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Home My WebLink About17 - Establishing the Fiscal Transparency Ad Hoc CommitteeQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report January 27, 2026 Agenda Item No. 17 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jason AI -Imam, Adminstrative Services Director/Treasurer - 949- 644-3126, jalimam@newportbeachca.gov PREPARED BY: Jason AI -Imam, Administrative Services Director/Treasurer TITLE: Resolution No. 2026-05 —Establishing the Fiscal Transparency Ad Hoc Committee ABSTRACT - At its January 13, 2026, meeting, the City Council voted via straw poll to direct staff to return with an item to consider suspending Finance Committee meetings while creating a City Council Ad Hoc Committee focused on fiscal transparency. Mayor Lauren Kleiman subsequently clarified that the Finance Committee should not be suspended and remain active. The proposed resolution would only establish a City Council Fiscal Transparency Ad Hoc Committee consisting of the Mayor Kleiman and Councilmembers Weber and Stapleton. RECOMMENDATIONS: a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; and b) Adopt Resolution No. 2026-05, A Resolution of the City Council of the City of Newport Beach, California, Establishing the Fiscal Transparency Ad Hoc Committee. DISCUSSION: On January 13, 2026, pursuant to City Council Policy A-1, Mayor Lauren Kleiman (Mayor) requested that the City Council consider temporarily suspending Finance Committee meetings, along with related appointments, while a City Council Ad Hoc Committee, evaluates potential ways to enhance transparency, accountability, and the efficient use of City resources, broaden policy perspectives, and increase public engagement in discussions relating to the fiscal governance and financial status of the City. Mayor Kleiman, Mayor Pro Tern Noah Blom, and Councilmembers Sara J. Weber and Erik Weigand voted, via a straw poll, in favor of bringing the item back for consideration at a future meeting. On January 20, 2026, the Mayor modified her request by asking staff to draft a resolution formally establishing a City Council Fiscal Transparency Ad Hoc Resolution No. 2026-05 —Establishing the Fiscal Transparency Ad Hoc Committee January 27, 2026 Page 2 Committee consisting of the Mayor and Councilmembers Weber and Stapleton, and by clarifying that she no longer wished to suspend the Finance Committee. To inform the City Council's discussion on this item, a survey of Orange County cities was conducted to determine whether neighboring cities maintain Finance Committees. Of the 34 cities in the County, 14 currently have a Finance Committee, representing approximately 41 percent. The likelihood of having a Finance Committee increases with population size. Among the 16 cities with populations of 65,000 or more, 10 have a Finance Committee, or about 63 percent. Among the 14 cities with a Finance Committee, 8 include one or more City Council Members on the committee, representing approximately 57 percent. The remaining 6 cities rely exclusively on non -council members, such as residents or subject matter experts. Overall, the survey indicates a variety of approaches across the county, with a majority of Finance Committees including some level of Council participation, often alongside non -council members. Looking specifically at coastal cities, including Huntington Beach, Laguna Beach, Seal Beach, Dana Point and San Clemente, 2 of the 5 currently have Finance Committees. Including Newport Beach, this results in an equal split among neighboring coastal cities. In addition to the survey results, staff compiled a list of items reviewed and discussed by the Finance Committee in calendar years 2024 and 2025 that did not go before the City Council for review and consideration. This information is intended to provide further context regarding the types of matters typically handled by the Finance Committee. If the resolution is adopted, the Ad Hoc Committee will make a recommendation to the City Council for their consideration. FISCAL IMPACT: There are no direct fiscal impacts associated with this item. City staff estimates that approximately 485 hours are spent annually preparing for and attending Finance Committee meetings, including agenda preparation, development of reports and presentations, internal review and coordination, and meeting attendance. This estimate reflects only activities specific to the Finance Committee and does not include staff time associated with items that also go before the City Council. ENVIRONMENTAL REVIEW: Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Resolution No. 2026-05 —Establishing the Fiscal Transparency Ad Hoc Committee January 27, 2026 Page 3 NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). ATTACHMENTS: Attachment A — Resolution No. 2026-05 Attachment B — Survey of Orange County Cities Attachment C — Finance Committee Items Discussed in Calendar Years 2024 & 2025 (Excluding Items Brought Before the City Council) Attachment A RESOLUTION NO. 2026-5 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ESTABLISHING THE FISCAL TRANSPARENCY AD HOC COMMITTEE WHEREAS, the City of Newport Beach ("City") is governed, in part, by its Charter, Municipal Code, and adopted City Council Policies; WHEREAS, the City Council has a long and established history of being good guardians and stewards of the public's money; WHEREAS, appropriations, expenditures, and other budgetary matters are a primary concern of the City Council; WHEREAS, the City Council adopted Resolution No. 94-110 on December 12, 1994, establishing the Finance Committee, whose duties and responsibilities have been amended throughout the years; WHEREAS, the Finance Committee is charged with a variety of tasks including, but not limited to, reviewing and monitoring events and issues that may affect the financial status of the City, and making recommendations to the City Council regarding amendments to financial policies; WHEREAS, the City Council recognizes the importance of maintaining transparent and efficient fiscal governance; and WHEREAS, the City Council desires to form an ad hoc committee to evaluate options to enhance transparency, accountability and efficient use of City resources, broaden policy perspectives, and increase public engagement in discussions relating to the fiscal governance and financial status of the City. NOW, THEREFORE, the City Council of the City of Newport Beach hereby resolves as follows. - Section 1: The City Council Fiscal Transparency Ad Hoc Committee ("Committee") is hereby established and shall consist of three Council Members appointed by the Mayor. The following three Council Members are hereby appointed by the Mayor: Mayor Lauren Kleiman; Council Member Sara J. Weber; and Council Member Joe Stapleton. Section 2: The sole purpose and responsibility of the Committee is to: evaluate ways to enhance transparency, accountability and the efficient use of City resources; Resolution No. 2026- Page 2 of 3 broaden policy perspectives; increase public engagement in discussions relating to the fiscal governance and financial status of the City; and make recommendations to the entire City Council in regards thereto. Section 3: Unless terminated sooner by action of the City Council, the Committee shall be advisory and shall expire on January 31, 2027, or upon making recommendations to the entire City Council, whichever is first. Section 4: The Committee shall not be subject to the Brown Act; however, the recommendations of the Committee to the City Council shall be considered at a meeting of the entire City Council noticed in accordance with California Government Code Section 54950 et seq. Section 5: The City Council hereby repeals all prior resolutions to the extent that they conflict with this resolution. Section 6: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 7: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Resolution No. 2026- Page 3 of 3 Section 8: The City Council finds the adoption of this resolution is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Section 9: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 27th day of January, 2026. Lauren Kleiman Mayor ATTEST: Lena Shumway City Clerk APPROVED AS TO FORM: CITY TTORNEY'S OFFICE 7 ot�C ar n C. Harp City Attorney Attachment B SURVEY OF ORANGE COUNTY CITIES City I Population I Finance Committee I No. of Committee Members I No. of Council Members I No. of Other Members Anaheim 350,351 Yes 7 membersNone members Santa Ana 332,332 1 No INone INone I None 287,387 Yes membersIrvine 7 •members Huntington••228 Yes 7 members Nonemembers Garden• • Yes 7 members•members Orange 138,661 1 No None None None Fullerton 138,638 No I None INone INone Costa•11 Yes 9 members 3 members• - Mission Viejo 94,375 No I None INone INone Westminster 90,642 • •members Lake Forest 85,529 No None INone INone Newport•members 4 members Buena Park 81,783 No I None INone INone Tustin • 4. Yes 5 members•members Yorba Linda W' 67,645 Yes dL 2 members 2 members None Laguna Niguel ffih.. 66,384 d� Yesanift. 7 members 2 members 5 members San Clemente 64,562 No None None INone La Habra 62,233 No None None I None Fountain Valley 56,358 No None None INone Placentia :4 IPW Yes ML3 membersmembers Aliso Viejo 51,320 No I None INone INone Cypress 1 49,531 No INone INone INone 47,337 Yes membersBrea 5 •None Rancho Santa Margarita 47,257 No INone INone INone Stanton 38,639 1 No INone INone INone San Juan Capistrano 34,998 1 No INone INone INone Dana Point 32,883 Yes 5 members 2 members 3 members Laguna Hills 30,921 No None None None Seal Beach 24,868 No None None None Laguna Beach 22,777 No None None None Laguna Woods 17,342 No None None None La Palma 1 15,375 No INone None None Los Alamitos :4 JW YesAIIIIIIII 2 members•None Villa Park 1 5,776 1 No None INone INone Attachment C Finance Committee Items Discussed in Calendar Years 2024 & 2025 (Excluding Items Brought Before the City Council) • General Fund and Tide Lands Fund Long Range Financial Forecast Update • Harbor & Beaches Master Plan (HBMP) • Budget Amendments for Each Quarter • Overview Of Revenue Projections • Proposed Budget Overview of Expenditures • Performance Metrics • Annual Review of Investment Performance • Departmental Overviews o Overview Of Public Works Department Budget o Overview Of Utilities Department Budget o Overview Of Recreation and Senior Services Department Budget o Overview Of Community Development Department Budget • Internal Audit Program Update • OPEB Actuarial Valuation Report Update • CalPERS Update • Enterprise Risk Assessment Review • Review of the Los Angeles County and Orange County Investment Pools • Overview of Sales Tax Allocations for Automobile Sales