other taxes, and investment income, offset by decreases in sales taxes and other general revenues. Revenue
increases across various categories illustrates that Newport Beach’s underlying local economy continues to remain strong. Property tax is the largest revenue source for the City and collections finished the year $7.8 million higher than the previous fiscal year. This increase was mostly due to an increase in secured taxes as a robust demand for coastal property continued driving property values higher. At $43.4 million, sales taxes represent the second largest individual revenue source for the City.
Sales taxes decreased $3.1 million from the previous fiscal year. This decrease in sales tax revenue was due to consumer spending shifting from taxable sales, such as automobiles and transportation, to nontaxable sales, such as entertainment. Additionally, luxury vehicle sales finished significantly lower due in part to the temporary closure of a luxury automobile dealership while undergoing a construction renovation project.
Transient occupancy taxes (TOT), the City’s third largest revenue source, finished the year at $31.7 million, which is an increase of $1.5 million from the previous fiscal year. Hotel TOT revenue
21%
18%58%
3%
Charges for Services
Contributions and Grants
Taxes
Other
36
55
increased due to the opening of the new Pendry hotel and continued robust demand, which offset a slowdown in residential TOT.
Investment income, comprised of both interest income and unrealized gains/losses, increased about $6.8 million from the prior fiscal year. Because the federal funds rate remained constant
throughout most of the fiscal year, the increase in investment income is mostly a result of the availability of elevated interest rates throughout more of the fiscal year than the previous year. This allowed the City to reinvest earnings throughout the year at higher rates. Expenses Associated with Governmental Activities Discussion
The City is a full-service city providing residents and visitors with the following functional services: General Government is comprised of six departments (City Council, City Clerk, City Manager, City Attorney, Human Resources, and Finance) providing general governance, information technology services, executive management, legal services, records management, risk management, finance, and accounting.
Public Safety is comprised of two departments (Police and Fire) providing general law enforcement, fire suppression and prevention services, paramedic and medical transport services, disaster preparedness, and ocean lifeguard services. Public Works is comprised of one department (Public Works) providing engineering, construction
and maintenance of public streets, highways, buildings, beaches, parks, facilities and related infrastructure; as well as traffic engineering and street lighting.
Community Development is comprised of one department (Community Development) that provides planning, building, and zoning services, economic development services, and building plan check and code enforcement services.
Community Services is comprised of three departments (Library Services, Recreation & Senior Services, and Harbor) providing library services, cultural and arts programs, recreation services, senior social and transportation services, and harbor programs and services. Business Enterprise Operations are overseen by the Utilities Department providing water and wastewater services. These are considered business-type activities and are discussed further in the Business-Type Activities section. Figure 2 illustrates in detail how the $324.4 million of Governmental Activities expense was derived. The increase of $52.7 million from the prior year is mostly due to an increase in the
government-wide adjustment for internal service fund activity as there was a net loss in total in the internal service funds due to an increase in workers’ compensation and general liability expenses. An increase in the government-wide adjustment related to pension expense, and
increases in salaries and benefits also contributed to the increase in Governmental Activities expenses.
37
56
Figure 4 below summarizes the Governmental Activities expenses shared across functions.
Figure 4 Governmental Activities Functional Expenses For the Year Ended June 30, 2024
Figures 5 and 6 illustrate the net cost of each service. The net cost represents the amount that governmental activities are subsidized by taxes and other general revenues of the City. Figure 5 Governmental Activities For the Years Ended June 30 (in thousands)
47%
27%
10%
9%
5%2%
Public Safety
Public Works
Community Services
General Government
Community Development
Interest
Total Cost Net (Cost) Total Cost Net (Cost)
of Service of Service of Service of Service
General government 26,912$ (10,988)$ 28,392$ (10,212)$
Public safety 121,310 (92,434) 151,626 (115,049)
Public works 75,904 (49,373) 88,360 (22,387)
Community development 13,048 (765) 16,814 (5,338)
Community services 27,937 (11,155) 33,034 (13,622)
Interest 6,666 (6,666) 6,215 (6,215)
271,777$ (171,381)$ 324,441$ (172,823)$
2023 2024
38
57
Figure 6 Program Expenses and Revenues – Governmental Activities For the Year Ended June 30, 2024 (in millions)
BUSINESS-TYPE ACTIVITIES As noted earlier, the City combines the Water Enterprise Fund and Wastewater Enterprise Fund into Business-type Activities for the presentation of the Government-wide Financial Statements. Business-type activities are mainly funded by charging fees to customers to recover the cost of providing services.
Revenues Associated with Business-Type Activities Discussion As displayed in Figure 2, total revenues related to Business-type activities totaled $40.7 million.
Program revenues totaled $39.2 million and were supplemented by about $1.5 million of general revenues related to investment income. As shown in Figure 7 on the following page, Water activities represents about $33.9 million (86.5%) of program revenues, while Wastewater activities represents $5.3 million (13.5%) of program revenues.
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
GeneralGovernment Public Safety Public Works CommunityDevelopment CommunityServices Interest
Total Expenses Program Revenues
39
58
Figure 7 Program Expenses and Revenue – Business-type Activities For the Year Ended June 30, 2024 (in millions)
Expenses Associated with Business-Type Activities Discussion Current year expenses for Business-type Activities totaled $44.3 million, an increase of about
$8.2 million over prior year as shown in Figure 2. This is attributable to increases in salaries and benefits, maintenance, utilities, and miscellaneous expenses.
Major Business-type expenses in the current fiscal year included the following: Water
Of the $37.3 million in water related expenses, $12.6 million (33.7%) is for the purchase of water, $6.0 million (16.0%) covers employee related costs, $9.9 million (26.5%) is for maintenance, supplies, and depreciation of the water system, $2.2 million (5.8%) is for professional services, $2.2 million (5.9%) is for utility payments and the remaining $4.4 million (12.1%) is collectively attributable to other miscellaneous expenses.
Wastewater
Of the $7.0 million in wastewater related expenses, $2.7 million (39.5%) is for maintenance,
supplies, and depreciation of the wastewater system, $1.9 million (26.6%) is for employee related costs, and the remaining approximately $2.4 million (33.9%) is attributable to professional services, utility payments and other miscellaneous expenses.
Figure 7 summarizes Business-type expenses separately for Water and Wastewater activities.
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
Water Wastewater
Total Expenses Program Revenues
40
59
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to highlight available financial resources and to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds Utilizing the current financial resources measurement focus, the City’s Governmental Funds provide information on near-term inflows, outflows, and balances of spendable resources. This information is useful in assessing the City’s financing requirements and may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. Fund Balance – As shown in Figure 8, the City’s Governmental Funds reported combined fund balances of $295.1 million, an increase of $47.1 million from the prior fiscal year. The increase is net result of increases in fund balances in almost every major fund below, including the General Fund, the Tide and Submerged Land – Operating Fund, the Tide and submerged Land – Harbor
Capital Fund, Debt Service Fund, other special revenue funds, other capital projects funds, and other permanent funds in aggregate, offset by a decrease in the Facilities Financial Planning Reserve Fund. The General Fund represented $96.4 million or 32.7% of the combined fund
balances of the Governmental Funds. Figure 8 Governmental Funds Fund Balance June 30 (in thousands)
The following describes the classification of fund balance as of June 30, 2024. Additional information on the City’s fund balance can be found in Note (15) of the Notes to the Financial Statements. Nonspendable Fund Balance – The City has $11.8 million in fund balance classified as nonspendable to indicate that it cannot be readily converted to cash. Of the $11.8 million nonspendable fund balance, $1.3 million is for prepaid items, $215,285 is for inventories, $5.7 million is for long-term loan receivables, and $4.6 million is for permanent endowments.
Restricted Fund Balance – The City has $112.8 million in fund balance classified as restricted to indicate that it has externally imposed restrictions on how the money may be spent. Of the $112.8 million restricted fund balance, $7.4 million is restricted in the Tide and Submerged Land
– Operating Fund, of which $5.7 million is restricted for capital projects and maintenance and repairs, and $1.7 million is restricted for the Upper Newport Bay restoration; $43.1 million is
2023 2024 Change
General Fund 91,443$ 96,441$ 4,998$
Tide and Submerged Land - Operating 6,107 8,548 2,441
Tide and Submerged Land - Harbor Capital 30,215 43,107 12,892
Facilities Financial Planning Reserve 24,800 20,436 (4,364)
Debt Service Fund 2,184 2,323 139
Non-major special revenue 26,518 32,274 5,756
Non-major capital projects 60,148 85,087 24,939
Non-major permanent 6,543 6,846 303
247,958$ 295,062$ 47,104$
41
60
restricted in the Tidelands and Submerged Land – Harbor Capital Fund for capital projects related to the harbor; and $2.3 million is restricted for debt service. Of the remaining $60.0 million in
restricted fund balance, $32.5 million is restricted for various special revenue funds, $25.0 million is restricted for the Assessment District Fund, $292,893 is restricted for the Fire Station Fund, and $2.2 million of fund balance is restricted for permanent funds.
Committed Fund Balance – The City has $88.1 million in fund balance classified as committed to indicate that the City Council has committed how the money will be spent. Of the $88.1 million committed fund balance, $6.8 million is committed in the General Fund mostly for contract services and maintenance and repairs; $1.1 million is committed in the Tide and Submerged Land – Operating Fund for oil and gas related uses; $20.4 million is committed in the Facilities Financial Planning Reserve Fund; $3.0 million is committed in the Fire Station Fund; $505,166 is committed in the Civic Center and Park Fund; $16.1 million is committed in the Parks and Community Center Fund; $310,593 is committed in Balboa Village Parking Management District Fund; $4.2 million is committed to the Facilities Maintenance Fund; $11.7 million is committed in the Neighborhood Enhancement Fund; $122,146 is committed in the Junior Lifeguards Fund; $15.7 million is
committed in the Unrestricted Capital Improvements Fund; $6.5 million is committed to the Miscellaneous FFP Projects Fund; and $687,908 is committed to the Police Facility Fund; and $1.0 million is committed to the Park Maintenance Fund.
Assigned Fund Balance – The City does not have any fund balance classified as assigned. Assigned fund balance is fund balance which is not restricted or committed and is classified as
assigned to indicate the City Manager’s intent to be used for specific purposes. Unassigned Fund Balance – The remaining $82.4 million in fund balance is classified as unassigned to indicate that it is the residual balance not otherwise restricted, committed, or assigned. Major Governmental Funds results for the year included the following:
• General Fund revenues finished $11.8 million or 4.1% higher than the prior year mostly due to a combined $6.2 million net increase in the City’s top three revenues sources – property taxes, sales taxes and transient occupancy taxes – with a $7.8 million increase in property taxes as the City’s assessed valuation continued to increase due primarily to the appreciation of property values; offset with a $3.1 million decrease in sales taxes as consumer spending shifted from taxable sales to nontaxable sales; and a $1.5 million increase in transient occupancy taxes due to the opening of a new hotel and continued strong hotel occupancy rates. Additionally, property income increased $3.5 million
compared to the previous year mostly due to the normal increase in parking rates and the number of travelers returning to more pre-pandemic levels, and there was a full year’s worth of rental income from a property that was acquired late in the previous fiscal year.
General Fund expenditures finished $18.7 million or 7.7% higher than the prior fiscal year mostly due to the expected increase in salaries and benefits related to routine step increases, cost of living adjustments, new positions, increased pension costs and capital outlays. Notably, capital outlays related to leases increased $3.3 million due to the leasing of additional space in a homeless shelter to help individuals experiencing homelessness within the City. Though revenues exceeded expenditures by about $33.9 million, there were substantial transfers activity in the General Fund with transfers in totaling $26.9 million and transfers out totaling $59.4 million, mostly for funding capital improvement projects. In total, fund balance in the General Fund increased $5.0 million and ended the year at $96.4 million.
42
61
• Fund balance for the Tide and Submerged Land – Operating Fund increased $2.4 million and ended the current year with $8.5 million in fund balance. The increase was mostly due to an increase in property income related to parking revenues and investment earnings.
• Fund balance for the Tide and Submerged Land – Harbor Capital Fund increased $12.9 million ending at $43.1 million. This was largely due to reduction in expenditures as two major harbor dredging capital improvement projects nearing completion.
• Fund balance for the Facilities Financial Planning Reserve Fund decreased $4.4 million to end the current year at $20.4 million in fund balance. This was mainly due to transfers to other funds to cash fund construction projects related to a new library lecture hall and upgrading a fueling facility and transfer station.
• Fund balance for the Debt Service Fund increased $139,136 ending at $2.3 million. The increase was due to increase in investment income and a decrease in debt service related to servicing certificates of participation.
Proprietary Funds
The City’s Proprietary Funds (Enterprise and Internal Service Funds) presented in the Fund
Financial Statements section basically provide the same type of information in the Government-wide Financial Statements, but also include information for individual funds.
Enterprise Fund results for the year included the following:
• Net position in the Water Fund decreased $683,219 in total mostly due to the City’s
highest producing water well being out of service for most of the fiscal year undergoing maintenance and a prior period restatement. The out of service well resulted in increased expenses for the purchase of water and for system maintenance which were offset by
increases in water sales revenue related to a rate increase, and an increase in non-operating investment related revenues, resulting in a positive change to net position. However, the prior period restatement reduced net position, ultimately resulting in an
overall decrease to net position in the Water Fund. See note (20) in the Notes to the Financial Statements for additional information about the prior period restatement.
• Net position in the Wastewater Fund decreased $854,173. Similarly to the Water Fund, the decrease in net position was mainly due to increased system maintenance expenses and a prior period restatement, offset by an increase in sewer service and connection fees revenue as the City Council previously adopted a resolution to increase sewer rates each January 1st during calendar years 2024 through 2028. Increasing sewer rates should improve the Wastewater Fund’s net position in future years. See note (20) in the Notes to the Financial Statements for additional information about the prior period restatement. Major Internal Service Fund activity in the current fiscal year included the following:
• Total net position in the Internal Service Funds decreased $15.0 million in the current fiscal year. This was mostly due to operating loss of $25.1 million, which was mostly due to an increase in expenses related to the City’s self-insured general liability and workers’ compensation programs, offset by increases in nonoperating revenues like investment earnings, gain on sale of capital assets and transfers in. The increase in transfers in was
43
62
directly attributable to an additional one-time $5.8 million payment to pay down the City’s OPEB liability. GENERAL FUND BUDGETARY HIGHLIGHTS Changes to Original Budget Final budgeted revenues for the General Fund increased $2.5 million from the original budget during the year ended June 30, 2024. Factors contributing to this fluctuation are highlighted as follows:
• Final budgeted intergovernmental revenue increased $2.4 million primarily due to adjustments related to the Newport Beach Fire Department’s mutual aid reimbursements, revenue sharing with the County under a Waste Disposal Agreement, and the acceptance of grants.
• Property taxes revenue increased $1.3 million due to the Proposition 13 inflationary
adjustment and increases in assessed values related to changes in ownership and new construction.
• Final budgeted sales tax decreased from the adopted budget by $3.3 million. The main factor behind this decline was a decrease in demand for luxury automobiles as well as a temporary closure of a local new car dealership for renovations.
• Charges for services increased from the adopted budget by $396,600. This adjustment is related to increased revenue received for recreation classes and special events.
• Property income revenues increased by $1.3 million mainly due to the grossing up of full revenues related to the Dove Street property management. The adopted budget included the net revenue associated with the property, but the budget was revised to capture the full revenue associated with the property.
• Other revenues increased by $247,849 from the adopted budget due to contributions to the Newport Beach Library Foundation for library materials and programming accounts and the Friends of the Newport Library program to enhance programs such as Summer Reading, Sunday Musicales, National Library Week, and Young Adult Programs.
• Donations were adjusted upward by $113,851 related to donations to the Library Services Department, Police Department, Fire Department, and the Recreation & Senior Services Department. Final budgeted expenditures for the General Fund increased $16.1 million from the original budget during the year ended June 30, 2024. The significant factors contributing to the increase are as follows:
• The addition of $5.3 million to the benefits and salary budget associated with an additional discretionary payment of $5.0 million toward the City's unfunded pension liability and roughly $300,000 in overtime for police services due to the Police Department’s new Boardwalk and Quality of Life Enforcement program that tackles boardwalk safety and
44
63
quality of life issues throughout the City, and acceptance of the Stonegarden Grant which enhances cooperation and coordination amongst various agencies to raise the level of law
enforcement presence on the coastline.
• Budgeted carryovers from Fiscal Year 2022-23 totaling $5.5 million were added to the adopted budget.
• The addition of $1.3 million related to grossing up the expenditures related to the Dove Street property management as the adopted budget represented net activity, but the budget was revised to capture the full expenditures associated with the property.
• The addition of $1.8 million related to the Fire Department’s mutual aid reimbursements, purchase of a new outfitted ambulance unit, and purchases of a lifeguard computer-aided design system and software license renewal for the records and management system.
Variance with Final Budget
Actual General Fund revenues came in at $9.1 million above final budgeted revenues for the year ended June 30, 2024. Significant factors contributing to this favorable variance are summarized as follows:
• Property tax revenues came in $3.4 million higher than the final budget, largely due to
supplemental taxes.
• Investment earning revenues were $3.1 million higher than final budgeted revenues due to interest income from bonds and elevated interest rates.
• Other taxes ended the year $1.3 million higher than projected due primarily to business license taxes, utility franchise fees, and solid waste franchise fees.
• Charges for services came in $291,475 higher due primarily to receipts for paramedic
service fees, plan check fees, as well as revenue received from recreation fee-based classes, and the Junior Lifeguard program.
• Property income ended the year $1.6 million higher mainly due to overages in Beacon Bay, Balboa Yacht Basin, as well as parking revenue, and GASB 87.
• Intergovernmental revenues came in $333,024 higher than the final budget largely due to
payments from the Newport Beach Fire Department to the IGT-GEMT program resulting in additional revenue to the City, as well as reimbursements for mutual aid.
• Other revenues exceeded the budgeted amount by $980,168 and were made up largely of the net of bad debt and damage to city property revenues.
Actual General Fund expenditures of $262.7 million were less than final budgetary estimates of $275.6 million. The $12.9 million favorable variance was due largely in part to routine savings in
salaries and benefits from vacancies as well as contract services. Salary and benefit savings totaled $8.0 million and are spread across multiple departments, with savings in the larger departments (such as the Police Department, the Public Works Department, and the Fire Department) totaling $3.3 million.
45
64
CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City’s capital assets for Governmental and Business-type Activities as of June 30, 2024
amount to $2.5 billion, net of accumulated depreciation/amortization. This is comprised of a broad range of tangible capital assets including land, buildings, machinery and equipment, park facilities, road improvements, storm drains, piers, oil wells, sound walls, an 800 MHz radio communications system, parking pay stations and meters, and bridges; and intangible capital assets including the rights to use land and rights of way, structures and equipment. Total capital assets increased $19.7 million over the prior fiscal year. Figure 9 Capital Assets June 30 (net of depreciation/amortization, in thousands)
Major capital asset events during the current fiscal year included the following:
• Capital asset additions totaled $60.3 million in both the Governmental and Business-type Activities in the current year. Of the $60.3 million, $9.5 million is related to structure additions of a junior lifeguard facility, upgrading a park to synthetic turf with new lighting
and a pickleball court; $19.5 million represents additions of infrastructure assets mostly related to the road system and water system; $4.5 million is related to equipment and intangible right to use equipment, and intangible right to use subscriptions additions; $3.3 million is related to intangible right to use structures. The remaining $23.5 million is comprised of additions of non-depreciable/non-amortizable assets such as work in progress of $19.6 million, and land and rights of way of $3.9 million.
• Of the $50.2 million of additions in governmental assets in the current year, additions in infrastructure contributed $11.3 million, which was mostly due to upgrades in the road
system. The remaining $38.9 million added in the current year as governmental assets is comprised of $9.5 million of structure additions and $3.9 million of land additions, both mostly related to the completion of a new junior lifeguard program facility, upgrading a
park with a new multipurpose synthetic turf field and adding a pickleball court to a separate park; $17.7 million of work in progress, mostly related to construction of a new lecture hall
2023 2024 2023 2024 2023 2024
Land 1,918,486$ 1,922,330$ 2,219$ 2,219$ 1,920,705$ 1,924,549$
Intangible right to use
land and rights of way - - 3,809 3,755 3,809 3,755
Structures 196,235 199,676 378 363 196,613 200,039
Intangible right to use structures 12,007 14,045 - - 12,007 14,045
Equipment 19,346 19,050 101 126 19,447 19,176
Intangible right to use equipment 236 162 - - 236 162
Intangible right to use subscriptions 2,231 2,145 - - 2,231 2,145
Infrastructure 210,389 211,479 121,062 125,767 331,451 337,246
Work in progress 13,839 22,200 7,697 4,408 21,536 26,608
Totals 2,372,769$ 2,391,087$ 135,266$ 136,638$ 2,508,035$ 2,527,725$
Activities Activities
Governmental Business-Type
Total
46
65
at the central library, upgrades to the road system, and a water wheel that will help keep the harbor waters clear of debris; $4.5 million of equipment and subscription additions,
mostly related to vehicle purchases and information technology related purchases; and $3.3 million of intangible right to use structures related to the use of a local shelter for people experiencing homelessness in the City.
• The $10.1 million of business-type asset additions in the current year is comprised of $8.2 million in water system infrastructure additions, mostly related to replacing water lines and
updating a water well, and $1.9 million of work in progress additions related to water system improvements, most notably replacing a major water main.
Additional information on the City’s capital assets can be found in Note (6) of the Notes to the
Financial Statements.
Long-term Debt Figure 10 Outstanding Debt June 30 (in thousands)
The City’s total debt decreased $4.2 million during the current fiscal year. The decrease is the
result of expected debt service payments. Additional information on the City’s long-term debt obligation can be found in Note (7) of the Notes to the Financial Statements.
FACTORS AFFECTING NEXT YEAR’S BUDGET Economy
The City’s assessed property values continue to increase, providing a strong revenue base for the City. However, recent reductions in sales tax revenue have raised concerns about the broader economy. Nonetheless, sales tax revenue is projected to begin rebounding in Fiscal Year 2024-25. Additionally, transient occupancy tax revenue from hotels continues to grow, as tourism remains a strong source of income for the City. Therefore, the local economy in Newport Beach remains strong, with a positive economic outlook for the foreseeable future. This positions the City to withstand the impacts of a potential recession and maintain long-term fiscal sustainability. Local Revenue Trends
Property tax revenue, the City’s largest source of revenue, is projected to increase approximately 4.2% next fiscal year, which is largely related to the Proposition 13 inflationary adjustment and
2023 2024 2023 2024 2023 2024
Certificates of participation 97,610$ 93,525$ -$ -$ 97,610$ 93,525$
Bond premium 1,007 865 - - 1,007 865
Totals 98,617$ 94,390$ -$ -$ 98,617$ 94,390$
Activities Activities
Governmental Business-Type Total
47
66
due to changes in ownership and new construction. Although higher interest rates and elevated mortgage rates have slowed home sales, property tax revenue for Fiscal Year 2024-25 is
projected to be higher largely due to an increase in assessed values. Property tax revenues are expected to continue growing for the foreseeable future.
Sales tax revenue is the second largest source of General Fund revenue. Approximately 84% of
sales tax revenue is generated from autos and transportation, restaurants and hotels, general consumer goods, and the State and County pools. Sales tax revenue is projected to be 4.1% higher next fiscal year, largely due to moderate growth in restaurants and hotels, general consumer goods, and the State and County pools. Revenue from these three industry groups is projected to increase by 5% next fiscal year, which is offset by modest growth in autos and transportation. Revenue from autos and transportation is projected to increase by 0.6%, due in part to the temporary closure of a luxury automobile dealership undergoing a construction renovation project. Transient occupancy tax (TOT) revenue, which is the third largest source of revenue in the General Fund, continues to remain strong. This trend is expected to continue with TOT revenues projected to increase approximately 3% next fiscal year, which is largely due to hotels reporting record high TOT receipts.
Discretionary Appropriations The annual budget serves as the foundation for financial planning and control, and allows the City
Council to prioritize expenditures in alignment with core community values. The budget as adopted is reflective of strong revenues, healthy reserves, and a sound debt position. This budget reflects a strong local economy that continues to provide stable revenues that support a wide
variety of programs and initiatives. The City Council adopted a Fiscal Year 2024-25 budget that maintains a deliberate resource balance between these important municipal expenses:
• Addressing long-term obligations such as pension liabilities, post-employment health care benefits, and debt service;
• Keeping a level of operations that reflects the community’s desire for an active, safe, and attractive community; and
• Investing in infrastructure to maintain a high-quality natural and physical environment.
An aspect of the City’s balanced approach to fiscal management is managing resources as efficiently as possible, responsibly managing debt, and working collaboratively with employees to recalibrate the compensation structure and share in the costs of pension obligations. The budget for Fiscal Year 2024-25 includes $45 million of funding for the continuation of an aggressive pension paydown strategy, which is approximately $15 million more than the amount required to be paid. This aggressive pension paydown strategy of making $45 million payments
to CalPERS each year is expected to eliminate the City’s pension liability by 2033. In Fiscal Year 2023-24, $7.1 million in contributions were made to the OPEB Trust. Additionally,
$3.9 million in investment income was recognized in the OPEB Trust, bringing the value of the OPEB Trust Fund assets to $46.2 million as of June 30, 2024. This amount exceeds the value of
48
67
the explicit portion of the OPEB liability. Since the OPEB liability is fully funded, contributions to the OPEB Trust are no longer required. Therefore, OPEB Trust assets will be used to fund future
benefit payments. Beginning in Fiscal Year 2024-25, annual savings totaling approximately $4 million are expected from the elimination of the OPEB liability.
Overall, the City’s total debt burden is low and remains affordable. The economy benefits from the City's mature, robust tax base and strong employment across diverse business sectors, as well as retail shopping and tourism activity. Residential and commercial property values are among the highest in the country. Our overall assessed valuation (AV) has been stable despite the economic downturn between 2009 and 2012, with growth in each of the last 30 years. A strong financial profile is a particularly important factor considered by rating agencies when evaluating the creditworthiness of local government debt. The rating agencies Fitch, Moody's, and Standard & Poor's have all assigned the City the highest-quality credit rating of AAA. Both Moody’s and Fitch reaffirmed their AAA ratings in 2024. Expenditure controls over the past decade have included additional employee contributions toward pension costs, contracting
services, and freezing vacant positions when necessary, usually during recessionary periods. Financial operations produced net surpluses (after transfers) in the last ten years due to conservative budgeting and a stable and growing tax revenue base. The City has used surpluses
for important one-time purposes, such as paying down debt and investing in infrastructure and neighborhood capital improvements. The City’s financial management policies are strong and have been further enhanced in recent years.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department, 100 Civic Center Drive, Newport Beach, CA 92660, (949) 644-3123. The City’s Budgets, Annual Comprehensive Financial Reports, as well as other City financial information can be found on the City’s website at: www.newportbeachca.gov/financialinfo.
49
68
This page left blank intentionally.
50
69
51
70
This page left blank intentionally.
52
71
Governmental Business-type
Activities Activities Total
Assets:
Cash and investments (note 2)359,465,817$ 28,972,098$ 388,437,915$
Receivables:
Accounts (net of allowance)14,089,676 6,102,021 20,191,697
Interest 1,316,897 92,534 1,409,431
Intergovernmental receivables 13,493,376 10,736 13,504,112
Lease receivables (note 3)268,028,069 - 268,028,069
Public-private partnership receivable (note 18)714,546 - 714,546
Restricted cash and investments with fiscal agent (note 2)35,126,167 - 35,126,167
Internal balances 4,629,537 (4,629,537) -
Investment in joint ventures (note 13)270,127 - 270,127
Inventory 679,067 - 679,067
Prepaid items 2,097,926 - 2,097,926
Capital assets (note 6):
Non-depreciable/non-amortizable 1,944,530,634 6,627,893 1,951,158,527
Depreciable/amortizable 760,313,084 210,612,679 970,925,763
Accumulated depreciation/amortization (313,755,179) (80,601,365) (394,356,544)
Total assets 3,090,999,744 167,187,059 3,258,186,803
Deferred Outflows of Resources:
Deferred amount from pension plans (note 11)124,099,025 4,189,507 128,288,532
Deferred amount from OPEB (note 12)20,927,518 1,151,419 22,078,937
Total deferred outflows of resources 145,026,543 5,340,926 150,367,469
Liabilities:
Accounts payable 36,287,807 4,678,774 40,966,581
Accrued payroll 6,686,759 280,733 6,967,492
Accrued interest payable 3,247,902 - 3,247,902
Deposits payable 3,301,637 26,034 3,327,671
Unearned revenue 9,316,215 - 9,316,215
Noncurrent liabilities:
Due within one year:
Lease liability (note 7)1,272,450 44,364 1,316,814
Subscription liability (note 7)289,030 - 289,030
Other (note 7)15,386,741 - 15,386,741
Due in more than one year:
Net pension liability (note 11)306,754,409 10,224,331 316,978,740
Net OPEB liability (note 12)17,042,719 927,270 17,969,989
Lease liability (note 7)13,066,932 3,732,290 16,799,222
Subscription liability (note 7)1,543,725 - 1,543,725
Other (note 7)126,942,939 - 126,942,939
Total liabilities 541,139,265 19,913,796 561,053,061
Deferred Inflows of Resources:
Deferred amount from pension plans (note 11)2,246,776 44,187 2,290,963
Deferred amount from OPEB (note 12)642,920 35,281 678,201
Deferred amount from leases (note 3)264,667,787 - 264,667,787
Deferred amount from public-private partnerships (note 18)784,001 - 784,001
Total deferred inflows of resources 268,341,484 79,468 268,420,952
Net Position:
Net investment in capital assets 2,275,099,514 132,331,781 2,407,431,295
Restricted for:
Public safety 1,002,804 - 1,002,804
Public works 55,096,135 - 55,096,135
Community services 56,839,874 - 56,839,874
Community development 1,336,346 - 1,336,346
Debt service 2,323,115 - 2,323,115
Permanent funds:
Nonexpendable 4,629,781 - 4,629,781
Expendable 2,216,508 - 2,216,508
Unrestricted 28,001,461 20,202,940 48,204,401
Total net position 2,426,545,538$ 152,534,721$ 2,579,080,259$
CITY OF NEWPORT BEACH
Statement of Net Position
June 30, 2024
See accompanying notes to basic financial statements
53
72
CITY OF NEWPORT BEACH
Statement of Activities
For the Year Ended June 30, 2024
Operating Capital Total
Charges for Grants and Grants and Program
Expenses Services Contributions Contributions Revenues
Functions/Programs
Primary government:
Governmental activities:
General government 28,392,550$ 15,953,090$ 2,189,588$ 37,954$ 18,180,632$
Public safety 151,625,944 27,903,642 8,672,982 - 36,576,624
Public works 88,359,562 9,397,103 21,543,775 35,031,614 65,972,492
Community development 16,813,900 10,849,048 590,147 36,736 11,475,931
Community services 33,034,132 17,370,410 1,501,469 539,991 19,411,870
Interest on long-term debt 6,215,237 - - - -
Total governmental activities 324,441,325 81,473,293 34,497,961 35,646,295 151,617,549
Business-type activities:
Water 37,322,293 33,842,356 97,212 - 33,939,568
Wastewater 6,959,273 5,274,889 18,287 - 5,293,176
Total business-type activities 44,281,566 39,117,245 115,499 - 39,232,744
Total primary government 368,722,891$ 120,590,538$ 34,613,460$ 35,646,295$ 190,850,293$
Taxes:
Property tax
Sales tax
Transient occupancy tax
Business license tax
Franchise tax
Other taxes
Investment income
Net increase in fair value of investments
Other
Total general revenues
Change in net position
Net position, beginning, as previously reported
Restatement for correction of error (note 20)
Net position, beginning, as restated
Net position at end of year
Program Revenues
See accompanying notes to basic financial statements
54
73
Governmental Business-type
Activities Activities Total
(10,211,918)$ -$ (10,211,918)$
(115,049,320) - (115,049,320)
(22,387,070) - (22,387,070)
(5,337,969) - (5,337,969)
(13,622,262) - (13,622,262)
(6,215,237) - (6,215,237)
(172,823,776) - (172,823,776)
- (3,382,726) (3,382,726)
- (1,666,097) (1,666,097)
- (5,048,823) (5,048,823)
(172,823,776) (5,048,823) (177,872,599)
146,136,873 - 146,136,873
43,444,542 - 43,444,542
31,736,961 - 31,736,961
4,896,557 - 4,896,557
5,152,384 - 5,152,384
203,135 - 203,135
5,834,247 893,332 6,727,579
3,534,164 568,429 4,102,593
2,855,069 - 2,855,069
243,793,932 1,461,761 245,255,693
70,970,156 (3,587,062) 67,383,094
2,355,575,382 157,717,018 2,513,292,400
- (1,595,235) (1,595,235)
2,355,575,382 156,121,783 2,511,697,165
2,426,545,538$ 152,534,721$ 2,579,080,259$
Net (Expense) Revenue and Changes in Net AssetsPrimary Government
See accompanying notes to basic financial statements
55
74
This page left blank intentionally.
56
75
FUND FINANCIAL STATEMENTS
57
76
This page left blank intentionally.
58
77
GOVERNMENTAL FUNDS
Major Funds The General Fund is used to account for fiscal resources that are dedicated to governmental operations of the City, and not required to be accounted for in another fund. The Tide and Submerged Land – Operating Fund is a Special Revenue Fund used to account for revenues related to the operation of the City’s tidelands, including beaches and marinas, and the related expenditures. Revenue from tideland operations includes, but is not limited to, rents from moorings, piers, and
leases, as well as income from parking lots, meters, and the sale of oil. The Tide and Submerged Land – Harbor Capital Fund is a Special Revenue Fund used to account for incremental increases in revenue from certain property lease, pier, and mooring rentals that exceed Council designated base year
revenue amounts, as well as other designated revenues and the related expenditures for capital projects, maintenance, and servicing of loan advances from the General Fund. The Facilities Financial Planning Reserve Fund is used to account for the
receipt and expenditure of funds for the replacement of facilities. In prior years, this fund was called the Facilities Replacement Fund. The Debt Service Fund is used to account for debt service transactions related to the Certificates of Participation issued to finance the construction of the Civic
Center Complex and the construction of Fire Station No. 2. Other Governmental Funds
Other governmental funds are those governmental funds that do not meet the criteria of a major fund. For reporting purposes in this section, they are combined as Other Governmental Funds.
59
78
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Assets
Cash and investments (note 2)85,538,605$ 7,057,434$ 48,689,151$
Receivables:
Accounts (net of allowance)6,183,059 2,224,279 -
Interest 403,601 39,628 137,249
Intergovernmental receivables 10,533,790 - -
Lease receivables (note 3)78,878,480 189,149,589 -
Public-private partnership receivable (note 18)- 714,546 -
Restricted cash and investments with fiscal agent (note 2)- - -
Due from other funds (note 4)6,816,287 - -
Advance to other funds (note 4)5,676,659 - -
Prepaid items 1,160,659 101,646 -
Inventory 215,285 - -
Total assets 195,406,425$ 199,287,122$ 48,826,400$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 9,195,144$ 1,305,980$ 42,395$
Accrued payroll 6,117,226 62,414 -
Deposits payable 3,041,127 260,510 -
Unearned revenue 3,068,326 980,433 -
Advance from other funds (note 4)- - 5,676,659
Due to other funds (note 4)- - -
Total liabilities 21,421,823 2,609,337 5,719,054
Deferred Inflows of Resources:
Unavailable revenue 285,689 - -
Deferred amount from leases (note 3)77,257,725 187,410,062 -
Deferred amount from public-private partnerships (note 18)- 720,001 -
Total deferred inflows of resources 77,543,414 188,130,063 -
Fund balances:
Nonspendable:
Prepaid items 1,160,659 101,646 -
Inventories 215,285 - -
Long-term loan receivable 5,676,659 - -
Permanent endowment - - -
Restricted:
Upper Newport Bay restoration - 1,683,144 -
Other (note 15)- 5,710,272 43,107,346
Committed:
Capital re-appropriations 436,303 - -
Oil and gas - 1,052,660 -
Other (note 15)6,350,542 - -
Assigned - - -
Unassigned 82,601,740 - -
Total fund balances 96,441,188 8,547,722 43,107,346
Total liabilities, deferred inflows of
resources and fund balances 195,406,425$ 199,287,122$ 48,826,400$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2024
Page 1 of 2
See accompanying notes to basic financial statements
60
79
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Assets
Cash and investments (note 2)20,371,975$ -$ 111,480,369$ 273,137,534$
Receivables:
Accounts (net of allowance)4,643,968 - 1,011,297 14,062,603
Interest 63,779 - 395,718 1,039,975
Intergovernmental receivables - 1,039,804 1,919,782 13,493,376
Lease receivables (note 3)- - - 268,028,069
Public-private partnership receivable (note 18)- - - 714,546
Restricted cash and investments with fiscal agent (note 2)- 7,505,205 27,620,962 35,126,167
Due from other funds (note 4)- - - 6,816,287
Advance to other funds (note 4)- - - 5,676,659
Prepaid items - - 39,723 1,302,028
Inventory - - - 215,285
Total assets 25,079,722$ 8,545,009$ 142,467,851$ 619,612,529$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 47$ 11,148,502$ 21,692,068$
Accrued payroll - - 3,436 6,183,076
Deposits payable - - - 3,301,637
Unearned revenue - - 5,267,456 9,316,215
Advance from other funds (note 4)- - - 5,676,659
Due to other funds (note 4)- 6,221,847 241,439 6,463,286
Total liabilities - 6,221,894 16,660,833 52,632,941
Deferred Inflows of Resources:
Unavailable revenue 4,643,968 - 1,599,312 6,528,969
Deferred amount from leases (note 3)- - - 264,667,787
Deferred amount from public-private partnerships (note 18)- - - 720,001
Total deferred inflows of resources 4,643,968 - 1,599,312 271,916,757
Fund balances:
Nonspendable:
Prepaid items - - 39,723 1,302,028
Inventories - - - 215,285
Long-term loan receivable - - - 5,676,659
Permanent endowment - - 4,629,781 4,629,781
Restricted:
Upper Newport Bay restoration - - - 1,683,144
Other (note 15)- 2,323,115 59,938,876 111,079,609
Committed:
Capital re-appropriations - - - 436,303
Oil and gas - - - 1,052,660
Other (note 15)20,435,754 - 59,829,107 86,615,403
Assigned - - - -
Unassigned - - (229,781) 82,371,959
Total fund balances 20,435,754 2,323,115 124,207,706 295,062,831
Total liabilities, deferred inflows of
resources and fund balances 25,079,722$ 8,545,009$ 142,467,851$ 619,612,529$
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2024
Page 2 of 2
See accompanying notes to basic financial statements
61
80
This page left blank intentionally.
62
81
Fund balances of governmental funds 295,062,831$
Amounts reported for governmental activities in the statement of net position are
different because:
Capital assets net of accumulated depreciation have not been included
as financial resources in governmental fund activity. Amount excludes
capital assets from internal service funds which are added below.2,371,916,763
All liabilities (both current and long-term) are reported in the Statement of Net Position.
Amounts exclude long-term debt activity from internal service funds which have been
added below:
Certificates of participation payable - Series 2010B (87,800,000)
Certificates of participation payable - Series 2020A (5,725,000)
Bond premium - Series 2020A (864,633)
Lease liability (14,198,968)
Subscription liability (326,977)
Deferred inflows for improvements by the operator to the underlying asset of a
public-private partnership are recognized only in the government-wide statements
for governmental activities.(64,000)
Pension related debt applicable to the governmental activities are not due and payable in
the current period and accordingly are not reported as fund liabilities. Deferred outflows
of resources and deferred inflows of resources related to pension are only reported in
the Statement of Net Position as the changes in these amounts affect only the
government-wide statements for governmental activities. Amounts exclude internal
service fund activity which has been added below:
Deferred outflows of resources 121,343,453
Deferred inflows of resources (2,217,713)
Pension liability (300,029,538)
OPEB related debt applicable to the governmental activities are not due and payable in
the current period and accordingly are not reported as fund liabilities. Deferred outflows
of resources and deferred inflows of resources related to OPEB are only reported in
the Statement of Net Position as the changes in these amounts affect only the
government-wide statements for governmental activities. Amounts exclude internal
service fund activity which has been added below:
Deferred outflows of resources 20,170,193
Deferred inflows of resources (619,714)
OPEB liability (16,432,820)
Accrued interest payable for the current portion of interest due on long-term debt
has not been reported in the governmental funds.(3,247,902)
Some of the revenue will be collected after year-end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds.6,528,969
Internal service funds are used by management to charge the costs of certain
activities, such as self-insurance, workers' compensation, compensated absences,
retiree insurance, fleet management and information technology, to individual funds.
The assets (including capital assets) and liabilities of the internal service funds must be
added to the statement of net position.38,150,930
Investment in joint ventures is not a current financial resource and therefore not reported
in the governmental funds.270,127
Internal balance created by the consolidation of internal service fund activities
related to enterprise funds is not reported in the governmental funds.4,629,537
Net position of governmental activities 2,426,545,538$
CITY OF NEWPORT BEACH
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2024
See accompanying notes to basic financial statements
63
82
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Revenues:
Taxes and assessments:
Property tax 146,136,871$ -$ -$
Sales tax 43,444,542 - -
Transient occupancy tax 31,736,961 - -
Other taxes 10,252,076 - -
Intergovernmental 4,977,096 6,481 -
Licenses, permits and fees 5,568,126 103,338 -
Charges for services 25,117,366 38,081 -
Fines and forfeitures 4,157,294 37,902 -
Investment income 3,200,616 194,821 1,309,710
Net increase in fair value of investments 1,652,435 77,382 790,072
Property income 18,970,340 15,308,476 6,624,712
Donations 418,774 - -
Special assessments - - -
Other 983,010 14,041 -
Total revenues 296,615,507 15,780,522 8,724,494
Expenditures:
Current:
General government 21,368,625 516,156 -
Public safety 139,582,338 - -
Public works 54,085,488 1,507,721 -
Community development 15,384,163 20,637 -
Community services 27,388,952 2,487,623 -
Capital outlay 3,574,983 726,928 546,959
Debt service:
Principal 1,250,081 - -
Interest and fiscal charges 83,092 - -
Total expenditures 262,717,722 5,259,065 546,959
Excess (deficiency) of revenues
over expenditures 33,897,785 10,521,457 8,177,535
Other financing sources (uses):
Transfers in (note 5)26,926,241 11,252,355 4,715,000
Transfers out (note 5)(59,400,346) (19,333,407) -
Leases (as lessee)3,259,414 - -
Inception of subscription-based IT arrangements 315,569 - -
Total other financing sources (uses)(28,899,122) (8,081,052) 4,715,000
Net change in fund balances 4,998,663 2,440,405 12,892,535
Fund balances, beginning 91,442,525 6,107,317 30,214,811
Fund balances, ending 96,441,188$ 8,547,722$ 43,107,346$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
Page 1 of 2
See accompanying notes to basic financial statements
64
83
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Revenues:
Taxes and assessments:
Property tax -$ -$ -$ 146,136,871$
Sales tax - - - 43,444,542
Transient occupancy tax - - - 31,736,961
Other taxes - - 963,173 11,215,249
Intergovernmental - 2,073,983 20,657,672 27,715,232
Licenses, permits and fees 68,617 - 948,030 6,688,111
Charges for services - - 61,917 25,217,364
Fines and forfeitures - - - 4,195,196
Investment income 765,875 87,785 3,827,939 9,386,746
Net increase in fair value of investments 516,408 - 1,548,348 4,584,645
Property income - - 295,230 41,198,758
Donations 37,951 - 5,614,105 6,070,830
Special assessments - - 26,843,142 26,843,142
Other - - 178,204 1,175,255
Total revenues 1,388,851 2,161,768 60,937,760 385,608,902
Expenditures:
Current:
General government - - 122,977 22,007,758
Public safety - - 550,206 140,132,544
Public works - - 9,938,981 65,532,190
Community development - - 329,743 15,734,543
Community services - - 183,559 30,060,134
Capital outlay - - 45,927,164 50,776,034
Debt service:
Principal - 4,085,000 - 5,335,081
Interest and fiscal charges - 6,615,252 - 6,698,344
Total expenditures - 10,700,252 57,052,630 336,276,628
Excess (deficiency) of revenues
over expenditures 1,388,851 (8,538,484) 3,885,130 49,332,274
Other financing sources (uses):
Transfers in (note 5)11,072,033 8,677,620 34,788,805 97,432,054
Transfers out (note 5)(16,825,622) - (7,675,179) (103,234,554)
Leases (as lessee)- - - 3,259,414
Inception of subscription-based IT arrangements - - - 315,569
Total other financing sources (uses)(5,753,589) 8,677,620 27,113,626 (2,227,517)
Net change in fund balances (4,364,738) 139,136 30,998,756 47,104,757
Fund balances, beginning 24,800,492 2,183,979 93,208,950 247,958,074
Fund balances, ending 20,435,754$ 2,323,115$ 124,207,706$ 295,062,831$
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
Page 2 of 2
See accompanying notes to basic financial statements
65
84
47,104,757$
Amounts reported for governmental activities in the statement of activities differ
from the amounts reported in governmental funds because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the costs of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount by which capital outlay exceeded
depreciation in the current period.
Capital outlay 31,465,934
Depreciation expense (12,726,650)
The issuance of long-term debt provides current financial resources to governmental funds, while
repayment of the principal and issuance costs of long-term debt consumes the current financial
resources of the governmental funds. Issuance of bond principal is an other financing source and
repayment of bond principal is an expenditure in governmental funds, but the issuance increases
long-term liabilities and the repayment reduces long-term liabilities in the Statement of Net Position.
The amounts are the net effect of these differences in the treatment of long-term debt:
Repayment of principal on bonds 4,085,000
Amortization of principal on leases 1,132,423
Amortization of principal on subscriptions 355,544
Inception of leases (3,259,414)
Inception of subscription-based IT arrangements (315,569)
Amortization of deferred inflows for improvements by the operator to the underlying asset of a
public-private partnership are recognized only in the government-wide statements for
governmental activities.8,000
Premium on bonds is recognized as revenues in the period received; however, in the
statement of activities, it is amortized over the life of the bond.
Amortization of bond premium - Series 2020A 142,131
Accrued interest for debt service is the net change in accrued interest for the current period.113,074
Pension expense reported in the governmental funds includes the employer contributions made.
In the Statement of Activities, pension expense includes the change in the net pension liability
and related change in pension amounts for deferred outflows of resources and deferred inflows
of resources.1,688,919
OPEB expense reported in the governmental funds includes the employer contributions made.
In the Statement of Activities, OPEB expense includes the change in the net OPEB liability
and related change in OPEB amounts for deferred outflows of resources and deferred inflows
of resources.7,058,228
Some of the revenue will be collected after year-end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds. This is the net change in unavailable revenue
for the current period.5,369,988
Internal service funds are used by management to charge the costs of certain
activities, such as self-insurance, workers' compensation, compensated absences,
retiree insurance and fleet management, to individual funds. The net expense of the internal
service funds is reported in the statement of activities.(14,952,609)
Investment in joint ventures creates an explicit, measurable equity interest reported only
in the statement of activities.55,496
Internal balance created by the consolidation of internal service funds activities related
to enterprise funds is reflected as a reduction of expenses in the statement of activities.3,644,904
Change in net position of governmental activities 70,970,156$
Net change in fund balances - total governmental funds
CITY OF NEWPORT BEACH
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Year Ended June 30, 2024
See accompanying notes to basic financial statements
66
85
FUND FINANCIAL STATEMENTS
67
86
This page left blank intentionally.
68
87
PROPRIETARY FUNDS
Business-type Activities
The Water Fund is a Major Fund used to account for the operations of the City’s
water utility, a self-supporting activity which is entirely financed though user
charges.
The Wastewater Fund is a Major Fund used to account for the operations of the
City’s wastewater system, a self-supporting activity which is entirely financed
through user charges.
Governmental Activities
The Internal Service Funds are used to allocate the cost of providing goods and
services by one department to other departments on a cost reimbursement basis.
69
88
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Assets and Deferred Outflows of ResourcesCurrent assets:
Cash and investments (note 2)25,516,076$ 3,456,022$ 28,972,098$ 86,328,283$
Receivables:
Accounts (net of allowance)5,288,749 813,272 6,102,021 27,073
Interest 81,485 11,049 92,534 276,922
Intergovernmental receivables 8,747 1,989 10,736 -
Inventories - - - 463,782
Prepaid items - - - 795,898
Total current assets 30,895,057 4,282,332 35,177,389 87,891,958
Noncurrent assets:
Capital assets (note 6):
Land 2,219,450 - 2,219,450 -
Intangible right to use land 3,883,062 - 3,883,062 - Structures 688,396 - 688,396 39,581 Equipment 344,080 35,988 380,068 48,586,874 Intangible right to use equipment - - - 363,725
Software - - - 4,360,625
Intangible right to use subscriptions - - - 2,271,273
Infrastructure 156,834,559 48,826,594 205,661,153 -
Work in progress 4,393,623 14,820 4,408,443 -
Less accumulated depreciation/amortization (58,686,738) (21,914,627) (80,601,365) (36,450,302)
Total capital assets (net of accumulated depreciation/amortization)109,676,432 26,962,775 136,639,207 19,171,776
Total assets 140,571,489 31,245,107 171,816,596 107,063,734
Deferred outflows of resources:Deferred amount from pension plans (note 11)3,027,028 1,162,479 4,189,507 2,755,572 Deferred amount from OPEB (note 12)831,931 319,488 1,151,419 757,325
Total deferred outflows of resources 3,858,959 1,481,967 5,340,926 3,512,897
Liabilities and Deferred Inflows of Resources
Current liabilities:
Accounts payable 4,589,147 89,627 4,678,774 14,595,739
Accrued payroll 213,382 67,351 280,733 503,683
Deposits payable 26,034 - 26,034 -
Due to other funds (note 4)- - - 353,001
Workers' compensation - current - - - 4,035,291
General liability - current - - - 3,577,058
Compensated absences - current - - - 3,539,392
Lease liability - current 44,364 - 44,364 73,074
Subscription liability - current - - - 204,832
Total current liabilities 4,872,927 156,978 5,029,905 26,882,070
Noncurrent liabilities:Workers' compensation (note 7)- - - 19,415,272 General liability (note 7)- - - 7,264,260 Compensated absences (note 7)- - - 10,108,774
Lease liability (note 7)3,732,290 - 3,732,290 67,340
Subscription liability (note 7)- - - 1,300,946
Net pension liability (note 11)7,387,359 2,836,972 10,224,331 6,724,871
Net OPEB liability (note 12)669,977 257,293 927,270 609,899
Total noncurrent liabilities 11,789,626 3,094,265 14,883,891 45,491,362
Total liabilities 16,662,553 3,251,243 19,913,796 72,373,432
Deferred inflows of resources:Deferred amount from pension plans (note 11)31,926 12,261 44,187 29,063 Deferred amount from OPEB (note 12)25,493 9,788 35,281 23,206
Total deferred inflows of resources 57,419 22,049 79,468 52,269
Net PositionNet investment in capital assets 105,369,006 26,962,775 132,331,781 17,445,675 Unrestricted 22,341,470 2,491,007 24,832,477 20,705,255
Total net position 127,710,476$ 29,453,782$ 157,164,258 38,150,930$
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (4,629,537)
Net position of business-type activities 152,534,721$
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Net Position
June 30, 2024
Enterprise Funds
See accompanying notes to basic financial statements
70
89
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Operating revenues:
Charges for sales and services:
Water sales 33,543,566$ -$ 33,543,566$ -$
Charges for services 543 - 543 37,930,386
Sewer service and connection fees - 5,242,974 5,242,974 -
Employee contributions - - - 24,130
Other 395,459 50,202 445,661 4,335,068
Total operating revenues 33,939,568 5,293,176 39,232,744 42,289,584
Operating expenses:
Purchase of water 12,583,108 - 12,583,108 -
Salaries and benefits 5,956,940 1,854,288 7,811,228 4,092,908
Depreciation/amortization 1,833,639 646,683 2,480,322 4,100,760
Professional services 2,195,023 602,106 2,797,129 858,195
Maintenance and supplies 3,251,231 1,387,887 4,639,118 3,301,916
System maintenance 4,802,920 712,965 5,515,885 -
Utilities 2,177,696 97,518 2,275,214 -
Fleet parts and supplies - - - 500,453
System maintenance - - - 151,358
Telecommunication - - - 194,919
Hardware - - - 381,955
Software - - - 541,072
Workers' compensation - - - 11,588,497
Claims and judgments - - - 25,766,286
Compensated absences - - - 2,498,119
OPEB ARC - cash subsidy - - - 11,002,082
Other 1,733,430 780,325 2,513,755 2,425,284
Total operating expenses 34,533,987 6,081,772 40,615,759 67,403,804
Operating (loss) (594,419) (788,596) (1,383,015) (25,114,220)
Nonoperating revenues (expenses):
Investment income 781,623 111,709 893,332 2,535,077
Net increase in fair value of investments 500,179 68,250 568,429 1,549,091
Gain on sale of capital assets - - - 284,927
Interest expense (20,903) - (20,903) (9,984)
Total nonoperating revenues 1,260,899 179,959 1,440,858 4,359,111
Income (loss) before transfers 666,480 (608,637) 57,843 (20,755,109)
Transfers in (note 5)- - - 5,802,500
Change in net position 666,480 (608,637) 57,843 (14,952,609)
Net position, beginning of year, as previously reported 128,393,695 30,307,955 53,103,539
Restatement for correction of error (note 20)(1,349,699) (245,536) -
Net position, beginning of year, as restated 127,043,996 30,062,419 53,103,539
Net position, end of year 127,710,476$ 29,453,782$ 38,150,930$
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds (3,644,904)
Change in net position of business-type activities (3,587,062)$
Enterprise Funds
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Revenues,
Expenses and Changes in Net Position
For the Year Ended June 30, 2024
See accompanying notes to basic financial statements
71
90
CITY OF NEWPORT BEACH
Statement of Cash Flows
For the Year Ended June 30, 2024
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Cash flows from operating activities:
Cash received from customers or user departments 33,077,216$ 5,082,806$ 38,160,022$ 37,905,795$
Cash payments to employees for services (6,097,147) (1,907,241) (8,004,388) (10,528,302)
Cash payments to suppliers for goods and services (24,109,071) (3,002,739) (27,111,810) (28,950,995)
Cash payments for other operating activities (1,337,971) (730,123) (2,068,094) -
Cash received for other operating activities - - - 4,359,198
Net cash provided by operating activities 1,533,027 (557,297) 975,730 2,785,696
Cash flows from noncapital financing activities:
Cash received from other funds - - - 5,802,500
Net cash provided by noncapital financing activities - - - 5,802,500
Cash flows from capital and related financing activities:
Acquisition of capital assets (3,837,902) (14,818) (3,852,720) (3,680,695)
Lease liabilities and related (65,023) - (65,023) (63,152)
Subscription liabilities and related - - - (370,992)
Proceeds from sale of capital assets - - - 284,927
Net cash (used) for capital and related financing activities (3,902,925) (14,818) (3,917,743) (3,829,912)
Cash flows from investing activities:
Investment income 1,294,554 182,510 1,477,064 4,081,647
Net cash provided by investing activities 1,294,554 182,510 1,477,064 4,081,647
Net increase (decrease) in cash and cash equivalents (1,075,344) (389,605) (1,464,949) 8,839,931
Cash and cash equivalents, beginning 26,591,421 3,845,630 30,437,051 77,488,352
Cash and cash equivalents, ending 25,516,077$ 3,456,025$ 28,972,102$ 86,328,283$
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position 25,516,076$ 3,456,022$ 28,972,098$ 86,328,283$
Cash and cash equivalents 25,516,076$ 3,456,022$ 28,972,098$ 86,328,283$
Reconciliation of operating income to net cash
provided by operating activities:
Operating (loss)(594,419)$ (788,596)$ (1,383,015)$ (25,114,220)$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation 1,833,639 646,683 2,480,322 4,100,760
Changes in operating assets and liabilities:
(Increase) in accounts receivable (452,722) (159,660) (612,382) (24,591)
(Increase) in intergovernmental receivables (8,747) (508) (9,255) -
(Increase) in inventories - - - (25,209)
Decrease in prepaid items - - - 180,657
Increase (decrease) in accounts payable and accrued payroll 934,249 (188,569) 745,680 13,662,489
(Decrease) in deposits payable (5,424) - (5,424) -
Increase in workers' compensation - - - 7,054,410
Increase in general liability - - - 2,152,257
Increase in compensated absences - - - 957,126
Increase in net pension liability and deferred cash flows 117,579 45,156 162,735 107,037
(Decrease) in net OPEB liability and deferred cash flows (291,128) (111,803) (402,931) (265,020)
Total adjustments 2,127,446 231,299 2,358,745 27,899,916
Net cash provided (used) by operating activities 1,533,027$ (557,297)$ 975,730$ 2,785,696$
Noncash investing, capital and financing activities:
Net increase in fair value of investments 500,179$ 68,250$ 568,429$ 1,549,091$
Obtaining an intangible right to use lease asset - - - 9,837
Total of noncash activities 500,179$ 68,250$ 568,429$ 1,558,928$
Proprietary Funds
Enterprise Funds
See accompanying notes to basic financial statements
72
91
FUND FINANCIAL STATEMENTS
73
92
This page left blank intentionally.
74
93
FIDUCIARY FUNDS
The Custodial Funds are used to account for assets held by the City as an agent for other government entities, private organizations, or individuals. The Other Post-Employment Benefits (OPEB) Trust Fund is used to account for the activities of the City’s trust for the OPEB plan.
75
94
Custodial OPEB
Funds Trust
Assets
Cash and investments (note 2)285,349$ -$
Restricted cash and investments with fiscal agent (note 2)4,245,553 46,202,050
Receivable:
Interest 86 5,625
Intergovernmental receivable 45,980 -
Total assets 4,576,968 46,207,675
Liabilities
Due to others 13,186 12,338
Total liabilities 13,186 12,338
Net Position
Restricted for:
Individuals, organizations, and other governments 4,563,782 46,195,337
Total net position 4,563,782$ 46,195,337$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2024
See accompanying notes to basic financial statements
76
95
Custodial OPEB
Funds Trust
Additions
Special assessments 3,277,101$ -$
Investment earnings 152,832 3,964,765
Other 1,165,060 7,130,405
Total additions 4,594,993 11,095,170
Deductions
Debt service 2,007,651 -
Administrative 96,944 55,551
Other 127,861 -
Total deductions 2,232,456 55,551
Net increase in fiduciary net position 2,362,537 11,039,619
Net position, beginning of year, as previously reported 2,226,973 -
Restatement for removal of Flexible Spending Account Fund
(note 20) (25,728) -
Restatement for addition of OPEB Trust Fund (note 20)- 35,155,718
Total restatements (25,728) 35,155,718
Net position, beginning of year, as restated 2,201,245 35,155,718
Net position, end of year 4,563,782$ 46,195,337$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2024
See accompanying notes to basic financial statements
77
96
This page left blank intentionally.
78
97
79
98
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies
The basic financial statements of the City of Newport Beach (the “City”) have been prepared in
conformity with accounting principles generally accepted in the United States of America
(“GAAP”) as applicable to government units. The Governmental Accounting Standards Board
(“GASB”) is the accepted standard-setting body for establishing governmental accounting and
financial reporting principles.
a. Reporting Entity
The City was incorporated on September 1, 1906. The current City Charter was adopted in
1954. Since adoption, the Charter has been amended several times. The most recent
Charter amendment was approved by the voters on November 2, 2010. The City operates
under a Council-Manager form of government and provides the following services: public
safety (police, fire, and marine), highway and streets, cultural and recreation, public
improvements, planning and zoning, utilities, and general administrative services.
The financial statements present the financial activity of the City (the primary government)
and its component unit. The component unit discussed below is included in the City's
reporting entity because of the significance of its operational or financial relationship with
the City. This entity is legally separate from the City. However, the City’s elected officials
have continuing full or partial accountability for fiscal matters of the component unit. The
financial reporting entity consists of: (1) the City, (2) organizations for which the City is
financially accountable, and (3) organizations for which the nature and significance of their
relationship with the City are such that exclusion would cause the City's financial statements
to be misleading or incomplete.
An organization is fiscally dependent on the primary government if it is unable to adopt its
budget, levy taxes, set rates or charges, or issue bonded debt without approval by the
primary government. In a blended presentation, a component unit’s balances and
transactions are reported in a manner similar to the balances and transactions of the City.
Component units are presented on a blended basis when the component unit's governing
body is substantially the same as the City's or the component unit provides services almost
entirely to the City.
Blended Component Unit
The financial statements of the City include the financial activities of the Newport Beach
Public Facilities Corporation (the "Corporation"). The Corporation was formed on March 9,
1992, for the purpose of assisting the City of Newport Beach in the financing of public
improvements, including the City’s Central Library, Civic Center, and most recently the new
Fire Station No. 2. The Corporation is governed by a Board of Directors, which is comprised
of the seven City Council Members of the City. The Corporation's financial data and
transactions are included in the debt service fund. Separate financial statements are not
prepared for the Corporation. The debt service fund is used solely to account for the
activities of the Corporation and contains no other City debt financing activities.
80
99
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
Government-wide financial statements
Fund financial statements
Notes to the financial statements
Government-wide Financial Statements
Government-wide financial statements display information about the reporting government
as a whole, except for its fiduciary activities. These statements include separate columns
for the governmental and business-type activities of the primary government (including its
blended component units). The City has no discretely presented component units.
Eliminations have been made in the Statement of Activities so that certain allocated
expenses are recorded only once (by the function to which they were allocated). However,
general government expenses have not been allocated as indirect expenses to the various
functions of the City.
Government-wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Under the economic resources
measurement focus, all (both current and long-term) economic resources and obligations of
the reporting government are reported in the government-wide financial statements. Basis
of accounting refers to when revenues and expenses are recognized in the accounts and
reported in the financial statements. Under the accrual basis of accounting, revenues,
expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like
transactions are recognized when the exchange takes place.
Program revenues include charges for services, special assessments, and payments made
by parties outside of the reporting government’s citizenry if that money is restricted to a
particular program. Program revenues are netted with program expenses in the statement
of activities to present the net cost of each program.
Amounts paid to acquire capital assets are capitalized as assets in the government-wide
financial statements, rather than reported as an expenditure. Proceeds of long-term debt
are recorded as a liability in the government-wide financial statements, rather than as an
other financing source. Amounts paid to reduce long-term indebtedness of the reporting
government are reported as a reduction of the related liability, rather than as an expenditure.
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g.,
restricted bond or grant proceeds) and unrestricted resources. In order to calculate the
amounts to report as restricted – net position and unrestricted – net position in the
government-wide and proprietary fund financial statements, a flow assumption must be
81
100
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and Measurement Focus (Continued)
made about the order in which the resources are considered to be applied. It is the City’s
practice to consider restricted-net position to have been depleted before unrestricted – net
position is applied.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the basis of
separate funds, each of which is considered to be a separate accounting entity. The
operations of each fund are accounted for with a separate set of self-balancing accounts
that comprise its assets, liabilities, deferred inflows/outflows of resources, fund equity,
revenues, and expenditures or expenses, as appropriate. Governmental resources are
allocated to and accounted for in individual funds based upon the purposes for which they
are to be spent and the means by which spending activities are controlled.
Fund financial statements for the primary government’s governmental, proprietary, and
fiduciary funds are presented after the government-wide financial statements. These
statements display information about major funds individually and non-major funds in the
aggregate for governmental and enterprise funds. Fiduciary funds are excluded from
government-wide financial statements. Fiduciary statements include financial information
for fiduciary funds. Fiduciary funds of the City primarily represent assets held by the City in
a custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental funds are presented using the modified-
accrual basis of accounting. Their revenues are recognized when they become measurable
and available as net current assets. Measurable means that the amounts can be estimated,
or otherwise determined. Available means that the amounts were collected during the
reporting period or soon enough thereafter to be available to finance the expenditures
accrued for the reporting period. The City uses an availability period of 60 days for all
revenues.
Property taxes, sales taxes, franchise taxes, gas taxes, motor vehicle license fees, transient
occupancy taxes, grants, and interest associated with the current fiscal period are all
considered to be subject to accrual and so have been recognized as revenues of the current
fiscal period to the extent normally collected within the availability period. Other revenue
items are considered to be measurable and available when cash is received by the City.
Revenue recognition is subject to the measurability and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are recognized
as revenues in the period in which they are earned (i.e., the related goods or services are
82
101
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and Measurement Focus (Continued)
provided). Locally imposed derived tax revenues are recognized as revenues in the period
in which the underlying exchange transaction upon which they are based takes place.
Imposed non-exchange transactions are recognized as revenues in the period for which
they were imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are received,
whichever occurs first. Government-mandated and voluntary non-exchange transactions
are recognized as revenues when all applicable eligibility requirements have been met.
In the fund financial statements, governmental funds are presented using the current
financial resources measurement focus. This means that only current assets and deferred
outflows of resources, and current liabilities and deferred inflows of resources are generally
included on their balance sheets. The reported fund balance is considered to be a measure
of “available spendable resources”. Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other
financing uses) in fund balance. Accordingly, they are said to present a summary of sources
and uses of “available spendable resources” during a period.
Non-current portions of long-term receivables due to governmental funds are reported on
their balance sheets in spite of their spending measurement focus.
Because of their spending measurement focus, expenditure recognition for governmental
fund types excludes amounts represented by non-current liabilities. Since they do not affect
“available spendable resources”, such long-term amounts are not recognized as
governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the year that
resources were expended, rather than as fund assets. The proceeds of long-term debt are
recorded as other financing sources rather than as a fund liability. Amounts paid to reduce
long-term indebtedness are reported as fund expenditures.
Permanent Funds, also referred to as Endowment Funds, are governmental funds used to
report resources that are legally restricted to the extent that only earnings, and not principal,
may be used for purposes that support City programs. The amount of net appreciation on
investments that is available to support City programs is $2,216,508. The amount of
investment earnings available for expenditure is reported as Restricted Fund Balance in the
fund level financial statements. The endowment principal is reported as Nonspendable for
Permanent Endowments in the Balance Sheet. The State law governing the spending of
endowment funds investment earnings is California Probate Code Section 18504. The
authority for spending investment earnings for scholarships resides with the City Manager,
and the authority for periodic maintenance dredging in the Newport Bay resides with the
City Council.
83
102
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
b. Basis of Accounting and Measurement Focus (Continued)
Proprietary & Fiduciary Funds
The City’s enterprise and internal service funds are proprietary funds. In the fund financial
statements, proprietary and fiduciary funds are presented using the accrual basis of
accounting. Revenues are recognized when they are earned and expenses are recognized
when the related goods or services are delivered. In the fund financial statements,
proprietary funds are presented using the economic resources measurement focus. This
means that all assets, deferred outflows of resources, all liabilities and deferred inflows of
resources (whether current or non-current) associated with their activity are included on their
balance sheets. Proprietary fund type operating statements present increases (revenues)
and decreases (expenses) in total net position.
Proprietary fund operating revenues, such as charges for services, result from exchange
transactions associated with the principal activity of the fund. Exchange transactions are
those in which each party receives and gives up essentially equal values. Non-operating
revenues, such as subsidies, taxes, and investment earnings result from non-exchange
transactions or ancillary activities. Amounts paid to acquire capital assets are capitalized as
assets in the proprietary fund financial statements, rather than reported as expenditures.
Proceeds of long-term debt are recorded as a liability in the proprietary fund financial
statements, rather than as other financing sources. Amounts paid to reduce long-term
indebtedness of the proprietary funds are reported as reductions of the related liabilities,
rather than as expenditures.
When both restricted and unrestricted resources are combined in a proprietary fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
Fiduciary funds are also reported using the economic resources measurement focus and
the accrual basis of accounting.
c. Fund Classifications
The City utilizes the following broad categories of funds:
Major Funds – Major funds are those funds which are either material or of particular
importance.
Major Governmental Funds – Governmental funds are generally used to account for tax
supported activities. The following governmental funds meet the criteria of a major fund:
84
103
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
c. Fund Classifications (Continued)
General Fund
The General Fund is the general operating fund of the City. It is used to account for all
activities, except those required to be accounted for in another fund.
Special Revenue Funds
Tide and Submerged Land – Operating
The Tide and Submerged Land – Operating Fund is a special revenue fund used to account
for revenues related to the operation of the City’s tidelands, including beaches and marinas,
and the related expenditures. Revenue from tideland operations includes, but is not limited
to, rents from moorings, piers, and leases, as well as income from parking lots, meters, and
the sale of oil.
Tide and Submerged Land – Harbor Capital
The Tide and Submerged Land - Harbor Capital Fund is used to account for incremental
increases in revenue from certain property lease, pier, and mooring rentals that exceed
Council designated base year revenue amounts, as well as other designated revenues and
the related expenditures for capital projects, maintenance, and servicing of loan advances
from the General Fund.
Capital Project Fund
Facilities Financial Planning Reserve Fund
The Facilities Financial Planning Reserve Fund is used to account for the receipt and
expenditure of funds for the replacement of facilities. In prior years, this fund was called the
Facilities Replacement Fund.
Debt Service Fund
The Debt Service Fund is used to account for debt service transactions related to the
Certificates of Participation issued to finance the construction of the City’s Civic Center
Complex and the construction of Fire Station No. 2.
Major Proprietary Funds – Proprietary funds are used to report an activity for which a fee is
charged to external users to recover the cost of operation.
Water Fund
The Water Fund is an enterprise fund used to account for the activities associated with the
transmission and distribution of potable water by the City to its users.
Wastewater Fund
The Wastewater Fund is an enterprise fund used to account for the activities associated
with providing sewer services by the City to its users.
85
104
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
c. Fund Classifications (Continued)
Other Governmental Funds – Other Governmental Funds are those funds which do not
meet the criteria of a major fund. Other Governmental Funds used by the City fall into the
following governmental fund types:
Other Special Revenue Funds – Other Special Revenue Funds are used to account for the
proceeds of specific revenue sources which are legally restricted to expenditures for
specified purposes.
Other Capital Projects Funds – Other Capital Projects Funds are used to account for
resources used for the acquisition and construction of capital facilities by the City, except
those financed by Enterprise Funds.
Permanent Funds – Permanent Funds are used to report resources that are legally
restricted for the extent that only earnings, not principal, may be used for purposes that
support the reporting government’s programs.
Internal Service Funds – The Internal Service Funds are used to account for the City’s
self-insured general liability and workers’ compensation, compensated absences, and
retiree insurance liabilities; the cost of maintaining and replacing the City’s rolling stock fleet,
parking equipment, coordinated communications systems equipment, certain fire
equipment, and recreation equipment; and the cost of maintaining and replacing the City’s
information technology systems. City departments are the primary users of these services
and are charged a fee on a cost reimbursement basis.
Fiduciary Funds – The Custodial Funds, a type of Fiduciary Fund, are used to account for
assets held by the City as an agent for property owners with special assessments, and local
businesses in business improvements districts. The Other Post-Employment Benefit
(OPEB) Trust Fund is used to account for the activities of the City's trust for the OPEB plan.
d. New Accounting Pronouncements
Current Year Standards
In fiscal year 2023-24, the City implemented the following GASB Statements:
GASB Statement No. 100, Accounting Changes and Error Corrections, effective for
periods beginning after June 15, 2023. The objective of this statement is to amend
GASB Statement No. 62 and clarify the existing definition of accounting changes,
and requires enhancements to accounting and financial reporting for accounting
changes and error corrections to provide more understandable, reliable, relevant,
consistent and comparable information.
86
105
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
d. New Accounting Pronouncements (Continued)
Pending Accounting Standards
GASB has issued the following pronouncements that may impact future financial reporting
requirements:
GASB Statement No. 101, Compensated Absences, effective for periods beginning
after December 15, 2023. The objective of this Statement requires that liabilities for
compensated absences be recognized for (1) leave that has not been used and (2)
leave that has been used but not yet paid in cash or settled through noncash means.
A liability should be recognized for leave that has not been used if (a) the leave is
attributable to services already rendered, (b) the leave accumulates, and (c) the
leave is more likely than not to be used for time off or otherwise paid in cash or
settled through noncash means. Leave is attributable to services already rendered
when an employee has performed the services required to earn the leave. Leave
that accumulates is carried forward from the reporting period in which it is earned to
a future reporting period during which it may be used for time off or otherwise paid
or settled.
GASB Statement No. 102, Certain Risk Disclosures, effective for reporting periods
beginning after June 15, 2024. The objective of this Statement is to provide users of
government financial statements with essential information about risks related to a
government’s vulnerabilities due to certain concentrations or constraints. This
Statement requires a government to assess whether a concentration or constraint
makes the primary government reporting unit or other reporting units that report a
liability for revenue debt vulnerable to the risk of a substantial impact. Additionally,
this Statement requires a government to assess whether an event or events
associated with a concentration or constraint that could cause the substantial impact
have occurred, have begun to occur, or are more likely than not to begin to occur
within 12 months of the date the financial statements are issued.
GASB Statement No. 103, Financial Reporting Model Improvements, Effective for
reporting periods beginning after June 15, 2025. The objective of this Statement is
to improve key components of the financial reporting model to enhance its
effectiveness in providing information that is essential for decision making and
assessing a government’s accountability. This Statement also addresses certain
application issues.
87
106
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
e. Cash and Investments
Cash and cash equivalents are defined to be cash on hand and demand deposits.
Investments are generally stated at fair value which is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Cash and investments are pooled to maximize investment yields. Typically, the City’s funds
may deposit or withdraw from the City’s cash and investments pool on demand without
penalty. The net change in fair value and interest earned on the pooled cash and
investments is allocated to the respective funds based on each fund’s average monthly
pooled cash and investments balance. Each fund’s share of the pooled cash and
investments balance is treated as cash and cash equivalents on the City’s statements of
cash flows. Consistent with GAAP only the City’s proprietary funds report a statement of
cash flows.
f. Accounts Receivable
Accounts receivable represent all service and capital project billings other than
intergovernmental receivables stated below. As of June 30, 2024, accounts receivable
deemed to be uncollectible with an outstanding balance over 120 days past due were written
off the City’s accounting records to ensure that the income statement and balance sheet are
fairly stated at the amount expected to be collected in receivables. Receivables with
governmental organizations are generally excluded from the write-off as they are more likely
to be received due to the governments’ creditworthiness.
g. Intergovernmental Receivables
Intergovernmental receivables represent grant reimbursement requests, capital project
billings, and pending transfers of taxes and fees collected by other government agencies.
As of June 30, 2024, the balance of these accounts totaled $13,504,112.
h. Inventories and Prepaid Items
Inventories are valued at cost, which approximates market, using the first-in, first-out
method. The City follows the consumption method for inventory control. The costs of
governmental fund and internal service fund inventories are recorded as expenditures when
consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items. The City follows the consumption method for prepaid items.
88
107
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
i. Capital Assets
Capital assets are tangible and intangible assets, which include land, structures, equipment,
and infrastructure assets, and are reported in the applicable governmental or business-type
activities columns in the Government-wide Financial Statements. Tangible capital assets
are recorded at cost where historical records are available and at an estimated original cost
where no historical records exist. Equipment purchased in excess of $5,000 is capitalized if
it has an expected useful life in excess of one year. Buildings, infrastructure, and
improvements are capitalized if cost is in excess of $30,000 and the expected useful life is
in excess of one year. The cost of normal maintenance and repairs that do not add to the
value of the asset’s life are not capitalized. The City chose to value and report on
infrastructure assets in their entirety (e.g., prior to 1980).
Major capital outlays for tangible capital assets and improvements are capitalized as
projects are constructed. Tangible capital assets acquired through lease obligations are
valued at the present value of future lease payments at the date acquired. Contributed
tangible capital assets are valued at their estimated acquisition value at the date of
contribution. Intangible capitals assets are generally an estimated present value of certain
future lease or software subscription payments for the leases or subscriptions in which the
City is the lessee or subscriber.
Capital assets used in operations are depreciated/amortized using the straight-line method
in the government-wide financial statements and in the fund financial statements of the
proprietary funds. Tangible capital assets are depreciated over their estimated useful lives.
Intangible assets are amortized over the shorter of the estimated useful life of the underlying
asset or the period of time included in the estimated present value. Depreciation/
amortization is charged as an expense against operations and accumulated depreciation/
amortization is reported on the respective balance sheet. The ranges of useful life for
depreciation purposes for each capital asset class are as follows:
Structures 15-75 years
Equipment 3-15 years
Infrastructure 20-75 years
89
108
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
j. Claims and Judgments
The City accounts for material claims and judgments and associated legal and
administrative costs when it is probable that the liability claim has been incurred and the
amount of the loss can be reasonably estimated. The City records the estimated loss
liabilities in the Internal Service Fund. Included therein are claims incurred but not reported,
which consists of (a) known loss events expected to be presented as claims later, (b)
unknown loss events that are expected to become claims, and (c) expected future
development on claims already reported. This is based upon historical actual results that
have established a reliable pattern supplemented by specific information about current
matters. Small dollar claims and judgments are recorded as expenditures when paid.
k. Property Taxes
The assessment, levy, and collection of property taxes are the responsibility of the County
of Orange. The City records property taxes as revenue when received from the County,
except at fiscal year-end, when property taxes received within 60 days are accrued as
revenue. Property taxes are assessed and collected each fiscal year according to the
following property tax calendar:
Lien date January 1
Levy date July 1
Due dates November 1 1st installment
March 1 2nd installment
Collection dates December 10 1st installment
April 10 2nd installment
l. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and
limited amounts of earned but unused sick leave benefits, which will be paid to employees
upon separation from City service. Beginning in fiscal year 1990, the City adopted a general
leave plan to replace the traditional vacation and sick leave plan. The City uses a general
leave plan that permits a maximum of three years’ accrual for every employee, above which
the excess either stops accruing or is paid out as current compensation. All employees hired
prior to January 1,1990, were given the option of remaining in the traditional vacation and
sick leave plan or enrolling in the general leave plan. All employees hired on or after January
1,1990, are automatically enrolled in the general leave plan. Compensated absences are
accrued in the Compensated Absence Internal Service Fund when employee services have
been rendered and when it becomes probable that the City will compensate the employees
for benefits through paid time off or cash payments at termination or retirement. Benefits
that have been earned but are not yet available for use because employees have not met
certain conditions are accrued to the extent it is probable that the employees will meet the
conditions for compensation in the future.
90
109
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
m. Deposits Payable
In the government-wide and fund-level financial statements, deposits payable represents
monies collected for developer deposits, demolition deposits, planning deposits and others,
for services which have not yet been performed. These unspent portions are reported as
liabilities on the financial statements.
n. Unearned Revenue
Unearned revenues are those where asset recognition criteria have been met, but the
revenue recognition criteria have not been met.
o. Deferred Inflows/Outflows of Resources
In addition to assets, the statement of net position and the governmental funds balance
sheet will sometimes report a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a
consumption of net assets that applies to future periods and so will not be recognized as an
outflow of resources (expense) until that time. The City has three items that qualify for
reporting in this category. The first item is the deferred outflows related to employer pension
and OPEB contributions made after the measurement date. The second item is a deferred
outflow related to pensions and OPEB resulting from changes in assumptions. This amount
is amortized over a closed period equal to the average of expected remaining service lives
of all employees that are provided pensions and OPEB through the plans. The third item is
a deferred outflow related to pensions and OPEB resulting from the difference between
expected and actual experience. This amount is amortized over a closed period equal to the
average of expected remaining service lives of all employees that are provided pensions
and OPEB through the plans.
91
110
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
o. Deferred Inflows/Outflows of Resources (Continued)
In addition to liabilities, the statement of net position and the governmental funds balance
sheet will sometimes report a separate section for deferred inflows of resources. This
separate financial statement element, deferred inflows of resources, represents an
acquisition of net assets that applies to future periods and will not be recognized as an inflow
of resources (revenue) until that time. The City has five items that qualify for reporting in this
category. The first item is unavailable revenues, which is only reported in the governmental
funds balance sheet. The governmental funds report unavailable revenues from two
sources: grants receivable and rent collections. These amounts are deferred and
recognized as an inflow of resources in the period that the amounts become available. The
second item is a deferred inflow related to pensions and OPEB resulting from the difference
between actual and expected experience. This amount is amortized over a closed period
equal to the average of the expected remaining service lives of all employees that are
provided pensions through the plans. The third item is a deferred inflow related to pensions
and OPEB resulting from the change in assumptions. This amount is amortized over a
closed period equal to the average of expected remaining service lives of all employees that
are provided pensions through the plans. The fourth item is a deferred inflow for certain
leases for which the City is lessor, and relates to a present value estimate of certain future
lease payments. This amount generally is amortized over the same time period associated
with the related present value estimate. The fifth item is a deferred inflow from a certain
public-private partnership arrangement where the City is the transferor, and represents the
sum of certain improvements by the operator to the underlying public-private partnership
asset and a present-value estimate of certain future payments from the operator to the City.
This amount is generally amortized over the same time period associated with the related
present value estimate.
p. Fund Balance Classifications
The governmental fund balance is made up of different classifications and the following
provides explanations as to the nature and purpose of each classification:
Nonspendable fund balance
That portion of fund balance that typically includes amounts that are either (a) not in a
spendable form such as inventories and prepaid items, or (b) legally or contractually
required to be maintained intact such as endowments.
Restricted fund balance
The portion of fund balance that reflects constraints placed on the use of resources (other
than nonspendable items) that are either (a) externally imposed by creditors, grantors,
contributors, or laws or regulations of other governments; or (b) imposed by law through
constitutional provisions or enabling legislation.
92
111
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
p. Fund Balance Classifications (Continued)
Committed fund balance
That portion of a fund balance that includes amounts that can only be used for specific
purposes pursuant to constraints imposed by formal action by the government’s highest
level of decision making authority, and remain binding unless removed in the same manner.
The City Council has authority to establish or modify a fund balance commitment by
legislation (Council action) and can only rescind a fund balance commitment by new
legislation requiring the same voting consensus. The City considers a resolution to
constitute a formal action of the City Council for the purposes of establishing committed fund
balance.
Assigned fund balance
That portion of a fund balance that includes amounts that are constrained by the City’s intent
to be used for specific purposes and do not meet the criteria to be classified as restricted or
committed. Constraints imposed on the use of assigned amounts are more easily removed
or modified than those imposed on amounts classified as committed. The City’s Reserve
Policy gives the City Manager the authority to establish, modify, or rescind a fund balance
assignment.
Unassigned fund balance
The residual portion of a fund balance that is not otherwise restricted, committed, or
assigned. Positive unassigned fund balance is available to be used for any purpose. Only
the general fund may report a positive unassigned fund balance. Funds, except the general
fund, may report negative unassigned fund balance in certain circumstances.
In the governmental fund statements, when expenditures are incurred for purposes for which
both restricted and unrestricted (committed, assigned, or unassigned) fund balances are
available, the City uses the most restrictive funds first. The City uses the appropriate funds
in the following order: restricted, committed, assigned, and finally unassigned amounts.
q. Estimates
The preparation of financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of certain assets,
deferred outflows of resources, liabilities and deferred inflows of resources, disclosure of
contingent assets and liabilities, and the related amounts of revenues and expenditures.
Actual results could differ from those estimates. Management believes that the estimates
are reasonable.
93
112
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
r. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of
resources related to pensions, and pension expense, information about the fiduciary net
position of the City of Newport Beach’s California Public Employees’ Retirement System
(CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position
have been determined on the same basis as they are reported by CalPERS. For this
purpose, benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at
fair value.
GASB 68 requires that the reported results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2022
Measurement Date (MD) June 30, 2023
Measurement Period (MP) July 1, 2022 to June 30, 2023
s. Post-Employment Health Care Benefits (OPEB)
For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources
related to OPEB and OPEB expense, information about the fiduciary net position of the City
of Newport Beach’s California Public Employees’ Retirement System (CalPERS) Health
Plan and additions to/deductions from the Plans’ fiduciary net position have been
determined on the same basis as they are reported by CalPERS. For this purpose, benefit
payments (including refunds of employee contributions) are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
GASB 75 requires that the reported results must pertain to liability and asset information
within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2023
Measurement Date (MD) June 30, 2023
Measurement Period (MP) July 1, 2022 to June 30, 2023
94
113
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(1) Summary of Significant Accounting Policies (Continued)
t. Lease Liabilities and Receivables
Lease liabilities and receivables are estimated present values of future lease payments.
Estimating present values involves various related estimates, including lease terms and
interest rates. The estimated lease term is the time period that the lease is noncancelable,
plus extension and termination time periods if based on the lease agreement it is reasonable
that the extensions will be exercised, and the terminations will not be exercised. When a
lease’s implicit interest rate is not known, estimates are made of either the City’s incremental
borrowing rate or the rate the City may charge a lessee. Non-lease components of lease
agreements have been treated as separate non-lease agreements when practicable, and
are excluded from the City’s estimated lease liabilities and receivables. Leases that do not
meet GASB’s definition of a lease liability or receivable (e.g., short-term leases, etc.) are
also excluded from the City’s estimated lease liabilities and receivables.
u. Subscription-Based Information Technology (IT) Arrangements
The City is a participant in subscription-based IT arrangements as detailed in note 7. The
City recognizes a subscription liability and intangible right to use subscription assets in the
financial statements. At the commencement of the arrangement, the City initially measures
the liability at the present value of payments expected to be paid during the arrangement
term. Subsequently, the liability is reduced by the principal portion of payments made. The
intangible right to use subscription assets are initially measured at the initial amount of the
subscription liability. Subsequently, the intangible right to use subscription assets are
amortized over the life of the arrangement term.
v. Public-Private Partnerships (PPP)
The City’s public-private partnership receivable is an estimated present-value of future
payments from the operator to the City. The estimated public-private partnership term is the
time period that the operator’s right to use the underlying public-private partnership asset is
noncancelable, plus extension and termination time periods if based on the public-private
partnership arrangement it is reasonable that the extensions will be exercised, and the
terminations will not be exercised. When the public-private partnership arrangement’s
implicit interest rate is not known an estimate is made of the rate the City may charge an
operator. Non-public-private partnership components of public-private partnership
arrangements have been treated as separate arrangements when practicable and are
excluded from the City’s estimated receivable. Arrangements that do not meet GASB’s
definition of a public private partnership (e.g., leases that do not require the operator to
improve the City’s existing assets, etc.) are also excluded from the City’s estimated
receivable.
95
114
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments
Cash and investments as of June 30, 2024, are classified in the accompanying financial
statements as follows:
Cash and investments as of June 30, 2024, consist of the following:
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California
Government Code (or the City’s investment policy, where more restrictive). The table also
identifies certain provisions of the California Government Code (or the City’s investment policy,
where more restrictive) that address interest rate risk and concentration of credit risk. Certain
investments related to debt proceeds and the City’s OPEB trust are excluded from the table below,
because they are governed neither by the California Government Code nor by the City’s
investment policy. Debt proceeds held by bond trustees are instead governed by the provisions
of debt agreements of the City. Investments in the City’s OPEB trust are governed by the
agreement between the City and the trustee.
Statement of net position:
388,437,915$ Cash and investments
Cash and investments
with fiscal agent
Fiduciary funds:
Cash and investments 285,349
Cash and investments with fiscal agent 50,447,603
Total cash and investments 474,297,034$
35,126,167
Cash on hand 27,606$
Deposits with financial institutions 16,631,116
Cash and receivables in investment accounts 1,485,892
Investments 456,152,420
Total cash and investments 474,297,034$
96
115
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
*Excluding amounts held by bond trustee and by the OPEB trust that are not subject to California Government
Code restrictions.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustees (i.e., fiscal agents) are governed by
provisions of the debt agreements, rather than the general provisions of the California
Government Code or the City’s investment policy. The table below identifies the investment types
that are authorized for investments held by bond trustees. The table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and concentration
of credit risk.
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio
Maximum
Investment in
One Issuer
Minimum
Rating
Local Agency Bonds 5 years 30% 5% A-
U.S. Treasury Obligations 5 years No Limit No Limit None
U.S. Agency Securities 5 years No Limit 30% None
FHLMC 5 years No Limit 30% None
Banker's Acceptances 180 days 40% 5% A-1
Commercial Paper 270 days 40% 5% A-1
Negotiable Certificates of Deposit 2 years 30% 5% A-1
Repurchase Agreements 30 days No Limit 5% A-1
Reverse Repurchase Agreements 30 days 10% 5% None
Medium-Term Notes 5 years 30% 5% A-
Mutual Funds N/A 20% 10% AAA
Money Market Mutual Funds N/A 20% 20% AAAm
Mortgage Pass-Through Securities 5 years 20% 5% AAA
California Asset Management Program (CAMP)N/A $75 million $75 million None
Local Agency Investment Fund (LAIF)N/A $75 million $75 million N/A
Supranationals 5 years 20% 10% AA-
97
116
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value
of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity
of its fair value to changes in market interest rates. One of the ways that the City manages its
exposure to interest rate risk is by purchasing a combination of shorter term and longer term
investments and by timing cash flows from maturities so that a portion of the portfolio is maturing
or coming close to maturity over time as necessary to provide the cash flow and liquidity needed
for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments
held by bond trustees and by the OPEB trust) to market interest rate fluctuations is provided by
the following table that shows the distribution of the City’s investments by maturity:
Maximum Maximum
Percentage Investment in
Authorized Investment Type Maximum Maturity Allowed One Issuer
U.S. Treasury Obligations 6 months - No Limit No Limit No Limit
U.S. Agency Securities 6 months - No Limit No Limit No Limit
Banker's Acceptances 6 months - 1 Year 0% - No Limit No Limit
Commercial Paper 180 days - 6 months No Limit 10%
Money Market Mutual Funds N/A No Limit No Limit
Investment Agreements 6 months - No Limit No Limit No Limit
Certificates of Deposit 6 months - No Limit No Limit No Limit
Demand Deposits 6 months - No Limit No Limit No Limit
Time Deposits 6 months - No Limit No Limit No Limit
Local Agency Bonds 6 months - No Limit No Limit No Limit
Forward Delivery Agreement 6 months - No Limit 0% - No Limit No Limit
Forward Purchase Agreement 6 months - No Limit 0% - No Limit No Limit
Repurchase Agreements 6 months - No Limit No Limit No Limit
Local Agency Investment Fund (LAIF) N/A No Limit No Limit
Municipal Obligations 6 months - No Limit No Limit No Limit
County Pooled Investment Funds N/A 0% - No Limit No Limit
98
117
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Some of the City’s investments may have call features where the investments’ principal may be
paid down before its maturity. Such investments include asset backed securities, FHLMCs,
investments with make whole call provisions, and investments with call dates.
The City’s asset backed securities pay monthly coupons, at which time principal may be paid
down. As of June 30, 2024, the City held asset backed securities of about $5.9 million.
The City’s FHLMCs may pay down principal prior to maturity. As of June 30, 2024, the City held
FHLMCs of about $12.6 million.
Investments with make whole call provisions generally may be called any time, but the terms of
the call price generally mitigate the financial impact of a call. As of June 30, 2024, the City held
corporate and Yankee bonds with make whole call provisions as summarized below:
Investment Maturities (In Years)
Investment Type Fair Value Less than 1 1 to 3 3 to 5 More than 5 Total
Money Market Funds 12,329,522$ 12,329,522$ -$ -$ -$ 12,329,522$
U.S. Treasury Bills 77,815,938 77,815,938 - - - 77,815,938
U.S. Treasuries 111,989,778 75,073,780 24,277,195 12,638,803 - 111,989,778
Commercial Papers 4,812,662 4,812,662 - - - 4,812,662
Certificates of Deposit 5,999,433 5,999,433 - - - 5,999,433
U.S. Agency Bonds 15,353,100 8,069,550 3,318,350 3,965,200 - 15,353,100
U.S. Agency Discount Bonds 10,643,320 10,643,320 - - - 10,643,320
FHLMC 12,570,371 5,545,275 7,025,096 - - 12,570,371
Asset Backed Securities 5,871,122 2,440,518 3,430,604 - - 5,871,122
Corporate Bonds 44,625,358 22,953,449 10,077,159 11,594,750 - 44,625,358
CAMP 51,011,428 51,011,428 - - - 51,011,428
LAIF 10,320,499 10,320,499 - - - 10,320,499
Yankee Bonds 1,997,680 1,997,680 - - - 1,997,680
Supranationals 6,381,433 6,381,433 - - - 6,381,433
Investments with Fiscal Agent:
Money Market Funds 17,432,588 17,432,588 - - - 17,432,588
U.S. Treasury Bills 435,789 435,789 - - - 435,789
U.S. Treasuries 17,767,397 9,514,318 8,253,079 - - 17,767,397
U.S. Agency Securities 2,301,100 1,438,373 862,727 - - 2,301,100
LAIF 291,852 291,852 - - - 291,852
Investments with OPEB Trust:
Money Market Funds 1,600,784 1,600,784 - - - 1,600,784
Mutual Funds - Fixed Income 16,834,993 16,834,993 - - - 16,834,993
Mutual Funds - Equity 27,766,273 27,766,273 - - - 27,766,273
Totals 456,152,420$ 370,709,457$ 57,244,210$ 28,198,753$ -$ 456,152,420$
Assuming callable securities (if any) will not be called.
99
118
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Investments with call dates may be called anytime on or after the call date. As of June 30, 2024,
the City held corporate bonds with call dates as summarized below:
Investments may have both a make whole call provision and a regular call date. As of June 30,
2024, the City held corporate bonds with both a make whole call provision and a regular call date
as summarized below:
Maturity Value
July 2024 1,997,680$
February 2025 977,990
March 2027 1,921,060
September 2027 1,044,524
January 2029 1,185,972
February 2029 1,200,972
Total 8,328,198
16,656,396$
Maturity Value Call Date
April 2025 1,450,264$ March 2025
February 2026 878,076 February 2025
May 2027 2,928,870 April 2027
Total 5,257,210$
Maturity Value Call Date
July 2024 469,098$ July 2024
September 2024 992,830 August 2024
March 2025 2,934,180 February 2025
April 2025 2,927,460 March 2025
August 2025 2,368,813 May 2025
July 2026 1,980,340 July 2025
September 2027 977,340 August 2027
June 2029 1,243,438 May 2029
Total 13,893,499$
100
119
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Approximately $5.7 million of the investments that are FHLMC's or have either a regular call date
or both a make whole call provision and a regular call date, also have interest rate reset dates. If
$2.9 million of the securities with interest rate reset dates are not called by their call date, then
these securities will convert to floating rate securities tied to a benchmark index. Prior to their call
date, these securities pay a fixed rate of interest. An additional $2.8 million of the securities with
interest rate reset dates are FHLMC's with a potential variable coupon rate.
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
As of June 30, 2024, the City did not have any investments (including investments held by fiscal
agent) whose fair values were highly sensitive to interest rate fluctuations.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented in the following schedule is the minimum
rating (where applicable) required by the California Government Code, the City’s investment
policy, or debt agreements, and the actual rating by Standard & Poor’s as of June 30, 2024 for
each investment type.
Minimum
Legal
Investment Type Fair Value Rating AAA AAAm AA+ AA AA- A-1+ A-1 A+ A A- Not Rated
Money Market Funds $12,329,522 AAAm -$ 12,329,522$ -$ -$ -$ -$ -$ -$ -$ -$ -$
U.S. Treasury Bills 77,815,938 None - -- - - 77,815,938 - - - - -
U.S. Treasuries 111,989,778 None - - 111,989,778 - - - - - - - -
Commercial Papers 4,812,662 A-1 - -- - - - - - - - 4,812,662
Certificates of Deposit 5,999,433 A-1 - -- - - 2,999,895 2,999,538 - - - -
U.S. Agency Bonds 15,353,100 None - - 15,353,100 - - - - - - - -
U.S. Agency Discount Bonds 10,643,320 None - -- - - 10,643,320 - - - - -
FHLMC 12,570,371 None - - 12,570,371 - - - - - - - -
Asset Backed Securities 5,871,122 AAA 4,573,711 - - - - - - - - - 1,297,411
Corporate Bonds 44,625,358 A-- - 9,119,006 977,340 6,031,192 - - 10,300,913 15,238,577 2,958,330 - CAMP 51,011,428 None - 51,011,428 - - - - - - - - -
LAIF 10,320,499 None - - - - - - - - - - 10,320,499
Yankee Bonds 1,997,680 A-- - - - - - - - - 1,997,680 -
Supranationals 6,381,433 AA- 6,381,433 - - - - - - - - - -
Investments with Fiscal Agent:
Money Market Funds 17,432,588 AAm - 17,432,588 - - - - - - - - -
U.S. Treasury Bills 435,789 None - -- - - 435,789 - - - - -
U.S. Treasuries 17,767,397 None - - 17,767,397 - - - - - - - - U.S. Agency Securities 2,301,100 None - - 2,301,100 - - - - - - - -
LAIF 291,852 None - -- - - - - - - - 291,852
Investments with OPEB Trust:
Money Market Funds 1,600,784 None - 1,600,784 - - - - - - - - -
Mutual Funds - Fixed Income 16,834,993 None - -- - - - - - - - 16,834,993
Mutual Funds - Equity 27,766,273 None - -- - - - - - - - 27,766,273
Totals 456,152,420$ 10,955,144$ 82,374,322$ 169,100,752$ 977,340$ 6,031,192$ 91,894,942$ 2,999,538$ 10,300,913$ 15,238,577$ 4,956,010$ 61,323,690$
101
120
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Concentration of Credit Risk
The investment policy of the City and the California Government Code limit the amount that can
be invested in any one issuer as previously discussed. There were no investments in any one
issuer (excluding U.S. treasury bills, U.S. treasuries, mutual funds, and pooled investments) that
represented 5% or more of total City investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. The custodial credit risk for
investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to
a transaction, a government will not be able to recover the value of its investment or collateral
securities that are in the possession of another party. The California Government Code and the
City’s investment policy do not contain legal or policy requirements that would limit the exposure
to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by
state or local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The fair value
of the pledged securities in the collateral pool must equal at least 110% of the total amount
deposited by the public agencies. California law also allows financial institutions to secure City
deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits. As of June 30, 2024, none of the City’s deposits with financial institutions in excess of
federal depository amounts were held in uncollateralized accounts.
For investments identified herein as restricted cash with fiscal agent, the fiscal agent selects the
investment under the terms of the applicable trust agreement, acquires the investment, and holds
the investment on behalf of the reporting government.
Investment in California Asset Management Trust’s Cash Reserve Portfolio (CAMP)
The City voluntarily invests in the Cash Reserve Portfolio (CAMP) of the California Asset
Management Trust (CAMT). CAMT is an external investment pool that is both a California joint
exercise of powers authority regulated by California Government Code Section 6509.7 and a
common law trust regulated by CAMT’s bylaws and declaration of trust. Oversight of CAMT is
provided by CAMT’s trustees. Other than CAMT’s initial trustees, CAMT’s board of trustees
appoints trustees to indefinite terms, and these appointed trustees are subject to approval by
participants in CAMT that have executed CAMT’s declaration of trust. Because the City has not
executed CAMT’s declaration of trust, the City has no voting rights with CAMT.
102
121
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
One of CAMP’s investment objectives is to maintain a stable net asset value of $1.00 per share.
According to CAMT’s audited financial statements for calendar year 2023, “In accordance with
GASB Statement No. 79, Cash Reserve Portfolio securities are valued at amortized cost, which
approximates fair value.”. CAMP is rated AAAm by S&P Global. Under normal circumstances the
City may withdraw from its investment with CAMP “upon proper notice without restrictions”. CAMT
may suspend withdrawals in limited circumstances.
Investment in State Investment Pool
The City voluntarily invests in the Local Agency Investment Fund (LAIF). LAIF is an external
investment pool that is regulated by California Government Code Sections 16429.1 – 16429.4.
Oversight of LAIF is provided by the Local Investment Advisory Board (LIAB). LIAB’s chairman
is the State Treasurer or his or her designee. The State Treasurer also appoints the remaining
four members of LIAB to serve two-year terms or at the State Treasurer’s pleasure. California
Government Code Section 16429.2 specifies the required qualifications of the State Treasurer’s
appointees to LIAF.
LAIF provides the fair value of the City’s investment in LAIF, which is reported in the
accompanying financial statements and is based upon the City’s pro-rata share of the fair value
of the entire LAIF portfolio, in relation to the amortized cost of that portfolio. The balance available
for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an
amortized cost basis. LAIF’s credit risk is not rated by a nationally recognized statistical rating
organization.
Limitations and restrictions apply to the City’s investment in LAIF. Up to 15 transactions with LAIF
are permitted each month. Balances in LAIF may not exceed $75 million, with the exception of
bond accounts. LAIF requests one day prior notice for transactions of $10 million or more.
103
122
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Investments in Other Post-Employment Benefits (OPEB) Trust
The City established a trust account with Public Agency Retirement Services (PARS) to hold
assets that are legally restricted for use in administering the City’s OPEB plan. The OPEB Trust’s
cash and investments are managed by a third-party portfolio manager under guidelines approved
by the City. Those guidelines are as follows:
Risk Tolerance Moderate
Risk Management The portfolio is constructed to control risk through diversification of
asset classes (cash, fixed income, and equity), investment styles
(large cap, small cap, international, etc.), and securities.
Disciplined mutual fund selection and monitoring processes help to
drive return potential while reducing portfolio risk.
Investment Objective To provide growth of principal and income. It is expected that
dividend and interest income will comprise a significant portion of
total return, although growth through capital appreciation is equally
important.
Strategic Ranges 0% - 20% Cash
30% - 50% Fixed Income
50% - 70% Equity
Fair Value Measurements
The City categorizes its fair value measurement within the fair value hierarchy established by
generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for
identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are
significant unobservable inputs.
Most of the City’s investments are in Level 2 of the fair value hierarchy. Examples of Level 2
valuation inputs include:
Quoted prices for similar assets or liabilities in active markets
Quoted prices for identical or similar assets or liabilities in markets that are not active
Inputs other than quoted prices that are observable for the asset or liability
Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
104
123
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(2) Cash and Investments (Continued)
Following are the City’s recurring fair value measurements as of June 30, 2024:
(3) Lease Receivables
City as Lessor
Lease agreements that meet the requirements of GASB 87 for which the City is the lessor are
disclosed as lease receivables on the City’s financial statements. Included in the City’s lease
receivables are over 900 agreements related to land and structures. GASB 87 excludes certain
inflows (e.g., certain variable payments, etc.) from the measurement of lease receivables. For the
fiscal year ending June 30, 2024, the City recognized $4,487,725 of variable payments related to
the lease receivables that were excluded from the measurement of the lease receivables. Lease
inflows, including inflows excluded from GASB 87, are included on the City’s financial statements
as property income. Lease inflows for interest revenue from amortization of the GASB 87 lease
Quoted Prices
Investments in Active Quoted Prices
That Are Not Markets for for Similar Significant
Subject to Fair Identical Assets Assets in Active Unobservable
Fair Value Value Hierarchy (Level 1) Markets (Level 2) Inputs (Level 3)
Money Market Funds $12,329,522 12,329,522$ -$ -$ -$
U.S. Treasury Bills 77,815,938 - - 77,815,938 -
U.S. Treasuries 111,989,778 - - 111,989,778 -
Commercial Papers 4,812,662 - - 4,812,662 -
Certificates of Deposit 5,999,433 - - 5,999,433 -
U.S. Agency Bonds 15,353,100 - - 15,353,100 -
U.S. Agency Discount Bonds 10,643,320 - - 10,643,320 -
FHLMC 12,570,371 - - 12,570,371 -
Asset Backed Securities 5,871,122 - - 5,871,122 -
Corporate Bonds 44,625,358 - - 44,625,358 -
CAMP 51,011,428 51,011,428 - - -
LAIF 10,320,499 10,320,499 - - -
Yankee Bonds 1,997,680 - - 1,997,680 -
Supranationals 6,381,433 - - 6,381,433 -
Investments with Fiscal Agent:
Money Market Funds 17,432,588 17,432,588 - - -
U.S. Treasury Bills 435,789 - - 435,789 -
U.S. Treasuries 17,767,397 - - 17,767,397 -
U.S. Agency Securities 2,301,100 - - 2,301,100 -
LAIF 291,852 291,852 - - -
Investments with OPEB Trust:
Money Market Funds 1,600,784 1,600,784 - - -
Mutual Funds - Fixed Income 16,834,993 - 3,183,119 13,651,874 -
Mutual Funds - Equity 27,766,273 - 5,475,356 22,290,917 -
Totals 456,152,420$ 92,986,673$ 8,658,475$ 354,507,272$ -$
105
124
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(3) Lease Receivables (Continued)
receivables totaled $3,092,111. Lease inflows for lease revenue from amortization of the related
GASB 87 deferred inflows of resources from leases was $10,363,339. Lease receivables at June
30, 2024 were $268,028,069.
Regulated Lease
While not technically a lease, the City licenses streetlight space for cellphone antennas and
related equipment to a cellphone company. Restrictions to the license cause the license to be a
GASB 87 regulated lease that is excluded from GASB 87’s present value calculations and notes.
Generally, these licensed streetlight spaces are licensed nonexclusively, but some of these
licensed spaces may be licensed exclusively. The total revenue recognized during the fiscal year
for this license was $8,182. Below are the expected future minimum payments to the City from
this license. License payments by the cellphone company to the City do not secure debt issued
by the City.
(4) Interfund Receivables and Payables
At June 30, 2024, interfund receivables and payable were as follows:
Year Ending License
June 30,Payments
2025 8,186$
2026 1,500
2027 1,500
2028 1,500
2029 1,500
2030-2034 7,500
2035-2039 7,000
Total 28,686$
Due From Due To
General Fund 6,816,287$ -$
Debt Service Fund - 6,221,847
Internal Service Fund - 353,001
Other Governmental Funds - 241,439
106
125
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(4) Interfund Receivables and Payables (Continued)
The above balances are primarily due to reclassification of negative cash balances in the city-
wide cash pool.
At June 30, 2024, interfund advances receivable and payable were as follows:
The General Fund advance to the Tide and Submerged Land – Harbor Capital Fund was utilized
for dredging within the City’s Tidelands. Repayment of the advance to the General Fund is funded
from incremental revenue increases generated from certain leases, mooring rents, commercial
and residential pier rents, and parking meter revenues.
The annual amortization of the repayment of the advance is as follows:
Due From Due To
General Fund 5,676,659$ -$
Tide and Submerged Land - Harbor Capital Fund - 5,676,659
Advance #1 Advance #2
Dredging Marina Park
Fiscal Projects Project Total
Year Repayment Repayment Repayment
2025 750,000$ 500,000$ 1,250,000$
2026 750,000 500,000 1,250,000
2027 750,000 500,000 1,250,000
2028 426,659 500,000 926,659
2029 - 500,000 500,000
2030 - 500,000 500,000
Totals 2,676,659$ 3,000,000$ 5,676,659$
Harbor Capital Fund Advance - Repayment Terms
(Zero-Interest Advance)
107
126
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(5) Interfund Transfers
Interfund transfers at June 30, 2024, consisted of the following:
The City typically uses transfers to fund ongoing subsidies and to set aside resources for long-
term needs such as capital facilities replacement and major maintenance. The General Fund
transferred:
$11,170,010 to the Tide and Submerged Land – Operating Fund to subsidize the
maintenance and operation;
$4,715,000 to the Tide and Submerged Land – Harbor Capital Fund to cash fund Harbor
Capital projects;
$11,072,033 to the Facilities Financial Planning Reserve Fund to cash fund construction
projects for General Fund supported facilities;
$8,677,620 to the Debt Service Fund for the debt service payments related to the Civic
Center Certificates of Participation and the Fire Station No. 2 Certificates of Participation;
$5,802,500 to the Retiree Insurance Internal Service Fund to fund the OPEB Trust; and
$17,963,183 to Other Governmental Funds, which includes $12,776,641 to the
Unrestricted Capital Improvements Fund to cash fund General Fund capital
improvements, $15,290 to close Measure M project, $1,665,952 the Neighborhood
Enhancement Fund for capital improvements, $1,000,000 to the Park Maintenance Fund
for maintenance of parks, $2,500,000 to the Facilities Maintenance Fund for maintenance
of facilities, and $5,300 to the Assessment District Fund services.
The Tide and Submerged Land – Operating Fund transferred $19,333,407 to the General Fund
to reimburse for tidelands related expenditures.
General Fund
Tide and
Submerged
Land -
Operating
Tide and
Submerged
Land - Harbor
Capital
Facilities
Financial
Planning
Reserve Debt Service
Internal
Service
Funds
Other
Governmental
Funds Total
General Fund -$ 11,170,010$ 4,715,000$ 11,072,033$ 8,677,620$ 5,802,500$ 17,963,183$ 59,400,346$
Tide and Submerged Land -
Operating 19,333,407 - - - - - - 19,333,407
Facilities Financial Planning
Reserve - - - - - - 16,825,622 16,825,622 Other Governmental Funds 7,592,834 82,345 - - - - - 7,675,179
Totals 26,926,241$ 11,252,355$ 4,715,000$ 11,072,033$ 8,677,620$ 5,802,500$ 34,788,805$ 103,234,554$
Transfers In
T
r
a
n
s
f
e
r
s
Ou
t
108
127
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(5) Interfund Transfers (Continued)
The Facilities Financial Planning Reserve Fund also transferred $16,825,622 to Other
Governmental Funds as follows:
$6,955,012 to the Parks and Community Centers Fund to fund construction of a new
library lecture hall;
$4,940,281 to the Miscellaneous FFP Projects Fund for CNG fueling support facility and
transfer station rehabilitation;
$4,643,968 to the Contributions Fund to fund the construction of a new library lecture hall;
and
$286,361 to the Junior Lifeguards Fund to cash fund construction projects related to the
Junior Lifeguard Building.
Other Governmental Funds transferred $7,675,179 to other funds as follows:
The Contributions Fund transferred $135,892 to the General Fund and $82,345 to the Tide
and Submerged Land - Operating Fund, to reimburse those funds for expenses related to
a storm drain dry weather diversion capital project;
The American Rescue Plan Act Fund transferred $5,226,642 to the General Fund for
public safety services incurred on fire operations;
The Assessment District Fund transferred $1,230,300 to the General Fund as
reimbursement for engineering and design work related to Assessment Districts;
The Unrestricted Capital Improvements Fund transferred $1,000,000 to the General Fund
for the Travelodge North Homekey project.
109
128
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(6) Capital Assets
Capital asset activity for the year ended June 30, 2024, was as follows:
Governmental Activities:
Governmental Activities capital assets net of accumulated depreciation/amortization at June 30,
2024 are comprised of the following:
General Capital Assets, net 2,371,916,763$
Internal Service Fund Capital Assets, net 19,171,776
Total 2,391,088,539$
Beginning Balance
Balance Additions Deletions June 30, 2024
Non-depreciable/non-amortizable:
Land and rights of way 1,918,486,226$ 3,908,965$ (64,792)$ 1,922,330,399$
Work in progress 13,838,976 17,712,529 (9,351,270) 22,200,235
1,932,325,202 21,621,494 (9,416,062) 1,944,530,634
Depreciable/amortizable:
Structures 260,708,379 9,509,647 (37,808) 270,180,218
Intangible right to use structures 13,927,685 3,259,414 - 17,187,099
Equipment 60,805,831 3,843,617 (1,129,005) 63,520,443
Intangible right to use equipment 353,888 9,837 - 363,725
Intangible right to use subscriptions 2,634,434 616,790 (584,372) 2,666,852
Infrastructure 400,132,758 11,340,723 (5,078,734) 406,394,747
738,562,975 28,580,028 (6,829,919) 760,313,084
Less accumulated depreciation/amortization for:
Structures (64,472,932) (6,031,296) - (70,504,228)
Intangible right to use structures (1,921,060) (1,221,283) - (3,142,343)
Equipment (41,460,147) (4,088,541) 1,078,403 (44,470,285)
Intangible right to use equipment (117,809) (83,595) - (201,404)
Intangible right to use subscriptions (403,595) (454,384) 336,407 (521,572)
Infrastructure (189,743,313) (7,577,849) 2,405,815 (194,915,347)
(298,118,856) (19,456,948) 3,820,625 (313,755,179)
Net depreciable/amortizable 440,444,119 9,123,080 (3,009,294) 446,557,905
Net capital assets 2,372,769,321$ 30,744,574$ (12,425,356)$ 2,391,088,539$
110
129
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(6) Capital Assets (Continued)
Business-type Activities:
Depreciation/amortization expense was charged in the following functions in the Statement of
Activities:
Governmental Business-type
Activities Activities
General Government 6,686,354$ -$
Public Safety 2,299,560 -
Public Works 174,632 -
Community Development 478,587 -
Community Service 9,817,815 -
Water - 1,833,639
Wastewater - 646,683
Totals 19,456,948$ 2,480,322$
Beginning Balance
Balance Additions Deletions June 30, 2024
Non-depreciable/non-amortizable:
Land 2,219,450$ -$ -$ 2,219,450$
Work in progress 7,697,408 1,856,408 (5,145,373) 4,408,443
9,916,858 1,856,408 (5,145,373) 6,627,893
Depreciable/amortizable:
Intangible right to use land and right of way 3,883,062 - - 3,883,062
Structures 688,396 - - 688,396
Equipment 337,180 42,888 - 380,068
Infrastructure 198,854,753 8,189,807 (1,383,407) 205,661,153
Total Capital Assets 203,763,391 8,232,695 (1,383,407) 210,612,679
Less accumulated depreciation/amortization for:
Intangible right to use land and right of way (74,169) (53,656) - (127,825)
Structures (310,212) (15,357) - (325,569)
Equipment (236,129) (17,935) - (254,064)
Infrastructure (77,792,931) (2,393,374) 292,398 (79,893,907)
(78,413,441) (2,480,322) 292,398 (80,601,365)
Net depreciable/amortizable 125,349,950 5,752,373 (1,091,009) 130,011,314
Net capital assets 135,266,808$ 7,608,781$ (6,236,382)$ 136,639,207$
111
130
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(6) Capital Assets (Continued)
Internal Service Fund depreciation/amortization of $4,100,760 is allocated to governmental
functions above.
(7) Long-Term Liabilities
Changes in Long-Term Liabilities
The long-term liabilities for governmental activities for the fiscal year ended June 30, 2024, are
as follows:
Internal service funds predominantly serve the governmental funds. Accordingly, long-term
liabilities for them are included as part of the above totals for governmental activities. Also,
liabilities for workers’ compensation, claims and judgments, compensated absences, and net
OPEB obligation are typically liquidated from the internal service funds through resources
collected from individual funds.
The long-term liabilities for business-type activities for the fiscal year ended June 30, 2024, are
as follows:
Amounts
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
Other debt:
Certificates of participation - Series 2010B 91,190,000$ -$ (3,390,000)$ 87,800,000$ 3,510,000$
Certificates of participation - Series 2020A 6,420,000 - (695,000) 5,725,000 725,000
Bond premium - Series 2020A 1,006,764 - (142,131) 864,633 -
Other long-term liabilities:
Workers' compensation payable 16,396,153 11,588,497 (4,534,087) 23,450,563 4,035,291
Claims and judgments payable 8,689,061 25,766,286 (23,614,029) 10,841,318 3,577,058
Compensated absences 12,691,040 2,498,119 (1,540,993) 13,648,166 3,539,392
Lease liability 12,274,149 3,269,251 (1,204,018) 14,339,382 1,272,450
Subscription liability 2,235,133 315,569 (717,947) 1,832,755 289,030
Total governmental activities 150,902,300$ 43,437,722$ (35,838,205)$ 158,501,817$ 16,948,221$
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Business-type activities:
Lease liability 3,820,774$ -$ (44,120)$ 3,776,654$ 44,364$
Total business-type activities 3,820,774$ -$ (44,120)$ 3,776,654$ 44,364$
112
131
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
2010 Certificates of Participation
In fiscal year 2010-11, the City issued $20,085,000 of Series 2010A (Tax Exempt) and
$106,575,000 of Series 2010B (Federally Taxable Direct Pay Build America Bonds) Certificates
of Participation. The 2010A Certificates were issued to prepay the $3,990,000 principal
outstanding on the 1998 Library Certificates of Participation. Accordingly, the 1998 Library
Certificates have been defeased and are no longer outstanding. The remaining proceeds from
the Series 2010A Certificates were used to finance the acquisition, improvement and equipping
of the Civic Center Project. The Series 2010B Certificates were issued to provide additional
financing for the Civic Center Project. The proceeds of the Certificates also were applied to pay
certain costs of issuance incurred in connection with the Certificates.
The lease payments made by the City are held by a trustee who makes semi-annual payments
on the Certificates of Participation. The lease payments began January 1, 2011, and are in
amounts sufficient to cover the payment of principal and interest of the Certificates. Interest on
the Certificates is payable semiannually on January 1 and July 1 of each year. The 2010A
Certificates have been defeased and are no longer outstanding. The 2010B Certificates interest
rates range from 4.45% to 7.17%. The City has designated the Series 2010B Certificates as “Build
America Bonds” (BABs) under the provisions of the American Recovery and Reinvestment Act of
2009. Thus, the City receives refundable credits from the United States Treasury on the interest
paid on the 2010B Certificates. As of June 30, 2024, the City has received $31,524,132 of BABs
Subsidy from the United States Treasury and expects to receive subsidy equal to about 33% on
future interest payable on the 2010B Certificates. Principal payments are payable annually on
July 1 of each year. The remaining principal payments for the Series 2010B Certificates, which
are payable through July 1, 2040, range from $3,510,000 to $7,245,000. The total outstanding
balance at June 30, 2024 amounted to $87,800,000. The use of the following assets has been
pledged as security for the outstanding balance: the Central Library and the Civic Center.
113
132
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
The annual amortization requirements of the outstanding Series 2010B Certificates of
Participation are as follows:
2020 Certificates of Participation
In Fiscal Year 2020-21, the City issued $7,860,000 of Series 2020A Certificates of Participation.
The 2020A Certificates were issued to finance the acquisition, improvement, and equipping of
Fire Station No. 2. The proceeds of the Certificates also were applied to pay certain costs of
issuance incurred in connection with the Certificates.
The lease payments made by the City are held by a trustee who makes semi-annual payments
on the Certificates of Participation. The lease payments began June 15, 2021, and are in amounts
sufficient to cover the payment of principal and interest of the Certificates. Interest on the
Certificates is payable semiannually on January 1 and July 1 of each year. The 2020A Certificates’
interest rate is 4.00%. Principal payments are payable annually on July 1 of each year. The
remaining principal payments of the Series 2020A Certificates, which are payable through July 1,
2030, range from $725,000 to $915,000. The total outstanding balance at June 30, 2024
amounted to $5,725,000. The use of the following assets has been pledged as security for the
outstanding balance: Fire Station 5 and Fire Station 7.
Year Ending
June 30,Principal Interest Total
2025 3,510,000$ 6,142,971$ 9,652,971$
2026 3,675,000 5,889,360 9,564,360
2027 3,850,000 5,623,515 9,473,515
2028 4,025,000 5,345,089 9,370,089
2029 4,210,000 5,053,726 9,263,726
2030-2034 24,115,000 20,386,712 44,501,712
2035-2039 30,250,000 10,695,372 40,945,372
2040-2041 14,165,000 1,026,996 15,191,996
Totals 87,800,000$ 60,163,741$ 147,963,741$
114
133
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
The annual amortization requirements of the outstanding Series 2020A Certificates of
Participation are as follows:
Claims and Judgments
The City retains the risk of loss for general liability and workers’ compensation claims as described
in Note (9). These amounts represent estimates of amounts to be paid for reported general liability
and workers' compensation claims including incurred-but-not-reported claims based upon past
experience, modified for current trends and information. While the ultimate amount of losses
incurred through June 30, 2024, is dependent on future developments based upon information
from the City’s attorney, the City's claims administrators, and others involved with the
administration of the programs, City management believes the accrual is adequate to cover such
losses. The estimated liability at June 30, 2024, for general liability and workers’ compensation
was $10,841,318 and $23,450,563, respectively.
Compensated Absences
The City's policies relating to compensated absences are described in Note (1). This liability at
June 30, 2024, is $13,648,166. Compensated absences are liquidated from the Compensated
Absences internal service fund.
Unused Credit
The City has a letter of credit in the amount of $300,938.
Year Ending
June 30,Principal Interest Total
2025 725,000$ 214,500$ 939,500$
2026 755,000 184,900 939,900
2027 785,000 154,100 939,100
2028 815,000 122,100 937,100
2029 850,000 88,800 938,800
2030-2031 1,795,000 72,500 1,867,500
Totals 5,725,000$ 836,900$ 6,561,900$
115
134
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
Leases
Lease agreements that meet the requirements of GASB 87 for which the City is lessee are
disclosed as lease liabilities on the City’s financial statements that are presented on the accrual
basis of accounting and with an economic resources measurement focus. Included in the City’s
lease liabilities are agreements related to water well easements, lifeguard communication
equipment, and part of a homeless shelter. For lease provisions subject to GASB 87 during the
fiscal year there were no variable lease payments that were not previously included in the City’s
lease liabilities.
Estimates of the future lease payments for the City’s lease liability for governmental activities are
as follows:
Year Ending
June 30 Principal Interest Total
2025 1,272,450$ 76,212$ 1,348,662$
2026 1,273,326 69,199 1,342,525
2027 1,212,633 62,367 1,275,000
2028 1,219,317 55,683 1,275,000
2029 1,226,038 48,963 1,275,001
2030-2034 6,232,288 142,712 6,375,000
2035-2038 1,903,330 9,170 1,912,500
Totals 14,339,382$ 464,306$ 14,803,688$
116
135
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
Estimates of the future lease payments for the City’s lease liability for business-type activities are
as follows:
Subscription-Based Information Technology Arrangements
Subscription-based information technology arrangements (SBITAs) that meet the requirements
of GASB 96 for which the City is a subscriber are disclosed as SBITA liabilities on the City’s
financial statements that are presented on the accrual basis of accounting with an economic
resources measurement focus. Included in the City’s SBITA liabilities are subscriptions related
to library operations, public communications, recreation classes registrations, website hosting,
performance evaluations, public safety, etc. GASB 96 excludes certain outflows (e.g., certain
variable payments, etc.) from the measurement of SBITA liabilities.
Fiscal
Year Ending
June 30,Principal Interest Total
2025 44,364$ 20,660$ 65,024$
2026 44,608 20,415 65,023
2027 44,854 20,169 65,023
2028 45,101 19,922 65,023
2029 45,350 19,673 65,023
2030-2034 230,529 94,588 325,117
2035-2039 236,955 88,162 325,117
2040-2044 243,560 81,557 325,117
2045-2049 250,350 74,767 325,117
2050-2054 257,328 67,789 325,117
2055-2059 264,501 60,616 325,117
2060-2064 271,874 53,243 325,117
2065-2069 279,453 45,664 325,117
2070-2074 287,243 37,874 325,117
2075-2079 295,250 29,868 325,118
2080-2084 303,480 21,637 325,117
2085-2089 311,939 13,178 325,117
2090-2094 280,510 4,584 285,094
2095-2099 39,402 181 39,583
Totals 3,776,651$ 774,547$ 4,551,198$
117
136
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(7) Long-Term Liabilities (Continued)
During the fiscal year, outflows of resources from the City to one SBITA vendor included variable
payments that were not previously included in the City’s SBITA liabilities. The city’s recreation
class registration software vendor charges fees for every class registration. These fees cover both
credit card processing and the registration software subscription. The amount of fees paid to the
software vendor varies with the number of registrations. However, the fees will not decrease
below the vendor’s annual minimum fee. Only the estimated annual minimum software
subscription fee has been included in the City’s GASB 96 subscription liabilities.
For the fiscal year ended June 30, 2024, there were approximately $21,907 of software
subscription fees in excess of the annual minimum. Part way through the fiscal year, the City’s
existing recreation class registration software’s contract ended. The City’s recreation class
registration software’s new contract has both transaction fees (e.g., credit card processing, etc.)
and a separate fixed software subscription fee. Consequently, the City is not expecting to disclose
variable software subscription fees after the fiscal year ended June 30, 2024.
Estimates of the future subscription payments for the City’s SBITA liabilities are as follows:
(8) Limited Obligation Bonds
The City has issued certain Assessment District and Community Facilities District Bonds.
Although the City collects and disburses funds for these districts, the City has no obligation or
duty to pay any delinquency out of any available funds of the City. Neither the faith and credit nor
the taxing power of the City is pledged to the payment of the bonds, and therefore the bonded
indebtedness is not shown in the financial statements of the City. The City holds reserve funds
on behalf of bondholders, and the assets are recorded in the Special Assessment District
Custodial Fund. Bonds outstanding at June 30, 2024, for each district under the Bond Acts of
1911 and 1915 are as follows:
Year Ending
June 30,Principal Interest Total
2025 289,030$ 9,282$ 298,312$
2026 243,771 7,872 251,643
2027 234,542 6,559 241,101
2028 235,836 5,266 241,102
2029 215,788 3,980 219,768
2030-2033 613,788 6,067 619,855
Totals 1,832,755$ 39,026$ 1,871,781$
118
137
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(8) Limited Obligation Bonds (Continued)
(9) Risk Management – General Liability and Workers’ Compensation
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction
of assets, errors and omissions, injuries to employees, and natural disasters. The City carries
commercial insurance with independent third parties for loss risks associated with real and
personal property, and automotive liability. The City purchases fidelity bonds for employees in key
positions. Settled claims from these risks have not exceeded commercial insurance coverage for
the past three years.
The City utilizes Public Risk Innovation, Solutions, and Management (PRISM), formerly called
California State Association of Counties – Excess Insurance Authority (CSAC-EIA), a joint powers
authority, to provide excess insurance for the general liability and workers’ compensation
programs. PRISM provides coverage under the terms of a joint-powers agreement with the City
as follows:
Type of Coverage Self-Insured Retention Coverage Limits
General liability $500,000 $25,000,000
Workers’ compensation 500,000 Statutory
PRISM was established for the purpose of creating a risk management pool for all California
public entities. PRISM is governed by a Board of Directors consisting of representatives of its
member public entities.
The Insurance Reserve fund was established to account for costs associated with general liability
and workers’ compensation. The Insurance Reserve fund is accounted for as an internal service
fund where assets are set aside for risk management, administration, claim settlements and
benefit distribution. A premium is charged to each fund that accounts for part-time or full-time
Bonds Outstanding
Assessment District Original Issue June 30, 2024
Reassessment District 2012 $ 13,583,436 $ 574,037
Assessment District No. 117 2,955,000 2,255,000
Assessment District No. 116 1,575,000 1,300,000
Assessment District No. 116B 665,000 550,000
Assessment District No. 113 4,565,000 4,140,000
Assessment District No. 111 2,412,000 2,097,000
Assessment District No. 120-2 2,505,000 2,505,000
Assessment District No. 124 23,625,000 23,625,000
Totals 51,885,436$ 37,046,037$
119
138
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(9) Risk Management – General Liability and Workers’ Compensation (Continued)
employees. The total charge allocated to each of the funds is calculated using trends in actual
experience after considering unexpected and unusual claims.
Fund liabilities are reported when it is probable that a loss has occurred and the amount of the
loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred
but not reported (IBNR). Claims liabilities are calculated considering the effects of inflation, recent
claim settlement trends including frequency and amounts of payouts and other economic and
social factors. The total claims payable was $34,291,881 at June 30, 2024, which represents the
discounted present value of all outstanding claims. The claims are discounted using an interest
rate of 3%.
(10) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all City employees, permits them to set aside
a portion of their salary and defer taxation on the contributions and any investment earnings until
future years.
Section 457 plan assets were placed in trust for the exclusive benefit of all employees and their
beneficiaries. Therefore, all employee assets held in Section 457 plans are not the property of the
City and are not subject to the claims of the City’s general creditors. The assets under the plan,
which are not included in the accompanying financial statements, totaled $157,659,215 at June
30, 2024.
(11) Pension Plans
a. General Information about the Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to
participate in the City of Newport Beach’s separate Safety (police and fire) and
Miscellaneous (all other) Employee Pension Plans, agent multiple-employer defined benefit
pension plans administered by the California Public Employees’ Retirement System
(CalPERS), which acts as a common investment and administrative agent for its
participating member employers.
June 30, 2023 June 30, 2024 June 30, 2023 June 30, 2024
Unpaid claims, beginning of fiscal year 8,695,880$ 8,689,061$ 15,754,588$ 16,396,153$
Insured claims (including IBNR)5,618,185 25,766,286 4,903,042 11,588,497
Claim payments (5,625,004) (23,614,029) (4,261,477) (4,534,087)
Unpaid claims, end of fiscal year 8,689,061$ 10,841,318$ 16,396,153$ 23,450,563$
General Liability Workers' Compensation
120
139
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Benefit provisions under the Plans are established by State statute and Local Government
resolution. CalPERS issues publicly available reports that include a full description of the
pension plans regarding benefit provisions, assumptions and membership information that
can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual
cost of living adjustments and death benefits to plan members, who must be public
employees and beneficiaries. Benefits are based on years of credited service, equal to one
year of full-time employment. Members with five years of total service are eligible to retire
at age 50 to 62 with statutorily reduced benefits. PEPRA miscellaneous members become
eligible for service retirement upon attainment of age 52 with at least five years of service.
All members are eligible for non-duty disability benefits after five years of service. The death
benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit, the
Optional Settlement 2W Death Benefit, or the 1957 Survivor Benefit. Safety members can
receive a special death benefit if the member dies while actively employed and the death is
job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death
Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at
least 20 years of total CalPERS service. The cost-of-living adjustments for each plan are
applied as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect for the measurement period ended June 30,
2023 are summarized as follows:
Prior to On or after On or after
Hire date November 24, 2012 November 24, 2012 January 1, 2013
Benefit formula 2.5%@55 2.0%@60 2.0%@62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50-55 50-63 52-67
Monthly benefits, as a % of eligible compensation 2.0% - 2.5% 1.092% - 2.418% 1.0% - 2.5%
Required employee contribution rates 11.5% - 13.0% 11.5% - 13.0% 11.5% - 13.0%
Required employer contribution rates 30.06% - 31.56% 26.64% - 28.14% 27.14% - 28.64%
Prior to On or after On or after
Hire date November 24,2012 November 24, 2012 January 1, 2013
Benefit formula 3.0%@50 2.0%@50; 3.0%@55 2.7%@57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service
Benefit payments monthly for life monthly for life monthly for life
Retirement age 50-55 50-55 50-57
Monthly benefits, as a % of eligible compensation 3.0% 2.0% - 2.7%; 2.4% - 3.0% 2.0% - 2.7%
Required employee contribution rates 13.5% - 14.6% 13.5% - 14.6% 13.5% - 14.6%
Required employer contribution rates 65.11% - 66.21% 65.11% - 66.21% 68.54% - 69.71%
Miscellaneous
Safety
121
140
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Employees Covered – At the measurement date of June 30, 2023, the following employees
were covered by the benefit terms for each Plan:
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law
requires that the employer contribution rates for all public employers are determined on an
annual basis by the actuary and shall be effective on the July 1 following notice of a change
in the rate. The total plan contributions are determined through CalPERS’ annual actuarial
valuation process. The actuarially determined rate is the estimated amount necessary to
finance the costs of benefits earned by employees during the year, with an additional
amount to finance any unfunded accrued liability. The City is required to contribute the
difference between the actuarially determined rate and the contribution rate of employees.
City contribution rates may change if plan contracts are amended. Payments made by the
employer to satisfy contribution requirements that are identified by the pension plan terms
as plan member contributions requirements are classified as plan member contributions.
b. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less
the pension plan’s fiduciary net position. The net pension liability of each of the Plans is
measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022
rolled forward to June 30, 2023 using standard update procedures. The General Fund,
Tidelands Funds, Water Fund, and Wastewater Fund have typically been used in prior years
to liquidate the net pension liability. A summary of principal assumptions and methods used
to determine the net pension liability is shown below.
Miscellaneous Safety
Inactive employees or beneficiaries
currently receiving benefits 778 475
Inactive employees entitled to
but not yet receiving benefits 665 110
Active employees 517 276
Totals 1,960 861
122
141
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Actuarial Assumptions – The total pension liabilities in the June 30, 2022 actuarial
valuations were determined using the following actuarial assumptions:
All other actuarial assumptions used in the June 30, 2022 valuation were based on the
results of an actuarial experience study for the period from 2000 to 2019, including updates
to salary increase, mortality and retirement rates. The Experience Study report can be
obtained at the CalPERS website under Forms and Publications.
Discount Rate – The discount rate used to measure the total pension liability was 6.90%.
The projection of cash flows used to determine the discount rate assumed that contributions
from plan members will be made at the current member contribution rates and that
contributions from employers will be made at statutorily required rates, actuarially
determined. Based on those assumptions, the Plan’s fiduciary net position was projected to
be available to make all projected future benefit payments of current plan members.
Miscellaneous Safety
Valuation Date June 30, 2022 June 30, 2022
Measurement Date June 30, 2023 June 30, 2023
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 6.90%6.90%
Inflation 2.30%2.30%
Payroll growth 2.80%2.80%
Projected salary increases
Investment Rate of Return 6.80%(1)6.80%(1)
Mortality Rate Table (1)
Post Retirement Benefit Increase
(1) The mortality table used was developed based on CalPERS-specific data.
The probabilities of mortality are based on the 2021 CalPERS Experience
Study and Review of Actuarial Assumptions. Mortality rates include full
generational mortality improvement using 80% of Scale MP-2020 published by
the Society of Actuaries. For more details on this table, please refer to the 2021
experience study report from November 2021 that can be found on the
CalPERS website.
Derived using CalPERS' membership
Entry-Age Normal Cost Method
Varies by Entry Age and Services
data for all funds
The lesser of contract COLA or 2.30%
until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies, 2.3% thereafter
123
142
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Therefore, the long-term expected rate of return on plan investments was applied to all
periods of projected benefit payments to determine the total pension liability.
Long-term Expected Rate of Return – The long-term expected rate of return on pension
plan investments was determined using a building-block method in which expected future
real rates of return (expected returns, net of pension plan investment expense and inflation)
are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-
term and long-term market return expectations. Using historical returns of all of the funds’
asset classes, expected compound (geometric) returns were calculated over the next 20
years using a building-block approach. The expected rate of return was then adjusted to
account for assumed administrative expenses of 10 basis points.
The expected real rates of return by asset class are as follows:
Subsequent Event – During the time period between the valuation date and the publication
of this report, price inflation has been higher than the assumed rate of 2.3% per annum.
Since inflation influences cost of living adjustments for retirees and beneficiaries and active
member pay increases, higher inflation is likely to put at least some upward pressure on the
pension expense and the net pension liability in future valuations. The actual impact of
higher inflation on future valuation results will depend on, among other factors, how long
Assumed
Asset Real Return
Allocation Years 1-10(1),(2)
Global equity - Cap-weighted 30.00% 4.54%
Global equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
e(1)An expected inflation of 2.30% used for this period.
e(2)Figures are based on the 2021 Asset Liability Management study.
Asset Class(1)
124
143
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
higher inflation persists. At this time, we continue to believe the long-term price inflation
assumption of 2.3% per annum is appropriate.
c. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan for the measurement period follow:
Miscellaneous Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2022 499,195,502$ 378,772,145$ 120,423,357$
Changes in the Year:
Service cost 8,045,390 - 8,045,390
Interest on the total pension liability 34,232,164 - 34,232,164
Changes in benefit terms 474,137 - 474,137
Differences between expected and
actual experience 5,716,564 - 5,716,564
Contribution - employer - 20,800,063 (20,800,063)
Contribution - employee - 4,113,185 (4,113,185)
Net investment income - 23,270,469 (23,270,469)
Benefit payments, including refunds
of employee contributions (26,581,149) (26,581,149) -
Administrative expense - (278,531) 278,531
Net Changes 21,887,106 21,324,037 563,069
Balance at June 30, 2023 521,082,608$ 400,096,182$ 120,986,426$
Increase (Decrease)
125
144
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following
presents the net pension liability of the City for each Plan, calculated using the discount rate
for each Plan, as well as what the City’s net pension liability would be if it were calculated
using a discount rate that is 1-percentage point lower or 1-percentage point higher than the
current rate:
Safety Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2022 667,148,312$ 470,269,260$ 196,879,052$
Changes in the Year:
Service cost 10,727,817 - 10,727,817
Interest on the total pension liability 45,793,334 - 45,793,334
Changes in benefit terms 268,557 - 268,557
Differences between expected and
actual experience 9,833,536 - 9,833,536
Net plan to plan resource movement - - -
Contribution - employer - 35,285,332 (35,285,332)
Contribution - employee - 3,577,340 (3,577,340)
Net investment income - 28,993,124 (28,993,124)
Benefit payments, including refunds
of employee contributions (37,885,623) (37,885,623) -
Administrative expense - (345,814) 345,814
Net Changes 28,737,621 29,624,359 (886,738)
Balance at June 30, 2023 695,885,933$ 499,893,619$ 195,992,314$
Increase (Decrease)
Miscellaneous Safety
1% Decrease 5.90%5.90%
Net Pension Liability 190,345,838$ 286,451,219$
Current Discount Rate 6.90%6.90%
Net Pension Liability 120,986,426$ 195,992,314$
1% Increase 7.90%7.90%
Net Pension Liability 63,892,194$ 121,284,207$
126
145
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s
fiduciary net position is available in the separately issued CalPERS financial reports.
d. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the fiscal year ended June 30, 2024, the City recognized pension expense of
$56,762,175 ($23,469,057 Miscellaneous Plan and $33,293,118 Safety Plan). At June 30,
2024, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Miscellaneous plan:
Pension contributions subsequent to
measurement date 21,537,720$ -$
Differences between expected and 3,863,463 (522,874)
actual experience
Change in assumptions 5,865,289 -
Net differences between projected and actual
and actual earnings on plan investments 18,308,754 -
Total miscellaneous plan 49,575,226 (522,874)
Safety plan:
Pension contributions subsequent to
measurement date 36,635,838 -
Differences between expected and
actual experience 7,514,668 (1,768,089)
Change in assumptions 11,593,442 -
Net differences between projected and actual
and actual earnings on plan investments 22,969,358 -
Total safety plan 78,713,306 (1,768,089)
Total all plans 128,288,532$ (2,290,963)$
127
146
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(11) Pension Plans (Continued)
$58,173,558 reported as deferred outflows of resources related to contributions subsequent
to the measurement date will be recognized as a reduction of the net pension liability in the
fiscal year ending June 30, 2025. Other amounts reported as deferred outflows of resources
and deferred inflows of resources related to pensions will be recognized as pension expense
as follows:
e. Payable to the Pension Plan
At June 30, 2024, the City had no outstanding contributions to the pension plan required for
the year ended June 30, 2024.
f. Plan Description - Defined Contribution Plan
Pursuant to City Council Resolution No. 91-106, the City entered into a defined contribution
plan administrated by the private administrator known as Public Agency Retirement System
("PARS") for all of its part-time employees, pursuant to the requirements of Section 11332
of the Social Security Act. The City Council has the authority for establishing and amending
the plan’s provisions per the Resolution, including establishing and amending contribution
requirements. In a defined contribution plan, benefits depend solely on amounts contributed
to the plan plus investment earnings. All part-time employees are eligible to participate from
the date of employment. Federal legislation requires contributions of at least 7.5% to a
retirement plan, and City Council resolved to match the employees' contributions of 3.75%.
The City's contributions for each employee (and interest earned by the accounts) are fully
vested immediately.
For the fiscal year ended June 30, 2024, the City's covered payroll for employees
participating in the plan was $3,730,194. Employees made contributions of $139,896
(3.75% of current covered payroll), which was matched by the employer in the same
amount. Assets of the plan totaled $2,443,815 at June 30, 2024.
Fiscal
Year Ending
June 30, Miscellaneous Safety Total
2025 9,779,876$ 11,425,126$ 21,205,002$
2026 4,788,658 9,665,572 14,454,230
2027 12,391,635 18,286,128 30,677,763
2028 554,463 932,553 1,487,016
Thereafter - - -
128
147
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB)
The following description of the City of Newport Beach Retiree Health Savings (“RHS”) Plan
provides only general information. Participants should refer to the Plan agreement for a more
complete description of the Plan’s provisions.
Plan Description
The Retiree Health Savings Plan consists of the following post-retirement medical benefits:
PEMHCA
The CalPERS Public Employees' Medical and Hospital Care Act (PEMHCA) plan under the
authority of section 22750 to 22948 of the state of California's government code, is an agent
multiple employer plan. The City pays the required PEMHCA minimum contribution for all
miscellaneous and safety employees retiring directly from the City who enroll in a CalPERS
medical plan. The 2024 PEMHCA minimum contribution amount is $157 per month.
Implicit Subsidy
The City provides healthcare benefits to retirees in the form of an implied rate subsidy, which
results from the pooling of non-Medicare retirees and active employees for premium purposes.
Therefore, retirees receive the benefit of a lower premium, which would be higher if the premium
for retirees was based on age, health status or claims history. The difference between these
amounts is the implicit rate subsidy.
Other Retiree Medical Benefits
The City provides other retiree medical benefits in the form a single-employer defined contribution
plan, a single-employer defined benefit plan, and a hybrid of the two. In January 2006, the City
and employee associations agreed to major changes in the Post-Employment Health Care Plan.
All employees hired after January 1, 2006, and certain employees hired prior to this date, as well
as employees who elected to fully convert to a defined contribution formula (hereafter fully
converted employees), participate in a program that requires mandatory employee and employer
contributions. However, once these contributions have been made to the employee’s account,
the City has no further funding obligation to the Plan on their behalf, except for the Public
Employees’ Medical and Hospital Care Act (“PEMHCA”) minimum, which is the responsibility of
the City. These employees and eligible retirees participate in a Retiree Health Savings (“RHS”)
Plan sponsored by the City, the single employer of the plan. Plan assets are held in trust and
managed by MissionSquare Retirement (Trustee), under IRS Revenue Ruling 2002-41 (June 26,
2002) and IRS Notice 2002-45 (June 26, 2002).
Certain employees hired prior to January 1, 2006, had the option to retain a hybrid of the former
defined benefit plan, or to fully convert to the new Plan. Employees electing to retain a hybrid of
the former defined benefit formula participate in a program requiring mandatory defined
129
148
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
contributions by employees and the City, as well as a defined benefit consisting of an ongoing
contribution from the City to the participant’s RHS account each month after retirement.
Additionally, these employees are eligible to receive health care benefits under the City’s group
health care plans. In order to receive these benefits, these employees are required to pay the City
$100 per month up until their retirement to offset the unfunded portion of post-employment health
care benefits existing at the inception of the plan.
For fully converted employees, the City made a one-time contribution into their individual RHS
account of $100 per month for every month the employee contributed to the previous defined
benefit plan up to a maximum of 15 years. For employees who elected to retain a hybrid plan, the
City made a one-time contribution into their individual RHS account of $75 per month for every
month the employee contributed to the previous defined plan up to a maximum of 15 years. In
order to receive these contributions, the employee must retire from the City. At June 30, 2024,
the liability for the conversion part of the RHS Plan was $893,075. This amount is not included in
the net OPEB liability, but is included in the compensated absences liability. See Note (7).
Employees who retired prior to January 1, 2006, continue to receive an ongoing defined benefit
consisting of a contribution made by the City to the participant’s RHS account each month. The
defined benefit portion of the plan is closed to new participants.
In 2024, the City closed the OPEB Trust with the California Employers’ Retiree Benefit Trust
(“CERBT”) Fund and transferred its assets to Public Agency Retirement Services (“PARS”) to
prefund its OPEB liability. The assets held by PARS are legally restricted for the City’s OPEB plan
under Section 115 of the Internal Revenue Code. The City has made discretionary contributions
to the OPEB Trust. Contributions to the OPEB Trust, along with earnings on those contributions,
are irrevocable.
The City determines the timing of the distribution of trust assets and whether those assets will be
paid directly to the insurance provider or used to reimburse the City for plan benefits and expenses
it has paid. The OPEB Trust is reported as a fiduciary fund since it would be misleading to exclude
the OPEB Trust Fund from the City’s financial statements. PARS issues a publicly available
financial report detailing the fiduciary net position of the OPEB Trust, which is available upon
request. The plan itself does not issue a separate financial report. PARS is an agent multiple-
employer trust.
130
149
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Employees Covered
As of the measurement date June 30, 2023, the following current and former employees were
covered by the benefit terms under the plan:
Contributions
Contribution requirements are established by City policy and may be amended by the City
Council. The annual contribution is based on the actuarially determined contribution. For the year
ended June 30, 2024, the City’s cash contributions were $6,327,150 to the trust in premium
payments and $1,309,458 for the estimated implicit subsidy, resulting in a total payment of
$7,636,608.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2023, and the total OPEB liability used
to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023.
The General Fund, Tidelands Funds, Water Fund, and Wastewater Fund have typically been
used in prior years to liquidate the net OPEB liability. A summary of the principal assumptions
and methods used to determine the total OPEB liability is shown below.
Actuarial Assumptions
The total OPEB liability as of June 30, 2023 actuarial valuation was determined using the following
actuarial assumptions and applied to all periods included in the measurement, unless otherwise
specified:
Inactive employees, spouses, or beneficiaries currently receiving benefits 460
Inactive employees or beneficiaries entitled to but not receiving benefits 346
Active employees 807
Total 1,613
131
150
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Valuation Date June 30, 2023
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.00%
Inflation 2.75%
Projected Salary Increase 2.80% per annum, in aggregate
Expected long term investment rate of return 6.00%
Healthcare Cost Trend Rates Initial rate of 8.00%, decreasing 0.25%
annually to an ultimate rate of 4.50% for
Pre-65 and 6.50% decreasing by 0.25%
annually to an ultimate rate of 4.50% for
Post -65.
Post-Retirement Turnover Derived from CalPERS pension plan
Mortality From Society of Actuaries Pub-2010 Public
Retirement Plans Mortality Table Report
The actuarial assumptions used in the June 30, 2023, valuation were based on a standard set of
assumptions the actuary has used for similar valuations, modified as appropriate for the City.
The long-term expected rate of return on OPEB plan investment is assumed to be 6.00%. This
was determined using a building-block method in which expected future real rates of return
(expected returns, net of OPEB plan investment expense and inflation) are developed for each
major asset class. These expected future real rates of return are then combined to produce the
long-term expected rate of return by weighting them based on the target asset allocation
percentage and adding in expected inflation (2.75%). The asset class percentages are taken from
the current composition of the CERBT Fund, and the expected yields by asset class were not
available to the actuary:
Assumed Long-Term
Asset Expected Real
Allocation Rate of Return
Global Equities 49.00% N/A
Fixed Income 23.00% N/A
TIPS 5.00% N/A
Commodities 3.00% N/A
REITs 20.00%N/A
Totals 100.00%6.00%
Asset Class
132
151
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability is 6.00% per annum. This is the
expected long-term rate of return on City assets using investment strategy 1 within CERBT. The
projection of cash flows used to determine the discount rate assumed that the City contribution
will be made at rates equal to the actuarially determined contribution rates. Based on those
assumptions, the OPEB plan’s fiduciary net position is projected to cover all future OPEB
payments. Therefore, the discount rate was set equal to the long-term expected rate of return.
Changes in the Net OPEB Liability
The changes in the net OPEB liability are as follows:
Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2022 54,234,204$ 31,569,252$ 22,664,952$
Changes in the Year:
Service cost 635,096 - 635,096
Interest on the total OPEB liability 3,150,800 - 3,150,800
Changes of assumptions 292,126 - 292,126
Differences between actual and
expected experience (393,810) - (393,810)
Contribution - employer - 6,327,150 (6,327,150)
Net investment income - 2,061,410 (2,061,410)
Benefit payments, including refunds of
employee contributions (4,781,574) (4,781,574) -
Administrative expenses - (9,385) 9,385
Net Changes (1,097,362) 3,597,601 (4,694,963)
Balance at June 30, 2023 53,136,842$ 35,166,853$ 17,969,989$
Increase (Decrease)
133
152
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Change of Assumptions
The mortality table has been updated from the 2017 CalPERS Public Agency Misc. Mortality to
the following tables from the Society of Actuaries (SOA) Pub-2010:
Employees and retirees: General Headcount Weighted Mortality Table fully generational
using Scale MP-2021.
Surviving Spouses: Continuing Survivor Headcount Weighted Mortality Table Fully
generational using Scale MP-2021.
Disabled retirees: Safety Headcount Weighted Mortality Table fully generational using
Scale MP-2021.
Future health care cost trend rates have been reset to an initial rate of 8.00%, decreasing
0.25% annually to an ultimate rate of 4.50% for Pre-65 and 6.50% decreasing by 0.25%
annually to an ultimate rate of 4.50% for Post-65.
Salary scale has been updated to 2.80% per year plus merit increased based on the 2021
CalPERS experience study.
Retirement rates have been updated to be consistent with the 2021 CalPERS experience
study.
Termination rates have been updated to be consistent with the 2021 CalPERS experience
study.
Change of Benefit Terms
There was no change of benefit terms.
Subsequent Events
There were no subsequent events that would materially affect the results presented in this
disclosure.
134
153
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City, calculated using the discount rate for
the Plan, as well as what the City’s total OPEB liability would be if it were calculated using a
discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Sensitivity of the Net OPEB Liability to Changes in Health-Care Cost Trend Rates
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage point
lower (7.00% HMO/7.00% PPO) or 1-percentage point higher (9.00% HMO/9.00% PPO) than
current healthcare cost trend rates:
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the year ended June 30, 2024, the City recognized OPEB expense of $3,758,246. At June
30, 2024, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
1% Decrease Discount Rate 1% Increase
(5.00%)(6.00%)(7.00%)
Net OPEB Liability 23,442,813$ 17,969,989$ 13,346,226$
1% Decrease Current 1% Increase
(7.00%HMO/7.00%PPO (8.00%HMO/8.00%PPO (9.00%HMO/9.00%PPO
decreasing to decreasing to decreasing to
3.5%HMO/3.5%PPO)4.50%HMO/4.50%PPO)5.5%HMO/5.5%PPO)
Net OPEB Liability $15,261,584 $17,969,989 $21,608,100
Healthcare Cost Trend Rates
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
OPEB contributions subsequent to measurement date 12,311,540$ -$
Differences between projected and actual experience 5,400,158 (476,525)
Change of assumptions 2,205,758 (201,676)
Net difference between projected and actual earnings
on OPEB plan investments 2,161,481 -
Totals 22,078,937$ (678,201)$
135
154
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
The differences between expected and actual experience, and changes of assumptions are
amortized over a six-year period or a nine-year period, depending on the fiscal year the difference
occurred. The net difference between projected and actual earnings on plan investment is
amortized over a five-year period.
An amount of $10,162,093, which is reported as deferred outflows of resources related to
contributions subsequent to the measurement date, will be recognized as a reduction of the net
OPEB liability in the fiscal year ending June 30, 2025.
Amounts reported as deferred outflows of resources and deferred inflows of resources related to
OPEB will be recognized in OPEB expense as follows:
Payable to the OPEB Plan
At June 30, 2024, the City had no outstanding amount of contributions to the OPEB plan required
for the year ended June 30, 2024.
(13) Joint Venture Agreements
Bonita Canyon Public Facilities Financing Authority
The Bonita Canyon Public Facilities Financing Authority (Authority) is a joint powers authority
comprised of the City of Newport Beach and the Newport-Mesa Unified School District. The
Authority’s Board is comprised of two members appointed by each of the member agencies. The
Authority created Community Facilities District 98-1 to finance public facilities that will benefit the
properties within the District’s boundaries. In 1998, the Authority issued $45,000,000 of special
tax bonds to be repaid by special assessments. $30,577,712 (81.7%) of the proceeds were used
to pay for the costs of the City acquiring and constructing public facilities including parks and road
improvements. In Fiscal Year 2011-12, the Authority issued $38,330,000 of special tax refunding
bonds to refinance the 1998 Series. In Fiscal Year 2017-18, the Authority issued $28,245,000 of
special tax refunding bonds to refinance the 2012 series; the City is not obligated in any manner
to repay the bonds. As of June 30, 2024, the contributions from property owners have been fully
Fiscal Year
Ending
June 30, Amount
2025 1,914,265$
2026 1,335,302
2027 2,424,073
2028 991,194
2029 1,015,561
Thereafter 1,408,801
136
155
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(13) Joint Venture Agreements (Continued)
spent and no funds are held in trust by the fiscal agent. The City does not make any annual
contributions to the Authority and does not include the Authority as a component unit, as the City
is not financially accountable for the Authority’s activities and the Authority is not fiscally
dependent on the City. The City’s equity interest in the Authority is not readily determinable.
Complete separate financial statements can be obtained at the Newport Mesa Unified School
District, 2985 Bear Street, Suite 8M, Costa Mesa, California.
Metro Cities Fire Authority
The City of Newport Beach is a participant in a joint venture consisting of the cities of Anaheim,
Brea, Fountain Valley, Fullerton, Huntington Beach, and Orange for the operation of a
communication network utilized by fire suppression, emergency medical assistance, and rescue
services. The oversight board consists of one voting member and one alternate appointed by the
governing body of each member agency. The City of Newport Beach’s costs are based each fiscal
year upon the number of recorded incidents attributable to the City divided by the recorded
incidents attributable to all members during the year and are recorded in the General Fund as an
expenditure for service. Upon termination of the agreement, the proceeds from the sale of the
property and assets of the joint venture will be paid to each member agency pursuant to their fair
share percentage. Annually, the amounts paid by the City to this joint venture are approximately
$824,888. The City’s 10.80% interest in the net equity of this joint venture at June 30, 2024,
amounts to $270,127. Complete separate financial statements can be obtained at the Metro Cities
Fire Authority offices at 201 S. Anaheim Boulevard, Suite 302, Anaheim, California.
Integrated Law and Justice Agency of Orange County
The City is a participant in a joint venture with several other public agencies in Orange County for
the operation of the Integrated Law and Justice Agency of Orange County (ILJAOC). The ILJAOC
was established in fiscal year 2006-07 and consists of 23 member agencies, with an oversight
board consisting of 12 members from the participating agencies. Annually, each member agency
pays a percentage of the operating and replacement costs for the ILJAOC. The City’s annual
contribution and interest in the net equity of this joint venture was immaterial as of June 30, 2024.
The City of Newport Beach acted as the Treasurer/Controller of the ILJAOC from inception
through the end of fiscal year 2010-11. Beginning July 1, 2011, the City of Brea, another member
agency, was appointed to serve as Treasurer/Controller, and assumed responsibility for all
operating activities of the ILJAOC. Complete separate financial statements can be obtained from
the City of Brea, 1 Civic Center Circle, Brea, California 92821.
137
156
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(14) Commitments and Contingencies
Claims and Judgments
Numerous claims and suits have been filed against the City in the normal course of business. The
estimated liability under such claims, based upon information received from the City Attorney,
contracted attorneys, and the Risk Manager, has been estimated and recorded as accrued claims
and judgments payable. (See Note 7)
Operating Agreements
The City of Newport Beach first entered into an agreement with Visit Newport Beach Inc. (“VNB”),
a legally separate non-profit marketing organization, in 1987. The primary responsibility of VNB
is to attract additional visitor business by promoting the City as the premier tourist and business
destination in Orange County. VNB is governed by an Executive Committee comprised of seven
individuals not appointed by the City Council of the City of Newport Beach. The current agreement
was entered into on September 27, 2011, and subsequently amended on January 28, 2014,
extending the agreement through December 31, 2024. The City pays VNB 18% of the Total
Transient Occupancy Tax collected during the fiscal year. For the Fiscal Year ending June 30,
2024, the City paid VNB $6,945,387.
Contractual Commitments
Construction and contractual commitments for major construction projects are as follows:
Annual Project YTD Unexpended
Budget Expenditures Commitments
Central Library Lecture Hall 22,777,582$ 4,282,389$ 18,462,635$
Lower Sunset View Park Concept 9,674,898 7,218,549 2,456,349
Newport Bay Water Wheel 4,781,465 2,787,548 1,993,917
East Coast Highway Pavement Rehab 5,937,437 3,693,199 1,873,289
Balboa Island P-19 Phase 3 3,251,852 1,798,116 1,453,736
Facilities Maintenance Master Plan 2,500,000 173,445 1,266,973
WCH Hwy Intersection Imp Ped Bridge 1,092,827 17,920 1,073,490
Facilities Maintenance Master Plan 2,478,272 1,576,409 901,863
Shorecliffs Comm Water System Imprv 2,750,000 67,967 918,115
Traffic Signal Rehabilitation 1,694,375 833,648 860,727
Park Master Maintenance Plan 1,000,000 90,294 804,091
Advanced Metering Infrastructure 1,011,128 256,280 754,848
Junior Lifeguards Building 3,187,653 2,837,402 350,251
Garde Adjustments - Water Valves 1,572,890 442,873 738,483
Collins Island Bridge Replacement 2,429,168 239,203 725,263
San Miguel Drive Pavement Rehab 680,000 71,025 608,975
Slurry Seal Program 1,689,022 889,418 566,459
Sewer Lift Station Improvements 571,815 13,679 558,136
138
157
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(14) Commitments and Contingencies (Continued)
At fiscal year end, the City’s encumbrances with contractors were as follows:
Tide and Tide and Special Capital
Submerged Submerged Debt Service Revenue Project
General Land - Operating Land - Harbor Capital Fund Funds Funds Total
Oceanfront encroachment -$ -$ -$ -$ 155,804$ -$ 155,804$
Cable franchise reserve - - - - 7,883 - 7,883
Streets and highways - - - - 9,599,936 3,552,856 13,152,792
Parks and community centers - - - - - 14,594,621 14,594,621
Facilities - - - - - 460,193 460,193
Public arts and culture - - - - 32,500 - 32,500
Fiin - - - - 1,071 - 1,071
Debt service - - - 1,500 - - 1,500
Capital re-appropriations - - - - - 9,274,595 9,274,595
Beaches - 354,000 666,837 - - - 1,020,837
Marinas - 16,835 - - - - 16,835
Dredging - - 21,525 - - - 21,525
Equipment 33,121 239,641 - - 11,000 - 283,762
Facilities Replacement - - - - - 100 100
Drainage - - - - - 423,312 423,312
Miscellaneous and studies - - - - - 113,375 113,375
Contract services 4,044,062 - - - - - 4,044,062
Supplies and materials 152,490 - - - - - 152,490
Maintenance and repairs 1,605,727 - - - - 2,848,368 4,454,095
General 127,541 - - - - - 127,541
Total encumbrances 5,962,941$ 610,476$ 688,362$ 1,500$ 9,808,194$ 31,267,420$ 48,338,893$
Major Governmental Funds Other Governmental Funds
139
158
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(15) Fund Balance
Governmental Fund Balance at June 30, 2024, is classified as follows:
Governmental Fund Balance
Tide and Tide and Facilities Special Capital Submerged Submerged Financial Planning Debt Service Revenue Project PermanentGeneralLand - Operating Land - Harbor Capital Reserve Fund Funds Funds Funds Totals Nonspendable:
Prepaid items (legally restricted)1,160,659$ 101,646$ -$ -$ -$ 39,723$ -$ -$ 1,302,028$
Inventories (legally restricted)215,284 - - - - - - - 215,284
Long-term loan receivable (form restricted)5,676,659 - - - - - - - 5,676,659
Permanent endowment (legally restricted)- - - - - - - 4,629,781 4,629,781
Restricted: Affordable housing - - - - - 484,021 - - 484,021 Oceanfront encroachment - - - - - 212,543 - - 212,543 Upper Newport bay restoration - 1,683,144 - - - - - - 1,683,144
Cable franchise reserve - - - - - 3,550,006 - - 3,550,006
Community development - - - - - - 3,411 - 3,411
Streets and highways - - - - - 9,599,936 - - 9,599,936
Public safety - - - - - 817,396 - - 817,396 Facilities - - - - - - 292,893 - 292,893 Transportation - - - - - 611,470 - - 611,470 Air quality improvement - - - - - 1,528,948 - - 1,528,948
Environmental liability mitigation - - - - - 8,555,811 - - 8,555,811
Public arts and culture - - - - - 1,154,535 - - 1,154,535
Parking - - - - - 252,714 - - 252,714
Training - - - - - 556,121 - - 556,121 Libraries - - - - - - - 226,570 226,570 Scholarships - - - - - - - 216,581 216,581 Fiin - - - - - 1,094,800 - - 1,094,800 Debt service - - - - 2,323,115 - - - 2,323,115
Capital re-appropriations - 5,099,796 11,622,548 - - 3,971,674 24,961,911 - 45,655,929
Beaches - 354,000 666,837 - - - - - 1,020,837
Marinas - 16,835 - - - - - - 16,835
Dredging - - 30,817,961 - - - - 1,773,357 32,591,318 Equipment - 239,641 - - - 11,000 - - 250,641 General Plan Maintenance - - - - - 63,172 - - 63,172 Committed:
Facilities replacement - - - 20,435,754 - - 687,907 - 21,123,661
Facilities maintenance - - - - - - 1,763,676 - 1,763,676
Civic center and park - - - - - - 505,166 - 505,166
Oil and gas liabilities - 1,052,660 - - - - - - 1,052,660 Parking management - - - - - - 162,449 - 162,449 Neighborhood enhancement - - - - - - 10,811,958 - 10,811,958 Capital re-appropriations 436,303 - - - - - - - 436,303
Drainage - - - - - - 2,836,212 - 2,836,212
Streets and highways - - - - - - 12,367,394 - 12,367,394
Facilities - - - - - - 10,486,563 - 10,486,563
Miscellaneous and studies - - - - - - 113,375 - 113,375
Parks and community centers - - - - - - 17,246,041 - 17,246,041 Contract services 4,194,063 - - - - - - - 4,194,063 Supplies and materials 390,091 - - - - - - - 390,091 Maintenance and repairs 1,605,727 - - - - - 2,848,366 - 4,454,093
Equipment 33,121 - - - - - - - 33,121
General 127,541 - - - - - - - 127,541
Unassigned 82,601,740 - - - - (229,775) - - 82,371,965
Total fund balances 96,441,188$ 8,547,722$ 43,107,346$ 20,435,754$ 2,323,115$ 32,274,095$ 85,087,322$ 6,846,289$ 295,062,831$
Other Governmental Funds
140
159
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(16) Deficit Fund Equity
The following funds reported deficit equity balances:
The OTS DUI Grant Fund is used to account for federal funding for the Selective Traffic
Enforcement Program (STEP). These funds are used exclusively for DUI enforcement. The City
will receive reimbursement in the following fiscal year, which will eliminate the deficit fund balance.
The Community Development Block Grant Fund is used to account for revenues and expenditures
relating to the City's Community Development Block Grant program. These funds are received
from the Federal Department of Housing and Urban Development and must be expended
exclusively on programs for low- or moderate-income individuals/families. The City will receive
reimbursement in the following fiscal year, which will eliminate the deficit fund balance.
The Insurance Reserve Fund is used to account for the City's self-insured general liability and
workers' compensation program. The City's intention is to eliminate the deficit fund balance
through a future interfund transfer.
For the Compensated Absences Fund, the City’s Reserve Policy sets the maximum cash reserve
at 50% of the long-term compensated absences liability and targets a lesser amount that is the
median between that amount and a three-year average of the actual payments made for the cash-
out of accumulated leave balances. Accordingly, this deficit fund balance is intentional and in
compliance with the City Council-approved Reserve Policy.
(17) Tax Abatements
The City may enter into sales tax abatement agreements with automobile dealerships under City
Council Resolution 99-64. Under that Resolution, the City may rebate sales taxes “for the sole
purpose of reimbursing [automobile dealerships] for costs incurred for a project necessary to
make the project financially feasible.” Automobile dealerships must covenant “to complete the
project, to remain and operate the project for a specified period of time… [, and] to maximize the
City as the point-of-sale…”. Automobile dealership sales tax rebates are based on negotiations
that require City Council approval. On an accrual basis, for the fiscal year ended June 30, 2024,
the City rebated sales taxes to automobile dealerships totaling $369,781 under this program.
Special Revenue Funds:
OTS DUI Grant 159$
Community Development Block Grant 229,622
Internal Service Funds:
Insurance Reserve 4,399,439
Compensation Absences 6,021,996
141
160
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(18) Public-Private Partnerships
Agreements that meet the requirements of GASB 94 for which the city is transferor are disclosed
as public-private partnerships (PPP) receivables on the City’s financial statements. The City’s
PPP receivable is related to the facilities for the Balboa Island Ferry, Inc. (operator). GASB 94
excludes certain inflows (e.g., certain variable payments, etc.) from the measurement of PPP
receivables. Payments from the operator to the City include variable payments, because the
operator pays the City the greater of a minimum base amount or a specified percentage of the
operator’s gross receipts. For the fiscal year ending June 30, 2024, the City recognized $7,629
of payments related to PPP receivables that were excluded from the measurement of the PPP
receivables. A discount rate of 1.50% was applied to the measurement of the PPP receivable.
The PPP agreement leases facilities to the operator for the continued operation of a ferry between
Balboa Island and Balboa Peninsula. The City retains the right to inspect the property anytime
without notice to the operator. Please see the Statement of Net Position for additional information
about the nature and amounts of the PPP receivable and PPP deferred inflow.
(19) Subsequent Events
301 Balboa Boulevard East Property Purchase
On August 27, 2024, the City Council authorized staff to execute an agreement with Bobby and
Linda Hanada for the purchase of property at 301 Balboa Boulevard East for future expansion of
public parking access. The negotiated purchase price for the property at 301 Balboa Boulevard
East is $2.6 million, which will be funded from General Fund surplus. The close of escrow is
anticipated to be December 2024.
Affordable Housing Loan Agreement to American Family Housing for the Travelodge North
Homekey Project
On July 11, 2023, the City Council approved a loan commitment of $3.0 million to American Family
Housing, LLC (AFH) to provide local match funds for costs associated with the acquisition,
rehabilitation and conversion of the Travelodge North Motel property, located at 1400 Bristol
Street into permanent supportive housing. The City’s funding is conditional based upon multiple
requirements of the developer securing commitments for the balance of the project cost,
approximately $42.4 million. The developer is finalizing negotiations of various loan and funding
agreements and approvals. On December 10, 2024, City Council authorized the City Manager to
finalize negotiations and execute the Affordable Housing Loan Agreement between the City and
AFH. The terms of the agreement is for the City to loan $3.0 million with a 55-year term, at a 3.0%
simple interest rate, commencing upon completion of the project. The $3.0 million loan will be
disbursed through escrow during construction of the project to cover constructions costs and will
be funded by from available funds in the Facilities Financial Planning Reserve Fund.
142
161
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(20) Prior Period Restatements
Utility Services Revenues
The City restated net position in both the Water and Wastewater Funds due to a correction of an
error regarding the unbilled receivables for utility services for revenues in the prior year that
related to the current fiscal year ending June 30, 2024.
Flexible Spending Account Fund
The City implemented GASB 100: Accounting Changes and Error Corrections – an Amendment
of GASB Statement No. 62 which requires the City to report any changes in the presentation of
the reporting of major funds. The City removed the reporting of the Flexible Spending Account
(FSA) Fund from the Fiduciary Fund as it does not meet the requirements of a custodial fund. The
FSA fund has been consolidated into the General Fund.
Government-Wide
Business Type
Description Water Wastewater Activities
Beginning net position, as previously reported 128,393,695$ 30,307,955$ 157,717,018$
To adjust net position for an overstatement
in unbilled receivables (1,349,699) (245,536) (1,595,235)
Beginning net position, as restated 127,043,996$ 30,062,419$ 156,121,783$
Proprietary Funds
Fiduciary Funds
Description Total Custodial Funds
Beginning fund balance, as previously reported 2,226,973$
To adjust net position for the removal
of Flexible Spending Account Fund (25,728)
Beginning net position, as restated 2,201,245$
143
162
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2024
(20) Prior Period Restatements (Continued)
OPEB Trust Fund
In 2024, the City closed the OPEB Trust with the California Employers’ Retiree Benefit Trust
(“CERBT”) Fund and transferred its assets to Public Agency Retirement Services (“PARS”) to
prefund its OPEB liability. The assets held by PARS are legally restricted for the City’s OPEB plan
under Section 115 of the Internal Revenue Code. The City has made discretionary contributions
to the OPEB Trust. Contributions to the OPEB Trust, along with earnings on those contributions,
are irrevocable.
The City determines the timing of the distribution of trust assets and whether those assets will be
paid directly to the insurance provider or used to reimburse the City for plan benefits and expenses
it has paid. The OPEB Trust is reported as a fiduciary fund since it would be misleading to exclude
the OPEB Trust Fund from the City’s financial statements. PARS issues a publicly available
financial report detailing the fiduciary net position of the OPEB Trust, which is available upon
request. The plan itself does not issue a separate financial report. PARS is an agent multiple-
employer trust.
Fiduciary Funds
Description OPEB Trust Fund
Beginning fund balance, as previously reported -$
To adjust net position for the addition of the
OPEB Trust Fund 35,155,718
Beginning net position, as restated 35,155,718$
144
163
REQUIRED SUPPLEMENTARY INFORMATION
145
164
2024 2023 2022 2021 2020
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019
Total Pension Liability
Service cost 8,045,390$ 8,261,032$ 7,438,050$ 7,347,708$ 7,084,444$ Interest on total pension liability 34,232,164 32,759,522 31,805,532 30,565,919 29,409,624
Differences between expected and actual experience 5,716,564 (1,394,332) 1,624,975 369,351 403,676
Changes in assumptions - 15,640,771 - - -
Changes in benefits 474,137 - - - -
Benefit payments, including refunds of employee contributions (26,581,149) (24,940,419) (22,976,493) (21,516,515) (20,129,701)
Net Change in Total Pension Liability 21,887,106 30,326,574 17,892,064 16,766,463 16,768,043
Total Pension Liability - beginning 499,195,502 468,868,928 450,976,864 434,210,401 417,442,358
Total Pension Liability - ending (a)521,082,608$ 499,195,502$ 468,868,928$ 450,976,864$ 434,210,401$
Plan Fiduciary Net Position
Contributions - employer 20,800,063$ 18,352,430$ 18,612,457$ 16,346,284$ 15,700,833$ Contributions - employee 4,113,185 3,974,974 4,057,107 4,067,751 3,955,144
Net investment income 23,270,469 (30,856,252) 76,031,841 16,074,793 19,895,019
Administrative expense (278,531) (256,962) (336,753) (454,777) (216,502)
Other miscellaneous income/(expense)- - - - 700
Plan to plan resource movement - - - - 1,570 Benefit payments (26,581,149) (24,940,419) (22,976,493) (21,516,515) (20,129,701)
Net change in Plan Fiduciary Net Position 21,324,037 (33,726,229) 75,388,159 14,517,536 19,207,063
Plan Fiduciary Net Position - beginning 378,772,145 412,498,374 337,110,215 322,592,679 303,385,616
Plan Fiduciary Net Position - ending (b)400,096,182$ 378,772,145$ 412,498,374$ 337,110,215$ 322,592,679$
Net pension liability - ending (a)-(b)120,986,426$ 120,423,357$ 56,370,554$ 113,866,649$ 111,617,722$
Plan fiduciary net position as a percentage of the total pension liability 76.78%75.88%87.98%74.75%74.29%
Covered payroll 48,099,822$ 45,210,057$ 44,809,856$ 43,902,594$ 42,153,383$
Net pension liability as percentage of covered payroll 251.53%266.36%125.80%259.36%264.79%
Notes to Schedule:
Benefit Changes:
Change in Assumptions:
Page 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2024Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two
Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be
material by the plan actuary. In 2022, SB 1186 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occuring on or after July 1, 2023. The impact, if
any, is included in the changes of benefit terms.
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of
return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation
assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement
dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
146
165
2019 2018 2017 2016 2015
Measurement Period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Total Pension Liability
Service cost 7,334,861$ 7,151,754$ 6,303,642$ 6,087,960$ 6,523,874$ Interest on total pension liability 28,226,598 27,069,673 26,375,073 25,427,094 24,624,559
Differences between expected and actual experience 2,243,854 (4,912,853) (2,686,814) (4,736,006) -
Changes in assumptions (2,522,093) 22,616,424 - (6,309,248) -
Changes in benefits - - - - -
Benefit payments, including refunds of employee contributions (18,458,539) (17,249,398) (16,714,022) (16,374,370) (15,290,340)
Net Change in Total Pension Liability 16,824,681 34,675,600 13,277,879 4,095,430 15,858,093
Total Pension Liability - beginning 400,617,677 365,942,077 352,664,198 348,568,768 332,710,674
Total Pension Liability - ending (a)417,442,358$ 400,617,677$ 365,942,077$ 352,664,198$ 348,568,767$
Plan Fiduciary Net Position
Contributions - employer 15,797,595$ 10,509,243$ 9,904,636$ 6,615,920$ 5,793,768$ Contributions - employee 3,979,337 4,134,130 4,206,942 4,321,646 4,319,336
Net investment income 23,855,196 28,349,491 1,241,432 5,687,908 38,237,161
Administrative expense (435,499) (375,172) (155,791) (287,862) -
Other miscellaneous income/(expense)(827,021) - - - -
Plan to plan resource movement (700) - (2,387) 26,981 - Benefit payments (18,458,539) (17,249,398) (16,714,022) (16,374,370) (15,290,340)
Net change in Plan Fiduciary Net Position 23,910,369 25,368,294 (1,519,190) (9,777) 33,059,925
Plan Fiduciary Net Position - beginning 279,475,247 254,106,953 255,626,143 255,635,920 222,575,995
Plan Fiduciary Net Position - ending (b)303,385,616$ 279,475,247$ 254,106,953$ 255,626,143$ 255,635,920$
Net pension liability - ending (a)-(b)114,056,742$ 121,142,430$ 111,835,124$ 97,038,055$ 92,932,847$
Plan fiduciary net position as a percentage of the total pension liability 72.68%69.76%69.44%72.48%73.34%
Covered payroll 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$ 37,775,051$
Net pension liability as percentage of covered payroll 275.04%290.32%279.37%251.97%246.02%
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2024Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
147
166
2024 2023 2022 2021 2020
Actuarially determined contribution 15,211,001$ 15,250,219$ 14,432,250$ 14,600,178$ 13,080,630$
Contributions in relation to the actuarially determined contributions (21,537,720) (20,794,397) (18,372,473) (18,730,840) (16,351,592)
Contribution deficiency (excess)(6,326,719)$ (5,544,178)$ (3,940,223)$ (4,130,662)$ (3,270,962)$
Covered payroll 50,824,016$ 48,099,822$ 45,210,057$ 44,809,856$ 43,902,594$
Contributions as a percentage of covered payroll 42.38%43.23%40.64%41.80%37.25%
Notes to Schedule:
Valuation date:06/30/2021 06/30/2020 06/30/2019 06/30/2018 06/30/2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.30% 2.50% 2.50% 2.50% 2.625%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 6.80% (3)7.00% (3)7.00% (3)7.00% (3)7.25% (3)Retirement age (4)(4)(4)(4)(4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established after June 30, 2019
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment and administrative expense; includes inflation
(4)(5)
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2024
Last 10 Years
Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board
Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board
Defined Benefit Plan for Miscellaneous Employees
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
Page 1 of 2
148
167
2019 2018 2017 2016 2015
Actuarially determined contribution 12,374,026$ 11,924,053$ 10,412,963$ 9,943,342$ 7,117,065$
Contributions in relation to the actuarially determined contributions (15,713,898) (15,742,587) (10,412,963) (9,943,342) (7,117,065)
Contribution deficiency (excess)(3,339,872)$ (3,818,534)$ -$ -$ -$
Covered payroll 42,153,383$ 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$
Contributions as a percentage of covered payroll 37.28%37.96%24.95%24.84%18.48%
Notes to Schedule:
Valuation date:06/30/2016 06/30/2015 06/30/2014 06/30/2013 06/30/2012
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.375% (3)7.5% (3)7.5% (3)7.5% (3)7.5% (3)Retirement age (4)(4)(4)(4)(4)
Mortality (5) (5) (5) (5) (5)
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
149
168
2024 2023 2022 2021 2020
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019
Total Pension Liability
Service cost 10,727,817$ 10,918,046$ 9,817,913$ 9,622,985$ 9,292,715$ Interest on total pension liability 45,793,334 43,860,290 42,760,906 41,449,511 40,081,524
Differences between expected and actual experience 9,833,536 (3,451,985) 196,690 957,686 4,798,077
Changes in assumptions - 22,634,816 - - - Changes in benefits 268,557 - - - -
Benefit payments, including refunds of employee contributions (37,885,623) (35,654,758) (33,765,218) (32,285,653) (30,443,097)
Net Change in Total Pension Liability 28,737,621 38,306,409 19,010,291 19,744,529 23,729,219
Total Pension Liability - beginning 667,148,312 628,841,903 609,831,612 590,087,083 566,357,864
Total Pension Liability - ending (a)695,885,933$ 667,148,312$ 628,841,903$ 609,831,612$ 590,087,083$
Plan Fiduciary Net Position
Contributions - employer 35,285,332$ 32,394,203$ 32,367,091$ 28,539,301$ 28,344,445$
Contributions - employee 3,577,340 3,417,660 3,347,740 3,249,005 3,162,044
Net investment income 28,993,124 (38,537,209) 93,813,435 19,685,354 24,254,890
Administrative expense (345,814) (317,056) (413,178) (556,832) (263,991)
Plan to plan resource movement - - - - (1,570)
Benefit payments (37,885,623) (35,654,758) (33,765,218) (32,285,653) (30,443,097)
Other miscellaneous income/(expense)- - - - 855
Net change in Plan Fiduciary Net Position 29,624,359 (38,697,160) 95,349,870 18,631,175 25,053,576
Plan Fiduciary Net Position - beginning 470,269,260 508,966,420 413,616,550 394,985,375 369,931,799
Plan Fiduciary Net Position - ending (b)499,893,619$ 470,269,260$ 508,966,420$ 413,616,550$ 394,985,375$
Net pension liability - ending (a)-(b)195,992,314$ 196,879,052$ 119,875,483$ 196,215,062$ 195,101,708$
Plan fiduciary net position as a percentage of the total pension liability 71.84%70.49%80.94%67.82%66.94%
Covered payroll 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$ 33,935,043$
Net pension liability as percentage of covered payroll 536.40%558.82%343.85%572.40%574.93%
Notes to Schedule:
Benefit Changes:
Change in Assumptions:
The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of
Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to
be material by the plan actuary. In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The
impact, if any, is included in the changes of benefit terms.
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected
rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the
price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for
measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
Page 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension PlanAs of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees
150
169
2019 2018 2017 2016 2015
Measurement Period June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
Total Pension Liability
Service cost 9,223,465$ 9,015,985$ 8,075,553$ 8,077,826$ 8,091,585$ Interest on total pension liability 38,458,387 37,083,966 36,239,226 35,098,055 33,807,462
Differences between expected and actual experience 3,278,018 (2,192,667) (1,613,985) (316,827) -
Changes in assumptions (1,630,045) 30,110,384 - (8,359,009) - Changes in benefits - - - - -
Benefit payments, including refunds of employee contributions (29,183,598) (28,074,414) (27,447,982) (25,838,982) (24,529,802)
Net Change in Total Pension Liability 20,146,227 45,943,254 15,252,812 8,661,063 17,369,245
Total Pension Liability - beginning 546,211,637 500,268,383 485,015,571 476,354,508 458,985,263
Total Pension Liability - ending (a)566,357,864$ 546,211,637$ 500,268,383$ 485,015,571$ 476,354,508$
Plan Fiduciary Net Position
Contributions - employer 26,779,897$ 19,260,537$ 18,496,776$ 21,529,513$ 12,089,637$
Contributions - employee 3,104,318 2,967,318 2,826,831 2,969,503 3,122,237
Net investment income 29,064,749 34,814,011 1,561,480 7,049,577 47,151,493
Administrative expense (532,480) (462,427) (193,780) (357,866) -
Plan to plan resource movement (855) - 2,387 - -
Benefit payments (29,183,598) (28,074,414) (27,447,982) (25,838,982) (24,529,802)
Other miscellaneous income/(expense)(1,011,188) - - - -
Net change in Plan Fiduciary Net Position 28,220,843 28,505,025 (4,754,288) 5,351,745 37,833,565
Plan Fiduciary Net Position - beginning 341,710,956 313,205,931 317,960,219 312,608,474 274,774,909
Plan Fiduciary Net Position - ending (b)369,931,799$ 341,710,956$ 313,205,931$ 317,960,219$ 312,608,474$
Net pension liability - ending (a)-(b)196,426,065$ 204,500,681$ 187,062,452$ 167,055,352$ 163,746,034$
Plan fiduciary net position as a percentage of the total pension liability 65.32%62.56%62.61%65.56%65.63%
Covered payroll 32,866,620$ 32,450,020$ 30,816,246$ 30,189,633$ 29,944,665$
Net pension liability as percentage of covered payroll 597.65%630.20%607.03%553.35%546.83%
Page 2 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension PlanAs of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees
151
170
2024 2023 2022 2021 2020
Actuarially determined contribution 25,872,229$ 25,952,201$ 25,115,878$ 25,341,788$ 22,980,289$
Contributions in relation to the actuarially determined contributions (36,635,838) (35,283,235) (32,317,538) (32,251,903) (28,531,744)
Contribution deficiency (excess)(10,763,609)$ (9,331,034)$ (7,201,660)$ (6,910,115)$ (5,551,455)$
Covered payroll 38,168,411$ 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$
Contributions as a percentage of covered payroll 95.98%96.56%91.73%92.51%83.23%
Notes to Schedule:
Valuation date:06/30/2021 06/30/2020 06/30/2019 06/30/2018 06/30/2017
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.30%2.50% 2.50% 2.50% 2.625%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 6.80% (3)7.00% (3)7.00% (3)7.00% (3)7.25% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
(1) Level percentage of payroll for bases established prior to June 30, 2019 and level dollar amount for bases established after June 30, 2019
(2) Depending on age, service, and type of employment
(3) Net of pension plan investment and administrative expense; includes inflation
(4)(5)
Retirement assumptions are based on retirement rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board
Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board
Page 1 of 2
Last 10 Years
Defined Benefit Plan for Safety Employees
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
As of June 30, 2024
152
171
2019 2018 2017 2016 2015
Actuarially determined contribution 22,227,698$ 21,524,636$ 19,338,360$ 18,466,207$ 13,393,374$
Contributions in relation to the actuarially determined contributions (28,346,069) (26,620,697) (19,338,360) (18,466,207) (20,993,374)
Contribution deficiency (excess)(6,118,371)$ (5,096,061)$ -$ -$ (7,600,000)$
Covered payroll 33,935,043$ 32,866,620$ 32,450,020$ 30,816,246$ 30,189,633$
Contributions as a percentage of covered payroll 83.53%81.00%59.59%59.92%69.54%
Notes to Schedule:
Valuation date:06/30/2016 06/30/2015 06/30/2014 06/30/2013 06/30/2012
Methods and assumptions used to determine contribution rates:
Actuarial cost method Entry age Entry age Entry age Entry age Entry age
Amortization method (1)(1)(1)(1)(1)
Asset valuation method Market Value Market Value Market Value Market Value Market Value
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.375% (3)7.5% (3)7.5% (3)7.5% (3)7.5% (3)
Retirement age (4)(4)(4)(4)(4)
Mortality (5)(5)(5)(5)(5)
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
As of June 30, 2024
Last 10 Years
Defined Benefit Plan for Safety Employees
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension Plan
153
172
2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020
Total OPEB Liability
Service cost 635,096$ 530,843$ 529,600$ 521,285$
Interest 3,150,800 3,237,390 2,909,400 2,944,050
Differences between expected and actual experience (393,810) 1,120,534 6,159,865 (219,772)
Changes in assumptions 292,126 2,473,450 (302,512) -
Changes in benefits terms - - - -
Benefit payments, including refunds of member contributions (4,781,574) (4,731,846) (3,786,232) (3,787,663)
Net change in Total OPEB Liability (1,097,362) 2,630,371 5,510,121 (542,100)
Total OPEB Liability - beginning 54,234,204 51,603,833 46,093,712 46,635,812
Total OPEB Liability - ending (a)53,136,842$ 54,234,204$ 51,603,833$ 46,093,712$
Plan fiduciary net position
Contributions - employer 6,327,150$ 6,185,537$ 5,785,342$ 4,674,814$
Contributions - member - - - -
Net investment income 2,061,410 (4,845,154) 7,184,241 900,087
Benefit payments, including refunds of member contributions (4,781,574) (4,731,846) (3,786,232) (3,787,663)
Administrative expense (9,385) (9,000) (9,908) (12,037)
Other expense - - - -
Net change in plan fiduciary net position 3,597,601 (3,400,463) 9,173,443 1,775,201
Plan fiduciary net position - beginning 31,569,252 34,969,715 25,796,272 24,021,071
Plan fiduciary net position - ending (b)35,166,853$ 31,569,252$ 34,969,715$ 25,796,272$
City's Net OPEB liability - ending (a)-(b)17,969,989$ 22,664,952$ 16,634,118$ 20,297,440$
Plan fiduciary net position as a percentage of the total OPEB liability 66.18%58.21%67.77%55.96%
Covered- employee payroll (1)81,451,477$ 79,636,594$ 78,621,426$ 77,637,171$
City's Net OPEB liability as percentage of covered-employee payroll 22.06% 28.46% 21.16% 26.14%
Notes to Schedule:
(1) Covered-employee payroll is used because contributions are not entirely based on a measure of pay.
* Fiscal year 2018 was the first year of implementation, therefore only seven years are shown.
Page 1 of 2
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last 10 Years *
Last Ten Fiscal Years*
154
173
2020 2019 2018
Measurement Period June 30, 2019 June 30, 2018 June 30, 2017
Total OPEB Liability
Service cost 524,717$ 509,434$ 478,341$
Interest 2,795,490 2,814,685 2,830,153
Differences between expected and actual experience 2,532,319 - -
Changes in assumptions 114,311 - -
Changes in benefits terms - - -
Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406)
Net change in Total OPEB Liability 2,339,142 (317,596) (204,912)
Total OPEB Liability - beginning 44,296,670 44,614,266 44,819,178
Total OPEB Liability - ending (a)46,635,812$ 44,296,670$ 44,614,266$
Plan fiduciary net position
Contributions - employer 4,460,937$ 4,675,193$ 4,594,772$
Contributions - member - - -
Net investment income 1,495,861 1,605,114 1,875,536
Benefit payments, including refunds of member contributions (3,627,695) (3,641,715) (3,513,406)
Administrative expense (4,980) (11,076) (9,452)
Other expense - (25,258) -
Net change in plan fiduciary net position 2,324,123 2,602,258 2,947,450
Plan fiduciary net position - beginning 21,696,948 19,094,690 16,147,240
Plan fiduciary net position - ending (b)24,021,071$ 21,696,948$ 19,094,690$
City's Net OPEB liability - ending (a)-(b)22,614,741$ 22,599,722$ 25,519,576$
Plan fiduciary net position as a percentage of the total OPEB liability 51.51%48.98%42.80%
Covered- employee payroll (1)75,814,626$ 73,999,059$ 74,484,613$
City's Net OPEB liability as percentage of covered-employee payroll 29.83% 30.54% 34.26%
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
Last 10 Years *
Page 2 of 2
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
155
174
2024 2023 2022 2021
Actuarially determined contribution 3,289,777$ 4,359,593$ 4,124,923$ 4,108,719$
Contributions in relation to the actuarially determined contributions (12,311,540) (7,154,265) (4,950,445) (6,511,545)
Contribution deficiency (excess)(9,021,763)$ (2,794,672)$ (825,522)$ (2,402,826)$
Covered-employee payroll (1)81,451,477$ 81,451,477$ 79,636,594$ 78,621,426$
Contributions as a percentage of covered-employee payroll -15.12%-8.78%-6.22%-8.28%
Notes to Schedule:
Valuation date:June 30, 2023 June 30, 2021 June 30, 2019 June 30, 2019
(1) Covered-employee payroll is used because contributions are not entirely based on a measure of pay.
* Fiscal year 2018 was the first year of implementation, therefore only seven years are shown.
Page 1 of 2
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
Last 10 Years *
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
156
175
2020 2019 2018
Actuarially determined contribution 3,834,916$ 3,827,337$ 3,925,087$
Contributions in relation to the actuarially determined contributions (5,379,799) (5,133,062) (5,309,626)
Contribution deficiency (excess)(1,544,883)$ (1,305,725)$ (1,384,539)$
Covered-employee payroll (1)77,637,171$ 75,814,626$ 73,999,059$
Contributions as a percentage of covered-employee payroll -6.93%-6.77%-7.18%
Notes to Schedule:
Valuation date:June 30, 2017 June 30, 2017 June 30, 2015
Last 10 Years *
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
Page 2 of 2
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
157
176
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Taxes and assessments:
Property 141,373,233$ 142,715,981$ 146,136,871$ 3,420,890$
Sales 48,532,772 45,257,552 43,444,542 (1,813,010)
Transient occupancy 31,986,150 31,986,150 31,736,961 (249,189)
Other taxes 8,937,999 8,937,999 10,252,076 1,314,077
Intergovernmental 2,289,407 4,644,072 4,977,096 333,024
Licenses, permits and fees 5,746,027 5,746,027 5,568,126 (177,901)
Charges for services 24,429,291 24,825,891 25,117,366 291,475
Fines and forfeitures 3,799,784 3,799,784 4,157,294 357,510
Investment income 1,750,000 1,750,000 3,200,616 1,450,616
Net increase in fair value of investments - - 1,652,435 1,652,435
Property income 16,025,781 17,331,591 18,970,340 1,638,749
Donations 412,300 526,151 418,774 (107,377)
Other (245,007) 2,842 983,010 980,168
Total revenues 285,037,737 287,524,040 296,615,507 9,091,467
Expenditures:
General government:
City council 924,218 929,844 635,839 294,005
City clerk 1,191,331 1,215,050 1,097,388 117,662
City attorney 2,526,824 2,592,211 2,423,648 168,563
City manager 6,760,030 9,887,013 4,420,332 5,466,681
Finance 11,039,023 11,252,744 9,437,432 1,815,312
Human resources 3,770,070 3,826,377 3,353,986 472,391
Total general government 26,211,496 29,703,239 21,368,625 8,334,614
Public safety:
Police 73,415,698 76,169,572 74,047,663 2,121,909
Fire 64,405,996 66,718,421 65,534,675 1,183,746
Total public safety 137,821,694 142,887,993 139,582,338 3,305,655
Public works:
Public works - general services 33,861,833 36,201,348 34,286,251 1,915,097
Public works 12,732,655 13,891,663 12,986,340 905,323
Utilities 5,982,258 6,329,822 6,812,897 (483,075)
Total public works 52,576,746 56,422,833 54,085,488 2,337,345
CITY OF NEWPORT BEACH
General Fund
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
Page 1 of 2
See accompanying notes to required supplementary information
158
177
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Community development:
Community development 13,995,918 15,697,665 14,380,441 1,317,224
Code and water quality enforcement 941,714 967,198 1,003,722 (36,524)
Total community development 14,937,632 16,664,863 15,384,163 1,280,700
Community services:
Parking operations 2,227,582 2,961,404 2,316,775 644,629
Library services 10,259,001 11,114,322 10,143,264 971,058
Recreation and senior services 15,394,067 15,811,350 14,928,913 882,437
Total community services 27,880,650 29,887,076 27,388,952 2,498,124
Capital outlay - - 3,574,983 (3,574,983)
Debt service:
Principal - - 1,250,081 (1,250,081)
Interest and fiscal charges - - 83,092 (83,092)
Total debt service - - 1,333,173 (1,333,173)
Total expenditures 259,428,218 275,566,004 262,717,722 12,848,282
Excess of revenues
over expenditures 25,609,519 11,958,036 33,897,785 21,939,749
Other financing sources (uses):
Transfers in 19,020,967 26,926,241 26,926,241 -
Transfers out (34,489,272) (59,400,346) (59,400,346) -
Inception of leases - - 3,259,414 3,259,414
Inception of subscription-based IT arrangements - - 315,569 315,569
Total other financing
sources (uses)(15,468,305) (32,474,105) (28,899,122) 3,574,983
Net change in fund balance 10,141,214 (20,516,069) 4,998,663 25,514,732
Fund balance, beginning 91,442,525 91,442,525 91,442,525 -
Fund balance, ending 101,583,739$ 70,926,456$ 96,441,188$ 25,514,732$
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2024
CITY OF NEWPORT BEACH
Budgeted Amounts
Page 2 of 2
See accompanying notes to required supplementary information
159
178
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 6,000$ 6,481$ 481$
Licenses, permits and fees 100,200 100,200 103,338 3,138
Charges for services 12,650 12,650 38,081 25,431
Fines and forfeitures 30,000 30,000 37,902 7,902
Investment income 192,208 192,208 194,821 2,613
Net increase in fair value of investments - - 77,382 77,382
Property income 13,799,460 13,821,766 15,308,476 1,486,710
Other - - 14,041 14,041
Total revenues 14,134,518 14,162,824 15,780,522 1,617,698
Expenditures:
General government 516,156 516,156 516,156 -
Public works 1,326,696 1,433,117 1,507,721 (74,604)
Community development 2,250 5,450 20,637 (15,187)
Community services 2,445,960 2,856,653 2,487,623 369,030
Capital outlay 1,975,000 4,020,459 726,928 3,293,531
Total expenditures 6,266,062 8,831,835 5,259,065 3,572,770
Excess (deficiency) of revenues
over expenditures 7,868,456 5,330,989 10,521,457 5,190,468
Other financing sources:
Transfers in 11,152,510 11,252,355 11,252,355 -
Transfers out (19,020,966) (19,333,407) (19,333,407) -
Total other financing sources (7,868,456) (8,081,052) (8,081,052) -
Net change in fund balance - (2,750,063) 2,440,405 5,190,468
Fund balance, beginning 6,107,317 6,107,317 6,107,317 -
Fund balance, ending 6,107,317$ 3,357,254$ 8,547,722$ 5,190,468$
CITY OF NEWPORT BEACH
Tide and Submerged Land - Operating
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
See accompanying notes to required supplementary information
160
179
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Investment income 436,141$ 436,141$ 1,309,710$ 873,569$
Net increase in fair value of investments - - 790,072 790,072
Property income 5,258,302 5,258,302 6,624,712 1,366,410
Total revenues 5,694,443 5,694,443 8,724,494 3,030,051
Expenditures:
Capital outlay 3,471,406 6,976,976 546,959 6,430,017
Excess (deficiency) of revenues
over expenditures 2,223,037 (1,282,533) 8,177,535 9,460,068
Other financing sources:
Transfers in 4,715,000 4,715,000 4,715,000 -
Net change in fund balance 6,938,037 3,432,467 12,892,535 9,460,068
Fund balance, beginning 30,214,811 30,214,811 30,214,811 -
Fund balance, ending 37,152,848$ 33,647,278$ 43,107,346$ 9,460,068$
CITY OF NEWPORT BEACH
Tide and Submerged Land - Harbor Capital
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
Budgeted Amounts
See accompanying notes to required supplementary information
161
180
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2024
(1) Budgetary Control and Compliance
The City adheres to the following general procedures in establishing the budgetary data reflected
in the financial statements:
During May, the City Manager submits to the City Council a proposed operating budget
for the fiscal year commencing the following July 1. The operating budget includes
proposed expenditures and the means of financing them. Public hearings are conducted
at City Council meetings to obtain citizen comments. Prior to July 1, the budget is legally
adopted through passage of an appropriation resolution.
Budgets are adopted on an annual basis consistent with generally accepted accounting
principles for General and Special Revenue Funds, except for the Opioid Remediation
Fund, for which no budget was adopted.
The City does not present budget information on Capital Projects Funds since the City
approves project-length budgets. These project-length budgets authorize total
expenditures over the duration of a construction project rather than through year-by-year
budgeting.
The City does not present budget information on Debt Service and Permanent Funds
since the City is not required to and does not adopt an annual budget for these funds.
The budget is formally integrated into the accounting system and employed as a
management control device during the year.
The legal level of budgetary control is at the fund level. The City Manager is authorized to
transfer budgeted amounts between departments within any fund; however, any revisions
which alter the total appropriations of any fund must be approved by the City Council.
At fiscal year-end, budget appropriations lapse. Budget appropriations for incomplete
capital projects are re-budgeted in the following fiscal year by City Council action and are
included in the revisions noted above. Projects that are not started during the budget year
are re-evaluated in the following year.
Encumbrances represent commitments related to unperformed contracts for goods and
services. The City utilizes an encumbrance system as a management control technique
to assist in controlling expenditures. Under this system, encumbrance accounting for the
expenditure of funds is recorded in order to indicate outstanding commitments and is
employed in the governmental fund types. Encumbrances outstanding at year-end are
reported as committed or restricted fund balances since they do not constitute
expenditures or liabilities. Encumbrances and their related budgets are honored in the
subsequent year to fulfill these commitments and are presented in the original adopted
budget.
162
181
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2024
(1) Budgetary Control and Compliance (Continued)
Expenditures exceeded appropriations in the following governmental fund:
Appropriations Expenditures Variance
Supplemental Law Enforcement Services $200,000 $241,105 $(41,105)
163
182
This page left blank intentionally.
164
183
SUPPLEMENTARY INFORMATION
165
184
This page left blank intentionally.
166
185
OTHER GOVERNMENTAL FUNDS
Other Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources which are legally restricted to expenditures for specified purposes. The City of Newport Beach Special Revenue Funds are as follows: The State Gas Tax Fund accounts for all State Gas Tax related revenues and expenditures, including street repair, construction, and maintenance. State law requires that these funds be used exclusively for maintenance of the street and highway system.
The SB1 Gas Tax RMRA Fund accounts for all Road Maintenance and Rehabilitation Account
related revenues and expenditures. State law requires that these funds be used exclusively for the transportation system. RMRA revenues are from fuel and vehicle registration taxes imposed by the state’s Road Repair and Accountability Act of 2017.
The Asset Forfeiture Fund was established to account for all revenues resulting from the seizure of assets in conjunction with criminal cases (primarily drug trafficking) in which judicial proceedings have been completed. All such funds are property of the City, and it is the City's policy that these funds shall be used for enhancement of law enforcement programs. The Office of the Traffic Safety (OTS) DUI Grant Fund is used to account for federal funding of
the Selective Traffic Enforcement Program (STEP). These funds are used exclusively for DUI enforcement. The Circulation and Transportation Fund is used to account for fair share revenues collected from developers and restricted for capital improvement projects meeting the circulation element of the City’s General Plan. The Building Excise Tax Fund is used to account for revenues received from builders or developers on building or remodeling projects within the City. Expenditures from this fund are used exclusively for public safety, libraries, parks, beaches, or recreational activities.
The Community Development Block Grant Fund is used to account for revenues and expenditures relating to the City's Community Development Block Grant program. These funds are received from the Federal Department of Housing and Urban Development and must be expended exclusively on programs for low or moderate income individuals/families. The Air Quality Management District Fund is used to account for revenues received from the South Coast Air Quality Management District restricted for the use of reducing air pollution. The Environmental Liability Fund is used to account for solid waste fees restricted for mitigation of future environmental liability relating to the handling of solid waste. The Supplemental Law Enforcement Services Fund (SLESF) is used to account for revenues received from the county to be used exclusively for front line law enforcement services. The Opioid Remediation Fund is used to account for revenues received from various settlements related to opioid manufacturing and distribution to be used exclusively for opioid remediation activities.
167
186
The Contributions Fund is used to account for revenues received from other government agencies or private developers and expended for specific streets, highway, construction, or water quality projects. The Fostering Interest in Nature (FIIN) Fund is restricted for recreation and education programming as a mitigation effort by the California Coastal Commission.
The Restricted Programs Fund is used to account for revenues received that are restricted for affordable housing, public arts and culture, parking improvements, and disability access training. The Measure M Fund is used to account for the revenues and expenditures of funds received from the Orange County Transportation Authority. Expenditures from this fund are used
exclusively for transportation related purposes. The Oceanfront Encroachment Fund is restricted for ocean front restoration and improvement and maintenance to enhance public access and use of ocean beaches as restricted by the Local
Coastal Program.
The American Rescue Plan Act Fund is used to account for federal funding received through Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act. The Miscellaneous Grants Fund is used to account for revenues received from various other
miscellaneous grants.
The PEG Fees Fund is used to account for cable franchise fees received from cable providers for support of Public, Education, and Government access programming only. Other Capital Projects Funds
Capital Projects Funds are used to account for resources used for the acquisition and construction of capital facilities by the City, except those financed by Enterprise Funds. The City of Newport Beach Capital Projects Funds are as follows:
The Assessment District Fund is used to account for the receipt and expenditure of funds received from 1911 Act and 1915 Act Assessment Districts for capital improvement projects.
The Fire Station Fund is used to account for the design and construction of new fire stations.
The Civic Center and Park Fund is used to account for the design and construction of a new
Civic Center Complex. In prior years, this fund was called City Hall Improvements Fund.
The Police Facility Fund is used to account for the purchase, design and construction of a new police station.
The Newport Uptown Undergrounding Fund is used to account for the receipt and
expenditures related to the development within the Newport Uptown Planned Community Development Plan.
The Parks and Community Centers Fund is used to account for expenditures for park and
community center rehabilitation, expansion and/or replacement in accordance with the Facilities Financing Planning Program.
The Balboa Village Parking Management District Fund is used to account for revenues and
expenditures associated with parking management improvements in Balboa Village.
168
187
The Facilities Maintenance Fund is used to account for revenues and expenditures associated with the maintenance of existing facilities. The Neighborhood Enhancement Fund is used to account for projects that will enhance neighborhood aesthetics and functionality.
The Miscellaneous FFP Projects Fund is used to account for expenditures for small scale facility rehabilitation, expansion and/or replacement in accordance with the Facilities Financing Planning Program. The Junior Lifeguards Fund is used to account for capital improvement projects related to the Junior Lifeguards program.
The Unrestricted Capital Improvements Fund is used to separately account for general fund capital improvement projects.
The Park Maintenance Fund is used to account for capital improvement projects associated with the maintenance of existing parks. Other Permanent Funds Permanent Funds are used to report resources that are legally restricted for the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. The City of Newport Beach Permanent Funds are as follows:
The Bay Dredging Fund is used to account for the receipt of permanent endowments intended to fund the ongoing cost of maintaining and dredging of the Upper Newport Bay.
The Ackerman Fund is used to account for the receipt of permanent endowments intended as
follows: 75% of the fund’s investment proceeds will be used for the purchase of high-tech library equipment while the remaining 25% will be used for scholarships for needy students.
169
188
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation
Assets
Cash and investments 3,344,439$ 520,112$ 816,276$ -$ 1,061,904$
Receivables:
Accounts (net of allowance)- - - - -
Interest 10,233 1,899 1,122 - 3,425
Intergovernmental receivables 201,787 382,983 - 59,493 -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 3,556,459$ 904,994$ 817,398$ 59,493$ 1,065,329$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 758,658$ 78,995$ -$ -$ 147,180$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - 59,652 -
Total liabilities 758,658 78,995 - 59,652 147,180
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 2,797,801 825,999 817,398 - 918,149
Committed - - - - -
Unassigned - - - (159) -
Total fund balances (deficits)2,797,801 825,999 817,398 (159) 918,149
Total liabilities, deferred inflows of resources
and fund balances 3,556,459$ 904,994$ 817,398$ 59,493$ 1,065,329$
(continued)
Special Revenue
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 1 of 7
170
189
Community Air Quality Supplemental
Building Excise Development Management Environmental Law Enforcement
Tax Block Grant District Liability Services
Assets
Cash and investments 371,255$ -$ 1,739,657$ 9,946,765$ -$
Receivables:
Accounts (net of allowance)24,974 - - 10,882 -
Interest 1,198 - 5,612 32,084 -
Intergovernmental receivables - 229,622 28,062 - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - 39,723 -
Total assets 397,427$ 229,622$ 1,773,331$ 10,029,454$ -$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 26,608$ 116,389$ -$ 62,513$ -$
Accrued payroll - - - 3,436 -
Unearned revenue - - - - -
Due to other funds - 113,233 - - -
Total liabilities 26,608 229,622 - 65,949 -
Deferred inflows of resources:
Unavailable revenue - 229,622 28,062 2,516 -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - 39,723 -
Permanent endowment - - - - -
Restricted 370,819 - 1,745,269 9,921,266 -
Committed - - - - -
Unassigned - (229,622) - - -
Total fund balances (deficits)370,819 (229,622) 1,745,269 9,960,989 -
Total liabilities, deferred inflows of resources
and fund balances 397,427$ 229,622$ 1,773,331$ 10,029,454$ -$
(continued)
Special Revenue
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 2 of 7
171
190
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Assets
Cash and investments 505,567$ 11,217,521$ 1,091,280$ 2,504,366$ 2,724,129$
Receivables:
Accounts (net of allowance)- 865,280 - - -
Interest - 3 3,520 8,078 8,797
Intergovernmental receivables - 44,277 - - 963,647
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 505,567$ 12,127,081$ 1,094,800$ 2,512,444$ 3,696,573$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 2,890,037$ -$ 1,882$ 106,418$
Accrued payroll - - - - -
Unearned revenue 505,567 4,256,433 - - 503,122
Due to other funds - - - - -
Total liabilities 505,567 7,146,470 - 1,882 609,540
Deferred inflows of resources:
Unavailable revenue - 784,131 - - 554,981
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - 4,196,480 1,094,800 2,510,562 2,532,052
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits)- 4,196,480 1,094,800 2,510,562 2,532,052
Total liabilities, deferred inflows of resources
and fund balances 505,567$ 12,127,081$ 1,094,800$ 2,512,444$ 3,696,573$
(continued)
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 3 of 7
Special Revenue
CITY OF NEWPORT BEACH
172
191
Capital Projects
Oceanfront American Miscellaneous Assessment
Encroachment Rescue Plan Act Grants PEG Fees District
Assets
Cash and investments 1,166,677$ 675,566$ -$ 3,463,701$ -$
Receivables:
Accounts (net of allowance)35,029 - - 75,132 -
Interest 3,763 - - 11,173 153,080
Intergovernmental receivables - - 9,911 - -
Restricted cash and investments with fiscal agent - - - - 27,328,069
Prepaid items - - - - -
Total assets 1,205,469$ 675,566$ 9,911$ 3,550,006$ 27,481,149$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 21,917$ 673,232$ -$ -$ 2,460,595$
Accrued payroll - - - - -
Unearned revenue - 2,334 - - -
Due to other funds - - 9,911 - 58,643
Total liabilities 21,917 675,566 9,911 - 2,519,238
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 1,183,552 - - 3,550,006 24,961,911
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits)1,183,552 - - 3,550,006 24,961,911
Total liabilities, deferred inflows of resources
and fund balances 1,205,469$ 675,566$ 9,911$ 3,550,006$ 27,481,149$
(continued)
Special Revenue
Page 4 of 7
June 30, 2024
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
173
192
Parks and
Civic Center Newport Uptown Community
Fire Station and Park Police Facility Undergrounding Centers
Assets
Cash and investments 3,041,090$ 504,119$ 685,696$ 3,400$ 17,594,132$
Receivables:
Accounts (net of allowance)- - - - -
Interest 9,810 1,465 2,212 11 56,753
Intergovernmental receivables - - - - -
Restricted cash and investments with fiscal agent 292,893 - - - -
Prepaid items - - - - -
Total assets 3,343,793$ 505,584$ 687,908$ 3,411$ 17,650,885$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 56,704$ 418$ -$ -$ 1,543,336$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities 56,704 418 - - 1,543,336
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 292,893 - - 3,411 -
Committed 2,994,196 505,166 687,908 - 16,107,549
Unassigned - - - - -
Total fund balances (deficits)3,287,089 505,166 687,908 3,411 16,107,549
Total liabilities, deferred inflows of resources
and fund balances 3,343,793$ 505,584$ 687,908$ 3,411$ 17,650,885$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 5 of 7
Capital Projects
174
193
Balboa Village
Parking
Management Facilities Neighborhood Miscellaneous Junior
District Maintenance Enhancement FFP Projects Lifeguards
Assets
Cash and investments 353,586$ 4,502,445$ 12,418,388$ 6,651,776$ 127,906$
Receivables:
Accounts (net of allowance)- - - - -
Interest 1,140 14,524 40,058 - 413
Intergovernmental receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 354,726$ 4,516,969$ 12,458,446$ 6,651,776$ 128,319$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 44,133$ 348,828$ 727,614$ 128,949$ 6,173$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities 44,133 348,828 727,614 128,949 6,173
Deferred inflows of resources:
Unavailable revenue - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - - - - -
Committed 310,593 4,168,141 11,730,832 6,522,827 122,146
Unassigned - - - - -
Total fund balances (deficits)310,593 4,168,141 11,730,832 6,522,827 122,146
Total liabilities, deferred inflows of resources
and fund balances 354,726$ 4,516,969$ 12,458,446$ 6,651,776$ 128,319$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 6 of 7
Capital Projects
175
194
Total
Unrestricted Other
Capital Park Ackerman Governmental
Improvements Maintenance Bay Dredging Donation Funds
Assets
Cash and investments 16,591,150$ 1,020,012$ 5,612,254$ 1,225,200$ 111,480,369$
Receivables:
Accounts (net of allowance)- - - - 1,011,297
Interest - 3,290 18,103 3,952 395,718
Intergovernmental receivables - - - - 1,919,782
Restricted cash and investments with fiscal agent - - - - 27,620,962
Prepaid items - - - - 39,723
Total assets 16,591,150$ 1,023,302$ 5,630,357$ 1,229,152$ 142,467,851$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 871,003$ 63,700$ -$ 13,220$ 11,148,502$
Accrued payroll - - - - 3,436
Unearned revenue - - - - 5,267,456
Due to other funds - - - - 241,439
Total liabilities 871,003 63,700 - 13,220 16,660,833
Deferred inflows of resources:
Unavailable revenue - - - - 1,599,312
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - 39,723
Permanent endowment - - 3,857,000 772,781 4,629,781
Restricted - - 1,773,357 443,151 59,938,876
Committed 15,720,147 959,602 - - 59,829,107
Unassigned - - - - (229,781)
Total fund balances (deficits)15,720,147 959,602 5,630,357 1,215,932 124,207,706
Total liabilities, deferred inflows of resources
and fund balances 16,591,150$ 1,023,302$ 5,630,357$ 1,229,152$ 142,467,851$
Capital Projects Permanent Funds
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2024
Page 7 of 7
176
195
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental 2,331,825 2,197,540 268,095 281,638 -
Charge for services - - - - -
Licenses, permits and fees - - - - 299,476
Property income - - - - -
Investment income 131,912 31,060 22,756 - 35,197
Net increase in fair value of investments 81,601 15,656 13,575 - 23,346
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 2,545,338 2,244,256 304,426 281,638 358,019
Expenditures:
Current:
General government - - - - -
Public safety - - 17,393 281,797 -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 3,455,116 1,834,308 - - 1,093,629
Total expenditures 3,455,116 1,834,308 17,393 281,797 1,093,629
Excess (deficiency) of revenues
over expenditures (909,778) 409,948 287,033 (159) (735,610)
Other financing sources (uses):
Transfers in - - - - -
Transfers out - - - - -
Total other financing sources (uses)- - - - -
Net change in fund balances (909,778) 409,948 287,033 (159) (735,610)
Fund balances (deficits), beginning 3,707,579 416,051 530,365 - 1,653,759
Fund balances (deficits), ending 2,797,801$ 825,999$ 817,398$ (159) 918,149$
(continued)
Other Governmental Funds
CITY OF NEWPORT BEACH
Combining Statement of Revenues,
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
Page 1 of 7
177
196
Community Air Quality Supplemental
Building Excise Development Management Environmental Law Enforcement
Tax Block Grant District Liability Services
Revenues:
Other taxes -$ -$ -$ 963,173$ -$
Intergovernmental - 95,221 112,059 - 241,105
Charge for services - - - - -
Licenses, permits and fees 190,664 - - - -
Property income - - - - -
Investment income 8,919 - 50,214 293,008 -
Net increase in fair value of investments 4,688 - 30,261 180,497 -
Donations - - - - -
Special assessments - - - - -
Other - - - 66,962 -
Total revenues 204,271 95,221 192,534 1,503,640 241,105
Expenditures:
Current:
General government - - - - -
Public safety - - - - 241,105
Public works - - - 421,635 -
Community development - 324,843 - - -
Community services - - - - -
Capital outlay 21,435 - - 377,713 -
Total expenditures 21,435 324,843 - 799,348 241,105
Excess (deficiency) of revenues
over expenditures 182,836 (229,622) 192,534 704,292 -
Other financing sources (uses):
Transfers in - - - - -
Transfers out - - - - -
Total other financing sources (uses)- - - - -
Net change in fund balances 182,836 (229,622) 192,534 704,292 -
Fund balances (deficits), beginning 187,983 - 1,552,735 9,256,697 -
Fund balances (deficits), ending 370,819$ (229,622)$ 1,745,269$ 9,960,989$ -$
(continued)
Other Governmental Funds
CITY OF NEWPORT BEACH
Combining Statement of Revenues,
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
Page 2 of 7
178
197
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - 5,083,257 - - 2,965,303
Charge for services - - - 61,917 -
Licenses, permits and fees - - - 150,000 -
Property income - - - 24,669 -
Investment income - 1,743 33,670 67,756 84,830
Net increase in fair value of investments - 1,097 21,022 40,531 50,670
Donations - 5,501,518 - 112,587 -
Special assessments - - - - -
Other 44,976 - - 66,266 -
Total revenues 44,976 10,587,615 54,692 523,726 3,100,803
Expenditures:
Current:
General government 44,976 - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - 149,948 13,671 -
Capital outlay - 10,805,241 - - 2,520,338
Total expenditures 44,976 10,805,241 149,948 13,671 2,520,338
Excess (deficiency) of revenues
over expenditures - (217,626) (95,256) 510,055 580,465
Other financing sources (uses):
Transfers in - 4,643,968 - - 15,290
Transfers out - (218,237) - - -
Total other financing sources (uses)- 4,425,731 - - 15,290
Net change in fund balances - 4,208,105 (95,256) 510,055 595,755
Fund balances (deficits), beginning - (11,625) 1,190,056 2,000,507 1,936,297
Fund balances (deficits), ending -$ 4,196,480$ 1,094,800$ 2,510,562$ 2,532,052$
(continued)
Expenditures and Changes in Fund Balances
Special Revenue
For the Year Ended June 30, 2024
Page 3 of 7
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
179
198
Capital Projects
Oceanfront American Miscellaneous Assessment
Encroachment Rescue Plan Act Grants PEG Fees District
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - 7,071,718 9,911 - -
Charge for services - -- - -
Licenses, permits and fees - -- 307,890 -
Property income 270,561 - - - -
Investment income 33,000 - - 100,757 1,393,470
Net increase in fair value of investments 19,596 - - 61,255 68,033
Donations - - - - -
Special assessments - - - - 26,843,142
Other - - - - -
Total revenues 323,157 7,071,718 9,911 469,902 28,304,645
Expenditures:
Current:
General government - 3,535 - 72,433 -
Public safety - - 9,911 - -
Public works - 115,499 - - 9,401,847
Community development - - - - -
Community services - - - - -
Capital outlay 85,228 1,726,042 - - -
Total expenditures 85,228 1,845,076 9,911 72,433 9,401,847
Excess (deficiency) of revenues
over expenditures 237,929 5,226,642 - 397,469 18,902,798
Other financing sources (uses):
Transfers in - - - - 5,300
Transfers out - (5,226,642) - - (1,230,300)
Total other financing sources (uses)- (5,226,642) - - (1,225,000.00)
Net change in fund balances 237,929 - - 397,469 17,677,798
Fund balances (deficits), beginning 945,623 - - 3,152,537 7,284,113
Fund balances (deficits), ending 1,183,552$ -$ -$ 3,550,006$ 24,961,911$
(continued)
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
CITY OF NEWPORT BEACH
Other Governmental Funds
Page 4 of 7
For the Year Ended June 30, 2024
Special Revenue
180
199
Parks and
Civic Center Newport Uptown Community
Fire Station and Park Police Facility Undergrounding Centers
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 102,256 13,536 18,654 101 528,941
Net increase in fair value of investments 56,411 8,298 14,748 62 303,359
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 158,667 21,834 33,402 163 832,300
Expenditures:
Current:
General government - 2,033 - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 181,529 - 4,250 - 6,361,244
Total expenditures 181,529 2,033 4,250 - 6,361,244
Excess (deficiency) of revenues
over expenditures (22,862) 19,801 29,152 163 (5,528,944)
Other financing sources (uses):
Transfers in - - - - 6,955,012
Transfers out - - - - -
Total other financing sources (uses)- - - - 6,955,012
Net change in fund balances (22,862) 19,801 29,152 163 1,426,068
Fund balances (deficits), beginning 3,309,951 485,365 658,756 3,248 14,681,481
Fund balances (deficits), ending 3,287,089$ 505,166$ 687,908$ 3,411$ 16,107,549$
(continued)
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
Page 5 of 7
Other Governmental Funds
CITY OF NEWPORT BEACH
Capital Projects
181
200
Balboa Village
Parking
Management Facilities Neighborhood Miscellaneous Junior
District Maintenance Enhancement FFP Projects Lifeguards
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 11,052 176,997 450,872 - 1,717
Net increase in fair value of investments 6,771 109,416 294,045 - 466
Donations - - - - -
Special assessments - - - - -
Other - - - - -
Total revenues 17,823 286,413 744,917 - 2,183
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 86,475 2,673,645 6,551,637 289,263 167,481
Total expenditures 86,475 2,673,645 6,551,637 289,263 167,481
Excess (deficiency) of revenues
over expenditures (68,652) (2,387,232) (5,806,720) (289,263) (165,298)
Other financing sources (uses):
Transfers in - 2,500,000 1,665,952 4,940,281 286,361
Transfers out - -- - -
Total other financing sources (uses)- 2,500,000 1,665,952 4,940,281 286,361
Net change in fund balances (68,652) 112,768 (4,140,768) 4,651,018 121,063
Fund balances (deficits), beginning 379,245 4,055,373 15,871,600 1,871,809 1,083
Fund balances (deficits), ending 310,593$ 4,168,141$ 11,730,832$ 6,522,827$ 122,146$
(continued)
For the Year Ended June 30, 2024
Page 6 of 7
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
Capital Projects
182
201
Total
Unrestricted Other
Capital Park Ackerman Governmental
Improvements Maintenance Bay Dredging Donation Funds
Revenues:
Other taxes -$ -$ -$ -$ 963,173
Intergovernmental - - - - 20,657,672
Charge for services - - - - 61,917
Licenses, permits and fees - - - - 948,030
Property income - - - - 295,230
Investment income - 31,748 167,037 36,736 3,827,939
Net increase in fair value of investments - 18,148 102,289 22,507 1,548,348
Donations - - - - 5,614,105
Special assessments - - - - 26,843,142
Other - - - - 178,204
Total revenues - 49,896 269,326 59,243 60,937,760
Expenditures:
Current:
General government - - - - 122,977
Public safety - - - - 550,206
Public works - - - - 9,938,981
Community development - - - 4,900 329,743
Community services - - - 19,940 183,559
Capital outlay 7,602,296 90,294 - - 45,927,164
Total expenditures 7,602,296 90,294 - 24,840 57,052,630
Excess (deficiency) of revenues
over expenditures (7,602,296) (40,398) 269,326 34,403 3,885,130
Other financing sources (uses):
Transfers in 12,776,641 1,000,000 - - 34,788,805
Transfers out (1,000,000) - - - (7,675,179)
Total other financing sources (uses)11,776,641 1,000,000 - - 27,113,626
Net change in fund balances 4,174,345 959,602 269,326 34,403 30,998,756
Fund balances (deficits), beginning 11,545,802 - 5,361,031 1,181,529 93,208,950
Fund balances (deficits), ending 15,720,147$ 959,602$ 5,630,357$ 1,215,932$ 124,207,706$
CITY OF NEWPORT BEACH
Page 7 of 7
Capital Projects Permanent Funds
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2024
183
202
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,189,879$ 2,189,879$ 2,331,825$ 141,946$
Investment income 21,669 21,669 131,912 110,243
Net increase in fair value of investments - - 81,601 81,601
Total revenues 2,211,548 2,211,548 2,545,338 333,790
Expenditures:
Capital outlay 1,864,993 5,690,245 3,455,116 2,235,129
Net change in fund balance 346,555 (3,478,697) (909,778) 2,568,919
Fund balance, beginning 3,707,579 3,707,579 3,707,579 -
Fund balance, ending 4,054,134$ 228,882$ 2,797,801$ 2,568,919$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
184
203
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 1,846,884$ 1,846,884$ 2,197,540$ 350,656$
Investment income 3,321 3,321 31,060 27,739
Net increase in fair value of investments - - 15,656 15,656
Total revenues 1,850,205 1,850,205 2,244,256 394,051
Expenditures:
Capital outlay 2,000,000 1,834,308 1,834,308 -
Net change in fund balance (149,795) 15,897 409,948 394,051
Fund balance, beginning 416,051 416,051 416,051 -
Fund balance, ending 266,256$ 431,948$ 825,999$ 394,051$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
SB1 Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
185
204
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ -$ 268,095$ 268,095$
Investment income - - 22,756 22,756
Net increase in fair value of investments - - 13,575 13,575
Total revenues - - 304,426 304,426
Expenditures:
Public safety 65,000 65,000 17,393 47,607
Net change in fund balance (65,000) (65,000) 287,033 352,033
Fund balance, beginning 530,365 530,365 530,365 -
Fund balance, ending 465,365$ 465,365$ 817,398$ 352,033$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2024
186
205
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 376,000$ 281,638$ (94,362)$
Expenditures:
Public safety - 376,000 281,797 94,203
Net change in fund balance - - (159) (159)
Fund balance, beginning - - - -
Fund balance, ending -$ -$ (159)$ (159)$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2024
187
206
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees -$ -$ 299,476$ 299,476$
Investment income - - 35,197 35,197
Net increase in fair value of investments - - 23,346 23,346
Total revenues - - 358,019 358,019
Expenditures:
Capital outlay - 1,253,127 1,093,629 159,498
Net change in fund balance - (1,253,127) (735,610) 517,517
Fund balance, beginning 1,653,759 1,653,759 1,653,759 -
Fund balance, ending 1,653,759$ 400,632$ 918,149$ 517,517$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
188
207
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 202,950$ 202,950$ 190,664$ (12,286)$
Investment income 3,006 3,006 8,919 5,913
Net increase in fair value of investments - - 4,688 4,688
Total revenues 205,956 205,956 204,271 (1,685)
Expenditures:
Capital outlay - 379,207 21,435 357,772
Net change in fund balance 205,956 (173,251) 182,836 356,087
Fund balance, beginning 187,983 187,983 187,983 -
Fund balance, ending 393,939$ 14,732$ 370,819$ 356,087$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2024
189
208
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 385,974$ 1,074,362$ 95,221$ (979,141)$
Total revenues 385,974 1,074,362 95,221 (979,141)
Expenditures:
Community development 183,586 1,074,362 324,843 749,519
Debt service:
Principal 208,000 - - -
Interest and fiscal charges 2,548 - - -
Total expenditures 394,134 1,074,362 324,843 749,519
Net change in fund balance (8,160) - (229,622) (229,622)
Fund balance, beginning - - - -
Fund balance (deficit), ending (8,160)$ -$ (229,622)$ (229,622)$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
190
209
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 100,000$ 100,000$ 112,059$ 12,059$
Investment income 16,734 16,734 50,214 33,480
Net increase in fair value of investments - - 30,261 30,261
Total revenues 116,734 116,734 192,534 75,800
Expenditures:
Capital outlay - 216,319 - 216,319
Net change in fund balance 116,734 (99,585) 192,534 292,119
Fund balance, beginning 1,552,735 1,552,735 1,552,735 -
Fund balance, ending 1,669,469$ 1,453,150$ 1,745,269$ 292,119$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
191
210
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other taxes 670,563$ 670,563$ 963,173$ 292,610$
Investment income 153,829 153,829 293,008 139,179
Net increase in fair value of investments - - 180,497 180,497
Other revenue 40,000 40,000 66,962 26,962
Total revenues 864,392 864,392 1,503,640 639,248
Expenditures:
Public works 714,458 714,458 421,635 292,823
Capital outlay - 1,273,486 377,713 895,773
Total expenditures 714,458 1,987,944 799,348 1,188,596
Net change in fund balance 149,934 (1,123,552) 704,292 1,827,844
Fund balance, beginning 9,256,697 9,256,697 9,256,697 -
Fund balance, ending 9,406,631$ 8,133,145$ 9,960,989$ 1,827,844$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2024
192
211
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 250,000$ 250,000$ 241,105$ (8,895)$
Expenditures:
Public safety 200,000 200,000 241,105 (41,105)
Net change in fund balance 50,000 50,000 - (50,000)
Fund balance, beginning - - - -
Fund balance, ending 50,000$ 50,000$ -$ (50,000)$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2024
193
212
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other -$ -$ 44,976$ 44,976
Expenditures:
General government - 395,766 44,976 350,790
Net change in fund balance - (395,766) - 395,766
Fund balance, beginning - - - -
Fund balance, ending -$ (395,766)$ -$ 395,766$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Opioid Remediation Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
194
213
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 7,643,957$ 5,083,257$ (2,560,700)$
Investment income 36,532 36,532 1,743 (34,789)
Net increase in fair value of investments - - 1,097 1,097
Donations - 9,079,969 5,501,518 (3,578,451)
Other - 42,650 - (42,650)
Total revenues 36,532 16,803,108 10,587,615 (6,215,493)
Expenditures:
Capital outlay 8,502,000 20,805,623 10,805,241 10,000,382
Excess (deficiency) of revenues
over expenditures (8,465,468) (4,002,515) (217,626) 3,784,889
Other financing sources:
Transfers in - 4,643,968 4,643,968 -
Transfers out - (218,237) (218,237) -
Total other financing sources (uses) - 4,425,731 4,425,731 -
Net change in fund balance (8,465,468) 423,216 4,208,105 3,784,889
Fund balance, beginning (11,625) (11,625) (11,625) -
Fund balance, ending (8,477,093)$ 411,591$ 4,196,480$ 3,784,889$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Contributions Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
195
214
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Investment income 23,910$ 23,910$ 33,670$ 9,760$
Net increase in fair value of investments - - 21,022 21,022
Donations - 75,000 - (75,000)
Total revenues 23,910 98,910 54,692 (44,218)
Expenditures:
Community services 147,000 233,669 149,948 83,721
Net change in fund balance (123,090) (134,759) (95,256) 39,503
Fund balance, beginning 1,190,056 1,190,056 1,190,056 -
Fund balance, ending 1,066,966$ 1,055,297$ 1,094,800$ 39,503$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
FIIN Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
196
215
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services -$ -$ 61,917$ 61,917$
Licenses, permits and fees 150,000 150,000 150,000 -
Property income 32,118 32,118 24,669 (7,449)
Investment income - - 67,756 67,756
Net increase in fair value of investments - - 40,531 40,531
Donations 35,000 35,000 112,587 77,587
Other 16,672 16,672 66,266 49,594
Total revenues 233,790 233,790 523,726 289,936
Expenditures:
Community development - 20,000 - 20,000
Community services - 46,351 13,671 32,680
Total expenditures - 66,351 13,671 52,680
Net change in fund balance 233,790 167,439 510,055 342,616
Fund balance, beginning 2,000,507 2,000,507 2,000,507 -
Fund balance, ending 2,234,297$ 2,167,946$ 2,510,562$ 342,616$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Restricted Programs Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
197
216
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,728,303$ 4,920,550$ 2,965,303$ (1,955,247)$
Investment income 7,122 7,122 84,830 77,708
Net increase in fair value of investments - - 50,670 50,670
Total revenues 2,735,425 4,927,672 3,100,803 (1,826,869)
Expenditures:
Capital outlay 1,857,000 6,185,248 2,520,338 3,664,910
Excess (deficiency) of revenues
over expenditures 878,425 (1,257,576) 580,465 1,838,041
Other financing sources:
Transfers in - 15,290 15,290 -
Net change in fund balance 878,425 (1,242,286) 595,755 1,838,041
Fund balance, beginning 1,936,297 1,936,297 1,936,297 -
Fund balance, ending 2,814,722$ 694,011$ 2,532,052$ 1,838,041$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Measure M Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
198
217
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Property income 259,728$ 259,728$ 270,561$ 10,833$
Investment income - - 33,000 33,000
Net increase in fair value of investments - - 19,596 19,596
Total revenues 259,728 259,728 323,157 63,429
Expenditures:
Capital outlay - 302,041 85,228 216,813
Net change in fund balance 259,728 (42,313) 237,929 280,242
Fund balance, beginning 945,623 945,623 945,623 -
Fund balance, ending 1,205,351$ 903,310$ 1,183,552$ 280,242$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Oceanfront Encroachment Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
199
218
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 7,071,718$ 7,071,718$ -$
Expenditures:
General government - 3,535 3,535 -
Public works - 115,499 115,499 -
Capital outlay 10,100,000 1,726,042 1,726,042 -
Total expenditures 10,100,000 1,845,076 1,845,076 -
Excess (deficiency) of revenues
over expenditures (10,100,000) 5,226,642 5,226,642 -
Other financing uses:
Transfers out - (5,226,642) (5,226,642) -
Net change in fund balance (10,100,000) - - -
Fund balance, beginning - - - -
Fund balance (deficit), ending (10,100,000)$ -$ -$ -$
Budgeted Amounts
CITY OF NEWPORT BEACH
American Rescue Plan Act
Budgetary Comparison Schedule
For the Year Ended June 30, 2024
200
219
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 9,911$ 9,911$ -$
Expenditures:
Public safety - 9,911 9,911 -
Net change in fund balance - - - -
Fund balance, beginning - - - -
Fund balance, ending -$ -$ -$ -$
Budgeted Amounts
For the Year Ended June 30, 2024
Miscellaneous Grants Special Revenue Fund
Budgetary Comparison Schedule
CITY OF NEWPORT BEACH
201
220
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 360,000$ 360,000$ 307,890$ (52,110)$
Investment income - - 100,757 100,757
Net increase in fair value of investments - - 61,255 61,255
Total revenues 360,000 360,000 469,902 109,902
Expenditures:
General government - 90,000 72,433 17,567
Net change in fund balance 360,000 270,000 397,469 127,469
Fund balance, beginning 3,152,537 3,152,537 3,152,537 -
Fund balance, ending 3,512,537$ 3,422,537$ 3,550,006$ 127,469$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
PEG Fees Special Revenue Fund
For the Year Ended June 30, 2024
Budgeted Amounts
202
221
SUPPLEMENTARY INFORMATION
203
222
This page left blank intentionally.
204
223
INTERNAL SERVICE FUNDS
The Internal Service Funds are used to allocate the cost of providing
goods and services by one department to other departments on a cost
reimbursement basis.
The City of Newport Beach Internal Service Funds are listed below:
The Insurance Reserve Fund is used to account for the City's self-
insured general liability and workers' compensation program.
The Compensated Absences Fund is used to account for the City’s
accumulated liability for compensated absences.
The Retiree Insurance Fund is used to account for the cost of providing
post-employment health care benefits.
The Equipment Maintenance Fund is used to account for the cost of
maintaining and replacing the City’s rolling stock fleet, parking equipment,
coordinated communications system equipment, fire equipment and recreation
equipment.
The Information Technology Fund is used to account for the cost of
maintaining and replacing the City’s computers, printers, copiers and
telecommunication services to other departments.
205
224
Total
Insurance Compensated Retiree Equipment Information Internal
Assets Reserve Absences Insurance Maintenance Technology Service Funds
Current assets:
Cash and investments 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$
Receivables:
Accounts (net of allowance)26,216 - 857 - - 27,073
Interest 140,638 24,789 3,231 66,868 41,396 276,922
Inventories - - - 463,782 - 463,782
Prepaid items - - 69,865 57,837 668,196 795,898
Total current assets 44,220,002 7,777,777 1,005,981 21,331,868 13,556,330 87,891,958
Noncurrent assets:
Capital assets:
Equipment - - - 45,058,356 3,528,518 48,586,874
Intangible right to use equipment - - - - 363,725 363,725
Structures - - - 39,581 - 39,581
Software - - - - 4,360,625 4,360,625
Intangible right to use subscriptions - - - 1,723,597 547,676 2,271,273
Less accumulated depreciation/amortization - - - (29,481,200) (6,969,102) (36,450,302)
Total capital assets (net of accumulated
depreciation/amortization)- - - 17,340,334 1,831,442 19,171,776
Total assets 44,220,002 7,777,777 1,005,981 38,672,202 15,387,772 107,063,734
Deferred outflows of resources:
Deferred amount from pension plans - - - 917,183 1,838,389 2,755,572
Deferred amount from OPEB - - - 252,071 505,254 757,325
Total deferred outflows of resources - - - 1,169,254 2,343,643 3,512,897
Liabilities
Current liabilities:
Accounts payable 14,315,707 - - 208,793 71,239 14,595,739
Accrued payroll 11,853 151,607 185,588 43,861 110,774 503,683
Due to other funds - - 353,001 - - 353,001
Workers' compensation - current 4,035,291 - - - - 4,035,291
General liability - current 3,577,058 - - - - 3,577,058
Compensated absences - current - 3,539,392 - - - 3,539,392
Lease liability - current - - - - 73,074 73,074
Subscription liability - current - - - 169,441 35,391 204,832
Total current liabilities 21,939,909 3,690,999 538,589 422,095 290,478 26,882,070
Noncurrent liabilities:
Workers' compensation 19,415,272 - - - - 19,415,272
General liability 7,264,260 - - - - 7,264,260
Compensated absences - 10,108,774 - - - 10,108,774
Lease liability - - - - 67,340 67,340
Subscription liability - - - 1,300,946 - 1,300,946
Net pension liability - - - 2,238,339 4,486,532 6,724,871
Net OPEB liability - - - 202,999 406,900 609,899
Total noncurrent liabilities 26,679,532 10,108,774 - 3,742,284 4,960,772 45,491,362
Total liabilities 48,619,441 13,799,773 538,589 4,164,379 5,251,250 72,373,432
Deferred inflows of resources:
Deferred amount from pension plans - - - 9,675 19,388 29,063
Deferred amount from OPEB - - - 7,724 15,482 23,206
Total deferred inflows of resources - - - 17,399 34,870 52,269
Net Position
Invested in capital assets - - - 15,801,398 1,644,277 17,445,675
Unrestricted (4,399,439) (6,021,996) 467,392 19,858,280 10,801,018 20,705,255
Total net position (4,399,439)$ (6,021,996)$ 467,392$ 35,659,678$ 12,445,295$ 38,150,930$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Net Position
June 30, 2024
206
225
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Operating revenues:
Charges for services 13,827,679$ 2,999,486$ 4,359,593$ 8,530,463$ 8,213,165$ 37,930,386$
Employee contributions - - 24,130 - - 24,130
Other 206,884 - 3,055,688 462,496 610,000 4,335,068
Total operating revenues 14,034,563 2,999,486 7,439,411 8,992,959 8,823,165 42,289,584
Operating expenses:
Salaries and wages - - - 1,166,646 2,926,262 4,092,908
Depreciation/amortization - - - 3,464,942 635,818 4,100,760
Professional services - - - 125,250 732,945 858,195
Maintenance and supplies - - - 1,638,837 1,663,079 3,301,916
Fleet parts and supplies - - - 500,453 - 500,453
Telecommunication - - - - 194,919 194,919
System maintenance - - - 151,358 - 151,358
Hardware - - - - 381,955 381,955
Software - - - - 541,072 541,072
Workers' compensation 11,588,497 - - - - 11,588,497
Claims and judgments 25,766,286 - - - - 25,766,286
Compensated absences - 2,498,119 - - - 2,498,119
OPEB - - 11,002,082 - - 11,002,082
Other - - 2,425,284 - - 2,425,284
Total operating expenses 37,354,783 2,498,119 13,427,366 7,047,486 7,076,050 67,403,804
Operating income (loss)(23,320,220) 501,367 (5,987,955) 1,945,473 1,747,115 (25,114,220)
Nonoperating revenues:
Investment income 1,241,067 210,890 104,471 610,819 367,830 2,535,077
Net increase in fair value of investments 748,014 124,970 85,176 370,906 220,025 1,549,091
Gain on sale of capital assets - - - 284,690 237 284,927
Interest expense - - - (8,590) (1,394) (9,984)
Total nonoperating revenues 1,989,081 335,860 189,647 1,257,825 586,698 4,359,111
Income (loss) before transfers (21,331,139) 837,227 (5,798,308) 3,203,298 2,333,813 (20,755,109)
Transfers in - - 5,802,500 - - 5,802,500
Change in net position (21,331,139) 837,227 4,192 3,203,298 2,333,813 (14,952,609)
Net position, beginning 16,931,700 (6,859,223) 463,200 32,456,380 10,111,482 53,103,539
Net position, ending (4,399,439)$ (6,021,996)$ 467,392$ 35,659,678$ 12,445,295$ 38,150,930$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2024
207
226
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Cash flows from operating activities:
Receipts from user departments 13,801,463$ 2,999,486$ 4,359,641$ 8,532,040$ 8,213,165$ 37,905,795$
Payments to employees (4,522,234) (1,786,620) - (1,213,185) (3,006,263) (10,528,302)
Payments to suppliers (9,338,468) - (13,240,726) (2,830,262) (3,541,539) (28,950,995)
Other operating cash receipts 206,884 - 3,079,818 462,496 610,000 4,359,198
Net cash provided (used) by operating activities 147,645 1,212,866 (5,801,267) 4,951,089 2,275,363 2,785,696
Cash flows from noncapital financing activities:
Cash received from other funds - - 5,802,500 - - 5,802,500
Net cash provided by noncapital financing activities - - 5,802,500 - - 5,802,500
Cash flows from capital and related financing activities:
Acquisition of capital assets - - - (3,267,454) (413,241) (3,680,695)
Lease liabilities and related - - - - (63,152) (63,152)
Subscription liabilities and related - - - (177,102) (193,890) (370,992)
Proceeds from sale of capital assets - - - 284,690 237 284,927
Net cash (used) for capital and related financing activities - - - (3,159,866) (670,046) (3,829,912)
Cash flows from investing activities:
Investment income 1,997,065 331,927 188,657 979,575 584,423 4,081,647
Net cash provided by investing activities 1,997,065 331,927 188,657 979,575 584,423 4,081,647
Net increase in cash and cash equivalents 2,144,710 1,544,793 189,890 2,770,798 2,189,740 8,839,931
Cash and cash equivalents, beginning 41,908,438 6,208,195 742,138 17,972,583 10,656,998 77,488,352
Cash and cash equivalents, ending 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$
Cash and cash equivalents 44,053,148$ 7,752,988$ 932,028$ 20,743,381$ 12,846,738$ 86,328,283$
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)(23,320,220)$ 501,367$ (5,987,955)$ 1,945,473$ 1,747,115$ (25,114,220)$
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation - - - 3,464,942 635,818 4,100,760
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (26,216) - 48 1,577 - (24,591)
(Increase) in inventories - - - (25,209) - (25,209)
(Increase) decrease in prepaid items 49,178 - 189,376 (57,837) (60) 180,657
Increase (decrease) in accounts payable and accrued
payroll 14,238,236 (245,627) (2,736) (325,273) (2,111) 13,662,489
Increase in workers' compensation 7,054,410 - - - - 7,054,410
Increase in general liability 2,152,257 - - - - 2,152,257
Increase in compensated absences - 957,126 - - - 957,126
Increase in net pension liability and deferred cash flows - - - 35,627 71,410 107,037
(Decrease) in net OPEB liability and deferred cash flows - - - (88,211) (176,809) (265,020)
Total adjustments 23,467,865 711,499 186,688 3,005,616 528,248 27,899,916
Net cash provided (used) by operating activities 147,645$ 1,212,866$ (5,801,267)$ 4,951,089$ 2,275,363$ 2,785,696$
Noncash investing, capital, and financing activities:
Net increase in fair value of investments 748,014$ 124,970$ 85,176$ 370,906$ 220,025$ 1,549,091$
Obtaining an intangible right to use lease asset - - - - 9,837 9,837
Total of noncash activities 748,014$ 124,970$ 85,176$ 370,906$ 229,862$ 1,558,928$
CITY OF NEWPORT BEACH
Combining Statement of Cash Flows
For the Year Ended June 30, 2024
Internal Service Funds
208
227
SUPPLEMENTARY INFORMATION
209
228
This page left blank intentionally.
210
229
CUSTODIAL FUNDS
Custodial Funds are used to account for assets held by the City in a trustee capacity, or as an agent for other government entities, private organizations, or individuals. The City of Newport Beach Custodial Funds are listed below:
The Special Assessment District Fund is used to account for funds received from affected property owners and payable to holders of 1911 Act and 1915 Act special assessment bonds.
The Tourism Business Improvement Fund is used to account for the Newport Beach Tourism Business Improvement District’s special assessment on short term room rental revenue collected by the City for Visit Newport Beach Inc. The Other Business Improvement Fund is used to account for monies
collected from local business districts for district property improvements and business enhancement. The Police Custodial Fund is used to account for monies received by the City’s police department in a custodial capacity, such as warrants and items pending
adjudication. The Flexible Spending Account Fund is used to account for monies withheld by the City from employees’ wages based on their voluntary enrollment in flexible spending accounts.
211
230
Custodial Funds
Special Tourism Other Flexible Total
Assessment Business Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds
Assets
Cash and investments 25,705$ 6,420$ 5,605$ 247,619$ -$ 285,349$
Restricted cash and investments with fiscal agent 4,245,553 - - - - 4,245,553
Receivable:
Interest 86 - - - - 86
Intergovernmental receivable 45,980 - - - - 45,980
Total assets 4,317,324 6,420 5,605 247,619 - 4,576,968
Liabilities
Due to others 516 6,420 5,605 645 - 13,186
Total liabilities 516 6,420 5,605 645 - 13,186
Net Position
Restricted for:
Individuals, organizations, and other governments 4,316,808 - - 246,974 - 4,563,782
Total net position 4,316,808$ -$ -$ 246,974$ -$ 4,563,782$
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Fiduciary Net Position
June 30, 2024
212
231
Custodial Funds
Special Tourism Other Flexible Total
Assessment Business Business Police Spending Custodial
District Improvement Improvement Custodial Account Funds
Additions
Special assessments 3,277,101$ -$ -$ -$ -$ 3,277,101$
Investment earnings 151,966 - - 866 - 152,832
Other 1,080,001 - - 85,059 - 1,165,060
Total additions 4,509,068 - - 85,925 - 4,594,993
Deductions
Debt service 2,007,651 - - - - 2,007,651
Administrative 96,944 - - - - 96,944
Other - - - 127,861 - 127,861
Total deductions 2,104,595 - - 127,861 - 2,232,456
Net increase (decrease) in fiduciary net position 2,404,473 - - (41,936) - 2,362,537
Net position, beginning of year, as previously reported 1,912,335 - - 288,910 25,728 2,226,973
Restatement for removal of Flexible Spending Account Fund - - - - (25,728) (25,728)
Net position, beginning of year, as restated 1,912,335 - - 288,910 - 2,201,245
Net position, end of year 4,316,808$ -$ -$ 246,974$ -$ 4,563,782$
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2024
213
232
This page left blank intentionally.
214
233
215
234
This page left blank intentionally.
216
235
FINANCIAL TRENDS
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules contain trend information illustrating how the City’s financial performance and well-being have changed over time:
• Net Position by Component
• Changes in Net Position
• Fund Balances of Governmental Funds
• Changes in Fund Balance of Governmental Funds
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.
217
236
20151 20162 20173 20184
Net investment in capital assets 2,176,644,408$ 2,193,773,102$ 2,201,552,683$ 2,208,832,391$
Restricted 45,689,702 44,033,677 45,753,736 49,791,908
Unrestricted (150,532,773) (130,468,268) (133,461,197) (122,024,754)
2,071,801,337$ 2,107,338,511$ 2,113,845,222$ 2,136,599,545$
Business-type activities:
Net investment in capital assets 113,914,514$ 117,055,576$ 116,238,944$ 119,375,596$
Unrestricted 21,756,124 23,430,189 28,890,311 29,183,382
135,670,638$ 140,485,765$ 145,129,255$ 148,558,978$
Primary government:
Net investment in capital assets 2,290,558,922$ 2,310,828,678$ 2,317,791,627$ 2,328,207,987$
Restricted 45,689,702 44,033,677 45,753,736 49,791,908
Unrestricted (128,776,649) (107,038,079) (104,570,886) (92,841,372)
2,207,471,975$ 2,247,824,276$ 2,258,974,477$ 2,285,158,523$
1
2
3
4
5
6
The City of Newport Beach implemented GASB 100 for the fiscal year ended June 30, 2024.
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2022 data varies from trend due to receipt of revenues such as property taxes and sales taxes that were not spent
or restricted by the end of the fiscal year.
The City of Newport Beach implemented GASB 63 and GASB 65 for the fiscal year ended June 30, 2013.
The City of Newport Beach implemented GASB 68 for the fiscal year ended June 30, 2015.
The City of Newport Beach implemented GASB 75 for the fiscal year ended June 30, 2018.
The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022.
Reflects restatement of net position due to unbilled receivables adjustments related to fiscal year ended June 30,
2023.
Fiscal Year
Governmental activities:
Total governmental activities
Total business-type activities
Total primary government
Reflects restatement of net position due to deferred outflow adjustments related to fiscal year ended June 30, 2017.
Reflects restatement of net position due to implementation of GASB 75 in fiscal year ended June 30, 2018.
Reflects restatement of net position due to adjustments for capital assets and compensated absences liability in
fiscal year ended June 30, 2019.
Reflects restatement of net position due to compensated absences and deferred outflow adjustments related to fiscal year ended June 30, 2016.
The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
218 237
2019 2020 2021 2022 20236 2024
2,218,040,304$ 2,217,852,660$ 2,227,572,605$ 2,223,773,786$ 2,256,305,577$ 2,275,099,514$
56,426,811 67,708,225 67,189,020 78,100,496 79,152,428 123,444,563
(102,035,181) (90,214,086) (72,301,558) (8,183,288) 20,117,377 28,001,461
2,172,431,934$ 2,195,346,799$ 2,222,460,067$ 2,293,690,994$ 2,355,575,382$ 2,426,545,538$
119,346,350$ 120,291,689$ 124,775,772$ 128,244,924$ 131,015,969$ 132,331,781$
30,331,669 30,276,662 27,039,499 28,559,633 25,105,814 20,202,940
149,678,019$ 150,568,351$ 151,815,271$ 156,804,557$ 156,121,783$ 152,534,721$
2,337,386,654$ 2,338,144,349$ 2,352,348,377$ 2,352,018,710$ 2,387,321,546$ 2,407,431,295$
56,426,811 67,708,225 67,189,020 78,100,496 79,152,428 123,444,563
(71,703,512) (59,937,424) (45,262,059) 20,376,345 5 45,223,191 48,204,401
2,322,109,953$ 2,345,915,150$ 2,374,275,338$ 2,450,495,551$ 2,511,697,165$ 2,579,080,259$
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
219 238
2015 2016 2017 2018
24,558,041$ 19,335,275$ 20,443,569$ 19,011,099$
96,945,872 91,046,455 102,494,314 107,647,562
45,774,939 45,443,988 54,039,601 47,615,000
10,073,248 9,943,868 12,056,086 12,377,394
22,418,287 22,700,052 26,583,440 27,307,115
7,711,334 7,615,094 7,472,188 7,381,743
Total governmental activities expenses 207,481,721 196,084,732 223,089,198 221,339,913
21,175,954 21,605,197 22,004,013 23,724,918
3,452,398 3,818,165 4,218,926 4,158,155
Total business-type activities expenses 24,628,352 25,423,362 26,222,939 27,883,073
Total primary government expenses 232,110,073 221,508,094 249,312,137 249,222,986
General government 3,647,210 3,722,557 5,089,123 5,355,887
Public safety 19,386,017 19,108,222 19,899,242 20,733,883
Public works 5,276,991 5,319,510 5,214,426 5,789,579
Community development 8,608,645 8,419,588 10,838,114 9,956,226
Community services 13,667,775 13,964,018 13,653,466 13,974,329
Operating grants and contributions:10,673,286 17,826,914 11,632,188 11,943,941
Capital grants and contributions:38,157,665 1 2,717,504 27,993,317 1 1,815,464
99,417,589 71,078,313 94,319,876 69,569,309
Water 27,705,129 24,499,952 25,371,307 26,931,193
Wastewater 3,326,362 3,065,762 3,161,114 3,445,772
Operating grants and contributions:- - - -
31,031,491 27,565,714 28,532,421 30,376,965
130,449,080 98,644,027 122,852,297 99,946,274
(108,064,132) (125,006,419) (128,769,322) (151,770,604)
6,403,139 2,142,352 2,309,482 2,493,892
(101,660,993)$ (122,864,067)$ (126,459,840)$ (149,276,712)$
General revenues and other changes in net position:
Property tax 84,121,461$ 91,516,611$ 96,964,060$ 101,593,290$
Sales tax 24,832,412 33,937,986 33,702,895 36,373,253
Sales tax in-lieu 8,046,424 2,870,474 - -
Transient occupancy tax 20,369,158 21,083,199 22,382,361 22,857,737
Business license tax 4,141,282 4,024,386 4,149,016 4,282,935
Franchise tax 4,189,130 4,047,584 4,026,005 4,228,469
Other taxes 354,919 327,009 358,209 3,346,987
Investment income 437,272 584,259 589,001 632,808
Net increase (decrease) in fair value of investments 61,337 376,311 - -
Other 3,161,567 4,001,486 2,290,482 3,416,348
Transfers - - (3,500,000) -
149,714,962 162,769,305 160,962,029 176,731,827
Investment income 123,445 216,576 77,752 184,906
Net increase (decrease) in fair value of investments 34,921 148,527 - -
Other - 2,375,000 - -
Capital contributions - 22,516 - - Transfers - - 3,500,000 -
158,366 2,762,619 3,577,752 184,906
149,873,328 165,531,924 164,539,781 176,916,733
41,650,830 37,762,886 32,192,707 24,961,223
6,561,505 4,904,971 5,887,234 2,678,798
48,212,335$ 42,667,857$ 38,079,941$ 27,640,021$
1
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Data varies from trend because of one-time receipt of developer contributions.
Changes in net position
Governmental activities
Business-type activities
Total primary government
Total primary government
Total primary government program revenues
Net revenues (expenses):
Governmental activities
Business-type activities
Total net revenues (expenses)
Governmental activities:
Taxes:
Total governmental activities
Business-type activities:
Total business-type activities
Total governmental activities program revenues
Business-type activities:
Charges for services:
Total business-type activities program revenues
Business-type activities:
Water
Wastewater
Program revenues:
Governmental activities:
Charges for services:
Interest on long-term debt
Expenses:
Governmental activities:
General government
Public safety
Public works
Community development
Community services
220 239
2019 2020 2021 2022 2023 2024
20,549,224$ 20,714,050$ 20,177,482$ 19,374,179$ 26,911,510$ 28,392,550$
111,556,065 119,194,302 119,184,958 104,767,466 121,309,057 151,625,944
53,339,878 60,054,860 63,689,155 65,031,715 75,904,138 88,359,562
11,493,204 12,842,020 12,157,226 9,664,500 13,048,442 16,813,900
27,758,097 26,668,079 28,214,205 24,508,702 27,937,349 33,034,132
7,187,971 7,064,521 7,321,612 6,877,577 6,666,044 6,215,237
231,884,439 246,537,832 250,744,638 230,224,139 271,776,540 324,441,325
26,898,075 27,387,120 28,943,243 27,117,471 30,701,834 37,322,293
4,222,228 4,291,755 5,223,245 4,094,448 5,343,891 6,959,273
31,120,303 31,678,875 34,166,488 31,211,919 36,045,725 44,281,566
263,004,742 278,216,707 284,911,126 261,436,058 307,822,265 368,722,891
5,887,265 3,846,962 2,914,007 3,625,809 12,386,628 15,953,090
21,979,376 22,232,248 22,038,904 23,156,703 26,273,944 27,903,642
5,778,441 5,054,694 5,067,478 7,538,103 8,770,525 9,397,103
9,902,445 9,599,848 10,491,970 11,119,757 11,269,905 10,849,048
13,556,360 16,936,285 17,601,288 22,302,788 15,753,446 17,370,410
14,021,506 14,659,016 20,361,620 16,800,039 20,131,513 34,497,961
6,638,356 7,352,407 7,658,387 8,693,429 5,809,562 35,646,295
77,763,749 79,681,460 86,133,654 93,236,628 100,395,523 151,617,549
26,843,751 27,100,429 30,739,726 32,104,202 32,033,631 33,842,356
4,069,265 4,110,815 4,618,186 4,825,249 4,666,685 5,274,889
- - - 116,629 - 115,499
30,913,016 31,211,244 35,357,912 37,046,080 36,700,316 39,232,744
108,676,765 110,892,704 121,491,566 130,282,708 137,095,839 190,850,293
(154,120,690) (166,856,372) (164,610,984) (136,987,511) (171,381,017) (172,823,776)
(207,287) (467,631) 1,191,424 5,834,161 654,591 (5,048,823)
(154,327,977)$ (167,324,003)$ (163,419,560)$ (131,153,350)$ (170,726,426)$ (177,872,599)$
108,365,261$ 113,313,535$ 119,157,057$ 124,335,985$ 138,358,730$ 146,136,873$
37,168,063 36,232,969 38,956,275 46,164,860 46,552,459 43,444,542
- - - - - - 24,697,446 21,097,384 16,886,197 26,677,331 30,201,649 31,736,961
4,428,440 4,882,419 4,481,349 4,363,145 4,901,385 4,896,557
4,286,496 4,394,156 4,204,224 4,561,278 4,996,526 5,152,384
2,633,720 2,592,369 4,166,549 4,333,071 181,800 203,135
2,644,319 2,621,488 2,603,982 1,995,214 3,208,250 5,834,247 2,234,249 2,520,033 (2,086,189) (6,856,640) (687,766) 3,534,164
3,495,085 2,116,884 3,354,808 2,644,194 5,552,372 2,855,069
- - - - - -
189,953,079 189,771,237 191,724,252 208,218,438 233,265,405 243,793,932
713,970 732,099 525,295 345,218 520,736 893,332
612,358 625,864 (469,799) (1,190,093) (262,867) 568,429
- - - - - -
- - - - - - - - - - - -
1,326,328 1,357,963 55,496 (844,875) 257,869 1,461,761
191,279,407 191,129,200 191,779,748 207,373,563 233,523,274 245,255,693
35,832,389 22,914,865 27,113,268 71,230,927 61,884,388 70,970,156
1,119,041 890,332 1,246,920 4,989,286 912,460 (3,587,062)
36,951,430$ 23,805,197$ 28,360,188$ 76,220,213$ 62,796,848$ 67,383,094$
Fiscal Year
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
221 240
2015 2016 2017 2018
General fund:
Nonspendable 15,784,396$ 15,210,896$ 14,434,017$ 14,050,930$
Restricted 5,389,810 3,083,133 3,797,009 4,412,302
Committed 11,847,852 2,726,020 1 10,570,638 2 13,444,487
Assigned 1,421,225 4,201,311 567,132 590,368
Unassigned 55,509,258 56,618,041 60,009,244 61,415,049
Total general fund 89,952,541$ 81,839,401$ 1 89,378,040$ 2 93,913,136$
All other governmental funds:
Nonspendable 4,669,269$ 4,629,781$ 4,666,256$ 4,787,243$
Restricted 29,842,384 33,662,859 31,950,139 38,629,419
Committed 26,159,261 40,248,977 49,510,047 41,731,742
Unassigned (12,495,729) (15,422,984) (6,308,331) (376,162)
Total all other governmental funds 48,175,185$ 63,118,633$ 79,818,111$ 84,772,242$
Total all governmental funds 138,127,726$ 144,958,034$ 169,196,151$ 178,685,378$
1
2
3
4
5
6
Fiscal Year
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Data varies from trend due to the moving of general fund capital projects to a separate capital project fund.
Data varies from trend due to additional funds set aside for seawall construction and pension-related items.
Data varies from trend due to the relocation of restricted funds to special revenue funds.
Data varies from trend due to the City's absence of fund balance not restricted or committed to be used for
specific purposes in fiscal year ended June 30, 2022.
Data varies from trend due to additional funds set aside mainly in the Facilities Financial Planning Reserve Fund and Unrestricted Capital Improvements Fund.
Data varies from trend due to issuance of special Assessment District bonds.
222 241
2019 2020 2021 2022 2023 2024
13,147,221$ 11,864,115$ 10,637,097$ 9,407,143$ 8,239,567$ 7,052,603$
4,757,437 5,710,434 4,876,025 -3 - -
13,335,675 2,210,811 3,235,746 4,429,573 5,465,426 6,786,845
1,199,682 2,598,828 1,489,350 -4 - -
64,146,123 76,699,284 85,715,180 83,302,665 77,737,532 82,601,740
96,586,138$ 99,083,472$ 105,953,398$ 97,139,381$ 91,442,525$ 96,441,188$
4,715,545$ 4,646,529$ 4,707,330$ 4,690,430$ 4,650,931$ 4,771,150$
45,958,167 53,310,518 63,914,627 73,013,208 73,657,409 112,762,753 6
40,732,124 48,032,259 47,863,154 73,243,534 5 78,218,834 81,317,521
(253) (50,137) (136,299) (119,371) (11,625) (229,781)
91,405,583$ 105,939,169$ 116,348,812$ 150,827,801$ 156,515,549$ 198,621,643$
187,991,721$ 205,022,641$ 222,302,210$ 247,967,182$ 247,958,074$ 295,062,831$
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Fund Balances
Total General Fund
Total all other Governmental Funds
223 242
2015 2016 2017 2018
Revenues:
Taxes 146,664,903$ 158,386,385$ 162,184,218$ 171,982,240$
Intergovernmental 11,813,208 17,262,147 17,073,653 16,148,754
Licenses, permits and fees 14,676,754 6,571,123 9,844,908 6,405,668
Charges for services 16,914,210 18,827,991 19,197,065 19,828,786
Fines and forfeitures 3,732,405 3,684,602 3,590,700 3,181,823
Investment income 928,729 1,157,539 772,546 1,143,210
Net increase (decrease) in fair value of investments 177,485 769,460 - -
Property income 21,406,667 22,259,425 23,553,188 25,430,217
Donations 22,249,427 4,190,822 16,827,889 414,123
Special assessments - - - -
Other 6,984,418 2,982,924 2,277,322 2,893,770
Total revenues 245,548,206 236,092,418 255,321,489 247,428,591
Expenditures:
Current:
General government 14,060,512 14,629,672 15,086,397 16,099,310
Public safety 94,568,122 96,225,784 98,750,981 109,760,129
Public works 33,694,578 36,000,905 35,961,024 38,012,230
Community development 9,876,706 10,913,205 11,696,779 12,979,656
Community services 20,235,546 21,784,680 23,607,284 25,538,966
Capital outlay 47,169,671 31,934,463 30,822,972 24,054,866
Debt service:
Principal 4,183,000 4,272,000 4,401,000 3,335,000
Interest and fiscal charges 7,957,811 7,839,341 7,704,957 7,617,107
Total expenditures 231,745,946 223,600,050 228,031,394 237,397,264
13,802,260 12,492,368 27,290,095 10,031,327
Other financing sources (uses):
Transfers in 53,281,956 48,523,132 45,342,446 45,308,862
Transfers out (57,431,956)(54,185,192)(49,390,226)(45,850,962)
Proceeds from sale - - 995,802 -
Certificates of participation issued - - - -
Premium on certificates of participation issued - - - -
Proceeds from loan issuance 1,339,000 - - -
Payment to refunded loan escrow agent (1,339,000) - - -
Leases (as lessee)- - - -
Inception of subscription-based IT arrangements - - - -
(4,150,000)(5,662,060)(3,051,978)(542,100)
Net change in fund balances 9,652,260$ 6,830,308$ 24,238,117$ 9,489,227$
Debt service as a percentage of
6.6%7.2%6.0%5.3%
1
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Data varies from trend due to implementation of GASB 96 for the fiscal year ended June 30, 2023.
noncapital expenditures
Excess (deficiency) of revenues over (under) expenditures
Total other financing sources (uses)
Fiscal Year
224 243
2019 2020 2021 2022 2023 2024
183,455,182$ 182,983,069$ 188,351,057$ 211,259,402$ 226,067,296$ 232,533,623$
15,818,543 12,672,931 22,233,872 19,683,307 21,080,285 27,715,232
6,302,603 5,783,862 6,566,555 6,995,700 6,719,969 6,688,111
19,472,866 21,125,622 18,434,439 22,897,475 25,214,184 25,217,364
3,347,714 3,509,883 3,923,726 4,191,518 3,892,875 4,195,196
3,490,992 3,765,753 3,201,376 2,756,712 4,525,340 9,386,746
2,938,136 3,477,299 (2,634,682) (8,900,762) (465,873) 4,584,645
26,674,107 25,651,360 28,842,374 33,770,750 35,830,362 41,198,758
402,709 795,561 5,491,871 1,805,249 717,157 6,070,830
- - - 8,086,594 4,948,430 26,843,142
5,173,716 5,950,279 3,504,103 1,441,813 3,412,302 1,175,255
267,076,568 265,715,619 277,914,691 303,987,758 331,942,327 385,608,902
16,769,920 15,968,085 17,154,507 17,397,786 20,680,878 22,007,758
116,054,531 118,290,847 126,006,313 127,590,486 132,441,032 140,132,544
44,132,877 45,730,965 46,817,293 54,293,534 56,046,234 65,532,190
12,310,621 12,612,751 12,996,840 13,021,562 14,735,582 15,734,543
26,372,495 24,474,242 26,745,189 26,421,141 27,558,760 30,060,134
26,347,312 20,376,106 33,728,085 28,603,393 68,434,127 50,776,034
3,470,000 3,576,000 3,247,000 5,138,250 5,296,166 5,335,081
7,428,469 7,265,703 7,306,143 7,141,264 6,908,693 6,698,344
252,886,225 248,294,699 274,001,370 279,607,416 332,101,472 336,276,628
14,190,343 17,420,920 3,913,321 24,380,342 (159,145)49,332,274
54,664,532 40,373,981 70,379,824 76,061,564 128,499,591 97,432,054
(59,548,532)(40,763,981)(65,965,012)(74,776,934)(128,879,043)(103,234,554)
- - - - - -
- - 7,860,000 - - -
- - 1,373,936 - - -
- - - - - -
- - - - - -
- - - - - 3,259,414
- - - - 529,489 1 315,569
(4,884,000)(390,000)13,648,748 1,284,630 150,037 (2,227,517)
9,306,343$ 17,030,920$ 17,562,069$ 25,664,972$ (9,108)$ 47,104,757$
4.8%4.8%4.2%4.8%4.5%4.2%
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
225 244
This page left blank intentionally.
226
245
REVENUE CAPACITY
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules present factors affecting the City’s ability to generate its
own revenue and its most significant local revenue source, the property tax:
• Assessed Value and Estimated Actual Value of Taxable Property
• Direct and Overlapping Property Tax Rates
• Principal Property Tax Payers
• Property Tax Levies and Collections
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
227
246
Fiscal Year Ended
June 30 Residential Commercial Other Unsecured Total Taxable Assessed Value Change Total Direct Tax Rate
2015 36,814,891,583 5,007,508,388 1,348,136,131 1,581,520,801 44,752,056,903 5.69%1.000%
2016 39,263,791,190 5,264,898,550 1,394,764,145 1,465,016,213 47,388,470,098 5.89%1.000%
2017 41,834,060,284 5,539,551,197 1,398,481,252 1,569,593,832 50,341,686,565 6.23%1.000%
2018 44,862,969,434 5,953,148,011 1,499,414,812 1,464,683,763 53,780,216,020 6.83%1.000%
2019 48,246,937,786 6,466,645,074 1,474,416,367 1,513,162,553 57,701,161,781 7.29%1.000%
2020 50,791,887,238 6,807,750,346 1,552,189,492 1,592,979,478 60,744,806,554 5.27%1.000%
2021 53,636,707,086 6,979,031,018 1,428,005,141 1,645,923,436 63,689,666,681 4.85%1.000%
2022 56,171,689,696 7,152,717,180 1,745,857,017 1,509,466,705 66,579,730,598 4.54%1.000%
2023 60,461,442,254 7,647,078,297 1,489,884,026 1,731,351,434 71,329,756,011 7.13%1.000%
2024 64,292,506,871 8,048,003,322 1,681,329,931 1,908,193,032 75,930,033,156 6.45%1.000%
NOTE:
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
In 1978,the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of
the property being taxed.Each year,the assessed value of property may be increased by an "inflation factor"(limited to a maximum increase of 2%).With fewexceptions, property is only re-assessed as a result of new construction activity or at the time it is sold to a new owner.At that point,the property is reassessed
based upon the added value of the construction or at the purchase price or economic value of the property sold.The assessed valuation data shown aboverepresents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
Secured
228 247
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$ 1.000$
Total City Direct Rate 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Overlapping Rates:
Water districts 0.047 0.047 0.047 0.047 0.047 0.032 0.047 0.047 0.047 0.051 0.182 0.183 0.173 0.176 0.161 0.173 0.186 0.170 0.175 0.158
Total Overlapping Rate 0.229 0.230 0.220 0.223 0.208 0.205 0.233 0.217 0.222 0.209
Total Direct & Overlapping Rate 1.229$ 1.230$ 1.220$ 1.223$ 1.208$ 1.205$ 1.233$ 1.217$ 1.222$ 1.209$
NOTE:
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of other debt obligations.
School districts
City Direct Rates:
City basic rate
Fiscal Year
229 248
Taxpayer Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value
The Irvine Company 833,108,564$ 1 1.10%1,835,109,685$ 1 4.10%
PH Finance LLC 346,858,756 2 0.46%N/A -0.00%
Villas at Fashion Island LLC 285,563,203 3 0.38%N/A -0.00%
Fashion Island Retail LLC 242,270,076 4 0.32%N/A -0.00%
Newport Center Hotel LLC 232,256,357 5 0.31%N/A -0.00%
HG Newport Owner LLC 193,028,546 6 0.25%N/A -0.00%
520 Newport Center Drive LLC 190,606,965 7 0.25%N/A -0.00%
Newport Bluffs LLC 173,753,982 8 0.23%146,556,073 3 0.33%
650 Newport Center Drive LLC 172,594,406 9 0.23%N/A -0.00%
Bay Island Club 159,120,374 10 0.21%82,471,372 10 0.18%
2,829,161,229$ 3.73%2,064,137,130$ 4.61%
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
2024 2015
230 249
CITY OF NEWPORT BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Year Ended
June 30
Taxes Levied for the Fiscal
Year Amount 1 Percent of
Levy
Collections in Subsequent
Years 2 Amount
Percent of
Levy
2015 83,843,488 82,191,604 98.03%642,292 82,833,896 98.80%
2016 84,166,940 81,762,526 97.14%612,863 82,375,389 97.87%
2017 86,264,321 84,019,053 97.40%574,124 84,593,177 98.06%
2018 92,139,181 90,279,099 97.98%581,969 90,861,068 98.61%
2019 98,471,700 96,356,203 97.85%646,203 97,002,406 98.51%
2020 102,636,451 100,701,002 98.11%886,688 101,587,690 98.98%
2021 107,647,017 105,781,072 98.27%862,772 106,643,844 99.07%
2022 113,318,692 110,354,271 97.38%789,969 111,144,240 98.08%
2023 123,844,578 121,011,910 97.71%1,020,161 122,032,071 98.54%
2024 129,506,001 126,637,893 97.79%- 3 126,637,893 97.79%
1
2
3
Source: Orange County Auditor Controller's Office
The total amount of Fiscal Year 2024 delinquent taxes collected in subsequent years was not available as of thedate the information was collected for the City's Annual Comprehensive Financial Report.
Collected within the Fiscal
Year of Levy Total Collections to Date
Exclusive of penalty charges.
Net collections reflect deductions for refunds and impoundments.
231 250
This page left blank intentionally.
232
251
DEBT CAPACITY
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules exhibit the City’s levels of outstanding debt over time, to
help readers assess the affordability of the current level of outstanding debt, and the City’s ability to issue additional debt:
• Ratios of Outstanding Debt by Type
• Ratios of General Bonded Debt Outstanding
• Direct and Overlapping Debt
• Legal Debt Margin Information
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
233
252
This page left blank intentionally.
234
253
Fiscal Year Ended June 30
Certificates of
Participation 1
Pre-Annexation Agreement CDBG Loan Leases 3
Subscription-based Information Technology
Arrangements 3
Total Governmental Activities Leases 3 Total Business-type Activities Total Primary Government
Percentage of Personal
Income 2 Debt Per
Capita 2
2015 117,197,765 2,400,000 1,339,000 - - 120,936,765 - - 120,936,765 1.77%1,386
2016 114,137,212 1,200,000 1,207,000 - - 116,544,212 - - 116,544,212 1.77%1,383
2017 110,956,659 - 1,066,000 - - 112,022,659 - - 112,022,659 1.66%1,319
2018 107,651,106 - 916,000 - - 108,567,106 - - 108,567,106 1.48%1,245
2019 104,220,553 - 756,000 - - 104,976,553 - - 104,976,553 1.36%1,204
2020 100,695,000 - 585,000 - - 101,280,000 - - 101,280,000 1.24%1,181
2021 106,781,026 - 403,000 - - 107,184,026 - - 107,184,026 1.31%1,248
2022 102,698,895 - 208,000 13,321,040 - 116,227,935 1,512,574 1,512,574 117,740,509 1.34%1,406
2023 98,616,764 - - 12,274,149 2,235,132 113,126,045 3,820,774 3,820,774 116,946,819 1.27%1,402
2024 94,389,633 - - 14,339,382 1,832,755 110,561,770 3,776,654 3,776,654 114,338,424 1.22%1,387
1
2 These ratios are calculated using personal income and population for the prior calendar year.
3 The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Amounts include any applicable bond premium.
Governmental Activities
Note: This schedule excludes claims and judgments, employee compensated absence, pension, OPEB, and Early Retirement Incentive Plan liabilities. Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Business-type Activities
235 254
Fiscal Year
Ended
June 30
Certificates of
Participation1
Amounts
Restricted for
Debt Service Total
Percent of
Assessed
Value2
General
Bonded Debt
Per Capita
2015 117,197,765 (2,350,210) 114,847,555 0.26%1,316
2016 114,137,212 (2,362,904) 111,774,308 0.24%1,326
2017 110,956,659 (2,364,034) 108,592,625 0.22%1,279
2018 107,651,106 (2,384,338) 105,266,768 0.20%1,207
2019 104,220,553 (2,362,228) 101,858,325 0.18%1,168
2020 100,695,000 (1,159,389) 99,535,611 0.16%1,160
2021 106,781,026 (2,255,795) 104,525,231 0.16%1,217
2022 102,698,895 (2,199,363) 100,499,532 0.15%1,200
2023 98,616,764 (2,183,979) 96,432,785 0.14%1,156
2024 94,389,633 (2,323,115) 92,066,518 0.12%1,117
1
2
Assessed value was used because the actual value of taxable property is not readily available in
the State of California.
CITY OF NEWPORT BEACH
Ratios of General Bonded Debt
Last Ten Fiscal Years
Amounts include any applicable bond premium.
236 255
City Net Assessed Valuation:75,930,033,156$
Percentage
Applicable (1)Outstanding Debt
6/30/24
Estimated Share of
Overlapping DebtOVERLAPPING DEBT:Metropolitan Water District 1.961%18,210,000$ 357,098$ Coast Community College District 35.244%886,956,084 312,598,802 Rancho Santiago Community College District 2.678%154,276,441 4,131,523
Rancho Santiago Community College District School Facilities Improvement District No. 1 5.019%144,765,000 7,265,755
Laguna Beach Unified School District 14.567%9,940,000 1,447,960 Laguna Beach Unified School District Community Facilities District No. 98-1 100.000%6,410,000 6,410,000 Newport Mesa Unified School District 73.630%215,994,635 159,036,850 Santa Ana Unified School District 6.180%409,228,633 25,290,330
Irvine Ranch Water District Improvement Districts 2.671% -
100.000%399,676,768 43,283,102
100.000%13,300,000 13,300,000
100.000%8,175,000 8,175,000
City of Newport Beach 1915 Act Bonds 100.000%37,046,036 37,046,036 Orange County Newport Coast Assessment District No. 01-1 100.000%3,182,000 3,182,000 Orange County Newport Coast Reassessment District No. 17-1R 100.000%19,270,000 19,270,000 Orange County General Fund Obligations 9.862%440,385,000 43,430,769 Orange County Board of Education General Fund Obligations 9.862%10,030,000 989,159
Coast Community College District General Fund Obligations 35.244%1,075,000 378,873
Coast Community College District Pension Obligation Bonds 35.244%925,000 326,007 Santa Ana Unified School District General Fund Obligations 6.180%42,399,216 2,620,272 TOTAL OVERLAPPING DEBT 2,821,244,813$ 688,539,536$
DIRECT DEBT:City of Newport Beach Certificates of Participation 100.000%94,389,633$ 94,389,633$ Workers' compensation payable 100.000%23,450,563 23,450,563
Claims and judgments payable 100.000%10,841,318 10,841,318
Compensated absences 100.000%13,648,166 13,648,166
Leases (3)100.000%14,339,382 14,339,382
Subscription-based Information Technology Arrangements (3)100.000%1,832,755 1,832,755 TOTAL DIRECT DEBT 158,501,817$ 158,501,817$
TOTAL DIRECT AND OVERLAPPING DEBT 847,041,353$
GROSS COMBINED TOTAL DEBT (2)847,041,353$
(1)
(2)
(3)
Ratios to 2023-24 Net Assessed Valuation:Total Overlapping Debt 0.91%Total Direct Debt ($158,501,817)0.21%Gross Combined Total Debt 1.12%
Source: California Municipal Statistics, Inc.
The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
CITY OF NEWPORT BEACH
Direct and Overlapping Debt
June 30, 2024
Bonita Canyon Public Facilities Financing Authority Community Facilities District No. 98-1
California Statewide Community Development Authority Community Facilities District No. 2018-3
237 256
2015 2016 2017 2018
44,752,056,903$ 47,388,470,098$ 50,341,686,565$ 53,780,216,020$
25%25%25%25%
11,188,014,226 11,847,117,525 12,585,421,641 13,445,054,005
15%15%15%15%
1,678,202,134 1,777,067,629 1,887,813,246 2,016,758,101
General obligation bonds - - - -
1,678,202,134$ 1,777,067,629$ 1,887,813,246$ 2,016,758,101$
as a percentage of debt limit 0.0%0.0%0.0%0.0%
NOTE:
Source: City Finance Department
The State of California Government Code Section 43605 provides for a legal debt limit of 15% of gross assessed
valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value.
Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent
change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for
each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal
debt margin was enacted by the State of California for local governments located within the state.
Adjusted assessed valuation
Debt limit
Total net debt applicable to limit:
Legal debt margin
Conversion percentage
Assessed valuation
Fiscal Year
Total debt applicable to the limit
Debt limit percentage
CITY OF NEWPORT BEACHLegal Debt Margin Information
Last Ten Fiscal Years
238 257
2019 2020 2021 2022 2023 2024
57,701,161,781$ 60,744,806,554$ 63,689,666,681$ 66,579,730,598$ 71,329,756,011$ 75,930,033,156$
25%25%25%25%25%25%
14,425,290,445 15,186,201,639 15,922,416,670 16,644,932,650 17,832,439,003 18,982,508,289
15%15%15%15%15%15%
2,163,793,567 2,277,930,246 2,388,362,501 2,496,739,897 2,674,865,850 2,847,376,243
- - - - - -
2,163,793,567$ 2,277,930,246$ 2,388,362,501$ 2,496,739,897$ 2,674,865,850$ 2,847,376,243$
0.0%0.0%0.0%0.0%0.0%0.0%
Fiscal Year
CITY OF NEWPORT BEACHLegal Debt Margin Information
Last Ten Fiscal Years
239 258
This page left blank intentionally.
240
259
DEMOGRAPHIC AND ECONOMIC INFORMATION
This section of the City of Newport Beach’s Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules depict demographic and economic indicators to assist the reader in understanding the socio-economic environment in which the City’s financial activities take place:
• Demographic and Economic Statistics
• Principal Employers
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports and underlying accounting records for the relevant years.
241
260
Fiscal Year Population1(1)Personal Income
(in thousands)
Per
Capita
Income(2)
Unemployment
Rate2(3)
2015 87,249 6,848,523 78,494 4.0%
2016 84,270 6,574,071 78,012 3.4%
2017 84,915 6,736,392 79,331 3.1%
2018 87,182 7,334,970 84,134 2.9%
2019 87,180 7,704,445 88,374 2.6%
2020 85,780 8,183,755 95,404 4.6%
2021 85,865 8,175,464 95,213 (4)6.0%
2022 83,727 8,791,502 105,002 3.0%
2023 83,411 9,219,835 110,535 3.0%
2024 82,419 9,389,008 113,918 3.5%
1
2
Sources:
CITY OF NEWPORT BEACH
Demographic and Economic Statistics
Last Ten Fiscal Years
(4) HdL, Coren & Cone
(2) U.S. Census Bureau - American Community Survey 1-Year Estimates
(3) State of California, Employment Development Department
(1) California State Department of Finance, E-4 Population Estimates for Cities, Counties and State and E-1 Population and Housing Estimates for Cities, Counties and the State.
Population estimates are as of January 1 of the year shown and do not reflect revised
estimates made available after the date the information was collected for the City's Annual Comprehensive Financial Report.
Unemployment rate represents an average of all monthly unemployment rates within a
fiscal year.
242 261
Employer
Number of
Employees Rank
Percent of
Total
Employment
Number of
Employees Rank
Percent of
Total
Employment
Hoag Memorial Hospital 5,483 1 6.78%4,567 1 5.48%
Pacific Life Insurance 1,657 2 2.05%1,258 2 1.51%
PIMCO 1,168 3 1.44%896 6 1.07%
Irvine Management Company 1,053 4 1.30%N/A 2 -N/A
Glidewell Dental 791 5 0.98%1,098 3 1.32%
Tower Semiconductor 790 6 0.98%692 8 0.83%
City of Newport Beach 765 7 0.95%727 7 0.87%
Newport-Mesa Unified School District 750 8 0.93%909 5 1.09%
Balboa Bay Club and Resort 729 9 0.90%370 10 0.44%
Resort at Pelican Hill 679 10 0.84%927 4 1.11%
Marriott Newport Coast Villas 449 11 0.55%N/A 2 -N/A
CBRE Inc.404 12 0.50%N/A 2 -N/A
1
2
Source: Data obtained from companies listed and compiled by City Finance Department.
Figures reflect number of employees of employer at the time the information was collected.
Company listed was unable to provide employee data for 2015.
CITY OF NEWPORT BEACH
Principal Employers1
Current Year and 9 years ago
2024 2015
243 262
This page left blank intentionally.
244
263
OPERATING INFORMATION
This section of the City of Newport Beach’s Annual Comprehensive Financial
Report (ACFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. The statistical information presented herein is un-audited.
The following schedules present information on the City’s operations and
resources including service and infrastructure data to facilitate the readers’ understanding of how financial statement information relates to the services the City provides and the activities it performs:
• Full Time City Employees by Functions
• Operating Indicators by Function
• Capital Asset Statistics by Function
• Water Sold by Customer Type
• Utility Rates
• Major Water Customers
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual
Comprehensive Financial Reports and underlying accounting records for the relevant years.
245
264
This page left blank intentionally.
246
265
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General government 78 77 77 79 80 78 80 81 85 94
Public safety 370 374 371 372 375 375 376 376 377 385
Community development 52 52 52 53 53 53 52 53 56 59
Public works 109 104 99 98 96 99 98 98 102 104
Community services 75 79 81 79 78 78 78 78 79 80
Water 31 32 31 33 33 33 33 33 32 34
Wastewater 13 12 13 11 11 11 11 11 11 10
Total 728 730 724 725 726 727 728 730 741 766
Source: City Finance Department
Function
Fiscal Year
CITY OF NEWPORT BEACH
Full-time City Employees by Function
Last Ten Fiscal Years
247 266
2015 2016 2017 2018
Police:
3,472 3,158 3,178 3,266
59,753 64,762 69,246 56,685
Fire:
305 300 247 248
1,281 1,201 1,216 1,307
General Services:
2,711 1,890 1,439 1,403
27,175 27,000 20,490 22,925
Recreation & Senior Services:
303,152 305,000 425,000 437,751
13,740 14,000 13,500 13,071
Water:
187 194 229 210
16.39 11.66 13.80 14.07
Sewer:
20 17 41 137
260 250 202 211
Library Services:
1,610,818 1,575,000 1,464,640 1,424,594
1
2
3
Source: City of Newport Beach
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Data varies with trend due to COVID-19 restrictions being lifted in 2022.
Fire Inspections
Adult Arrests
Parking Citations Issued
Fire Responses
Fiscal Year
Data varies with trend due to inclusion of responses to fires, hazardous materials, medical and other emergencies.
Data varies with trend due to COVID-19 restrictions in 2021.
Street Patching (tons of mix)
Sidewalk Repair (square feet)
Co-Sponsored Youth Organization Attendance
Senior Transportation Services
New Connections
Average Daily Consumption (hundred cubic feet)
New Connections
Miles of Pipe Cleaned
Library Circulation of Materials
248 267
2019 2020 2021 2022 2023 2024
3,520 3,093 2,872 2,650 2,800 2,615
67,048 73,372 86,439 83,307 85,003 86,002
209 11,913 1 12,204 13,251 13,486 13,493
1,033 2,842 475 2 3,015 3 2,807 2,824
1,402 913 920 901 903 739
14,840 11,729 7,805 13,590 12,885 16,069
469,959 439,954 455,442 392,605 454,418 527,754
13,386 9,300 6,287 8,805 10,048 10,190
210 256 160 252 184 176
13.75 13.44 14.87 14.28 11.06 10.77
46 10 25 3 12 9
196 221 240 209 178 192
1,376,041 1,084,206 1,043,629 1,195,151 1,172,951 1,213,486
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
249 268
2015 2016 2017 2018
Police:
Stations 1 1 1 1
Fire:
Fire Stations 8 8 8 8
Lifeguard Headquarters 1 1 1 1
Public works:
Streets (miles)395 399 400 400
Streetlights 5,977 5,978 5,978 5,978
Traffic Signals 808 808 808 808
Recreation & Senior Services:
Parks 64 64 64 64
Community Centers (includes leased property)14 15 15 15
Aquatic Center 1 1 1 1
Water:
Water Mains (miles)299.58 299.77 300.64 300.30
Maximum Daily Capacity (thousands of gallons)27,800 27,800 27,800 27,800
Wastewater:
Sanitary Sewers (miles)202.64 202.75 202.72 203.56
Storm Sewers (miles)94.14 92.08 94.74 95.12
Library Services:
Libraries 4 4 4 4
Source: City of Newport Beach
Fiscal Year
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
250 269
2019 2020 2021 2022 2023 2024
1 1 1 1 1 1
8 8 8 8 8 8
1 1 1 1 1 1
400 400 400 400 401 399
5,971 5,972 5,973 5,974 5,974 5,974
808 808 808 808 808 808
65 65 65 66 66 66
15 15 15 14 14 15
1 1 1 1 1 1
300.88 300.82 301.23 301.13 301.48 301.39
27,800 27,800 27,800 27,800 27,800 27,800
203.99 204.10 204.13 204.30 204.72 204.81
95.35 95.89 96.18 97.37 97.81 104.28
4 4 4 4 4 4
Fiscal Year
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
251 270
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Type of Customer:
Residential 3,853,566 3,072,589 3,564,203 3,603,927 3,439,655 3,747,408 3,811,231 3,714,134 3,242,477 3,154,529Commercial2,560,620 1,847,372 2,142,952 2,201,254 2,075,812 2,081,860 2,231,809 2,078,199 1,728,975 1,698,963
Government 396,605 263,116 305,214 289,738 256,398 270,638 299,442 314,128 256,850 224,058
Total 6,810,791 5,183,077 6,012,369 6,094,919 5,771,865 6,099,906 6,342,482 6,106,461 5,228,302 5,077,550
Total direct rate
per 100 cubic ft.3.08$ 3.08$ 3.08$ 3.08$ 3.08$ 3.11$ 1 3.35$ 2 3.60$ 3 3.87$ 4 4.16$ 5
1 Reflects increase in commodity rate effective January 1, 2020
2 Reflects increase in commodity rate effective January 1, 2021
3 Reflects increase in commodity rate effective January 1, 2022
4 Reflects increase in commodity rate effective January 1, 2023
5 Reflects increase in commodity rate effective January 1, 2024
Source: City Utilities Department
Fiscal Year
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
252 271
Fiscal Year
Ended
June 30 Monthly
Base Rate
Rate per
100 cubic ft
2015 21.77 3.43
2016 21.77 3.43
2017 21.77 3.43
2018 23.73 3.46
2019 24.34 3.50
2020 28.09 3.57
2021 30.25 3.85
2022 32.03 4.14
2023 33.77 4.41
2024 37.64 4.69
1
Source: City Revenue Division
CITY OF NEWPORT BEACH
Utility Rates1
Last Ten Fiscal Years
Rates are based on 5/8" or 3/4" meter,
which are the standard household meter
sizes.Rates include sewer service. The
City charges an excess-use rate above
normal demand.
253 272
Water Customer Water Charges Rank Percent of Total Water Revenues Water Charges Rank Percent of Total Water Revenues
Irvine Company Apartment 805,949$ 1 2.50%532,674$ 1 1 1.95%
Irvine Company Office 605,192 2 1.88%474,979 1 1 1.74%
Hoag Memorial Hospital 467,613 3 1.45%302,746 4 1.11%
Newport Beach Country Club 368,577 4 1.14%325,207 3 1.19%
Big Canyon Country Club 344,111 5 1.07%295,721 2 1.08%
UDR Newport Beach 342,458 6 1.06%251,069 8 0.92%
Newport-Mesa Unified School District 316,461 7 0.98%269,852 6 0.99%
Irvine Company Retail 270,791 8 0.84%174,528 10 0.64%
Bluffs Homeowners Association 263,595 9 0.82%273,137 7 1.00%
Pacific View - Pierce Bros.235,776 10 0.73%187,880 9 0.69%
Park Newport Ltd 195,097 11 0.61%284,543 5 1.04%
Newport Dunes Resort 175,223 12 0.54%122,840 16 0.45%
Villa Balboa Community Association 137,137 13 0.43%132,508 18 0.42%
De Anza Corp 133,394 14 0.41%89,228 22 0.33%
690 Hotel LLC 127,832 15 0.40%N/A 2 -N/A
4,789,205$ 14.87%3,716,911$ 13.57%
1
2
Source: City Revenue Division
CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Nine Years Ago
2024 2015
Company listed operated under The Irvine Company in 2015.
Company listed was established in 2021 therefore, no 2015 information was available.
254 273
274
City of Newport Beach
100 Civic Center Drive Newport Beach, CA 92660 (949) 644-3123www.newportbeachca.gov/acfr
275
ATTACHMENT B
Required Audit Communications
276
1
REQUIRED AUDIT COMMUNICATIONS
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of
Newport Beach (City) as of and for the year ended June 30, 2024, and have issued our report
thereon dated December 30, 2024. Professional standards require that we advise you of the
following matters during our audit.
Our Responsibility in Relation to the Financial Statement Audit
As communicated in our engagement letter dated July 9, 2024, our responsibility, as described
by professional standards, is to form and express opinions about whether the financial
statements that have been prepared by management with your oversight are presented fairly,
in all material respects, in accordance with accounting principles generally accepted in the
United States of America. Our audit of the financial statements does not relieve you or
management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit
to obtain reasonable, rather than absolute, assurance about whether the financial statements
are free of material misstatement. An audit of financial statements includes consideration of
internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of
our audit, we considered the internal control of the City solely for the purpose of determining
our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are,
in our professional judgment, relevant to your responsibilities in overseeing the financial
reporting process. However, we are not required to design procedures for the purpose of
identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously
communicated to you.
Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, and our firm have complied with
all relevant ethical requirements regarding independence.
277
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
2
We identified self-review threats to independence as a result of non-attest services provided.
Those non-attest services included assisting in preparation of the financial statements,
recording journal entries detected during the audit process, assisting in updating
infrastructure records and assisting in preparation of the State Controller’s Report. To
mitigate the risk, management has reviewed the financial statements and compared amounts
to the accounting records, reviewed proposed journal entries to supporting documentation
and posted the journal entries to the accounting records. Additionally, management has
reviewed the updates to infrastructure records and compared amounts to underlying
supporting documentation. Furthermore, management has reviewed the State Controller’s
Report and agreed the amounts to its accounting records.
Significant Risks Identified
We have identified the following significant risks:
• Risk of errors in capital asset records: We evaluated the accuracy of depreciation and
accumulated depreciation by performing a full recalculation by capital asset.
• Risk of valuation as a result a transfer of the other post-employment benefits (OPEB)
trust: We reviewed the transfer of the trust noting the complete closure of CERBT and
opening of the trust with PARS.
• Compliance with federal grant requirements. We plan to review the City’s Schedule of
Expenditure of Federal Awards and select major programs to test for compliance with
federal grant requirements. This work is scheduled to begin in late January.
Qualitative Aspects of the City’s Significant Accounting Practices
Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A
summary of the significant accounting policies adopted by the City is included in Note 1 to
the financial statements. No matters have come to our attention that would require us, under
professional standards, to inform you about (1) the methods used to account for significant
unusual transactions and (2) the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management’s current judgments. Those judgments are normally based on
knowledge and experience about past and current events and assumptions about future
events. Certain accounting estimates are particularly sensitive because of their significance to
the financial statements and because of the possibility that future events affecting them may
differ markedly from management’s current judgments. The most sensitive accounting
estimates affecting the financial statements are:
• Management’s estimate of the net pension liability.
• Management’s estimate of the net OPEB liability.
278
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
3
• Management’s estimates of the claims payable liabilities related to general liability and
workers’ compensation claims.
• Useful lives of depreciable assets.
Management’s estimate of the pension liability, OPEB liability and claims payable liabilities
are based on actuarial valuation reports. Management’s estimate of the useful lives of
assets are based on actual experience with the use of similar assets over time. We evaluated
the key factors and assumptions used to develop the pension liability, OPEB liability, claims
payable liabilities and useful lives of assets and determined they are reasonable in relation to
the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly
sensitive because of their significance to financial statement users. The most sensitive
disclosures affecting the City’s financial statements relate to pensions in Note 11 and OPEB in
Note 12. The financial statement disclosures are neutral, consistent, and clear.
Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to you
significant unusual transactions identified during our audit. There were no significant unusual
transactions identified as a result of our audit procedures.
Significant Difficulties Encountered During the Audit
We encountered no significant difficulties in dealing with management relating to the
performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all
known and likely misstatements identified during the audit, other than those that we believe
are trivial, and communicate them to the appropriate level of management. Further,
professional standards require us to also communicate the effect of uncorrected
misstatements related to prior periods on the relevant classes of transactions, account
balances or disclosures, and the financial statements as a whole and each applicable opinion
unit. Management has corrected all identified misstatements. Uncorrected misstatements or
matters underlying those uncorrected misstatements could potentially cause future-period
financial statements to be materially misstated, even though the uncorrected misstatements
are immaterial to the financial statements currently under audit.
In addition, professional standards require us to communicate to you all material, corrected
misstatements that were brought to the attention of management as a result of our audit
procedures. None of the misstatements identified by us as a result of our audit procedures
and corrected by management were material, either individually or in the aggregate, to the
financial statements taken as a whole or applicable opinion units.
279
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
4
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management
as a matter, whether or not resolved to our satisfaction, concerning a financial accounting,
reporting, or auditing matter, which could be significant to the City’s financial statements or
the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested and received certain written representations from management, which
are included in a separate letter dated December 30, 2024.
Management Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing
and accounting matters. Management informed us that, and to our knowledge, there were
no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a
variety of matters, including the application of accounting principles and auditing standards,
significant events or transactions that occurred during the year, operating and regulatory
conditions affecting the entity, and operational plans and strategies that may affect the risks
of material misstatement. None of the matters discussed resulted in a condition to our
retention as the City’s auditors.
Other Information Included in the Annual Comprehensive Financial Report
Pursuant to professional standards, our responsibility as auditors for other information,
whether financial or nonfinancial, included in the City’s annual report, does not extend beyond
the information identified in the audit report, and we are not required to perform any
procedures to corroborate such other information. However, in accordance with such
standards, we have read the information and considered whether such information, or the
manner of its presentation, was materially inconsistent with its presentation in the financial
statements.
Our responsibility also includes communicating to you any information which we believe is a
material misstatement of fact. Nothing came to our attention that caused us to believe that
such information, or its manner of presentation, is materially inconsistent with the
information, or manner of its presentation, appearing in the financial statements.
This report is intended solely for the information and use of City Council and management of
the City and is not intended to be, and should not be, used by anyone other than these
specified parties.
Irvine, California
December 30, 2024
280
ATTACHMENT C
Attachment C - Report on Internal Control and Other Matters
281
1
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States (Government
Auditing Standards), the financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of
Newport Beach (City), as of and for the year ended June 30, 2024, and the related notes to
the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated December 30, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s
internal control over financial reporting (internal control) as a basis for designing audit
procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the
effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be
prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency,
or a combination of deficiencies, in internal control that is less severe than a material
weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses or significant deficiencies may exist that were
not identified.
282
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
2
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements, noncompliance with which could have
a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit,
and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the entity’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
Irvine, California
December 30, 2024
283
Financial Statement
Audit Results
January 23, 2025 284
Discussion Topics
2
❑Scope of Audit
❑Management Responsibilities
❑Auditor Responsibilities
❑Results of Audit
285
Scope of Engagement
3
❑Annual financial audit of the City
❑Single Audit of Federal financial assistance
❑Agreed-upon procedures applied to Gann
limit
286
Management Responsibilities
4
❑Preparation and fair presentation of financial
statements, including notes
❑Prepared in accordance with generally
accepted accounting principles
❑Design, implement and maintain a system of
internal control
❑Financial statements free from material
misstatement, whether due to fraud or error
❑Evaluation of going concern
287
Auditor Responsibilities
5
❑Express opinion on financial statements
❑Conduct audit in accordance with generally
accepted auditing standards and
Government Auditing Standards
❑Plan and perform audit to obtain reasonable,
not absolute assurance, that financial
statements are free from material
misstatement, whether due to fraud or error
288
Auditor Responsibilities
6
❑Exercise professional judgment and
maintain professional skepticism
❑Identify and assess risks of material
misstatement
❑Obtain an understanding of internal control
❑Evaluate appropriateness of accounting
policies and estimates made by
management
❑Evaluate going concern
289
Results of Audit
7
❑Initial communication to Finance
Committee at 5/30/24 meeting
❑Timing
❑Interim – July 2024
❑Final – October 2024 through December 2024
❑Unmodified (“clean”) opinion issued
290
Results of Audit
8
❑Financial results at government-wide level:
❑Assets and deferred outflows increased $83
million
❑Liabilities and deferred inflows increased $18
million
❑Net position increased $66 million
❑Revenues increased $65 million
❑Expenses increased $61 million
291
Results of Audit
9
❑Significant Risks
❑Large increase in capital assets
❑OPEB trust transferred from CERBT to PARS
❑Compliance with federal grant requirements
❑Estimates in preparing statements
❑Useful lives of assets, pension liability, OPEB
liability and claims payable
❑All found to be reasonable and have a sound
basis
292
Results of Audit
10
❑No significant unusual transactions
❑One immaterial audit adjustment
❑Unbilled receivables
❑No uncorrected misstatements
❑No difficulties or disagreements with
management
293
Results of Audit
11
❑One housekeeping item
❑Update needed to Administrative Procedures
over Purchasing Cards
❑Management provided representations to
us at the end of the audit
❑No consultations with other accountants
❑We remain available as a resource
throughout the year
294
Questions
January 23, 2025 295
UTILITIES DEPARTMENT
Mark Vukojevic, Director
Finance Committee
January 23, 2025
Water, Wastewater, Storm Drains, Street Sweeping, Streetlights, Oil & Gas
Financial Review
296
2UTILITIES DEPARTMENT
On Today’s
Agenda
•Introduction
•Our Team
•Our Different Services
•Our Financials
•Some Financial Deep Dives
•Closing Thoughts
297
3UTILITIES DEPARTMENT
Our Team
Utilities Department Staff
59 total
- 1 Director, 2 Managers
- 4 Admin/Finance
- 28 Water, 10 Wastewater
- 7 Storm Drains/Sweeping
- 2 Street Lights
- 5 Part Time
Casey ParksSteffen CatronMark Vukojevic SuperintendentSuperintendent Director
- Water - Wastewater
- Storm Drains
- Electrical
- Oil
298
4UTILITIES DEPARTMENT
•On-call and 24-hour service
•4 groundwater wells (75-85% of City’s water)
•3 reservoirs (30-day supply)
•17 pumps and 42 pressure stations
•Transmission system
•Firefighting support
•Chlorine/Disinfection
•Water quality testing & public health
•Computer, monitoring & control system
Water Production Division
299
5UTILITIES DEPARTMENT
•On-call and 24-hour emergencies
•300 miles of water pipelines
•8,000+ valves & 2,000+ fire hydrants
•Water main repairs & replacements
•Service line repairs & replacements
•Meter valve replacements
•Air Vac replacements
•Water main breaks
•Fire hydrant knockdowns
Water
Maintenance & Repair Division
300
6UTILITIES DEPARTMENT
•27,000 water meters & boxes
•NEW AMI digital water meters
•Meter reading/billing preparation
•Field customer service
•Water conservation & use efficiency
•Leak detection
•Permit inspections
•Underground utility marking (protection)
•Requests from residents and plumbers
Water Meter Division
301
7UTILITIES DEPARTMENT
Water
(Enterprise Fund)
Salaries & Benefits
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
$ 5,310,000 $ 5,458,000 $ 5,816,000 $ 6,152,000
Contract Services $ 638,000 $ 706,000 $ 548,000 $ 982,000
Electricity, Phones...$ 1,755,000 $ 2,157,000 $ 2,194,000 $ 2,074,000
Supplies & Materials $ 12,381,000 $ 11,706,000 $ 12,824,000 $ 15,481,000
Maintenance & Repair $ 1,387,000 $ 1,675,000 $ 1,973,000 $ 1,865,000
General Expenses $ 2,451,000 $ 1,965,000 $ 2,197,000 $ 2,843,000
Insurance/Internal $ 1,748,000 $ 2,388,000 $ 2,584,000 $ 2,642,000
Total Operating Budget $ 25,670,000 $ 26,055,000 $ 28,136,000 $ 32,039,000
CIP Costs $ 6,509,000 $ 7,833,000 $ 8,641,000 $ 8,546,000
TOTAL WATER EXPENSE $ 31,769,000 $ 33,888,000 $ 36,777,000 $ 40,585,000
TOTAL WATER REVENUE $ 32,154,000 $ 32,220,000 $ 34,879,000 $ 37,274,000
302
8UTILITIES DEPARTMENT
Cost of Water
Groundwater – (OCWD)
Annexation charge $130/AF
Basin charges $688/AF
Electricity $ 55/AF
Treatment/testing $ 25/AF
Avg cost $ 898/AF
Imported State Water – (MWD, MWDOC)
Use Charge $1395/AF
Situational Comparison: 13,000 AF
50% Groundwater & 50% Imported
Groundwater cost: $5.8 mil
Imported water cost: $9.1 mil
303
9UTILITIES DEPARTMENT
Performance Measure: % of Groundwater Pumped
Goal is 85% groundwater,
(prior to 2023, goal was 77%)
20/21 21/22 22/23 23/24 24/25
Acre Feet Total Demand 15,070 14,150 12,700 12,400 13,100
% Groundwater 95%74%82%78%80%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Groundwater Pumped
Acre Feet Total Demand % Groundwater
304
10UTILITIES DEPARTMENT
Performance Measure: % of Water Fund Reserves vs. Reserve Goal
Reserve Goal: 120 days of expenses + 75% annual CIP +
30% water use reduction
23/24 24/25 25/26 26/27 27/28
Reserves $17,879,000 $12,610,000 $11,995,000 $12,689,000 $14,662,000
Reserve Goal $18,858,000 $19,067,000 $19,903,000 $20,754,000 $21,547,000
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Reserves Reserve Goal
305
11UTILITIES DEPARTMENT
Land, Engineering, Construction $30 mil
Funded by:
Newport Beach $20mil
Laguna Beach $10 mil
Previously envisioned funding plan:
Pay as you go, known as Pay/go
•Reprioritize CIP (delay certain pipeline projects)
•Plus use of water reserves
New Water Well, Cost:
306
12UTILITIES DEPARTMENT
(Long term, capital producing asset)
Recommended Funding plan:
•Pay/go from CIP, $3 mil over next 3 years
•Maintain existing reserves
•Finance $17mil over 20-30 years
‐Bond market placement
‐OCWD loan program option
‐4 – 4.5% interest rate
‐~$1 - 1.3 mil/year payment cycle
‐Invest groundwater savings into prepayments or CIP
New Water Well, Funding Plan:
307
13UTILITIES DEPARTMENT
•New AMI digital water meters will save in meter reading costs
& enable early leak detections
•Insurance cost increases have been high
•Fire hydrants knockdowns - 2021 (10), 2022 (6), 2023 (13),
2024 (11): Cost recovery goal
•Credit card billing fees, a $600k+ annual expense, fee changes
coming in Spring 2025
•Development Impact Fees aka “buy-in fees” coming
•Monthly billing will begin in March 2025
•Average residential water bill: $68/month
•Currently on 2nd year of a 5-year rate increase
•2025 water rate increase is approx. $5.50/month
•Next Rate study is planned for 2027
Financial Thoughts
(Water Fund)
308
14UTILITIES DEPARTMENT
•SEWER SPILL PREVENTION
•200 miles of sewer line cleaning, jetting, and rooting (monthly, quarterly, annually)
•Repairing mainlines and sewer laterals
•Pump station maintenance & repairs - 21 pump stations
•Regulatory compliance
•Emergency response, customer service, and plumber calls
Wastewater (Sewer) Division
309
15UTILITIES DEPARTMENT
Sewer Rates
•Average residential sewer bill: $16/month
•Currently on 2nd year of a 5-year rate increase
•2025 sewer rate increase is approx. $2.50/month
•Expenses have increased
•CIP costs has increased
•Below reserve targets
•No rate increases were implemented between 2006-2017
•New sewer rate study is planned for 2027
310
16UTILITIES DEPARTMENT
Salaries & Benefits
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
$ 1,617,000 $ 1,736,000 $ 1,821,000 $ 1,952,000
Contract Services $ 69,000 $ 142,000 $ 132,000 $ 181,000
Electricity, Phone...$ 71,000 $ 84,000 $ 97,000 $ 82,000
Maint. & Repair $ 572,000 $ 673,000 $ 984,000 $ 922,000
General Expenses $ 343,000 $ 545,000 $ 570,000 $ 704,000
Insurance/Internal $ 819,000 $ 1,360,000 $ 1,416,000 $ 1,480,000
Total Operating Budget $ 3,491,000 $ 4,540,000 $ 5,020,000 $ 5,321,000
CIP Costs $ 337,000 $ 152,000 $ 496,000 $ 2,550,000
Total Sewer Expense $ 3,828,000 $ 4,692,000 $ 5,516,000 $ 7,871,000
Total Sewer Revenue $ 4,793,000 $ 4,703,000 $ 5,371,000 $ 5,567,000
Wastewater/Sewer
(Enterprise Fund)
311
17UTILITIES DEPARTMENT
Performance Measure: % of Wastewater Fund Reserves vs. Reserve Goal
Reserve Goal: 90 days of expenses + 100% annual CIP
23/24 24/25 25/26 26/27 27/28
Reserves $993,000 $334,000 $261,000 $890,000 $2,296,000
Reserve Goal $2,661,000 $2,783,000 $2,908,000 $3,030,000 $3,157,000
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
Reserves Reserve Goal
312
18UTILITIES DEPARTMENT
•Insurance cost increases have been high but common across the
industry
•Internal cost allocations ensure Utilities to pay its fair share
•Continued capital investment is needed
•Frequent cleaning and quick response time are crucial to
protecting water quality
•Customer service is intensive, particularly with plumbers and
sewer laterals
•Development Impact Fees aka “buy-in fees” are coming Feb 2025
•Monthly billing will begin in March 2025
•Next Rate study is planned for 2027
Financial Thoughts
(Wastewater/Sewer Fund)
313
19UTILITIES DEPARTMENT
•Protecting harbor water quality
•87 miles of storm drains, channels, & ditches
•3,200+ catch basins cleaned annually
•23 inline large trash capture devices
•400+ catch basin trash capture devices
•300 tons of trash removed annually
•Repairs to storm drain pipes, catch basins & ditches
•Customer Service – i.e. car key recovery from catch basins
Storm Drains
(General Fund)
314
20UTILITIES DEPARTMENT
•90 tide valves requiring daily operation
•0 permanent pump stations
•40 mobile storm pumps
•12 electrically operated valves
- Lack of space & power outage realities
- Automation is not foolproof
•Tide valve maintenance during very low tides
•Forecasted Rain + Predicted High Tides
•Force multiply a staff of 7 to make 35 “pumpers”
Tide Valves
(General Fund)
315
21UTILITIES DEPARTMENT
•Residential weekly
•Commercial, parking lots, boardwalk, 2-3/week
•Contracted service - (2020) 10-year street sweeping
contract with new street sweepers
5 Street Sweepers every day!
- 700 miles a week
- 3,800 tons a year
•Alleys – every 2 weeks, (2021) 5-year contract
•City sweeper is the backup & for emergencies
•Customer service intensive with questions, requests and
special postings/sweepings
•Enforcement through Police Dept., Payments through
Finance Dept.
Street Sweeping
(General Fund)
316
22UTILITIES DEPARTMENT
•Contracted Service (prevailing wage)
•7 days a week, contracted service
- 2nd crew on Mondays
- Summer extra crews & special callouts
•Graffiti - 350+ locations removed/month
•Each location is inputted into the County system
•Customer service – phone, website & app
•Graffiti is removed with:
- chemical removers
- painted over & color matched
- pressure washing
•Stickers are growing nuisance
Graffiti Removal
(General Fund)
317
23UTILITIES DEPARTMENT
•7,000 Streetlights
(street, bollards, parking lots, beaches & facilities)
•99% of all lights are now LED
•2 City Staff Electricians
- Contracted Assistance (as needed & knockdowns)
•Customer Service – phone, website & app
•Annual night-time drive-by inspection of city lights
•30 City Emergency Generators; + air quality regs
•Street Light knockdowns:
2021 (24), 2022 (18), 2023 (17), 2024 (18)
Streetlight
(General Fund)
318
24UTILITIES DEPARTMENT
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
Salaries & Benefits $ 1,325,000 $ 1,480,000 $ 1,708,000 $ 1,406,000
Graffiti Removal $ 118,000 $ 172,000 $ 227,000 $ 190,000
Street Sweeping $ 938,000 $ 851,000 $ 863,000 $ 938,000
Storm Drain cleaning $ 287,000 $ 351,000 $ 357,000 $ 385,000
Maintenance & Repair $ 521,000 $ 543,000 $ 761,000 $ 614,000
Internal Services: IT, Fleet,
Insurance $ 595,000 $ 695,000 $ 744,000 $ 802,000
Emergency storm drain $ 234,000 $ 325,000
Total Expenses $ 3,784,000 $ 4,326,000 $ 4,985,000 $ 4,335,000
Storm Drains, Tide Valves,
Sweeping, Graffiti
(General Fund)
319
25UTILITIES DEPARTMENT
Streetlights
(General Fund)
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
Salaries & Benefits $ 214,000 $ 212,000 $ 267,000 $ 336,000
Contract Services $ 195,000 $ 195,000 $ 255,000 $ 211,000
Electricity $ 697,000 $ 746,000 $ 760,000 $ 825,000
Maint. & Repair $ 285,000 $ 217,000 $ 416,000 $ 316,000
Internal Services: IT, Fleet,
Insurance $ 58,000 $ 120,000 $ 130,000 $ 132,000
Total Expenses $ 1,449,000 $ 1,490,000 $ 1,828,000 $ 1,820,000
320
26UTILITIES DEPARTMENT
•Year 5 of 10 for street sweeping contract
•New catch basin cleaning contract in 2024
•Extra sweeping is added in the summer
•40% of the City is posted no parking for sweeping
•Extra graffiti services during the summer
•Staff overtime for pumping is $45-60/hour vs. contractor
overtime $160
•Important goal is to protect water quality
Financial Thoughts
(General Fund)
321
27UTILITIES DEPARTMENT
•16 oil wells producing 18,000 barrels/year
•Crude oil is sold
•Natural gas sent to Hoag Hospital
•Horizontally drilled in the 1950s
•City operated since 1981
•4 wells are currently offline
Oil & Gas
(Tidelands Fund)
322
28UTILITIES DEPARTMENT
Oil Operations
(Tidelands Fund)
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
Salaries & Benefits 0 0 0 0
Contract Services $ 236,000 $ 288,000 $ 238,000 $ 214,000
Utilities $ 76,000 $ 80,000 $ 124,000 $ 83,000
Maintenance & Repair $ 1,011,000 $ 894,000 $ 712,000 $ 478,000
Royalties & Agency Fees $ 156,000 $ 156,000 $ 127,000 $ 168,000
Total Expenses $ 1,479,000 $ 1,418,000 $ 1,201,000 $ 943,000
Total Revenue $ 1,680,000 $ 1,288,000 $ 1,582,662 $ 1,250,000
Barrels of Oil 20,377 16,860 21,225 19,200
323
29UTILITIES DEPARTMENT
•Crude oil pricing:
- Difficult to be profitable when oil is $50/barrel
- Oil is currently ~$60/barrel
•Cost of oil production
- Royalties cost ~ 10% of gross
- Expenses have increased, especially regulatory
permits costs and repair costs
- new operator contract coming
•Rehab and redrill efforts:
- New State law changes prohibit redrill efforts
Financial Thoughts
(Tidelands Fund)
324
30UTILITIES DEPARTMENT
•Narrow margin of profit
•High risk vs. benefit
•System is old and requires frequent repairs
•Not a core City business function
•Future goals:
- Decommission/abandon the oil wells
- $6-$10mil effort
- Place all profits in abandonment fund
- Decommission wells on a stepped annual basis, 1-3
wells per year, using realized profits
Note: oil wells and tank farm are on leased land
Financial Thoughts
(Tidelands Fund)
325
31UTILITIES DEPARTMENT
•1950s-1960s former City dump
•1972 sold to developer
•City shares 50/50 responsibility with HOA
•Managed/monitored by City staff
•Contracted resources used
•Landfill gas control system
- Extraction, pumping, and treatment
- Alarm system
- Emergency call outs
•Regulatory compliance – State and County
•System repairs and improvements
Old City Landfill
Newport Terrace Community
(Environmental Fund)
326
32UTILITIES DEPARTMENT
Old City Landfill
Newport Terrace Community
(Environmental Fund)
Actual
FY 21/22
Actual
FY 22/23
Actual
FY 23/24
Current Budget
FY 24/25
Salaries & Benefits 0 0 0 0
Contract Services $ 74,000 $ 109,000 $ 90,000 $ 115,000
Utilities $ 4,000 $ 3,000 $ 4,000 $ 5,000
Maintenance & Repair $ 58,000 $ 32,000 $ 54,000 $ 77,000
Insurance $ 130,000 $ 146,000 $ 165,000 $ 162,000
Total Expenses $ 266,000 $ 290,000 $ 313,000 $ 359,000
Total Revenue $ 67,000 $ 70,000 $ 67,000 $ 68,000
327
33UTILITIES DEPARTMENT
Closing:
Your Utilities Department:
•Water
•Wastewater
•Storm Drains & Tide Valves
•Street Sweeping & Graffiti
•Streetlights
•Oil & Gas
•Former Landfill
Thank you for the opportunity to present!
328
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 6C
January 23, 2025 TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE
FROM: Finance Department
Jason Al-Imam, Finance Director/Treasurer 949-644-3123, jalimam@newportbeachca.gov SUBJECT: GENERAL FUND AND TIDELANDS FUND LONG RANGE FINANCIAL
FORECAST UPDATE
EXECUTIVE SUMMARY
The City is projected to remain financially sound over the next 20 years, with a strong revenue base and healthy reserves. The forecast anticipates a surplus (revenues exceeding expenditures) each year during this period. Any short-term deficits resulting
from economic downturns or unforeseen events are expected to be absorbed without
long-term reliance on the Contingency Reserve, and no structural deficit is apparent. DISCUSSION
Strategic planning begins by determining the City’s fiscal capacity, based on long-term
financial forecasts of recurring revenues and future financial obligations. Before adopting
the annual budget, staff prepares a Long-Range Financial Forecast (LRFF) each year for the General Fund to evaluate internal and external factors affecting the City’s financial condition. This year, staff also prepared an LRFF for the Tide and Submerged Land Operating Fund, known as the Tidelands Fund. The LRFF aims to help the City achieve and maintain financial sustainability, provide long-term guidance for financial decisions,
and ensure sufficient resources to deliver programs and services to the community. Methodology The Finance Department follows a three-step process when preparing the LRFF. First, a baseline growth scenario for various revenue and expenditure categories is established
by analyzing historical compound annual growth rates (CAGR), historical average growth rates, and other future growth assumptions based on the latest data from consultants and other sources. Allowances are made for lower near-term growth rates, reflecting current data and anticipated changes in consumer activity for revenue sources such as sales tax and transient occupancy tax.
329
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 2
Next, line items that deviate from typical escalation patterns are adjusted according to their unique schedules, based on either dollar or percentage growth. These items include discretionary pension payments on a fixed annual contribution schedule, interest income,
known and expected ground lease revenue from various properties, and transfers to
support master financing plans, including the Facilities Financing Plan, Harbor and Beaches Master Plan, and Facilities Master Plan. Emerging commitments on the horizon are also considered.
Finally, the model is designed to be flexible, allowing for alternate baseline scenarios or
fiscal impact analyses as needed. Major Assumptions Major assumptions used in the model include the following:
The Fiscal Year 2024-25 adopted budget, excluding one-time items, was used as the base budget from which forward growth assumptions were developed. To refine the projections for the near-term years, the methodology for establishing the base for growth assumptions related to certain revenues and expenditures was updated. These updates
incorporate the Fiscal Year 2024-25 revised budget and the latest available actual
receipts and data. Additional information is summarized below. Annual General Fund transfers-out in support of:
• FFP – $15.3 million to $23.9 million annually, representing 3% of general fund
revenues as outlined in Council Policy F-28, and includes an additional $6 million for future capital projects.
• CIP – $6.5 million annually
• Facilities Maintenance – $2.5 million annually
• Tidelands Harbor Capital – $6.0 million, indexed at 2.5% annually, through Fiscal Year 2032-33, and reduced to $4.5 million thereafter
• Parks Maintenance Fund - $2.3 million annually Despite realizing year-end surpluses exceeding $10 million over the past several years, staff did not program future surpluses in the projections. Surpluses appearing in the
forecast represent the net operating result of annual revenues minus forecasted
expenditures. The forecast does not assume expenditure savings or revenues exceeding budgeted amounts, which are typically realized each year. Consequently, the forecast is prepared by projecting revenues conservatively and expenditures liberally.
Revenue Assumptions
The methodology used for calculating revenue changes from Fiscal Year 2025-26 to Fiscal Year 2045-46 is initially based on historical revenue trends using CAGR or the annual average growth for each revenue category, depending on which seems most applicable for the particular revenue growth category based on how it may change going
forward. This methodology is adjusted based on staff’s knowledge of known one-time
330
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 3
past events and other extraneous factors. Thereafter, an outlook is developed that factors in the cyclical nature of the economic cycle, which tends to fluctuate from periods of economic expansion followed by economic contraction. As a result, this approach
provides for dynamic forecasting as opposed to linear or static growth assumptions, which
mitigates the compounding effect that can tend to distort revenue growth over time. The General Fund’s top three revenue sources (property tax, sales tax, and transient occupancy tax) account for approximately 72% of total General Fund revenues.
Consequently, the future growth assumptions for these primary revenue sources can
have a considerable impact on the twenty-year forecast. The forecast for these three revenue sources is based on the most recently available economic data in addition to the updated projections reflected in the Fiscal Year 2024-25 revised budget.
Property Taxes
These revenues are primarily dependent on the assessed valuation established in January of each year. Newport Beach’s assessed property values increased 5.5% in Fiscal Year 2024-25 largely due to changes in ownership and new construction. In Fiscal Year 2025-26, assessed property values are projected to increase 4.4% based on an
increase in assessed values from home sales from January 2024 through September
2024. This growth is partly due to the two-percent inflation adjustment provided under Proposition 13. In addition, assessed values are projected to increase in Fiscal Year 2025-26 due to changes in ownership and new construction, although at a slower pace as home sales have slowed due to higher interest rates.
In outer years of the forecast, staff continues to expect consistent and vigorous demand for Newport Beach property. Changes to these revenues that may result from a dampened housing economy are less dramatic and less abrupt than with other revenues due to a tax collection lag and the high value of assessed properties in Newport Beach.
The lag is due to the lengthy time it takes (ranging from 12-18 months) to assess property
values, process appeals and other adjustments, prepare the property tax rolls and submit them to the County Tax Collector. While property tax growth rates fell sharply during the Great Recession, the City has experienced positive local assessed value growth during each of the past 20 years. Even while growth may have slowed, the assessed value in
Newport Beach never declined throughout the Great Recession. This demand has
allowed the City to enjoy long-term growth trends from its largest source of revenue. The average annual historical growth rate for this revenue category is 5.6% over the past 20 years. Beyond Fiscal Year 2025-26, staff conservatively forecast 3-4% annual growth for property taxes as a whole, which includes supplemental taxes and property transfer tax
revenue.
331
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 4
Sales Tax The second largest funding source for the General Fund is sales tax revenue, which is largely generated from three main industry categories including autos and transportation,
general consumer goods, and restaurants/hotels. Sales tax revenue was down 6.7% for Fiscal Year 2023-24 and is projected to increase 4.1% in Fiscal Year 2024-25 due to anticipated growth in the autos and transportation and the state and county pools.
Looking ahead, sustained sales tax growth is anticipated throughout the forecast, with Fiscal Year 2025-26 anticipated to increase by 6.9%, or approximately $3 million, compared to the Fiscal Year 2024-25 projection. Beyond Fiscal Year 2025-26, staff conservatively forecast annual growth of 2.6% on average each year for sales tax.
0
20
40
60
80
100
120
140
160
180
200
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Property Tax Historical and Future Projected Growth ($ Millions)
LRFF Projection Budget Property Tax Actual
332
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 5
Transient Occupancy Tax (TOT) The third largest funding source for the General Fund is TOT which makes up more than 10% of revenues. TOT revenue is derived from commercial and residential property. Commercial TOT revenue is derived from 21 hotels and resorts and accounts for
approximately 74% of TOT revenues. Residential TOT revenue is derived from approximately 1,550 vacation rentals representing 26% of TOT revenue. TOT revenue from short-term residential stays has nearly doubled since 2019-20, whereas hotel TOT revenue increased 46% over the same period. While commercial occupancy levels have not returned to pre-pandemic levels, they are increasing and are largely offset by higher
room rates.
The budget for Fiscal Year 2024-25 assumed a 2% growth rate over the prior year. For Fiscal Year 2025-26, staff projects receipts of $33.7 million, representing a 3.2% increase over the prior year. Generally consistent with historical trends, staff projects 2.9% average annual growth thereafter.
0
10
20
30
40
50
60
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Sales Tax Historical and Future Projected Growth ($ Millions)
LRFF Projection Budget Sales Tax Actual
333
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 6
Other revenues (service fees and charges, fines and penalties, property income, transfers
in, and other miscellaneous revenues) which make up 28% of the City’s total revenues
are projected to grow modestly at 3% on average over the next 20 years. This assumption is based on the average growth from the preceding 20 years. Service fees and charges are projected to grow by an average of 2% annually each year and Property Income, which includes leases and parking revenue, is projected to grow by an average of 4%
annually over the next 20 years. Transfers in, which represents the Tidelands payment to
the General Fund for the Cost Allocation Plan is estimated to grow at 3% annually. Expenditure Assumptions Regular salaries for both miscellaneous and public safety are reflective of the approved
adjustments through the end of the current MOU agreements. Thereafter, regular salaries
are assumed to grow at 2% annually. The forecast assumes no growth in personnel headcount. Special and other pays (e.g., certification pay, bilingual pay, motor officer pay, scholastic achievement, etc.) is projected to grow at 2% annually. The benefits category, which consists of life insurance, Medicare, retiree health plan contributions, and the City’s
pension contributions to CalPERS, among other miscellaneous benefits, is projected to
grow at 2% annually. However, based on the following assumptions and certain items in this category forecasted at alternate growth rates, the projected average year-over-year change is 0%. This category includes the 1.5% reduction in the employee’s share of pension contributions to CalPERS through December 2025 for applicable bargaining
units.
0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Transient Occupancy Tax
LRFF Projection Budget TOT Actual
334
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 7
The forecast assumes a baseline allocation of $40 million in annual funding for the pension liability, with $38 million coming from the General Fund. In Fiscal Year 2032-33, the pension liability is projected to be eliminated, assuming CalPERS continues to
achieve an average investment return of 6.8% and there are no significant changes in
future CalPERS experience studies or the discount rate. The baseline allocation of $40 million annually exceeds the required payment to CalPERS by approximately $10 million. An additional $5 million is also expected to be allocated each year from the year-end surplus, bringing the total annual payment for the pension liability to $45 million. This
approach aligns with the pension paydown strategy discussed with the Finance
Committee in November 2024. It also assumes that the City Council will continue to authorize additional contributions during this period, consistent with recent Council actions and Finance Committee recommendations.
General Fund Expenditure Forecast FY2025-26– FY2029-30
Non-personnel costs include contract services, utilities, supplies and materials, and
maintenance and repair. These expenditures are projected to grow an average of 5.2% annually. While some of these costs may increase by the consumer price index (CPI), many of the City’s contracts have capped the rate by which certain services or goods may increase by CPI. Thus, although CPI has remained high, that percentage was not broadly
projected for contract services or supplies and materials. In Fiscal Year 2023-24, the
City’s unfunded OPEB liability was paid down, which reduces general fund expenditures by approximately $4 million annually beginning in Fiscal Year 2024-25. Transfers out includes transfers from the General Fund to various other funds for future
capital improvement projects, as well as a transfer to support the Tidelands Fund
operations.
335
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 8
Tidelands Fund Forecasting Each year, the Tidelands Fund transfers approximately $20 million to the General Fund
to cover costs associated with activities in the Tidelands areas supported by General
Fund services. Allocated direct services impacting the Tidelands Fund include public safety services, such as Police Department patrols, traffic operations, Fire Department operations, emergency medical services, and marine safety. They also include public facilities services, such as Public Works Department maintenance of public spaces and
Finance Department management of parking.
Revenue in the Tidelands Fund is insufficient to fully cover the costs of Tidelands operations. As a result, the General Fund must subsidize these operations, with the subsidy estimated at $12.3 million for Fiscal Year 2024-25. Consequently, the
performance of the General Fund and the long-range financial plan must account for
projections related to the Tidelands Fund’s revenues, expenditures, and the related subsidy from the General Fund. In response to a recent internal audit recommendation presented to the Finance
Committee in November 2024, staff developed a long-range financial forecast (LRFF) for
the Tidelands Fund. The Tidelands LRFF uses the same methodology as the General Fund LRFF. The Fiscal Year 2024-25 adopted budget, excluding one-time items, was used as a base from which forward growth assumptions were developed.
Tidelands Revenue Assumptions
The Tidelands Fund’s revenue sources are related to the operation of the City’s tidelands, including but not limited to rents from moorings, piers, and leases, as well as income from parking lots, meters, and the sale of oil. The Tidelands Fund’s top three revenue sources—property income, parking revenue, and a transfer subsidy from the General
Fund—account for approximately 99% of total Tidelands revenue. Consequently, the
growth assumptions for these primary revenue sources significantly impact the twenty-year forecast. The forecast for these three revenue sources is based on the most recent economic data and updated projections reflected in the Fiscal Year 2024-25 revised budget.
Property Income Property income is the primary revenue source for the Tidelands Fund. For Fiscal Year 2024-25, Tide and Submerged Land Operating income is projected to generate $8.4 million from leases and an additional $1.3 million from oil sales. Looking ahead to Fiscal
Year 2025-26, property income revenues are expected to grow by 4%, or $386,764.
Parking Revenue Parking revenue is made up of $2.6 million from the Balboa Parking Lot, $1.4 million from the Ocean Front Lot, and $847,758 from a combination of smaller lots. In Fiscal Year
2025-26, parking revenues are projected to increase by 4%, or $187,740.
336
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 9
General Fund Subsidy Historically, the Tidelands Fund has not generated sufficient revenue to cover the full cost of operations, largely due to public safety expenses such as lifeguarding, EMS response,
and police services at ocean beaches. This remains true in Fiscal Year 2024-25. To
address the ongoing gap between revenues and expenditures, the City’s General Fund subsidizes the operations of the Tidelands Fund annually. Since Tidelands revenues and expenditures fluctuate year to year, the General Fund subsidy also varies. For Fiscal Year 2024-25, the General Fund transferred $12.3 million to subsidize the Tidelands Fund.
Tidelands Expenditure Assumptions Regular salaries are reflective of the approved adjustments through the end of the current MOU agreements. Thereafter, regular salaries are assumed to grow at 2% annually. The forecast assumes no growth in personnel headcount. Non-personnel costs include
contract services, utilities, supplies and materials, and maintenance and repair. These
expenditures are projected to grow an average of 4.5% annually. The largest expense in the Tidelands Fund is the transfer out to the General Fund to cover the allocated costs, which are the Citywide expenditures that support the
management and operation of the Tidelands that are accounted for in the General Fund.
Assumptions for these costs are based on the current Cost Allocation Plan and are escalated each year by 3%. CONCLUSION
The City is in a strong financial position. The General Fund LRFF projects a surplus
balance (revenues net of expenditures) of approximately $10.6 million in Fiscal Year 2025-26. Surpluses are also projected for the remaining years of the model. General Fund Revenues, Expenditures & Net Operating Results
FY 2025-26– FY 2033-34
337
General Fund and Tidelands Fund Long Range Financial Forecast Update January 23, 2025 Page 10
The City currently has a contingency reserve of $66.0 million, which represents 25% of operating expenditures. This reserve serves as a means of responding to unexpected deviations in operating trends over the 20-year term of the forecast. Historically, the City
has not utilized its contingency reserve to balance its annual budgets and only did so
recently to cover a revenue shortfall during the COVID-19 pandemic. The draw of less than $3 million from the contingency reserve during Fiscal Year 2020-21 was quickly reversed with the first quarter budget update that year.
However, the City is not without its fiscal challenges. Although revenues have improved
considerably since the Great Recession, future recessions or shifts in consumer behavior—such as changes in consumer spending and the outlook for travel and leisure—may alter the course of revenues, and new patterns could emerge that differ from past trends.
The City routinely faces financially impactful events, such as significant increases in CalPERS pension costs due to underperforming investment returns, unfunded state mandates, and the need to ramp up savings to meet substantial near-term facilities maintenance and replacement obligations in accordance with our long-term infrastructure
financing plans. Fortunately, the City’s revenue base provides the ability to make strategic
decisions each year, deploying the necessary resources toward the most critical needs of our citizens. In summary, the General Fund is projected to remain in a financially sound position over
the next 20 years. Any short-term deficits that may arise can be absorbed without long-
term reliance on the Contingency Reserve—no structural deficit is apparent.
Attachments: A. 20-Year Long-Range Financial Forecast for the General Fund
B. 20-Year Long-Range Financial Forecast for the Tidelands Fund
Submitted by:
/s/ Shelby Burguan
338
ATTACHMENT A
20-YEAR LONG-RANGE FINANCIAL FORECAST FOR THE GENERAL FUND
339
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 FY 2036-37 FY 2037-38 FY 2038-39 FY 2039-40 FY 2040-41 FY 2041-42 FY 2042-43 FY 2043-44 FY 2044-45
Property Tax 158,297,658$ 164,629,565$ 171,214,747$ 178,063,337$ 183,405,237$ 188,907,395$ 196,463,690$ 204,322,238$ 212,495,127$ 220,994,933$ 227,624,781$ 234,453,524$ 241,487,130$ 251,146,615$ 261,192,479$ 271,640,179$ 282,505,786$ 293,806,017$ 305,558,258$ 317,780,588$
Growth Rate 4.0%4.0%4.0%4.0%3.0%3.0%4.0%4.0%4.0%4.0%3.0%3.0%3.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%
Sales Tax 48,306,625$ 49,698,747$ 50,692,722$ 51,706,576$ 53,257,774$ 54,855,507$ 56,501,172$ 58,196,207$ 59,942,094$ 61,140,935$ 62,363,754$ 64,234,667$ 66,161,707$ 68,146,558$ 70,190,955$ 72,296,683$ 73,742,617$ 75,217,469$ 76,721,819$ 79,023,473$
Growth Rate 6.9%2.9%2.0%2.0%3.0%3.0%3.0%3.0%3.0%2.0%2.0%3.0%3.0%3.0%3.0%3.0%2.0%2.0%2.0%3.0%
Transient Occupancy Tax 33,668,079$ 34,341,440$ 35,371,684$ 36,079,117$ 36,439,908$ 37,168,707$ 38,283,768$ 39,815,119$ 41,407,723$ 42,649,955$ 43,502,954$ 43,937,984$ 44,816,743$ 46,161,246$ 48,007,695$ 49,928,003$ 51,925,123$ 54,002,128$ 56,162,213$ 57,847,080$
Growth Rate 3.2%2.0%3.0%2.0%1.0%2.0%3.0%4.0%4.0%3.0%2.0%1.0%2.0%3.0%4.0%4.0%4.0%4.0%4.0%3.0%
Other Revenues 71,013,021$ 74,144,543$ 75,973,676$ 77,856,209$ 79,234,720$ 81,152,582$ 83,322,065$ 85,427,425$ 83,537,085$ 85,532,128$ 87,583,423$ 89,919,103$ 91,957,808$ 94,270,368$ 96,650,674$ 99,100,913$ 101,218,372$ 103,450,382$ 105,670,241$ 120,981,095$
Growth Rate 1.4%4.4%2.5%2.5%1.8%2.4%2.7%2.5%-2.2%2.4%2.4%2.7%2.3%2.5%2.5%2.5%2.1%2.2%2.1%14.5%
Transfers In 21,610,808$ 22,221,632$ 22,527,440$ 22,748,805$ 23,416,269$ 23,603,757$ 24,311,870$ 25,041,226$ 25,792,463$ 26,566,237$ 27,363,224$ 28,184,120$ 29,029,644$ 29,900,533$ 30,797,549$ 31,721,476$ 32,673,120$ 33,653,314$ 34,662,913$ 35,702,801$
Growth Rate 2.8%2.8%1.4%1.0%2.9%0.8%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%
Total General Fund Revenue 332,896,192$ 345,035,928$ 355,780,269$ 366,454,045$ 375,753,909$ 385,687,947$ 398,882,565$ 412,802,215$ 423,174,492$ 436,884,188$ 448,438,136$ 460,729,398$ 473,453,031$ 489,625,320$ 506,839,353$ 524,687,254$ 542,065,018$ 560,129,311$ 578,775,445$ 611,335,037$
Growth Rate 3.8%3.6%3.1%3.0%2.5%2.6%3.4%3.5%2.5%3.2%2.6%2.7%2.8%3.4%3.5%3.5%3.3%3.3%3.3%5.6%
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 FY 2036-37 FY 2037-38 FY 2038-39 FY 2039-40 FY 2040-41 FY 2041-42 FY 2042-43 FY 2043-44 FY 2044-45
Regular Salaries 95,146,664$ 97,049,597$ 98,990,589$ 100,970,401$ 102,989,809$ 105,049,605$ 107,150,597$ 109,293,609$ 111,479,481$ 113,709,071$ 115,983,252$ 118,302,917$ 120,668,976$ 123,082,355$ 125,544,002$ 128,054,882$ 130,615,980$ 133,228,300$ 135,892,866$ 138,610,723$
Growth Rate 2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%
Special and Other Pays 16,777,018$ 17,112,558$ 17,454,809$ 17,803,905$ 18,159,983$ 18,523,183$ 18,893,647$ 19,271,520$ 19,656,950$ 20,050,089$ 20,451,091$ 20,860,113$ 21,277,315$ 21,702,861$ 22,136,919$ 22,579,657$ 23,031,250$ 23,491,875$ 23,961,713$ 24,440,947$
Growth Rate 1.8%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%
Benefits 1 71,678,450$ 73,017,135$ 74,422,950$ 75,899,659$ 77,451,245$ 79,081,925$ 80,796,165$ 48,777,160$ 46,773,978$ 48,768,386$ 50,866,996$ 53,075,750$ 55,400,940$ 57,849,230$ 60,427,675$ 63,143,749$ 66,005,367$ 67,327,227$ 68,675,595$ 70,051,003$
Growth Rate -6.2%1.9%1.9%2.0%2.0%2.1%2.2%-39.6%-4.1%4.3%4.3%4.3%4.4%4.4%4.5%4.5%4.5%2.0%2.0%2.0%
Non-Personnel Costs 90,524,454$ 95,013,548$ 99,923,832$ 105,102,412$ 110,564,164$ 116,324,794$ 122,400,888$ 131,522,871$ 138,408,770$ 144,570,997$ 150,225,279$ 158,161,907$ 166,534,969$ 175,368,766$ 184,688,964$ 194,522,671$ 204,898,519$ 216,270,171$ 227,856,803$ 240,270,205$
Growth Rate 3.0%5.0%5.2%5.2%5.2%5.2%5.2%7.5%5.2%4.5%3.9%5.3%5.3%5.3%5.3%5.3%5.3%5.5%5.4%5.4%
Transfers Out2 48,176,029$ 49,338,503$ 50,321,883$ 50,183,624$ 51,011,794$ 51,392,314$ 52,372,362$ 50,620,004$ 48,425,792$ 50,254,611$ 52,935,730$ 53,785,580$ 54,661,881$ 55,658,520$ 56,704,092$ 57,787,212$ 58,875,665$ 59,584,901$ 60,722,510$ 62,109,855$
Growth Rate 22.7%2.4%2.0%-0.3%1.7%0.7%1.9%-3.3%-4.3%3.8%5.3%1.6%1.6%1.8%1.9%1.9%1.9%1.2%1.9%2.3%
Total General Fund Expenditures 322,302,615$ 331,531,341$ 341,114,063$ 349,960,002$ 360,176,995$ 370,371,821$ 381,613,659$ 359,485,164$ 364,744,971$ 377,353,154$ 390,462,349$ 404,186,267$ 418,544,081$ 433,661,732$ 449,501,651$ 466,088,171$ 483,426,780$ 499,902,473$ 517,109,487$ 535,482,734$
Growth Rate 2.9%2.9%2.9%2.6%2.9%2.8%3.0%-5.8%1.5%3.5%3.5%3.5%3.6%3.6%3.7%3.7%3.7%3.4%3.4%3.6%
Surplus (Deficit)10,593,577$ 13,504,587$ 14,666,206$ 16,494,044$ 15,576,914$ 15,316,126$ 17,268,906$ 53,317,051$ 58,429,520$ 59,531,034$ 57,975,787$ 56,543,131$ 54,908,950$ 55,963,588$ 57,337,702$ 58,599,083$ 58,638,238$ 60,226,837$ 61,665,958$ 75,852,303$
1 Assumes CalPERS unfunded liability payment of $40 million citywide (General Fund portion is $38 million) per year through 2033.
2 Assumes transfer out to CIP remains flat and transfer out to HBMP and FFP is indexed per policy plus additional transfer amounts included in the FY25 budget plus an additional $5 million (reallocated from UAL payment). Includes projected increase to contingency reserve, which is typically funded from prior year end surplus.
CITY OF NEWPORT BEACH GENERAL FUND LONG-RANGE FISCAL FORECAST
FY 2026 - FY 2045
FY 26 FY 27 FY 28 FY 29 FY 30 FY 31 FY 32 FY 33 FY 34 FY 38 FY 39 FY 40 FY 41 FY 42 FY 43 FY 44 FY 45 FY 46
NET OPERATING RESULT $10.6 $13.5 $14.7 $16.5 $15.6 $15.3 $17.3 $53.3 $58.4 $54.9 $56.0 $57.3 $58.6 $58.6 $60.2 $61.7 $75.9 $77.9
TOTAL REVENUES $332.9 $345.0 $355.8 $366.5 $375.8 $385.7 $398.9 $412.8 $423.2 $473.5 $489.6 $506.8 $524.7 $542.1 $560.1 $578.8 $611.3 $632.2
TOTAL EXPENDITURES $322.3 $331.5 $341.1 $350.0 $360.2 $370.4 $381.6 $359.5 $364.7 $418.5 $433.7 $449.5 $466.1 $483.4 $499.9 $517.1 $535.5 $554.3
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$
M
I
L
L
I
O
N
S
GENERAL FUND REVENUES, EXPENDITURES & NET OPERATING RESULT (SURPLUS/DEFICIT)
FY 26 - FY 45
340
ATTACHMENT B
20-YEAR LONG-RANGE FINANCIAL FORECAST FOR THE TIDELANDS FUND
341
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 FY 2036-37 FY 2037-38 FY 2038-39 FY 2039-40 FY 2040-41 FY 2041-42 FY 2042-43 FY 2043-44 FY 2044-45
Property Income 10,055,856$ 10,458,090$ 10,876,414$ 11,311,470$ 11,763,929$ 12,234,486$ 12,723,865$ 13,232,820$ 13,762,133$ 14,312,618$ 14,885,123$ 15,480,528$ 16,099,749$ 16,743,739$ 17,413,488$ 18,110,028$ 18,834,429$ 19,587,806$ 20,371,319$ 21,186,171$
Growth Rate 4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%
Parking Revenue 4,881,249$ 5,076,499$ 5,279,559$ 5,490,741$ 5,710,371$ 5,938,786$ 6,176,337$ 6,423,391$ 6,680,327$ 6,947,540$ 7,225,441$ 7,514,459$ 7,815,037$ 8,127,639$ 8,452,744$ 8,790,854$ 9,142,488$ 9,508,188$ 9,888,515$ 10,284,056$
Growth Rate 4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%4.0%
Other Revenue 405,238$ 411,678$ 418,231$ 427,107$ 436,209$ 443,201$ 450,315$ 459,992$ 469,919$ 480,101$ 487,882$ 495,799$ 506,630$ 517,741$ 529,141$ 540,839$ 552,842$ 561,945$ 571,210$ 583,986$
Growth Rate 2.1%1.6%1.6%2.1%2.1%1.6%1.6%2.1%2.2%2.2%1.6%1.6%2.2%2.2%2.2%2.2%2.2%1.6%1.6%2.2%
Transfers In 13,733,517$ 14,020,835$ 13,991,544$ 13,863,665$ 14,169,494$ 13,984,943$ 14,308,023$ 14,580,383$ 14,704,332$ 15,043,844$ 15,394,533$ 15,754,182$ 16,120,355$ 16,496,047$ 16,881,631$ 17,277,508$ 17,684,100$ 18,105,071$ 18,537,849$ 18,979,603$
Growth Rate 12.0%2.1%-0.2%-0.9%2.2%-1.3%2.3%1.9%0.9%2.3%2.3%2.3%2.3%2.3%2.3%2.3%2.4%2.4%2.4%2.4%
Total Revenues 29,075,860$ 29,967,102$ 30,565,747$ 31,092,983$ 32,080,003$ 32,601,415$ 33,658,540$ 34,696,586$ 35,616,710$ 36,784,103$ 37,992,979$ 39,244,968$ 40,541,771$ 41,885,165$ 43,277,005$ 44,719,229$ 46,213,859$ 47,763,010$ 49,368,893$ 51,033,815$
Growth Rate 7.6%3.1%2.0%1.7%3.2%1.6%3.2%3.1%2.7%3.3%3.3%3.3%3.3%3.3%3.3%3.3%3.3%3.4%3.4%3.4%
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 FY 2030-31 FY 2031-32 FY 2032-33 FY 2033-34 FY 2034-35 FY 2035-36 FY 2036-37 FY 2037-38 FY 2038-39 FY 2039-40 FY 2040-41 FY 2041-42 FY 2042-43 FY 2043-44 FY 2044-45
Regular Salaries 1,153,752$ 1,176,827$ 1,200,363$ 1,224,370$ 1,248,858$ 1,273,835$ 1,299,312$ 1,325,298$ 1,351,804$ 1,378,840$ 1,406,417$ 1,434,545$ 1,463,236$ 1,492,501$ 1,522,351$ 1,552,798$ 1,583,854$ 1,615,531$ 1,647,841$ 1,680,798$
Growth Rate 3.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%
Special and Other Pays 4,100$ 4,182$ 4,266$ 4,351$ 4,438$ 4,527$ 4,618$ 4,710$ 4,804$ 4,900$ 4,998$ 5,098$ 5,200$ 5,304$ 5,410$ 5,519$ 5,629$ 5,742$ 5,856$ 5,974$
Growth Rate 2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%
Benefits 555,327$ 566,434$ 577,762$ 589,317$ 601,104$ 613,126$ 625,388$ 581,727$ 381,866$ 389,503$ 397,293$ 405,239$ 413,344$ 421,611$ 430,043$ 438,644$ 447,417$ 456,365$ 465,492$ 474,802$
Growth Rate -0.5%2.0%2.0%2.0%2.0%2.0%2.0%-7.0%-34.4%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%2.0%
Non-Personnel Costs 5,751,872$ 5,998,027$ 6,255,915$ 6,526,139$ 6,809,334$ 7,106,170$ 7,417,353$ 7,743,625$ 8,085,773$ 8,444,623$ 8,821,047$ 9,215,965$ 9,630,347$ 10,065,216$ 10,521,652$ 11,000,793$ 11,503,839$ 12,032,059$ 12,586,790$ 13,169,441$
Growth Rate 5.4%4.3%4.3%4.3%4.3%4.4%4.4%4.4%4.4%4.4%4.5%4.5%4.5%4.5%4.5%4.6%4.6%4.6%4.6%4.6%
Transfers Out 21,610,808$ 22,221,632$ 22,527,440$ 22,748,805$ 23,416,269$ 23,603,757$ 24,311,870$ 25,041,226$ 25,792,463$ 26,566,237$ 27,363,224$ 28,184,120$ 29,029,644$ 29,900,533$ 30,797,549$ 31,721,476$ 32,673,120$ 33,653,314$ 34,662,913$ 35,702,801$
Growth Rate 2.8%2.8%1.4%1.0%2.9%0.8%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%3.0%
Total Expenditures 29,075,860$ 29,967,102$ 30,565,747$ 31,092,983$ 32,080,003$ 32,601,415$ 33,658,540$ 34,696,586$ 35,616,710$ 36,784,103$ 37,992,979$ 39,244,968$ 40,541,771$ 41,885,165$ 43,277,005$ 44,719,229$ 46,213,859$ 47,763,010$ 49,368,893$ 51,033,815$
Growth Rate 3.3%3.1%2.0%1.7%3.2%1.6%3.2%3.1%2.7%3.3%3.3%3.3%3.3%3.3%3.3%3.3%3.3%3.4%3.4%3.4%
Surplus (Deficit)-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
CITY OF NEWPORT BEACH TIDE & SUBMERGED LANDS FUND FORECAST
FY 2026 - FY 2045
FY 26 FY 27 FY 28 FY 29 FY 30 FY 31 FY 32 FY 33 FY 34 FY 35 FY 36 FY 37 FY 38 FY 39 FY 40 FY 41 FY 42 FY 43 FY 44 FY 45 FY 46
TOTAL REVENUES $29.08 $29.97 $30.57 $31.09 $32.08 $32.60 $33.66 $34.70 $35.62 $36.78 $37.99 $39.24 $40.54 $41.89 $43.28 $44.72 $46.21 $47.76 $49.37 $51.03 $52.76
TOTAL EXPENDITURES $29.08 $29.97 $30.57 $31.09 $32.08 $32.60 $33.66 $34.70 $35.62 $36.78 $37.99 $39.24 $40.54 $41.89 $43.28 $44.72 $46.21 $47.76 $49.37 $51.03 $52.76
$-
$10
$20
$30
$40
$50
$60
$ MI
L
L
I
O
N
S
TIDE & SUBMERGED LANDS FUND REVENUES, EXPENDITURES & NET OPERATING RESULT (SURPLUS/DEFICIT)
FY 26 - FY 45
342
LONG RANGE FINANCIAL FORECAST
FISCAL YEARS 2026-2045
January 23, 2025
Finance Committee
Item No. 6C1Long Range Financial ForecastStaff Presentation01/23/2025
343
METHODOLOGY
2
Establish
baseline growth
scenario for
major revenue
and expenditure
categories
Develop unique
growth factors
for rev/exp
items that vary
from baseline
Create alternate
baseline
scenarios to
model potential
fiscal impacts (if
needed)
344
MAJOR ASSUMPTIONS
3
•The FY 2024-25 budget, excluding one-time items, was used as a base budget from which forward growth assumptions were developed.
•Annual General Fund transfers-out in support of:
•FFP – $15.3m up to $23.9m annually, representing 3% of General Fund revenues, and includes an additional $6 million for future capital projects.
•CIP – $6.5m annually
•Facilities Maintenance – $2.5m annually
•Tidelands Harbor Capital – $6.0m, indexed at 2.5% annually through FY 2032-33, and reduced to $4.5m thereafter
•Parks Maintenance Fund - $2.3m annually
•No programing of future surpluses in projections – the forecast assumes all revenues and expenditures are fully realized as presented.
345
REVENUE ASSUMPTIONS – PROPERTY TAX
4
19-year average
annual historical
growth: 5.9%
FY 2025-26
projected growth:
4.0%
Projected future
growth beyond FY
2025-26: 3.8%
346
REVENUE ASSUMPTIONS – SALES TAX
5
19-year average
annual historical
growth: 3.1%
FY 2025-26
projected growth:
6.9%
Projected future
growth beyond
FY 2025-26:
2.6%
347
REVENUE ASSUMPTIONS – TRANSIENT OCCUPANCY TAX
6
19-year average
annual historical
growth: 6.7%
FY 2025-26
projected
growth: 3.2%
Projected future
growth beyond
FY 2025-26:
2.9%
*This chart shows TOT revenue net of the amounts remitted to VNB
348
REVENUE ASSUMPTIONS – OTHER REVENUE
7
Top 3
Revenue
Other
Revenue
Projected to grow modestly at 3% on
average over the next 20 years
Service Fees & Charges are
projected to grow at 2%
annually.
Property Income, which
includes leases and parking
revenue is projected to grow by
an average of 3-4% annually.
349
EXPENDITURE ASSUMPTIONS
8
•Regular salaries for both miscellaneous and public safety are based on negotiated MOU
increases and then grow at 2% annually thereafter
•The forecast assumes no growth in personnel headcount
•Benefits (stipends, life insurance, Medicare fringes, retiree health plan contribution,
CalPERS contributions, etc.) are projected to grow at 2% annually
•Includes 1.5% reduction in the employee’s share in pension contributions to CalPERS
through December 2025
•Funding of the City’s unfunded actuarial liability at the $40 million level citywide ($38
million GF portion)
•Non-personnel costs (contract services, utilities, supplies and materials, maintenance and
repair) are projected to grow on average at 5.2% annually
350
EXPENDITURE GROWTH ASSUMPTIONS
9
FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
Regular Salaries 95,146,664$ 97,049,597$ 98,990,589$ 100,970,401$ 102,989,809$
Growth Rate 2.0%2.0%2.0%2.0%2.0%
Special and Other Pays 16,777,018$ 17,112,558$ 17,454,809$ 17,803,905$ 18,159,983$
Growth Rate 1.8%2.0%2.0%2.0%2.0%
Benefits 1 71,678,450$ 73,017,135$ 74,422,950$ 75,899,659$ 77,451,245$
Growth Rate -6.2%1.9%1.9%2.0%2.0%
Non-Personnel Costs 90,524,454$ 95,013,548$ 99,923,832$ 105,102,412$ 110,564,164$
Growth Rate 3.0%5.0%5.2%5.2%5.2%
Transfers Out2 48,176,029$ 49,338,503$ 50,321,883$ 50,183,624$ 51,011,794$
Growth Rate 22.7%2.4%2.0%-0.3%1.7%
Total General Fund Expenditures 322,302,615$ 331,531,341$ 341,114,063$ 349,960,002$ 360,176,995$
Growth Rate 2.9%2.9%2.9%2.6%2.9%
351
TIDELANDS FUND FORECAST
10
•Internal audit recommendation to develop a LRFF for the Tidelands Fund.
•The Tidelands Fund transfers approximately $20 million to the General Fund to cover costs associated with activities in the Tidelands areas supported by General Fund services.
•Police Department operations, Fire Department operations, emergency medical services, marine safety, Public Works Department maintenance of public spaces etc.
•Revenue in the Tidelands Fund is insufficient to fully cover the costs of Tidelands operations. As a result, the General Fund must subsidize these operations.
•Consequently, the performance of the General Fund and the long-range financial plan must account for projections related to the Tidelands Fund’s revenues, expenditures, and the related subsidy from the General Fund.
•Projections from the Tidelands Fund Forecast were used to improve assumptions in the General Fund LRFF as it relates to transfers to and from the General Fund and Tidelands Fund.
352
GENERAL FUND REVENUES, EXPENDITURES & NET RESULT
11
•The preparation of the FY
2025-26 budget is underway.
•Projected surplus of $10.6
million for the upcoming fiscal
year is preliminary.
•Revenue projections
continue to be honed
•Departmental
enhancement requests
not included
•Results of collective
bargaining not included
353
CONCLUSION AND OTHER CONSIDERATIONS
12
•The General Fund is projected to be in a financially sound position over the next 20-year period.
•Any short-term deficits can be absorbed without long-term reliance on Contingency Reserve –
No structural deficit is apparent.
•The City is not without its fiscal challenges. Potential challenges facing the City include:
•CalPERS Investment Return Volatility
•Future recessions or shifts in consumer spending
•Growing costs of health care, education, and housing are reducing discretionary spending
for taxable goods
•Near-term facilities maintenance and replacement obligations in accordance with long-term
infrastructure financing plans
•Increasing costs for construction projects and other capital needs
354
13
Questions?
355
CITY OF NEWPORT BEACH
FINANCE COMMITTEE
STAFF REPORT
Agenda Item No. 6D
January 23, 2025
TO: HONORABLE CHAIR AND MEMBERS OF THE COMMITTEE
FROM: Finance Department
Jason Al-Imam, Finance Director/Treasurer
949-644-3123 or jalimam@newportbeachca.gov
SUBJECT: BUDGET AMENDMENTS FOR QUARTER ENDING DECEMBER 31,
2024
EXECUTIVE SUMMARY
The purpose of this memorandum is to report on the budget amendments for the second
quarter of Fiscal Year 2024-25. 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 included as
Attachment A.
Prepared by: Submitted by:
/s/ Anthony Alannouf
/s/ Jason Al-Imam
Anthony Alannouf Jason Al-Imam
Budget Analyst Finance Director/Treasurer
Attachment:
A. Budget Amendments Fiscal Year 2024-25 Quarter Ending
December 31, 2024
356
ATTACHMENT A
BUDGET AMENDMENTS FISCAL YEAR 2024-25 QUARTER ENDING DECEMBER 31, 2024
357
Q2
BA #Date Amendment Type
Fund Number
Fund(s)Revenues Expenditures Net Effect on Fund Balance Increase/(Decrease)Department Explanation
016 09/10/2024 City Council 110 OTS GRANT FUND 360,000.00$ 360,000.00$ -$ Police
To increase revenue estimates and expenditure appropriations to accept the 2025 State of California, Office of Traffic Safety (OTS) Selective Traffic Enforcement Program (STEP) Grant (#PT25191) for increasing DUI Enforcement and Awareness and funding additional traffic safety enforcement, as well as DUI Sobriety Checkpoints. Funds will be used to pay for overtime costs specifically used for this program, related costs for travel and training, and supplies.
021 10/08/2024 City Council 752 EQUIPMENT FUND -$ 5,141,458.91$ (5,141,458.91)$ Fire
Per City Council Policy F-9: City Vehicle / Equipment
Replacement Guidelines, the replacement schedule for fire engines is 13 years for frontline engines and five to seven years for reserve engines. Four 2014 model year Pierce fire engines are slated for replacement in 2027. Due to current production lead times of 48 to 50 months from the manufacturer, and in order to secure discounted pricing, staff requests the purchase of four 2028 Model Year (MY) or newer engines in Fiscal Year (FY) 2024-25.
022 10/08/2024 City Council 120 COMM DEVL BLK GRANT FUND -$ 607,680.00$ (607,680.00)$ PW
To appropriate expenditures from the Community Development Block Grant (CDBG) unappropriated fund balance for the San Miguel Park Accessible Playground Improvements. City Council approved CDBG funding or this project with Resolution Nos. 2024-30 and 2023-23.
023 10/08/2024 City Council 123 MEASURE M-COMPETITIVE FUND -$ 56,000.00$ (56,000.00)$ PW
To appropriate expenditures from the Community Development Block Grant (CDBG) unappropriated fund balance to the TMDL Compliance/Water Quality Improvements project.
025 10/07/2024 City Council 010017 GENERAL FUNDSPECIAL PURPOSE DEPOSIT FUND 15,737.06$ 15,737.06$ -$ Library Transfer to accept check from the Dorothy Arens Ressel Trust and increase expenditure in Library Account.
026 10/07/2024 Harbor 100 TIDE & SUBMERGED LANDS FUND -$ -$ -$ Harbor
To transfer budget from Harbor Department Vehicle
Replace ISF to Equipment N.O.C. for the One-Time Additional Replacement Patrol Vessel. This program enhancement was approved as part of the FY25 budget and inadvertently placed in 881003.
027 10/22/2024 City Council 010513 GENERAL FUNDFACILITIES FINANCING PLAN 10,819,260.00$ 10,819,260.00$ -$ Finance To appropriate the FY 2023-24 year-end unrestricted surplus. Funds will be allocated to the FFP Fund to be used for future capital projects.
028 10/10/2024 City Manager 010017 GENERAL FUNDSPECIAL PURPOSE DEPOSIT FUND 17,411.00$ 17,411.00$ -$ City Clerk To increase revenue and expenditure appropriations in the election accounts form the Candidate Statement Speical Deposit Account.
029 10/14/2024 City Manager 010 GENERAL FUND 499.16$ 499.16$ -$ Library Incresae revenue and expenditures for Literacy Services
030 10/17/2024 City Manager 010017 GENERAL FUNDSPECIAL PURPOSE DEPOSIT FUND 200.00$ 200.00$ -$ Library Increase revenue and expenditure appropriations from the Literacy Services' Special Deposit account to help fund ongoing programs.
031 10/17/2024 City Council 010 GENERAL FUND 41,935.00$ 41,935.00$ -$ LIbrary Increase revenue and expenditure appropriations from California State Literacy Services (CLLS). Funds will be allocated to various Library Literacy Services accounts.
032 10/21/2024 City Manager 010 017 GENERAL FUNDSPECIAL PURPOSE DEPOSIT FUND 647.35$ 647.35$ -$ HR to incresae revenue and expense appropriations in the Training City Wide account from the CNB Toastmasters
Fees special deposit account.
033 10/22/2024 City Manager 135 CONTRIBUTIONS FUND 27,000.00$ 27,000.00$ -$ PW
To increase revenue and expenditure appropriations for the Water System Rehabilitation project (25W05) that investigates and constructs various city water infrastructure elements (pipelines and valves) that need rehabilitation and/or replacement.
034 10/25/2024 City Manager 010 GENERAL FUND 10,000.00$ 10,000.00$ -$ Fire
To increase revenue and expenditure appropriations for additional CERT equipment and supplies as the Fire Prevention Division ocntinues to revamp and review the CERT program. This CMBA will also transfer funds from the fire prevention's professional services account to special department supplies NOC.
Reporting Quarter:
City of Newport Beach
Fiscal Year 2024-25 Budget AmendmentsQuarter Ending December 31, 2024
358
035 11/12/2024 City Council 010012123
GENERAL FUNDGENERAL FUND CAPITAL PROJECTSMEASURE M-COMPETITIVE FUND 4,033,010.00$ 4,436,311.00$ (403,301.00)$ PW
To recognize revenues from the Orange County Transit Authority (OCTA) grant for the Trolley Program operation. Additionally, this budget amendment will expense the awarded grant to the Balboa Peninsula Trolley Transit Operations and Vehicle Procurement Services project (25T13).
036 10/30/2024 City Manager 010
015
GENERAL FUND
DEVELOPER DEPOSIT FUND 24,040.00$ 24,040.00$ -$ CAO To increase revenue and expenditure appropriations from Revenue N.O.C (No Other Category) to Outside Counsel Special Litigation.
037 11/01/2024 City Manager 010 GENERAL FUND -$ -$ -$ Finance To transfer budget from Accounting Supplies/Checks/Invoices/Forms to Computer Equipment.
038 11/01/2024 City Manager 010017 GENERAL FUNDSPECIAL PURPOSE DEPOSIT FUND 85.47$ 85.47$ -$ Finance
To increase revenue estimates and expenditure appropriations from the Literacy Services Special Deposit Account. Revenues will be increased in the Literacy Services Private Donation/Contributions account; expenditures will be increased in Literacy Services Library Materials.
039 11/19/2024 City Council 701702 WATER ENTERPRISE FUNDWATER CAPITAL FUND 1,339,096.00$ 2,678,192.00$ (1,339,096.00)$ PW
To transfer funds from the Water Enterprise Fund to the
Water Capital Fund and appropriate expenditures in Distribution & Piping CIP Expenditures for GL for the Water Well Rehabilitation Tamura Shallow, Dolphin Shallow and Dolphin Deep project 25W07.
040 11/19/2024 City Council 663 ASSESSMENT DIST #113 -$ 150,000.00$ (150,000.00)$ PW
To appropriate funds from the Assessment District 113 unappropriated fund balance for the completion of the AD 113 project that managed and constructed utility undergrounding such as undergrounded overhead power, telephone, and cable facilities.
041 11/19/2024 City Council 010 GENERAL FUND 449,763.69$ 449,763.69$ -$ Fire
The Fire Prevention division has been awarded a grant provided by State Department of Forestry and Fire Protection (CAL Fire) for Buck Gully Reserve Hazardous Fuel Thinning and Reduction Project (23-WP-ORC-58700857)
042 11/06/2024 City Manager 010 GENERAL FUND 300.00$ 300.00$ -$ Library To recognize revenues from a patron donation and increase expenditure appropriations for the purpose of purchasing books.
043 11/13/2024 City Manager 010 GENERAL FUND 12,600.00$ 12,600.00$ -$ Police
To recognize revenues from a donation from the Irvine Company and increase expenditure appropriations for
funding a one-year pilot program of four new Flock cameras that will be located adjacent to Fashion Island.
044 11/20/2024 City Manager 010135 GENERAL FUNDCONTRIBUTIONS FUND 5,489.28$ 5,489.28$ -$ Public Works
In FY 2020-21, the City of Newport Beach received funding
from CalRecycle for a Rubberized Pavement Grant. A journal entry was completed to reclass funds to reconcile revenues and expenditures related to the grant; however, it did not account for $5,489.28 retention held on a previous CalRecycle bill. Staff proposes transferring $5,489.28 from the General Fund in order to balance the revenues and expenses for this prior year project.
045 11/221/2024 City Manager 010 GENERAL FUND 4,231.38$ 4,231.38$ -$ PD
To recognize revenues from a donation from the Friends of Newport Beach Animal Shelter and increase expenditure appropriations for the purpose of reimbursement for the shelter flag pole.
046 11/27/2024 City Manager 010180 GENERAL FUNDRESTRICTED PROGRAM FUND -$ -$ -$ Library To appropriate funds from the Cultural Arts Sculture Garden VNB account to projects L2301 and L2401 for phase VIII and phase IX of the sculpture garden.
047 12/10/2024 City Council 012513 GENERAL FUND CAPITAL PROJECTSFACILITIES FINANCING PLAN 3,000,000.00$ 6,000,000.00$ (3,000,000.00)$ Finance To appropriate funds from the FFP unapporpriated fund balance to the General Fund Capital Project Fund for the Permanent Supportive Housing Project.
049 12/20/2024 City Manager 135 CONTRIBUTIONS FUND 29,259.11$ -$ 29,259.11$ Public Works To recognize revenue contributions from other agencies for the work the City is performing on the agencies' behald for the Grade Adjustments Water Valved Project (24R09).
359
1/16/25
Scheduled Date Agenda Title Report Type Agenda Description
Thursday, February 13, 2025
Facilities Financial Plan (FFP) and Harbor & Beaches Master Plan (HBMP)Presentation Staff will provide an update on the current status of FFP and HBMP.
Second Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected Fiscal
Year 2024-25 budget performance.
Enterprise Risk Assessment Review Presentation
Staff will provide the Committee with an overview of the enterprise risk
assessment and initial evaluation of internal control risk, which will aid in the
development of an internal audit work plan.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, March 13, 2025
Overview of Revenue Projections Presentation
Staff will provide the Committee with an overview of the assumptions utilized to
prepare revenue projections for the City's major funds as part of the Fiscal Year
2025-26 budget preparation process.
Fiscal Year 2024-25 Fee Study Update Presentation Review and discuss the proposed fee updates for Fiscal Year 2024-25
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, April 10, 2025
Proposed FY 2025-26 Budget Overview of Expenditures Presentation Staff will provide the Committee with an overview of the expenditure budget for
Fiscal Year 2025-26 that will be presented to the City Council in May.
Budget Amendments for Quarter Ending March 31, 2025 Receive and File Staff will report on the budget amendments from the prior quarter.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, May 8, 2025
Follow-Up Discussion of Proposed FY 2025-26 Budget Discussion
Staff will provide the Committee with a copy of the Fiscal Year 2025-26
proposed budget document. Should the Committee wish to continue April's
discussion of the Fiscal Year 2025-26 budget, this is also an opportunity to do
so.
Tuesday, May 27, 2025 Joint City Council and Finance Committee Study Session Presentation Staff will present the Fiscal Year 2025-26 proposed budget to the City Council
and Finance Committee.
Thursday, May 29, 2025 Committee Recommendation to Council for the FY 2024-25 Budget Discussion
Discussion of the Study Session earlier in the week and formulation of any
recommendations to be presented to the City Council at the budget public
hearing in June.
Third Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected Fiscal
Year 2024-25 budget performance.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Newport Beach Finance Committee Work Plan
April 2025
June 2025
February 2025
Committee Recess
March 2025
Committee Recess
July 2025
May 2025
1360
1/16/25
Scheduled Date Agenda Title Report Type Agenda Description
Newport Beach Finance Committee Work Plan
Thursday, September 11, 2025
Annual Review of Investment Performance Presentation
The City's investment advisor, Chandler Asset Management, will report on the
performance of the City's investment portfolio for the fiscal year ending June 30,
2025.
Annual Review of Investment Policy Presentation
Staff will provide a presentation regarding any proposed changes to the City's
Investment Policy prior to the Investment Policy being approved by the City
Council.
Budget Amendments for Quarter Ending June 30, 2025 Receive and File Staff will report on the budget amendments from the prior quarter.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, October 9, 2025
Budget Amendments for Quarter Ending September 30, 2025 Receive and File Staff will report on the budget amendments from the prior quarter.
Year-End Budget Results and Surplus Allocation Presentation
Staff will provide a presentation regarding the year-end budget results for Fiscal
Year 2024-25 and recommendations for allocation of any year-end budget
surplus.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, November 13, 2025
First Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected Fiscal
Year 2025-26 budget performance.
OPEB Actuarial Valuation Report Update Presentation Staff will provide the Committee with an overview of the Fiscal Year 2024-25
actuarial valuation report prepared by the City's actuary.
CalPERS Update Presentation
Staff will provide the Committee with an overview of the data from the latest
actuarial reports from CalPERS as well as their impact on prior projections of
the paydown of the City's unfunded pension liability.
Internal Audit Program Update Presentation Presentation of internal audit reports, findings, and recommendations from the
Fiscal Year 2024-25 audit program.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
September 2025
October 2025
November 2025
December 2025
Committee Recess
August 2025
Committee Recess
2361