HomeMy WebLinkAboutFinance Committee Agenda Packet - February 12, 2026CITY OF NEWPORT BEACH
FINANCE COMMITTEE AGENDA
Community Room
100 Civic Center Drive, Newport Beach, CA 92660
Thursday, February 12, 2026 - 3:00 PM
Finance Committee Members:
Joe Stapleton, Councilmember / Chair
Sara J. Weber, Councilmember
Allen Cashion, Committee Member
William Collopy, Committee Member
William Kenney, Committee Member
Kory Kramer, Committee Member
Staff Members:
Seimone Jurjis, City Manager
Jason Al-Imam, Administrative Services Director/Treasurer
Trevor Power, Acting 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 Administrative
Services 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, Administrative Services 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.
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February 12, 2026
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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.CURRENT BUSINESS
FINANCIAL STATEMENT AUDIT RESULTS AND RELATED
COMMUNICATION FOR THE FISCAL YEAR ENDING JUNE 30, 2025
A.
Summary:
Davis Farr, an independent public accounting firm of licensed public accountants,
has completed its audit for the fiscal year ending June 30, 2025. Marc Davis, the
audit partner, will meet with the Finance Committee to discuss the results of the
audit.
Recommended Action:
Receive and file.
STAFF REPORT
ATTACHMENT A
ATTACHMENT B
ATTACHMENT C
PRESENTATION
SECOND QUARTER BUDGET UPDATEB.
Summary:
Staff will report on the budget amendments from the prior quarter.
Recommended Action:
Receive and file.
STAFF REPORT
5B1_PRESENTATION
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February 12, 2026
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Finance Committee Meeting
WORK PLAN REVIEWC.
Summary:
Staff will report on the upcoming Finance Committee items.
Recommended Action:
Receive and file.
WORK PLAN
VI.ADJOURNMENT
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CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 5A February 12, 2026
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Administrative Services Department Jason Al-Imam, Administrative Services Director/Treasurer 949-644-3123, jalimam@newportbeachca.gov
SUBJECT: FINANCIAL STATEMENT AUDIT RESULTS AND RELATED COMMUNICATION FOR THE FISCAL YEAR ENDED JUNE 30, 2025
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, 2025 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, 2025 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 control that would need to be communicated to the Committee, nor did they identify any instances of noncompliance or other matters to report.
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Financial Statement Audit Results and Related Communication for the Fiscal Year Ended June 30, 2025 February 12, 2026 Page 2 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 2024-25 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 Administrative Services Director/ Treasurer
ATTACHMENTS:
Attachment A – Fiscal Year 2024-25 Financial Statement Attachment B – Required Audit Communications Attachment C – Report on Internal Control and Other Matters
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ATTACHMENT A
FISCAL YEAR 2024-25 FINANCIAL STATEMENT
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ANNUAL
COMPREHENSIVE
FINANCIAL REPORT
FISCAL YEARENDED
JUNE 30, 2025
&LW\RI1HZSRUW%HDFK&DOLIRUQLD 7
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Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Prepared by the Administrative Services Department
Jason Al-Imam,
Administrative Services and Finance Director/Treasurer
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The City of Newport Beach was incorporated September 1, 1906
The present City Seal was adopted July 22,1957
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INTRODUCTORY SECTION
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CITY OF NEWPORT BEACH
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2025
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 ............................................................................................... 51
Statement of Activities ..................................................................................................... 52
Fund Financial Statements:
Governmental Funds:
Balance Sheet .............................................................................................................. 58
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Position....................................................................................... 61
Statement of Revenues, Expenditures and Changes in Fund Balances ...................... 62
Reconciliation of Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities .............. 64
Proprietary Funds:
Statement of Net Position............................................................................................. 68
Statement of Revenues, Expenses and Changes in Net Position ............................... 69
Statement of Cash Flows ............................................................................................. 70
Fiduciary Funds:
Statement of Fiduciary Net Position ............................................................................. 74
Statement of Changes in Fiduciary Net Position .......................................................... 75
Notes to the Financial Statements ..................................................................................... 79
Required Supplementary Information
Defined Benefit Plan For Miscellaneous Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 142
Schedule of Contributions ............................................................................................. 144
Defined Benefit Plan For Safety Employees:
Schedule of Changes in the Net Pension Liability and Related Ratios ......................... 146
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Schedule of Contributions ............................................................................................. 148
Post-Employment Health Care Benefits (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios ............................ 150
Schedule of Contributions ............................................................................................. 152
Budgetary Comparison Statements:
General Fund ............................................................................................................... 154
Tide and Submerged Land – Operating Fund ............................................................... 156
Tide and Submerged Land – Harbor Capital Fund ....................................................... 157
Notes to Required Supplementary Information ................................................................ 158
Supplementary Schedules
Other Governmental Funds:
Combining Balance Sheet ............................................................................................. 166
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances .............................................................................................................. 173
Budgetary Comparison Schedules:
State Gas Tax Fund ...................................................................................................... 180
SB1 Gas Tax RMRA Fund ............................................................................................ 181
Asset Forfeiture Fund ................................................................................................... 182
OTS DUI Grant Fund .................................................................................................... 183
Circulation and Transportation Fund ............................................................................. 184
Building Excise Tax Fund .............................................................................................. 185
Community Development Block Grant Fund ................................................................. 186
Air Quality Management District Fund .......................................................................... 187
Environmental Liability Fund ......................................................................................... 188
Supplemental Law Enforcement Services Fund ........................................................... 189
Opioid Remediation Fund ............................................................................................. 190
Contributions Fund ........................................................................................................ 191
FIIN Fund ...................................................................................................................... 192
Restricted Programs Fund ............................................................................................ 193
Measure M Fund ........................................................................................................... 194
Oceanfront Encroachment Fund ................................................................................... 195
PEG Fees Fund ............................................................................................................ 196
Park Fees Fund ............................................................................................................. 197
Internal Service Funds:
Combining Statement of Net Position ........................................................................... 202
Combining Statement of Revenues, Expenses and Changes in Net Position .............. 203
Combining Statement of Cash Flows ............................................................................ 204
Custodial Funds:
Combining Statement of Fiduciary Net Position ............................................................ 208
Combining Statement of Changes in Fiduciary Net Position......................................... 209
STATISTICAL SECTION
(Unaudited)
Financial Trends:
Net Position by Component ................................................................................................ 214
Changes in Net Position ...................................................................................................... 216
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Fund Balances of Governmental Funds .............................................................................. 218
Changes in Fund Balance of Governmental Funds ............................................................ 220
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property ..................................... 224
Property Tax Rates, Direct and Overlapping Governments ................................................ 225
Principal Property Taxpayers .............................................................................................. 226
Property Tax Levies & Collections ...................................................................................... 227
Debt Capacity:
Ratios of Outstanding Debt by Type ................................................................................... 230
Ratios of General Bonded Debt .......................................................................................... 232
Schedule of Direct and Overlapping Debt ........................................................................... 233
Computation of Legal Debt Margin ..................................................................................... 234
Demographic and Economic Information:
Demographic and Economic Statistics ................................................................................ 238
Principal Employers ............................................................................................................ 239
Operating Information:
Full-Time City Employees by Function ................................................................................ 243
Operating Indicators by Function ........................................................................................ 244
Capital Asset Statistics by Function .................................................................................... 246
Water Sold by Customer Type ............................................................................................ 248
Utility Rates ......................................................................................................................... 250
Major Water Customers ...................................................................................................... 251
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Administrative Services Department
CITY OF NEWPORT BEACH
100 Civic Center Drive
Newport Beach, California 92660
949 644-3127 | 949 644-3339 FAX
newportbeachca.gov/finance
January 28, 2026
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, 2025 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, 2025 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, 2025 are fairly presented in
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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:
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Newport Beach surrounds Newport Bay, well known for its picturesque islands and one
of the greatest recreational harbors in the world, accommodating about 4,300 recreational
and sports charter boats docked within its 21-square-mile harbor area. The bay area and
the ten miles of ocean beach offer outstanding fishing, swimming, surfing, and aquatic
sports activities. The City has a permanent population of 82,654, 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
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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,
electricity, 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 82,654, 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
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Fiscal Year
Population
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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 4.1% as of August 2025 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 5.8%, and the county’s 4.6%, 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
over $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 $132,670
Orange County 115,229
California 100,149
USA 81,604
Source: U.S. Census Bureau, 2024
2024 Median Household Income
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025*
Calendar Year
Historical Unemployment Rates
(Rates are not seasonally adjusted)
Newport Beach
Orange County
California
* through August 31, 2025
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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 2024. Actual revenues were $10.4 million or 3.4% higher
than final anticipated estimates, and $17.1 million or 5.8% 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 74.5% of all General Fund revenues. Tax revenues in total,
including business licenses, franchise fees, and other taxes represent 77.8% of all
General Fund revenues, while only 22.2% 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 (49.2%) 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 2024-25 came in $8.1 million
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or 5.5% 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 2.4% in 2025, 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 $4.3 million, which far exceeds the countywide
estimated median value of $1.3 million. Higher assessed values are projected to continue
due to strong demand, which is expected to support continued growth in future property
tax revenues.
After Californians passed Proposition 13 in 1978, assessed property value is reassessed
to market value only when the property changes ownership. Otherwise, the assessed
value (AV) grows by no more than two percent per year. This practice creates a constant
lag and buffer between assessed and market values, effectively insulating the tax base
from more market volatility.
The City has experienced positive AV growth during each of the past 30 years (see chart
below with the past 15 years of AV growth demonstrated). While property tax growth rates
fell sharply during the Great Recession and many other cities experienced decreases in
their AV during 2008 through 2011, the assessed value never declined and has risen
steadily since.
Calendar Median Median %
Year Sales Price Change
2016 1,064 2,150,000$ 8.86%
2017 1,113 2,400,000$ 11.63%
2018 952 2,517,000$ 4.88%
2019 949 2,435,000$ -3.26%
2020 1,135 2,595,000$ 6.57%
2021 1,406 3,200,000$ 23.31%
2022 830 3,750,000$ 17.19%
2023 687 3,845,000$ 2.53%
2024 707 4,200,000$ 9.23%
2025*538 4,300,000$ 2.38%
Source: HdL Coren & Cone
*Data through September 2025
CITY OF NEWPORT BEACH
Detached Single Family Residential Full Value Sales
Median Price
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Value changes in Newport Beach show continued appreciation in property values in
Fiscal Year 2024-25. Over the past 10 years, assessed valuation increased an average
of 6.0% per year and 5.3% over a twenty-year period. Newport Beach’s assessed
property values increased 5.3%, with a local assessed value of $80.0 billion for Fiscal
Year 2024-25.
Sales Tax
The second largest funding source for the General Fund is sales tax revenue, making up
about 14.7% 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.
Sales tax revenue was up 5.7% during the current fiscal year, diverging from broader
regional and statewide patterns in which overall sales tax revenue growth declined across
much of the State of California. Consistent with state results, sales from autos and
transportation (the city’s largest source of sales tax revenue) were down in the current
year as higher interest rates continued to limit the demand for new vehicles. Additionally,
the continued temporary closure of a luxury automobile dealership for most of the year
while undergoing a construction renovation project had a negative impact on local auto
sales. However, a 9.1% increase in sales from general consumer goods and a 9.4%
increase in sales from restaurant/hotels, along with solid contributions from Business &
industry, more than made up for the decline in autos and transportation. The positive
result despite a downturn in the City’s largest source of sales tax revenue underscores
the City’s resilient local economy and strong visitor based spending, distinguishing its
performance from the wider regional and statewide downturn
Sales tax revenue is projected to increase by 3.0% next fiscal year, largely due to the
expected rebound of automobiles and transportation sector as the aforementioned luxury
automobile dealership will be open for the entire fiscal year. In addition, sales from
restaurants and hotels are projected to rise by 2.1% next year as restaurants are working
5.3%
7.1%
1.0%2.9%5.2%5.7%5.9%6.5%
6.6%
7.3%5.3%
6.4%
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Total Assessed Property Value Growth
4.5%4.8%
5.6%
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hard to limit menu price increases while also promoting deals and value menus to retain
consumers.
Transient Occupancy Tax (TOT)
The City distinguishes its transient occupancy taxpayers in two broad property type
categories, commercial (hotel) and residential (short-term lodging) property. Historically,
TOT accrues to the City at a rate of 10% of room charges with 18% of the collection from
both commercial and residential activity going to the local destination marketing
organization (Visit Newport Beach) to promote Newport Beach as a tourist destination.
Beginning January 2025, as the result of a new agreement, Visit Newport Beach’s share
of hotel TOT increased to 23% while its share of residential TOT was eliminated. 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 7% over the same five-year period.
In the current fiscal year, TOT revenue from short-term residential stays increased by 4%,
while hotel TOT revenue increased by 5%. Growth was stronger in the first part of the
fiscal year, but moderated in the final quarter, consistent with broader trends of leveling
demand in California’s lodging market. Ongoing hotel renovations and new development
projects indicated continued investment in the local lodging sector, which is expected to
increase capacity and improve guest offerings.
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
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s
Transient Occupancy Tax (TOT) Revenue
Residential (Short-term Rental) TOT Revenue Commercial (Hotel) TOT Revenue
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financial policies have resulted in a trend of General Fund operating surpluses and strong
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 12% between
FY 2008-09 and FY 2013-14, reaching a low in 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. The recent
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increase in positions has mostly been the result of converting part time positions to full
time positions to better support needs of departments.
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. The City maintains an elite credit profile holding the top-tier AAA credit rating
from major agencies like FitchRatings, Moody’s and S&P Global. The rating agencies
regularly note key aspects such as the City’s robust economy, strong financial reserves,
conservative fiscal management, and high wealth levels create a stable outlook affirming
the ability to meet financial obligations. 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.
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
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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 2024-25 by allocating resources to construct a new library and fire station,
construct permanent supportive housing, to finalize construction of a pedestrian bridge
and parking lot, and to explore construction of a new aquatic center.
Overall, the FFPR balance increased by $3.1 million from the prior fiscal year.
Pensions
As of the actuarial valuation date of June 30, 2024, the City had an Unfunded Accrued
Liability (UAL) of $312.5 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 52.3% of the Normal
Cost of the plan, or $11.9 million in Fiscal Year 2024-25.
Adopted a fixed and shorter amortization period for the unfunded liability.
Made Additional Discretionary Payments (ADPs)
Contributed no less than Actuarial Determined Contribution (ADC) each and every
year.
Beginning Balance 7/1/24 20,435,754$
Sources
Donations 1,068,190
Transfer In from General Fund 12,104,412
Investment Income 857,449
Net increase in fair value of investments 186,073
Total Sources 14,216,124
Uses
Fire Station/Library Replacement (6,800,000)
Permanent Supportive Housing (3,000,000)
Jr. Guard Capital Project (5,295)
Aquatic Center Project (500,000)
Superior Ave. Bridge and Parking Lot Project (805,874)
Total Uses (11,111,169)
Ending Balance 6/30/25 23,540,709$
Facilities Financial Planning Reserve Fund
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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 2024-25 represented six 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. Beginning
in fiscal year 2024-25, the OPEB liability is fully funded.
AWARDS AND ACKNOWLEDGMENTS
The City has prepared an Annual Comprehensive Financial Report for the past 32 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, 2024. In order to be awarded a Certificate of Achievement, a government unit
must publish an easily readable and efficiently organized Annual Comprehensive
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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 Administrative Services 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.
Seimone Jurjis
City Manager
Jason Al-Imam
Administrative Services and
Finance Director/Treasurer
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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, 2024
Executive Director/CEO
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Newport Beach City Officials
Sara J. Weber
Councilmember
District 7
Lauren Kleiman
Mayor
District 6
Michelle Barto
Councilmember
District 2
Erik Weigand
Councilmember
District 3
Noah Blom
Mayor Pro Tem
District 5
Robyn Grant
Councilmember
District 4
City Councilmembers
City Executive Staff
Seimone Jurjis
City Manager
Aaron Harp
City Attorney
Lena Shumway
City Clerk
Tara Finnigan .......................................................................................................................... Assistant City Manager
Jason Al-Imam.....................................................................Administrative Services and Finance Director/Treasurer
Jeff Boyles .................................................................................................................................................... Fire Chief
Paul Blank ............................................................................................................................................. Harbormaster
Melissa Hartson.................................................................................................................... Library Services Director
Dave Miner ............................................................................................................................................... Police Chief
Dave Webb ............................................................................................................................... Public Works Director
Sean Levin ....................................................................................................... Recreation & Senior Services Director
Mark Vukojevic ................................................................................................................................. Utilities Director
Joe Stapleton
Councilmember
District 1
Vacant.........................................................................................................................Municipal Operations Director
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Board of Library
Trustees
Building & Fire
Board 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
Administrative
Services
Fire
Municipal
Operations
Harbor
Library
Services
Public
Works
Utilities
Police
Recreation &
Senior Services
City
Committees
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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, 2025, 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,
2025, 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.
Emphasis of Matter
As described further in Notes 1 and 7 to the financial statements, during the year ended June
30, 2025, the City implemented Governmental Accounting Standards Board (GASB)
Statement No. 101, Compensated Absences. Our opinions are not modified with respect to
this matter.
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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
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.
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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
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
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The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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
January 28, 2026, 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
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
January 28, 2026
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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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, 2025. 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’s 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.
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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 the 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
fiduciary net position, and a statement of changes in fiduciary net position. We exclude
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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, 2025 was $2.6 billion, increasing $60.5 million or 2.3% 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 $29.7 million. This increase is primarily due to a $22.4 million increase in cash and investments primarily related to investment performance, a $8.3 million increase in lease receivables primarily related to signing new lease agreements, and a $5.1 million increase in prepaid items primarily related to the purchase of four fire engines, offset by a $7.3 million decrease in restricted cash and investments primarily related to undergrounding utilities. Capital assets increased $11.5 million, of which $9.8 million is related to additions to infrastructure and work in progress, and $1.6 million is due to additions to land structures, and
equipment.
Current liabilities decreased $17.3 million primarily due to decreases in accounts payable and unearned revenue offset by an increase in accrued payroll.
Long-term liabilities decreased $56.1 million. The decrease is primarily due to decreases in the City’s net pension liability and net OPEB liability as investment returns in both plans finished better than expected. See Note (11) and Note (12) of the Notes to the Financial Statements for more
information.
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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 $131.0 million of net position, an increase of $7.6 million from the
prior fiscal year, primarily due to an increase of restricted net position related to community
services offset by a decrease of restricted net position related to public works. 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. Public works’ decrease is mainly from the spending of limited obligation
improvement bond proceeds for undergrounding utilities.
As of June 30, 2025, unrestricted net position was $80.9 million, an increase of $32.7 million from
the prior fiscal year, primarily due to the receipt of unrestricted revenues such as property taxes
and sales taxes that were not spent or restricted by the end of the fiscal year and the decline of
net pension and net OPEB liabilities. As pension and OPEB obligations declined, fewer resources
were needed to support long-term benefit costs, strengthening the City’s overall financial position
and increasing unrestricted net position.
Governmental Activities Business-Type Activities Total
2024 2025 2024 2025 2024 2025
Current and other assets 699,910$ 725,870$ 30,548$ 34,266$ 730,458$ 760,136$
Capital assets 2,391,089 2,399,825 136,639 139,424 2,527,728 2,539,249
Total assets 3,090,999 3,125,695 167,187 173,690 3,258,186 3,299,385
Deferred outflows of resources 145,027 99,604 5,341 3,197 150,368 102,801
Current liabilities 58,840 40,164 4,986 6,356 63,826 46,520
Long-term liabilities 482,299 428,268 14,928 12,822 497,227 441,090
Total liabilities 541,139 468,432 19,914 19,178 561,053 487,610
Deferred inflows of resources 268,341 274,905 79 115 268,420 275,020
Net position
Net investment in capital assets 2,275,100 2,292,550 132,332 135,138 2,407,432 2,427,688
Restricted 123,445 131,011 - - 123,445 131,011
Unrestricted 28,001 58,401 20,203 22,456 48,204 80,857
Total net position 2,426,546$ 2,481,962$ 152,535$ 157,594$ 2,579,081$ 2,639,556$
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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 $364.4 million in Governmental Activities revenue was
derived. Figure 3 summarizes this revenue by major source. As shown on Figures 2 and 3, $80.3
million, or 22.0%, of the revenues were recovered from those who directly benefited from the
programs as a charge for service. Another $28.0 million, or 7.7%, 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 $256.1 million, or 70.3%,
represented general revenues of the City including taxes, intergovernmental revenues, and other
miscellaneous revenues.
Governmental Activities Business-Type Activities
2024 2025 2024 2025 2024 2025
Revenues:
Program revenues:
Charges for services 81,473$ 80,249$ 39,117$ 46,445$ 120,590$ 126,694$
Operating grants and contributions 34,498 22,766 115 26 34,613 22,792
Capital grants and contributions 35,647 5,260 - - 35,647 5,260
Total program revenues 151,618 108,275 39,232 46,471 190,850 154,746
General revenues:
Taxes:
Property taxes 146,137 154,183 - - 146,137 154,183
Sales tax 43,445 45,934 - - 43,445 45,934
Transient occupancy taxes 31,737 33,174 - - 31,737 33,174
Other taxes 10,252 10,386 - - 10,252 10,386
Investment related income 9,368 9,093 1,462 1,432 10,830 10,525
Other 2,855 3,333 - - 2,855 3,333
Total general revenues 243,794 256,103 1,462 1,432 245,256 257,535
Total revenues 395,412 364,378 40,694 47,903 436,106 412,281
Expenses:
General government 28,392 20,366 - - 28,392 20,366
Public safety 151,626 143,921 - - 151,626 143,921
Public works 88,360 87,889 - - 88,360 87,889
Community development 16,814 17,105 - - 16,814 17,105
Community services 33,034 33,510 - - 33,034 33,510
Interest 6,215 6,171 - - 6,215 6,171
Water - - 37,322 36,562 37,322 36,562
Wastewater - - 6,959 6,282 6,959 6,282
Total expenses 324,441 308,962 44,281 42,844 368,722 351,806
Increases in net position 70,971 55,416 (3,587) 5,059 67,384 60,475
Net position at beginning of year 2,355,575 2,426,546 157,717 152,535 2,513,292 2,579,081
Restatement - - (1,595) 1 - (1,595) 1 -
Net position at beginning of year, as restated 2,355,575 2,426,546 156,122 152,535 2,511,697 2,579,081
Net position at end of year 2,426,546$ 2,481,962$ 152,535$ 157,594$ 2,579,081$ 2,639,556$
1 Prior year net position w as restated due to unbilled receivables adjustment in Fiscal Year 2022-23.
Total
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Figure 3
Governmental Activities Revenue Sources
For the Year Ended June 30, 2025
As illustrated in Figure 2, program revenues related to Governmental Activities decreased $43.3
million from the prior fiscal year. This decrease was primarily attributable to the prior fiscal year
containing several large one-time capital and operating grants and contributions related to the
issuance of limited obligations improvement bonds for two assessment districts, and the
recognition of private contributions for the construction of a Junior Lifeguard building and
library lecture hall.
The City’s general revenues related to Governmental Activities increased about $12.3 million from
the prior year primarily due to increases in property taxes, sales taxes, transient occupancy taxes,
other taxes, and other general revenues, offset by decreases in investment related income.
Revenue increases across various categories illustrate 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 $8.0 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 and due
to an increase in residual tax revenue from the dissolution of a former redevelopment agency.
At $45.9 million, sales taxes represent the second largest individual revenue source for the City.
Sales taxes increased $2.5 million from the previous fiscal year. This increase in sales tax revenue
was due to strong consumer spending in key industry groups, including restaurants and hotels,
general consumer goods, and the sales tax pools offset a modest decline in sales from autos and
transportation.
Transient occupancy taxes (TOT), the City’s third largest revenue source, finished the year at
$33.2 million, which is an increase of $1.4 million from the previous fiscal year. Both Residential
TOT and Hotel TOT revenues experienced modest increases in the 4% to 5% range indicating
robust demand for Newport Beach as a premier tourist destination, which is why hoteliers continue
to invest in upgrades and renovations.
22%
8%
67%
3%
Charges for Services
Contributions and Grants
Taxes
Other
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Investment income, comprised of both interest income and unrealized gains/losses, decreased about $305,000 from the prior fiscal year. Between the two fiscal years there were less unrealized
gains for the current fiscal year. Over time the portfolio’s percentage of bonds with maturities of six months or less increased, which decreased the portfolio’s potential for unrealized gains.
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 $309.0 million of Governmental Activities expense was derived. The decrease of $15.5 million from the prior year is mostly due to a decrease in the government-wide adjustment for internal service fund activity as there was a net gain in total in the internal service funds mostly due to a decrease in workers’ compensation and general liability expenses. A decrease in the government-wide adjustment related to pension expense also contributed to the decrease in Governmental Activities expenses.
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Figure 4 below summarizes the Governmental Activities expenses shared across functions.
Figure 4
Governmental Activities Functional Expenses
For the Year Ended June 30, 2025
Figures 5 and 6 illustrate the net cost of each service. The net cost represents the amount that
governmental activities are subsidized by taxes and other general revenues of the City.
Figure 5
Governmental Activities
For the Years Ended June 30
(in thousands)
47%
28%
11%
7%
5%2%
Public Safety
Public Works
Community Services
General Government
Community Development
Interest
Total Cost Net (Cost) Total Cost Net (Cost)
of Service of Service of Service of Service
General government 28,392$ (10,212)$ 20,366$ (10,522)$
Public safety 151,626 (115,049) 143,921 (108,994)
Public works 88,360 (22,387) 87,889 (58,605)
Community development 16,814 (5,338) 17,105 (3,717)
Community services 33,034 (13,622) 33,510 (12,677)
Interest 6,215 (6,215) 6,171 (6,171)
324,441$ (172,823)$ 308,962$ (200,686)$
2024 2025
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Figure 6
Program Expenses and Revenues – Governmental Activities
For the Year Ended June 30, 2025
(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 $47.9 million.
Program revenues totaled $46.5 million and were supplemented by about $1.4 million of general
revenues related to investment income. As shown in Figure 7 on the following page, Water
activities represent about $40.5 million (87.1%) of program revenues, while Wastewater activities
represent about $6.0 million (12.9%) of program revenues.
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
$160.0
General
Government
Public Safety Public Works Community
Development
Community
Services
Interest
Total Expenses Program Revenues
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Figure 7
Program Expenses and Revenue – Business-type Activities
For the Year Ended June 30, 2025
(in millions)
Expenses Associated with Business-Type Activities Discussion
Current-year expenses for Business-type Activities totaled $42.8 million, a decrease of about $1.5
million over prior year as shown in Figure 2. This is attributable to decreases in maintenance.
Major Business-type expenses in the current fiscal year included the following:
Water
Of the $36.5 million in water related expenses, $14.2 million (39.0%) is for the purchase of water,
$6.1 million (16.6%) covers employee related costs, $8.2 million (22.6%) is for maintenance,
supplies, and depreciation of the water system, $3.3 million (8.9%) is for professional services,
$2.3 million (6.3%) is for utility payments, and the remaining $2.4 million (6.6%) is collectively
attributable to other miscellaneous expenses.
Wastewater
Of the $6.3 million in wastewater related expenses, $3.0 million (46.8%) is for maintenance,
supplies, and depreciation of the wastewater system, $1.9 million (30.6%) is for employee related
costs, and the remaining approximately $1.4 million (22.6%) 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
$45.0
Water Wastewater
Total Expenses Program Revenues
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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 $322.1 million, an increase of $27.0 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, the Facilities Financial Planning Reserve Fund, and other permanent funds in the
aggregate, offset by decreases in the Debt Service Fund, other special revenue funds, and other
capital projects funds in the aggregate. The General Fund represented about $108.1 million or
33.6% 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, 2025. 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 $10.7 million in fund balance classified as
nonspendable to indicate that it cannot be readily converted to cash. Of the $10.7 million
nonspendable fund balance, $1.5 million is for prepaid items, $183,978 is for inventories, $4.4
million is for long-term loan receivables, and $4.6 million is for permanent endowments.
Restricted Fund Balance – The City has $120.7 million in fund balance classified as restricted
to indicate that it has externally imposed restrictions on how the money may be spent. Of the
$120.7 million restricted fund balance, $10.5 million is restricted in the Tide and Submerged Land
– Operating Fund, of which $8.6 million is restricted for capital projects and maintenance and
repairs, and $1.9 million is restricted for the Upper Newport Bay restoration; $57.5 million is
2024 2025 Change
General Fund 96,441$ 108,148$ 11,707$
Tide and Submerged Land - Operating 8,548 11,809 3,261
Tide and Submerged Land - Harbor Capital 43,107 57,503 14,396
Facilities Financial Planning Reserve 20,436 23,541 3,105
Debt Service Fund 2,323 2,024 (299)
Non-major special revenue 32,274 31,996 (278)
Non-major capital projects 85,087 79,891 (5,196)
Non-major permanent 6,846 7,185 339
295,062$ 322,097$ 27,035$
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restricted in the Tide and Submerged Land – Harbor Capital Fund for capital projects related to the harbor; and $2.0 million is restricted for debt service. Of the remaining $50.7 million in
restricted fund balance, $32.0 million is restricted for various special revenue funds, $15.9 million is restricted for the Assessment District Fund, $306,531 is restricted for the Fire Station Fund, and $2.6 million of fund balance is restricted for permanent funds.
Committed Fund Balance – The City has $92.3 million in fund balance classified as committed to indicate that the City Council has committed how the money will be spent. Of the $92.3 million committed fund balance; $3.8 million is committed in the General Fund mostly for drones, contract services, and maintenance and repairs; $1.3 million is committed in the Tide and Submerged Land – Operating Fund for oil and gas related uses; $23.5 million is committed in the Facilities Financial Planning Reserve Fund; $9.6 million is committed in the Fire Station Fund; $526,902 is committed in the Civic Center and Park Fund; $13.4 million is committed in the Parks and Community Center Fund; $170,642 is committed in Balboa Village Parking Management District Fund; $3.0 million is committed to the Facilities Maintenance Fund; $8.8 million is committed in the Neighborhood Enhancement Fund; $56,438 is committed in the Junior Lifeguards Fund; $18.5
million is committed in the Unrestricted Capital Improvements Fund; $7.2 million is committed to the Miscellaneous FFP Projects Fund; and $723,235 is committed to the Police Facility Fund; and $1.7 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 $98.4 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 $17.1 million or 5.8% higher than the prior year mostlydue to a combined $12.0 million net increase in the City’s top three revenue sources –property taxes, sales taxes and transient occupancy taxes – with a $8.0 million increasein property taxes as the City’s assessed valuation continued to increase due primarily tothe appreciation of property values and due to an increase in residual tax revenue fromthe dissolution of a former redevelopment agency; supplemented with a $2.5 millionincrease in sales taxes due to strong consumer spending in key industry groups, includingrestaurants and hotels, general consumer goods, and the sales tax pools; and a $1.5
million increase in transient occupancy taxes due to continued strong hotel occupancyrates. Additionally, charges for services increased $1.8 million compared to the previousyear mostly due to an increase in building related plan checking fees as there were more
projects; an increase in recreation fees as there was more participation in recreationclasses; and, an increase in paramedic services fees, which tend to fluctuate from year toyear. General Fund expenditures finished $6.6 million or 2.5% higher than the prior fiscalyear mostly due to the expected increase in salaries and benefits related to routine stepincreases, cost of living adjustments, new positions, and increased pension costs. Thoughrevenues exceeded expenditures by about $44.4 million, there were substantial transferactivity in the General Fund with transfers in totaling $20.3 million and transfers out totaling$53.0 million, mostly for funding capital improvement projects. In total, fund balance inthe General Fund increased $11.7 million and ended the year at $108.1 million.
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Fund balance for the Tide and Submerged Land – Operating Fund increased $3.3 million
and ended the current year with $11.8 million in fund balance. The increase was mostly
due to an increase in property income related to lease interest income and parking
revenues.
Fund balance for the Tide and Submerged Land – Harbor Capital Fund increased $14.4
million ending at $57.5 million. This increase was similar to the previous year’s increase
and was largely due to additional investment earnings and capital improvement projects
not commencing in the current year. This fund is accumulating resources to be used for
major capital expenditures in the future.
Fund balance for the Facilities Financial Planning Reserve Fund increased $3.1 million to
end the current year at $23.5 million in fund balance. This was mainly due to a transfer in
of the Fiscal Year 2023-24 General Fund year-end unrestricted surplus to be used to cash
fund future construction projects and the receipt of a contribution related to a development
agreement.
Fund balance for the Debt Service Fund decreased $298,722 ending at $2.0 million. The
decrease was due to administrative charges and 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 generally 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 increased $2.9 million, mostly due to increases in water
sales revenue related to a water rate increase. During November 2023 the City Council
adopted a resolution to increase water rates each January 1st during calendar years 2024
through 2028.
Net position in the Wastewater Fund decreased $401,834. The decrease in net position
was mainly due to increases in expenses for system maintenance and professional
services. During November 2023 the City Council 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.
Major Internal Service Fund activity in the current fiscal year included the following:
Total net position in the Internal Service Funds increased $11.2 million in the current fiscal
year. This was mostly due to a decrease in expenses related to the City’s self-insured
general liability and workers’ compensation programs.
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GENERAL FUND BUDGETARY HIGHLIGHTS
Changes to Original Budget
Final budgeted revenues for the General Fund increased $7.8 million from the original budget
during the year ended June 30, 2025. Factors contributing to this fluctuation are highlighted as
follows:
Property taxes revenue increased $3.3 million due to increases in assessed values related
to changes in ownership and new construction.
Final budgeted intergovernmental revenue increased $3.1 million primarily due to the
City's portion of the ½ cent sales tax revenue paid to the County for public safety, state
mandate reimbursements, reimbursement for strike teams sent to assist with fires, and
revenue sharing with the County of Orange under the Waste Disposal Agreement (WDA).
Miscellaneous revenues increased from the adopted budget by $766,040.
Charges for services increased from the adopted budget by $512,700. This adjustment is
related to increased revenue received for recreation classes and special events.
Donations were adjusted upward by $185,780 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 $12.7 million from the original budget
during the year ended June 30, 2025. The significant factors contributing to the increase are as
follows:
The addition of $5.9 million to the benefits and salary budget is associated with pre-funding
the typical year-end contribution to CalPERS for paying down the unfunded pension
liability from the Fiscal Year 2023-24 structural surplus and approved memorandum of
understandings (MOUs) for the following bargaining units: League, Newport Beach Police
Association (NBPA), Newport Beach Fire Association (NBFA), Association of Newport
Beach Ocean Lifeguards (ANBOL).
Budgeted carryovers from Fiscal Year 2023-24 totaling $6.8 million were added to the
adopted budget.
Variance with Final Budget
Actual General Fund revenues came in at $10.4 million above final budgeted revenues for the
year ended June 30, 2025. Significant factors contributing to this favorable variance are
summarized as follows:
Property tax revenues came in $1.6 million higher than the final budget, largely due to
supplemental taxes.
Investment earning revenues were $3 million higher than final budgeted revenues due to
interest income from bonds and elevated interest rates.
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• Property income ended the year $1.9 million higher mainly due to overages in Beacon Bay, Balboa Yacht Basin, as well as parking revenue.
• Charges for services came in $1.2 million higher due primarily to receipts for paramedic service fees, plan check fees, as well as revenue received from renewals of short-term lodging permits.
• Other taxes ended the year $798,179 higher than final budgeted revenues primarily due to business license taxes, utility franchise fees, and solid waste franchise fees. Actual General Fund expenditures of $269.3 million were less than final budgetary estimates of $284.7 million. The $15.5 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 $6.8 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 $3.7 million.
CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City’s capital assets for Governmental and Business-type Activities as of June 30, 2025
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, equipment and subscriptions. Total capital assets increased $11.5 million over the prior fiscal year. Figure 9 Capital Assets June 30 (net of depreciation/amortization, in thousands)
2024 2025 2024 2025 2024 2025
Land 1,922,330$ 1,923,977$ 2,219$ 2,219$ 1,924,549$ 1,926,196$
Intangible right to use
land and rights of way - - 3,755 3,702 3,755 3,702
Structures 199,676 201,794 363 347 200,039 202,141
Intangible right to use structures 14,045 12,823 - - 14,045 12,823
Equipment 19,050 18,670 126 113 19,176 18,783
Intangible right to use equipment 162 78 - - 162 78
Intangible right to use subscriptions 2,145 1,722 - 117 2,145 1,839
Infrastructure 211,479 225,774 125,767 125,697 337,246 351,471
Work in progress 22,200 14,988 4,408 7,229 26,608 22,217
Totals 2,391,087$ 2,399,826$ 136,638$ 139,424$ 2,527,725$ 2,539,250$
Activities Activities
Governmental Business-Type
Total
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Major capital asset events during the current fiscal year included the following:
• Capital asset additions totaled $56.5 million in both the Governmental and Business-type Activities in the current year. Of the $56.5 million, $9.1 million is related to structure additions of a trash interceptor system in Newport Bay and upgrading park playground equipment and a separate park parking lot; $26.8 million represents additions of infrastructure assets mostly related to the road system and water system; $4.0 million is
related to equipment and intangible right to use equipment, and intangible right to use subscriptions additions; The remaining $16.6 million is comprised of additions of non-depreciable/non-amortizable assets such as work in progress of $14.9 million, and land
and rights of way of $1.7 million.
• Of the $46.8 million of additions in governmental assets in the current year, additions in
infrastructure contributed $22.8 million, which was mostly due to upgrades in the road system. The remaining $24.0 million added in the current year as governmental assets is comprised of $9.1 million of structure additions and $1.7 million of land additions, both
mostly related to the addition of a trash interceptor system and associated landside improvements, upgrading a park’s playground equipment, and upgrading a parking lot; $9.4 million of work in progress, mostly related to construction of a new lecture hall at the
central library, upgrades to the road system, and construction of a new fire station/library; $3.8 million of equipment additions, mostly related to vehicle purchases and parking lot pay station purchases.
• The $9.7 million of business-type asset additions in the current year is comprised of $4.0 million in water system infrastructure additions, mostly related to updating pump stations
and a water well; $5.5 million of work in progress additions related to water system improvements, including replacing a major water main and updating another pump station and water well The remaining amount of additions was for intangible rights to use a
subscription related to water meters.
Additional information on the City’s capital assets can be found in Note (6) of the Notes to the Financial Statements.
Long-term Debt Figure 10 Outstanding Debt June 30 (in thousands)
2024 2025 2024 2025 2024 2025
Certificates of participation 93,525$ 89,290$ -$ -$ 93,525$ 89,290$
Bond premium 865 723 - - 865 723
Totals 94,390$ 90,013$ -$ -$ 94,390$ 90,013$
Activities Activities
Governmental Business-Type Total
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The City’s total debt decreased $4.4 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 continues to benefit from a strong and stable local economy. Assessed property values
are increasing and remain a significant driver of revenue growth. Property tax revenues grew 5.5
percent in Fiscal Year 2024–25 and are projected to grow an additional 5.8 percent in Fiscal Year
2025–26 due to continued strength in property sales and rising median home prices. Sales tax
revenues grew 5.7 percent in Fiscal Year 2024–25 and are projected to increase by 3.0 percent
in Fiscal Year 2025–26, signaling continued resilience in the local retail and tourism sectors.
Transient Occupancy Tax revenue continues to grow, although at a slower pace than the post-
pandemic recovery period as international travel and hotel demand moderate.
The City’s diverse revenue base, stable property values, and sound fiscal management support
long-term financial sustainability. Newport Beach’s revenue structure continues to position the
City to withstand broader economic fluctuations and maintain essential services and capital
investments.
Local Revenue Trends
Property tax revenue remains the City’s largest General Fund revenue source and represents
approximately half of total General Fund revenues. Strong assessed valuation growth is the
primary driver of projected increases. Supplemental property tax revenues were also higher than
originally forecasted as final assessed valuation figures exceeded expectations.
Sales tax revenue is the second largest source of General Fund revenue and represents more
than 15 percent of the General Fund. Growth is driven largely by activity in autos and
transportation, general consumer goods, and restaurants and hotels. Although growth is
moderating from the previous year, sales tax revenues are performing above budgeted levels and
reflect continued strength in consumer spending and tourism.
Transient Occupancy Tax revenue is the third largest source of General Fund revenue. Following
several years of post-pandemic strength, growth has moderated due to softening hotel demand
and a reduction in international visitors. Despite this moderation, TOT revenues remain a
significant and stable contributor to the City’s revenue structure.
Collectively, General Fund revenues are projected to exceed the budgeted estimates for Fiscal
Year 2025–26 due to stronger than anticipated economic conditions. Based on updated revenue
projections and expenditure savings identified during the first quarter budget update, a $10.3
million General Fund surplus is currently projected for the year.
Discretionary Appropriations
The annual budget serves as the foundation for financial planning and fiscal control and allows
the City Council to prioritize resources consistent with community values. The Fiscal Year 2025–
26 budget reflects continued financial strength supported by growing revenues, healthy reserves,
and a conservative debt profile.
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When the Fiscal Year 2025-26 budget was adopted, the City projected a structural General Fund surplus of $12.2 million. Approximately $10 million of the surplus was committed to fund the first
year of three-year labor contracts with the City’s bargaining groups. This reduced the structural surplus to approximately $2 million at the time of adoption. Strong revenue performance and expenditure savings since adoption have increased the projected surplus to $10.3 million based
on the first quarter budget update.
The City continues to maintain a balanced approach to fiscal management by addressing long-term obligations, sustaining essential public services, and investing in infrastructure to support high service levels and quality of life. The City continues to execute an aggressive pension paydown strategy and to maintain sufficient reserves to address unforeseen economic or fiscal challenges.
Overall, the City’s debt burden remains low and affordable. Newport Beach benefits from a mature and diverse tax base, high residential and commercial property values, and a robust tourism and retail economy. The City’s strong financial profile is an important factor considered by credit rating
agencies when evaluating the creditworthiness of municipal debt. Fitch Ratings reaffirmed the City’s AAA credit rating in 2025, and Moody’s reaffirmed its AAA rating in 2024. Standard and Poor’s continues to assign the City its highest long-term credit rating of AAA.
The City’s financial management policies emphasize prudent budgeting practices, conservative revenue forecasting, and expenditure controls. Over the past decade, the City has employed
strategies such as modifying pension cost-sharing arrangements, contracting for services when appropriate, and freezing vacant positions during periods of economic uncertainty. These practices have supported consistent operating surpluses over the past ten years. Surpluses have been used for one-time purposes, including paying down liabilities and investing in capital and neighborhood improvements.
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 Administrative Services 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.
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Governmental Business-type
Activities Activities Total
Assets:
Cash and investments (note 2)381,192,951$ 29,631,436$ 410,824,387$
Receivables:
Accounts (net of allowance)13,473,448 6,554,867 20,028,315
Interest 1,812,524 145,252 1,957,776
Intergovernmental receivables 14,363,166 451 14,363,617
Lease receivables (note 3)276,374,011 - 276,374,011
Public-private partnership receivable (note 17)629,813 - 629,813
Restricted cash and investments with fiscal agent (note 2)27,782,192 - 27,782,192
Internal balances 2,065,843 (2,065,843) -
Investment in joint ventures (note 13)339,272 - 339,272
Inventory 686,808 - 686,808
Prepaid items 7,150,342 - 7,150,342
Capital assets (note 6):
Non-depreciable/non-amortizable 1,938,964,243 9,447,970 1,948,412,213
Depreciable/amortizable 790,941,765 212,913,481 1,003,855,246
Accumulated depreciation/amortization (330,081,448) (82,937,363) (413,018,811)
Total assets 3,125,694,930 173,690,251 3,299,385,181
Deferred Outflows of Resources:
Deferred amount from pension plans (note 11)91,256,632 2,738,713 93,995,345
Deferred amount from OPEB (note 12)8,347,130 458,803 8,805,933
Total deferred outflows of resources 99,603,762 3,197,516 102,801,278
Liabilities:
Accounts payable 19,990,178 6,006,188 25,996,366
Accrued payroll 7,752,498 320,013 8,072,511
Accrued interest payable 3,109,569 - 3,109,569
Deposits payable 3,658,843 29,784 3,688,627
Unearned revenue 5,652,744 - 5,652,744
Noncurrent liabilities:
Due within one year:
Lease liability (note 7)1,273,326 44,608 1,317,934
Subscription liability (note 7)243,771 36,593 280,364
Other (note 7)20,966,944 - 20,966,944
Due in more than one year:
Net pension liability (note 11)267,824,528 8,702,213 276,526,741
Net OPEB liability (note 12)5,237,348 277,324 5,514,672
Lease liability (note 7)11,793,605 3,687,682 15,481,287
Subscription liability (note 7)1,299,952 73,790 1,373,742
Other (note 7)119,628,344 - 119,628,344
Total liabilities 468,431,650 19,178,195 487,609,845
Deferred Inflows of Resources:
Deferred amount from pension plans (note 11)1,005,922 7,364 1,013,286
Deferred amount from OPEB (note 12)1,964,658 108,049 2,072,707
Deferred amount from leases (note 3)271,248,281 - 271,248,281
Deferred amount from public-private partnerships (note 17)686,001 - 686,001
Total deferred inflows of resources 274,904,862 115,413 275,020,275
Net Position:
Net investment in capital assets 2,292,549,844 135,138,380 2,427,688,224
Restricted for:
Public safety 759,073 - 759,073
Public works 44,563,786 - 44,563,786
Community services 75,003,024 - 75,003,024
Community development 1,475,624 - 1,475,624
Debt service 2,024,393 - 2,024,393
Permanent funds:
Nonexpendable 4,629,781 - 4,629,781
Expendable 2,555,481 - 2,555,481
Unrestricted 58,401,174 22,455,779 80,856,953
Total net position 2,481,962,180$ 157,594,159$ 2,639,556,339$
CITY OF NEWPORT BEACH
Statement of Net Position
June 30, 2025
See accompanying notes to basic financial statements
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63
CITY OF NEWPORT BEACH
Statement of Activities
For the Year Ended June 30, 2025
Operating Capital Total
Charges for Grants and Grants and Program
Expenses Services Contributions Contributions Revenues
Functions/Programs
Primary government:
Governmental activities:
General government 20,365,624$ 8,911,980$ 931,503$ -$ 9,843,483$
Public safety 143,920,632 30,839,794 4,086,656 - 34,926,450
Public works 87,889,339 8,890,609 15,990,133 4,403,307 29,284,049
Community development 17,104,756 12,723,330 616,730 48,181 13,388,241
Community services 33,510,164 18,883,733 1,140,761 808,629 20,833,123
Interest on long-term debt 6,171,195 - - - -
Total governmental activities 308,961,710 80,249,446 22,765,783 5,260,117 108,275,346
Business-type activities:
Water 36,561,497 40,463,909 15,456 - 40,479,365
Wastewater 6,282,179 5,980,769 10,728 - 5,991,497
Total business-type activities 42,843,676 46,444,678 26,184 - 46,470,862
Total primary government 351,805,386$ 126,694,124$ 22,791,967$ 5,260,117$ 154,746,208$
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 of year
Net position, end of year
Program Revenues
See accompanying notes to basic financial statements
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64
Governmental Business-type
Activities Activities Total
(10,522,141)$ -$ (10,522,141)$
(108,994,182) - (108,994,182)
(58,605,290) - (58,605,290)
(3,716,515) - (3,716,515)
(12,677,041) - (12,677,041)
(6,171,195) - (6,171,195)
(200,686,364) - (200,686,364)
- 3,917,868 3,917,868
- (290,682) (290,682)
- 3,627,186 3,627,186
(200,686,364) 3,627,186 (197,059,178)
154,182,579 - 154,182,579
45,934,260 - 45,934,260
33,174,268 - 33,174,268
5,086,253 - 5,086,253
5,052,778 - 5,052,778
246,787 - 246,787
6,747,045 1,119,040 7,866,085
2,346,015 313,212 2,659,227
3,333,021 - 3,333,021
256,103,006 1,432,252 257,535,258
55,416,642 5,059,438 60,476,080
2,426,545,538 152,534,721 2,579,080,259
2,481,962,180$ 157,594,159$ 2,639,556,339$
Net (Expense) Revenue and Changes in Net PositionPrimary Government
See accompanying notes to basic financial statements
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FUND FINANCIAL STATEMENTS
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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.
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69
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Assets
Cash and investments (note 2)96,363,732$ 9,167,630$ 62,161,008$
Receivables:
Accounts (net of allowance)6,115,707 2,165,513 -
Interest 520,192 66,363 254,095
Intergovernmental receivables 11,162,624 - -
Lease receivables (note 3)79,878,799 193,226,328 -
Public-private partnership receivable (note 17)- 629,813 -
Restricted cash and investments with fiscal agent (note 2)- - -
Due from other funds (note 4)8,718,563 - -
Advance to other funds (note 4)4,426,659 - -
Prepaid items 1,371,697 63,529 -
Inventory 183,978 - -
Total assets 208,741,951$ 205,319,176$ 62,415,103$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 9,586,771$ 1,269,942$ 485,298$
Accrued payroll 7,162,759 75,542 -
Deposits payable 3,345,409 313,434 -
Unearned revenue 2,654,437 980,433 -
Due to other funds (note 4)- - -
Advance from other funds (note 4)- - 4,426,659
Total liabilities 22,749,376 2,639,351 4,911,957
Deferred Inflows of Resources:
Unavailable revenue - - -
Deferred amount from leases (note 3)77,845,065 190,240,713 -
Deferred amount from public-private partnerships (note 17)- 630,001 -
Total deferred inflows of resources 77,845,065 190,870,714 -
Fund balances:
Nonspendable:
Prepaid items 1,371,697 63,529 -
Inventories 183,978 - -
Long-term loan receivable 4,426,659 - -
Permanent endowment - - -
Restricted:
Upper Newport Bay restoration - 1,871,911 -
Other (note 15)- 8,614,781 57,503,146
Committed:
Capital re-appropriations 374,822 - -
Oil and gas - 1,258,890 -
Other (note 15)3,411,044 - -
Unassigned 98,379,310 - -
Total fund balances 108,147,510 11,809,111 57,503,146
Total liabilities, deferred inflows of
resources and fund balances 208,741,951$ 205,319,176$ 62,415,103$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2025
Page 1 of 2
See accompanying notes to basic financial statements
58
70
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Assets
Cash and investments (note 2)23,434,039$ -$ 108,499,105$ 299,625,514$
Receivables:
Accounts (net of allowance)4,643,968 - 513,601 13,438,789
Interest 106,670 - 508,239 1,455,559
Intergovernmental receivables - 1,004,032 2,001,123 14,167,779
Lease receivables (note 3)- - 3,268,884 276,374,011
Public-private partnership receivable (note 17)- - - 629,813
Restricted cash and investments with fiscal agent (note 2)- 7,542,238 20,239,954 27,782,192
Due from other funds (note 4)- - - 8,718,563
Advance to other funds (note 4)- - - 4,426,659
Prepaid items - - 17,024 1,452,250
Inventory - - - 183,978
Total assets 28,184,677$ 8,546,270$ 135,047,930$ 648,255,107$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 4,099$ 7,688,301$ 19,034,411$
Accrued payroll - - 4,327 7,242,628
Deposits payable - - - 3,658,843
Unearned revenue - - 2,017,874 5,652,744
Due to other funds (note 4)- 6,517,778 1,847,784 8,365,562
Advance from other funds (note 4)- - - 4,426,659
Total liabilities - 6,521,877 11,558,286 48,380,847
Deferred Inflows of Resources:
Unavailable revenue 4,643,968 - 1,255,134 5,899,102
Deferred amount from leases (note 3)- - 3,162,503 271,248,281
Deferred amount from public-private partnerships (note 17)- - - 630,001
Total deferred inflows of resources 4,643,968 - 4,417,637 277,777,384
Fund balances:
Nonspendable:
Prepaid items - - 17,024 1,452,250
Inventories - - - 183,978
Long-term loan receivable - - - 4,426,659
Permanent endowment - - 4,629,781 4,629,781
Restricted:
Upper Newport Bay restoration - - - 1,871,911
Other (note 15)- 2,024,393 50,724,688 118,867,008
Committed:
Capital re-appropriations - - - 374,822
Oil and gas - - - 1,258,890
Other (note 15)23,540,709 - 63,700,525 90,652,278
Unassigned - - (11) 98,379,299
Total fund balances 23,540,709 2,024,393 119,072,007 322,096,876
Total liabilities, deferred inflows of
resources and fund balances 28,184,677$ 8,546,270$ 135,047,930$ 648,255,107$
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2025
Page 2 of 2
See accompanying notes to basic financial statements
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Fund balances of governmental funds 322,096,876$
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.2,381,189,972
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 (84,290,000)
Certificates of participation payable - Series 2020A (5,000,000)
Bond premium - Series 2020A (722,502)
Lease liability (12,999,592)
Subscription liability (242,777)
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.(56,000)
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 89,455,293
Deferred inflows of resources (1,001,078)
Pension liability (262,100,803)
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 8,045,360
Deferred inflows of resources (1,893,588)
OPEB liability (5,054,940)
Accrued interest payable for the current portion of interest due on long-term debt
has not been reported in the governmental funds.(3,109,569)
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.5,899,102
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.49,341,311
Investment in joint ventures is not a current financial resource and therefore not reported
in the governmental funds.339,272
Internal balance created by the consolidation of internal service fund activities
related to enterprise funds is not reported in the governmental funds.2,065,843
Net position of governmental activities 2,481,962,180$
CITY OF NEWPORT BEACH
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2025
See accompanying notes to basic financial statements
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73
Tide and Tide and
Submerged Submerged
General Land - Operating Land - Harbor Capital
Revenues:
Taxes and assessments:
Property tax 154,182,579$ -$ -$
Sales tax 45,934,260 - -
Transient occupancy tax 33,174,268 - -
Other taxes 10,385,818 - -
Intergovernmental 5,670,490 - -
Licenses, permits and fees 6,350,277 110,943 -
Charges for services 26,966,719 65,341 -
Fines and forfeitures 4,344,836 37,814 -
Investment income 3,771,565 332,181 2,170,732
Net increase in fair value of investments 1,129,325 52,743 625,833
Property income 19,808,736 16,739,019 6,711,452
Donations 795,959 - -
Other 1,202,884 78 -
Total revenues 313,717,716 17,338,119 9,508,017
Expenditures:
Current:
General government 21,920,035 576,031 -
Public safety 145,807,405 - -
Public works 55,236,683 1,546,690 -
Community development 16,506,628 29,506 -
Community services 28,461,405 2,709,858 -
Capital outlay - 1,160,516 945,092
Debt service:
Principal 1,283,576 - -
Interest and fiscal charges 77,188 - -
Total expenditures 269,292,920 6,022,601 945,092
Excess (deficiency) of revenues
over expenditures 44,424,796 11,315,518 8,562,925
Other financing sources (uses):
Transfers in (note 5)20,317,944 12,263,815 5,832,875
Transfers out (note 5)(53,036,418) (20,317,944) -
Total other financing sources (uses)(32,718,474) (8,054,129) 5,832,875
Net change in fund balances 11,706,322 3,261,389 14,395,800
Fund balances, beginning 96,441,188 8,547,722 43,107,346
Fund balances, ending 108,147,510$ 11,809,111$ 57,503,146$
Special Revenue Funds
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 1 of 2
See accompanying notes to basic financial statements
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74
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds Totals
Revenues:
Taxes and assessments:
Property tax -$ -$ -$ 154,182,579$
Sales tax - - - 45,934,260
Transient occupancy tax - - - 33,174,268
Other taxes - - 1,021,443 11,407,261
Intergovernmental - 2,006,281 10,497,718 18,174,489
Licenses, permits and fees - - 851,257 7,312,477
Charges for services - - 92,129 27,124,189
Fines and forfeitures - - - 4,382,650
Investment income 857,449 45,430 4,508,461 11,685,818
Net increase in fair value of investments 186,073 - 1,260,300 3,254,274
Property income - - 725,753 43,984,960
Donations 1,068,190 - 3,726,024 5,590,173
Other - - 120,155 1,323,117
Total revenues 2,111,712 2,051,711 22,803,240 367,530,515
Expenditures:
Current:
General government - - 1,610 22,497,676
Public safety - - 777,707 146,585,112
Public works - - 10,739,240 67,522,613
Community development - - 225,546 16,761,680
Community services - - 231,066 31,402,329
Capital outlay - - 41,637,631 43,743,239
Debt service:
Principal - 4,235,000 - 5,518,576
Interest and fiscal charges - 6,366,168 - 6,443,356
Total expenditures - 10,601,168 53,612,800 340,474,581
Excess (deficiency) of revenues
over expenditures 2,111,712 (8,549,457) (30,809,560) 27,055,934
Other financing sources (uses):
Transfers in (note 5)12,104,412 8,250,735 25,673,861 84,443,642
Transfers out (note 5)(11,111,169) - - (84,465,531)
Total other financing sources (uses)993,243 8,250,735 25,673,861 (21,889)
Net change in fund balances 3,104,955 (298,722) (5,135,699) 27,034,045
Fund balances, beginning 20,435,754 2,323,115 124,207,706 295,062,831
Fund balances, ending 23,540,709$ 2,024,393$ 119,072,007$ 322,096,876$
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 2 of 2
See accompanying notes to basic financial statements
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75
27,034,045$
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 are 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 26,386,385
Depreciation expense (15,910,049)
Other capital related items (1,203,127)
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 4,235,000
Amortization of principal on leases 1,199,376
Amortization of principal on subscriptions 84,200
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.138,333
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.7,257,210
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.(2,020,827)
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.(629,867)
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 change in net position of the
internal service funds is reported in the statement of activities.11,190,381
Investment in joint ventures creates an explicit, measurable equity interest reported only
in the statement of activities.69,145
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.(2,563,694)
Change in net position of governmental activities 55,416,642$
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, 2025
See accompanying notes to basic financial statements
64
76
FUND FINANCIAL STATEMENTS
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78
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.
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79
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Assets and Deferred Outflows of ResourcesCurrent assets:
Cash and investments (note 2)26,580,770$ 3,050,666$ 29,631,436$ 81,567,437$
Receivables:
Accounts (net of allowance)5,661,146 893,721 6,554,867 34,659
Interest 131,775 13,477 145,252 356,965
Intergovernmental receivables - 451 451 195,387
Inventories - - - 502,830
Prepaid items - - - 5,698,092
Total current assets 32,373,691 3,958,315 36,332,006 88,355,370
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 50,392,408 Intangible right to use equipment - - - 363,725
Software - - - 4,360,625
Intangible right to use subscriptions 146,843 - 146,843 2,099,163
Infrastructure 158,988,518 48,826,594 207,815,112 -
Work in progress 6,379,733 848,787 7,228,520 -
Less: accumulated depreciation/amortization (60,383,202) (22,554,161) (82,937,363) (38,620,914)
Total capital assets (net of accumulated depreciation/amortization)112,266,880 27,157,208 139,424,088 18,634,588
Total assets 144,640,571 31,115,523 175,756,094 106,989,958
Deferred outflows of resources:Deferred amount from pension plans (note 11)1,978,791 759,922 2,738,713 1,801,339 Deferred amount from OPEB (note 12)331,497 127,306 458,803 301,770
Total deferred outflows of resources 2,310,288 887,228 3,197,516 2,103,109
Liabilities and Deferred Inflows of Resources
Current liabilities:
Accounts payable 5,654,480 351,708 6,006,188 955,767
Accrued payroll 244,519 75,494 320,013 509,870
Deposits payable 29,784 - 29,784 -
Due to other funds (note 4)- - - 353,001
Workers' compensation - current - - - 4,497,885
General liability - current - - - 3,941,299
Compensated absences - current - - - 8,097,760
Lease liability - current 44,608 - 44,608 67,339 Subscription liability - current 36,593 - 36,593 170,375
Total current liabilities 6,009,984 427,202 6,437,186 18,593,296
Noncurrent liabilities:Workers' compensation (note 7)- - - 20,992,090 General liability (note 7)- - - 6,658,815 Compensated absences (note 7)- - - 6,394,937
Lease liability (note 7)3,687,682 - 3,687,682 -
Subscription liability (note 7)73,790 - 73,790 1,130,571
Net pension liability (note 11)6,287,587 2,414,626 8,702,213 5,723,725
Net OPEB liability (note 12)200,373 76,951 277,324 182,408
Total noncurrent liabilities 10,249,432 2,491,577 12,741,009 41,082,546
Total liabilities 16,259,416 2,918,779 19,178,195 59,675,842
Deferred inflows of resources:Deferred amount from pension plans (note 11)5,320 2,044 7,364 4,844 Deferred amount from OPEB (note 12)78,070 29,979 108,049 71,070
Total deferred inflows of resources 83,390 32,023 115,413 75,914
Net PositionNet investment in capital assets 108,424,207 26,714,173 135,138,380 16,984,653 Unrestricted 22,183,846 2,337,776 24,521,622 32,356,658
Total net position 130,608,053$ 29,051,949$ 159,660,002$ 49,341,311$
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (2,065,843)
Net position of business-type activities 157,594,159$
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Net Position
June 30, 2025
Enterprise Funds
See accompanying notes to basic financial statements
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Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
Operating revenues:
Charges for sales and services:
Water sales 40,173,666$ -$ 40,173,666$ -$
Charges for services - - - 39,112,990
Sewer service and connection fees - 5,929,991 5,929,991 -
Intergovernmental 15,456 10,728 26,184 195,387
Employee contributions - - - 22,086
Other 290,243 50,778 341,021 6,396,146
Total operating revenues 40,479,365 5,991,497 46,470,862 45,726,609
Operating expenses:
Purchase of water 14,258,486 - 14,258,486 -
Salaries and benefits 6,057,868 1,923,456 7,981,324 4,654,284
Depreciation/amortization 1,949,684 639,534 2,589,218 4,275,677
Professional services 3,270,486 698,697 3,969,183 996,283
Maintenance and supplies 3,392,569 1,359,247 4,751,816 4,102,840
System maintenance 2,921,079 940,192 3,861,271 27,692
Utilities 2,293,501 102,163 2,395,664 -
Fleet parts and supplies - - - 545,348
Telecommunication - - - 188,617
Hardware - - - 534,370
Software - - - 369,728
Workers' compensation - - - 7,107,333
Claims and judgments - - - 10,384,659
Compensated absences - - - 2,576,984
OPEB ARC - cash subsidy - - - 847,328
Other 4,688,299 890,710 5,579,009 2,227,349
Total operating expenses 38,831,972 6,553,999 45,385,971 38,838,492
Operating income (loss) 1,647,393 (562,502) 1,084,891 6,888,117
Nonoperating revenues (expenses):
Investment income 995,850 123,190 1,119,040 2,916,412
Net increase in fair value of investments 275,733 37,479 313,212 946,672
Gain on sale of capital assets - - - 425,594
Interest expense (21,399) - (21,399) (8,303)
Total nonoperating revenues 1,250,184 160,669 1,410,853 4,280,375
Income (loss) before transfers 2,897,577 (401,833) 2,495,744 11,168,492
Transfers in (note 5)- - - 21,889
Change in net position 2,897,577 (401,833) 2,495,744 11,190,381
Net position, beginning of year 127,710,476 29,453,782 38,150,930
Net position, end of year 130,608,053$ 29,051,949$ 49,341,311$
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 2,563,694
Change in net position of business-type activities 5,059,438$
Enterprise Funds
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Revenues,
Expenses and Changes in Net Position
For the Year Ended June 30, 2025
See accompanying notes to basic financial statements
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CITY OF NEWPORT BEACH
Statement of Cash Flows
For the Year Ended June 30, 2025
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
39,813,766$ 5,851,080$ 45,664,846$ 39,105,404$
(6,021,465) (1,913,288) (7,934,753) (11,441,209)
(22,922,028) (3,281,254) (26,203,282) (39,330,748)
(4,688,299) (890,710) (5,579,009) -
305,699 61,506 367,205 6,418,232
6,487,673 (172,666) 6,315,007 (5,248,321)
- - - 21,889
- - - 21,889
(6,542,049) (390,931) (6,932,980) (3,456,839)
(65,023) - (65,023) (73,663)
(37,200) - (37,200) (212,547)
- - - 425,594
(6,644,272) (390,931) (7,035,203) (3,317,455)
1,221,293 158,241 1,379,534 3,783,041
1,221,293 158,241 1,379,534 3,783,041
1,064,694 (405,356) 659,338 (4,760,846)
25,516,076 3,456,022 28,972,098 86,328,283
26,580,770$ 3,050,666$ 29,631,436$ 81,567,437$
26,580,770$ 3,050,666$ 29,631,436$ 81,567,437$
26,580,770$ 3,050,666$ 29,631,436$ 81,567,437$
1,647,393$ (562,502)$ 1,084,891$ 6,888,117$
1,949,684 639,534 2,589,218 4,275,677
(372,396) (80,449) (452,845) (7,586)
8,747 1,538 10,285 (195,387)
- - - (39,048)
- - - (4,902,194)
1,617,988 - 1,617,988 -
1,627,242 (172,812) 1,454,430 (13,915,435)
3,749 - 3,749 -
- - - 2,039,412
- - - (241,204)
- - - 844,531
(78,141) (30,006) (108,147) (71,132)
83,407 32,031 115,438 75,928
4,840,280 389,836 5,230,116 (12,136,438)
6,487,673$ (172,666)$ 6,315,007$ (5,248,321)$
-$ 443,036$ 443,036$ -$
146,843 - 146,843 -
Cash flows from operating activities:
Cash received from customers or user departments
Cash payments to employees for services
Cash payments to suppliers for goods and services
Cash payments for other operating activities
Cash received for other operating activities
Net cash provided (used) by operating activities
Cash flows from noncapital financing activities:
Cash received from other funds
Net cash provided by noncapital financing activities
Cash flows from capital and related financing activities:
Acquisition of capital assets
Lease liabilities and related
Subscription liabilities and related
Proceeds from sale of capital assets
Net cash (used) for capital and related financing activities
Cash flows from investing activities:
Investment income
Net cash provided by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position
Cash and cash equivalents
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation
Changes in operating assets and liabilities:
(Increase) in accounts receivable
(Increase) decrease in intergovernmental receivables
(Increase) in inventories
(Increase) in prepaid items
Decrease in net infrastructure from capital assets
Increase (decrease) in accounts payable and accrued payroll
Increase in deposits payable
Increase in workers' compensation
(Decrease) in general liability
Increase in compensated absences
(Decrease) in net pension liability and deferred cash flows
Increase in net OPEB liability and deferred cash flows
Total adjustments
Net cash provided (used) by operating activities
Noncash financing and investing activities:
Capital assets financed by ending accounts payable
Obtaining an intangible right to use subscription asset
(Loss) on disposal of capital assets (1,617,988) - (1,617,988) -
Total of noncash activities 1,764,831$ 443,036$ 2,207,867$ -$
Proprietary Funds
Enterprise Funds
See accompanying notes to basic financial statements
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FUND FINANCIAL STATEMENTS
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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.
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Custodial OPEB
Funds Trust
Assets
Cash and investments (note 2)1,582,522$ -$
Restricted cash and investments with fiscal agent (note 2)2,699,066 48,292,264
Receivable:
Interest 15,167 3,624
Intergovernmental receivable 34,320 -
Total assets 4,331,075 48,295,888
Liabilities
Due to others 35,616 -
Total liabilities 35,616 -
Net Position
Restricted for:
Postemployment benefits other than pensions - 48,295,888
Individuals, organizations, and other governments 4,295,459 -
Total net position 4,295,459$ 48,295,888$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2025
See accompanying notes to basic financial statements
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Custodial OPEB
Funds Trust
Additions
Special assessments 3,022,899$ -$
Investment earnings 155,193 4,904,074
Other 101,760 -
Total additions 3,279,852 4,904,074
Deductions
Debt service 3,317,230 -
Benefit payments for OPEB trust - 2,682,141
Administrative 97,408 121,382
Other 133,537 -
Total deductions 3,548,175 2,803,523
Net increase in fiduciary net position (268,323) 2,100,551
Net position, beginning of year 4,563,782 46,195,337
Net position, end of year 4,295,459$ 48,295,888$
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
See accompanying notes to basic financial statements
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 $2,555,481. 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 §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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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:
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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.
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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 2024-25, the City implemented the following GASB Statements:
GASB Statement No. 101, Compensated Absences, updates the recognition and
measurement guidance for compensated absences under a unified model. The
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,
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
d. New Accounting Pronouncements (Continued)
(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. As a result of
this implementation, the City updated the recognition and measurement guidance
for compensated absences to satisfy the criteria set forth above.
GASB Statement No. 102, Certain Risk Disclosures, requires state and local
governments to disclose certain risks that arise from vulnerabilities due to
concentrations and constraints that could adversely affect the level of service they
provide or their ability to meet obligations as they become due.
Pending Accounting Standards
GASB has issued the following pronouncements that may impact future financial reporting
requirements:
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.
GASB Statement No. 104, Disclosure of Certain Capital Assets, Effective for
reporting periods beginning after June 15, 2025. The objective of this Statement is
to provide users of government financial statement with essential information about
certain types of capital assets.
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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
e. Cash and Investments (Continued)
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, 2025, 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, 2025, the balance of these accounts totaled $14,363,617.
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.
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).
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
i. Capital Assets (Continued)
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 capital 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
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:
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
k. Property Taxes (Continued)
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.
Effective for the current fiscal year, the City implemented GASB Statement No. 101,
Compensated Absences, which establishes a unified model for recognizing and measuring
liabilities for compensated absences. Under this guidance, compensated absences are
recognized as a liability for (1) leave that has not been used when the leave is attributable
to services already rendered, accumulates, and is more likely than not to be used for time-
off or otherwise paid or settled, and (2) leave that has been used but has not yet been paid
or otherwise settled as of the financial statement date. The City measures compensated
absences using employees’ pay rates in effect at the financial statement date, or, when
applicable, the pay rates expected to be used to settle the obligation, and includes
salary‑related amounts that are directly and incrementally associated with payments for
such leave. It is assumed that when leave is taken the credits or hours earned first are the
ones first utilized or paid.
Compensated absences are accrued in the Compensated Absence Internal Service Fund
and in the government‑wide financial statements when employee services have been
rendered and when it becomes more likely than not that the City will compensate the
employees for benefits through paid time off or cash or other settlement, including at
termination or retirement.
The City accrues compensated absences for benefits that employees have earned but are
not yet available for use when it is more likely than not that the employees will meet the
required eligibility or service conditions for payment or use, based on the City’s historical
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
l. Compensated Absences (Continued)
experience and current policies. Benefits not covered by GASB 101, such as pension,
retiree health, or other postemployment benefits (including those administered through
CalPERS), are accounted for in accordance with the applicable GASB standards. Leave
that does not accumulate or is contingent upon sporadic events, such as jury duty,
bereavement, or certain forms of military or parental leave, is not accrued as compensated
absences and is recognized as an expense in the period the leave is taken or paid.
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.
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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
o. Deferred Inflows/Outflows of Resources (Continued)
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.
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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
p. Fund Balance Classifications (Continued)
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.
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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
r. Pensions (Continued)
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, 2023
Measurement Date (MD) June 30, 2024
Measurement Period (MP) July 1, 2023 to June 30, 2024
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, 2024
Measurement Period (MP) July 1, 2023 to June 30, 2024
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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
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.
(2) Cash and Investments
Cash and investments as of June 30, 2025, are classified in the accompanying financial
statements as follows:
Statement of net position:
Cash and investments 410,824,387$
Cash and investments with fiscal agent 27,782,192
Fiduciary funds:
Cash and investments 1,582,522
Cash and investments with fiscal agent 50,991,330
Total cash and investments 491,180,431$
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
Cash and investments as of June 30, 2025, 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.
*Excluding amounts held by bond trustee and by the OPEB trust that are not subject to California Government
Code restrictions.
Cash on hand 24,765$
Deposits with financial institutions 20,223,592
Cash and receivables in investment accounts 52,834
Investments 470,879,240
Total cash and investments 491,180,431$
Maximum Percentage Investment in Minimum
Authorized Investment Type Maturity*of Portfolio*One Issuer*Rating*
Local Agency Bonds 5 years 30% 5% A-
FHLMC 5 years No Limit 30% None
U.S. Treasury Obligations 5 years No Limit No Limit None
U.S. Agency Securities 5 years No Limit 30% None
Commercial Paper 270 days 40% 5% A-1
Negotiable Certificates of Deposit 2 years 30% 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
LA County Pooled Investment Funds N/A 5%5%
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-
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
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.
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.
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
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
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:
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, U.S. Agency
Commercial Mortgage Backed Securities (CMBS), 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, 2025, the City held asset backed securities of about $8.8 million.
The City’s U.S. Agency CMBS may pay down principal prior to maturity. As of June 30, 2025, the
City held U.S. Agency CMBS of about $19.7 million.
Investments with make whole call provisions generally may be called any time, but the terms of
the call price generally mitigate the financial impact of a call. As of June 30, 2025, the City held
corporate bonds with make whole call provisions as summarized below:
Investment Maturities (In Years)
Investment Type Fair Value Less than 1 1 to 3 3 to 5 More than 5 Total
Money Market Funds 18,497,696$ 18,497,696$ -$ -$ -$ 18,497,696$
U.S. Treasury Bills 44,745,992 44,745,992 - - - 44,745,992
U.S. Treasuries 80,357,245 47,098,495 30,734,922 2,523,828 - 80,357,245
Commercial Papers 34,094,969 34,094,969 - - - 34,094,969
U.S. Agency Bonds 7,522,679 3,478,549 4,044,130 - - 7,522,679
U.S. Agency CMBS 19,696,669 1,530,905 5,151,995 13,013,769 - 19,696,669
Asset Backed Securities 8,832,728 - 1,545,934 7,286,794 - 8,832,728
Corporate Bonds 54,743,652 10,599,683 13,492,745 30,651,224 - 54,743,652
Municipal Bonds 2,167,119 - - 2,167,119 - 2,167,119
CAMP 54,865,897 54,865,897 - - - 54,865,897
LAIF 66,581,074 66,581,074 - - - 66,581,074
Investments with Fiscal Agent:
Money Market Funds 20,924,102 20,924,102 - - - 20,924,102
U.S. Treasuries 8,379,253 8,379,253 - - - 8,379,253
U.S. Agency Bonds 872,453 872,453 - - - 872,453
LAIF 305,448 305,448 - - - 305,448
Investments with OPEB Trust:
Money Market Funds 929,614 929,614 - - - 929,614
Mutual Funds - Fixed Income 19,080,502 19,080,502 - - - 19,080,502
Mutual Funds - Equity 28,282,148 28,282,148 - - - 28,282,148
Totals 470,879,240$ 360,266,780$ 54,969,726$ 55,642,734$ -$ 470,879,240$
Assuming callable securities (if any) will not be called.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
Investments with call dates may be called anytime on or after the call date. As of June 30, 2025,
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,
2025, the City held corporate bonds with both a make whole call provision and a regular call date
as summarized below:
Maturity Value
September 2025 4,183,821$
March 2027 1,972,768
January 2029 1,214,226
February 2029 1,227,658
Total 8,598,473$
Maturity Value Call Date
May 2027 2,996,331$ April 2027
April 2029 1,521,192 April 2028
Total 4,517,523$
Maturity Value Call Date
August 2025 2,418,029$ July 2025
November 2025 1,999,822 September 2025
July 2026 1,999,691 July 2025
September 2027 1,000,872 August 2027
June 2028 477,855 May 2028
June 2029 1,275,916 May 2029
July 2029 1,744,235 July 2028
August 2029 1,415,038 May 2029
November 2029 1,434,754 August 2029
December 2029 1,502,814 December 2028
February 2030 4,605,710 January 2030
March 2030 1,535,316 February 2030
March 2030 1,446,812 December 2029
May 2030 2,194,517 April 2030
Total 25,051,381$
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
Approximately $13.6 million of the investments that are U.S. Agency CMBS 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 $6.7 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 $6.9 million
of the securities with interest rate reset dates are U.S. Agency CMBS with potentially variable
coupon rates.
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
As of June 30, 2025, the City did not have any investments (including investments held by fiscal
agents) whose fair values were highly sensitive to interest rate fluctuations.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented in the following schedule is the minimum
rating (where applicable) required by the California Government Code, the City’s investment
policy, or debt agreements, and the actual rating by Standard & Poor’s as of the June 30, 2025
for each investment type.
Concentration of Credit Risk
The investment policy of the City and the California Government Code limit the amount that can
be invested in any one issuer as previously discussed. There were no investments in any one
issuer (excluding U.S. treasury bills, U.S. treasuries, mutual funds, and pooled investments) that
represented 5% or more of total City investments.
Minimum
Legal
Investment Type Fair Value Rating AAA AAAm AA+ AA AA- A-1+ A+ A A-1 A- Not Rated
Money Market Funds 18,497,696$ AAAm -$ 18,497,696$ -$ -$ -$ -$ -$ -$ -$ -$ -$
U.S. Treasury Bills 44,745,992 None - - - - - 44,745,992 - - - - -
U.S. Treasuries 80,357,245 None - - 80,357,245 - - - - - - - -
Commercial Papers 34,094,969 A-1 - - - - - 25,817,304 - - 8,277,665 - -
U.S. Agency Bonds 7,522,679 None - - 7,522,679 - - - - - - - -
U.S. Agency CMBS 19,696,669 None 1,956,768 - 17,739,901 - - - - - - - -
Asset Backed Securities 8,832,728 AAA 6,746,633 - - - - - - - - - 2,086,095
Corporate Bonds 54,743,652 A- 1,535,316 - 9,600,282 2,999,072 8,746,917 - 11,621,788 9,341,895 - 9,364,123 1,534,259
Municipal Bonds 2,167,119 A-- - 756,612 - 1,410,507 - - - - - -
CAMP 54,865,897 None - 54,865,897 - - - - - - - - - LAIF 66,581,074 None - - - - - - - - - - 66,581,074 Investments with Fiscal Agent:Money Market Funds 20,924,102 AAm - 20,924,102 - - - - - - - - - U.S. Treasuries 8,379,253 None - - 8,379,253 - - - - - - - -
U.S. Agency Bonds 872,453 None - - 872,453 - - - - - - - -
LAIF 305,448 None - - - - - - - - - - 305,448
Investments with OPEB Trust:
Money Market Funds 929,614 None - 929,614 - - - - - - - - -
Mutual Funds - Fixed Income 19,080,502 None - - - - - - - - - - 19,080,502
Mutual Funds - Equity 28,282,148 None - - - - - - - - - - 28,282,148
Totals 470,879,240$ 10,238,717$ 95,217,309$ 125,228,425$ 2,999,072$ 10,157,424$ 70,563,296$ 11,621,788$ 9,341,895$ 8,277,665$ 9,364,123$ 117,869,526$
99
111
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
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, 2025, 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 and investments with fiscal agent, the fiscal
agent and/or financial advisor 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.
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 2024, “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.
100
112
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
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 §§16429.1 to 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 or his or her designee also
appoints the remaining four members of LIAB to serve two-year terms or at the State Treasurer’s
pleasure. California Government Code §16429.2 specifies the required qualifications of the State
Treasurer’s appointees to LIAB.
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.
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
101
113
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(2) Cash and Investments (Continued)
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.
Following are the City’s recurring fair value measurements as of June 30, 2025:
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 18,497,696$ 18,497,696$ -$ -$ -$
U.S. Treasury Bills 44,745,992 - - 44,745,992 -
U.S. Treasuries 80,357,245 - - 80,357,245 -
Commercial Papers 34,094,969 - - 34,094,969 -
U.S. Agency Bonds 7,522,679 - - 7,522,679 -
U.S. Agency CMBS 19,696,669 - - 19,696,669 -
Asset Backed Securities 8,832,728 - - 8,832,728 -
Corporate Bonds 54,743,652 - - 54,743,652 -
Municipal Bonds 2,167,119 - - 2,167,119 -
CAMP 54,865,897 54,865,897 - - -
LAIF 66,581,074 66,581,074 - - -
Investments with Fiscal Agent:
Money Market Funds 20,924,102 20,924,102 - - -
U.S. Treasuries 8,379,253 - - 8,379,253 -
U.S. Agency Bonds 872,453 - - 872,453 -
LAIF 305,448 305,448 - - -
Investments with OPEB Trust:
Money Market Funds 929,614 929,614 - - -
Mutual Funds - Fixed Income 19,080,502 - 4,675,098 14,405,404 -
Mutual Funds - Equity 28,282,148 - 13,325,739 14,956,409 -
Totals 470,879,240$ 162,103,831$ 18,000,837$ 290,774,572$ -$
102
114
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, 2025, the City recognized $3,960,576 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
receivables totaled $4,519,482. Lease inflows for lease revenue from amortization of the related
GASB 87 deferred inflows of resources from leases was $13,227,446. Lease receivables at June
30, 2025, were $276,374,011.
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 $8,182. Below are the expected future minimum payments to the City from
this license. License payments by the cellphone company to the City do not secure debt issued
by the City.
Year Ending License
June 30,Payments
2026 8,186$
2027 1,500
2028 1,500
2029 1,500
2030 1,500
2031-2035 7,500
2036-2040 5,500
Total 27,186$
103
115
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(4) Interfund Receivables and Payables
At June 30, 2025, interfund receivables and payables were as follows:
The above balances are primarily due to reclassification of negative cash balances in the city-
wide cash pool.
At June 30, 2025, 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 8,718,563$ -$
Debt Service Fund - 6,517,778
Internal Service Fund - 353,001
Other Governmental Funds - 1,847,784
Due From Due To
General Fund 4,426,659$ -$
Tide and Submerged Land - Harbor Capital Fund - 4,426,659
Advance #1 Advance #2
Dredging Marina Park
Fiscal Projects Project Total
Year Repayment Repayment Repayment
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 1,926,659$ 2,500,000$ 4,426,659$
Harbor Capital Fund Advance - Repayment Terms
(Zero-Interest Advance)
104
116
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(5) Interfund Transfers
Interfund transfers at June 30, 2025, 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:
$12,263,815 to the Tide and Submerged Land – Operating Fund to subsidize the
maintenance and operation;
$5,832,875 to the Tide and Submerged Land – Harbor Capital Fund to cash fund Harbor
Capital projects;
$12,104,412 to the Facilities Financial Planning Reserve Fund to cash fund construction
projects for General Fund supported facilities;
$8,250,735 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;
$6,160 to the Equipment Maintenance Fund and $15,729 to the Information Technology
Fund to fund additional CalPERS expenses; and
$14,562,692 to Other Governmental Funds, which includes $9,757,055 to the Unrestricted
Capital Improvements Fund to fund the purchase of real property and capital
improvements, $148 to the Office of Traffic Safety Fund to offset a variance and to claim
a reimbursement, $5,489 to the Contributions Fund to reconcile revenues and
expenditures related to the Rubberized Pavement Grant, $2,300,000 to the Park
Maintenance Fund for the maintenance of parks, and $2,500,000 to the Facilities
Maintenance Fund for the maintenance of facilities.
The Tide and Submerged Land – Operating Fund transferred $20,317,944 to the General Fund
to reimburse for tidelands related expenditures.
The Facilities Financial Planning Reserve Fund also transferred $11,111,169 to Other
Governmental Funds as follows:
$3,000,000 to the Unrestricted Capital Improvements Fund to fund a new permanent
supportive housing project;
General Fund
Tide and
Submerged
Land -
Operating
Tide and
Submerged
Land - Harbor
Capital
Facilities
Financial
Planning
Reserve
Debt Service
Fund
Internal
Service
Funds
Other
Governmental
Funds Total
General Fund -$ 12,263,815$ 5,832,875$ 12,104,412$ 8,250,735$ 21,889$ 14,562,692$ 53,036,418$
Tide and Submerged Land -
Operating 20,317,944 - - - - - - 20,317,944
Facilities Financial Planning
Reserve - - - - - - 11,111,169 11,111,169
Internal Service Funds - - - - - - - -
Other Governmental Funds - - - - - - - -
Total 20,317,944$ 12,263,815$ 5,832,875$ 12,104,412$ 8,250,735$ 21,889$ 25,673,861$ 84,465,531$
Transfers In
Tr
a
n
s
f
e
r
s
O
u
t
105
117
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(5) Interfund Transfers (Continued)
$500,000 to Miscellaneous FFP Projects Fund to fund entitlement process and preliminary
studies and outreach on the Lower Castaways Aquatic Center project.
$5,295 to the Junior Lifeguards Fund to fund construction projects related to the Junior
Lifeguard building;
$6,800,000 to the Fire Station Fund to cash fund the construction for replacing Balboa
Library/Fire Station No. 1; and
$805,874 to the Parks and Community Centers Fund to support the Lower Sunset View
Park project.
(6) Capital Assets
Capital asset activity for the year ended June 30, 2025, was as follows:
Governmental Activities:
Beginning Balance
Balance Additions Deletions June 30, 2025
Non-depreciable/non-amortizable:
Land and rights of way 1,922,330,399$ 1,646,200$ -$ 1,923,976,599$
Work in progress 22,200,235 9,389,848 (16,602,439) 14,987,644
Total non-depreciable/non-amortizable 1,944,530,634 11,036,048 (16,602,439) 1,938,964,243
Depreciable/amortizable:
Structures 270,180,218 9,090,044 (22,865) 279,247,397
Intangible right to use structures 17,187,099 - - 17,187,099
Equipment 63,520,443 3,867,886 (2,013,301) 65,375,028
Intangible right to use equipment 363,725 - - 363,725
Intangible right to use subscriptions 2,666,852 - (214,474) 2,452,378
Infrastructure 406,394,747 22,784,377 (2,862,986) 426,316,138
Total depreciable/amortizable 760,313,084 35,742,307 (5,113,626) 790,941,765
Less accumulated depreciation/amortization for:
Structures (70,504,228) (6,972,478) 22,865 (77,453,841)
Intangible right to use structures (3,142,343) (1,221,302) - (4,363,645)
Equipment (44,470,285) (4,197,345) 1,962,260 (46,705,370)
Intangible right to use equipment (201,404) (84,689) - (286,093)
Intangible right to use subscriptions (521,572) (423,693) 214,474 (730,791)
Infrastructure (194,915,347) (7,286,220) 1,659,859 (200,541,708)
Total accumulated depreciation (313,755,179) (20,185,727) 3,859,458 (330,081,448)
Net depreciable/amortizable 446,557,905 15,556,580 (1,254,168) 460,860,317
Net capital assets 2,391,088,539$ 26,592,628$ (17,856,607)$ 2,399,824,560$
106
118
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(6) Capital Assets (Continued)
Governmental Activities capital assets net of accumulated depreciation/amortization at June 30,
2025 are comprised of the following:
Business-type Activities:
General Capital Assets, net 2,381,189,972$
Internal Service Fund Capital Assets, net 18,634,588
Total 2,399,824,560$
Beginning Balance
Balance Additions Deletions June 30, 2025
Non-depreciable/non-amortizable:
Land 2,219,450$ -$ -$ 2,219,450$
Work in progress 4,408,443 5,540,234 (2,720,157) 7,228,520
Total non-depreciable/non-amortizable 6,627,893 5,540,234 (2,720,157) 9,447,970
Depreciable/amortizable:
Intangible right to use land and right of way 3,883,062 -- 3,883,062
Structures 688,396 -- 688,396
Equipment 380,068 -- 380,068
Intangible rights to use subscription - 146,843 - 146,843
Infrastructure 205,661,153 4,025,167 (1,871,208) 207,815,112
Total depreciable/amortizable 210,612,679 4,172,010 (1,871,208) 212,913,481
Less accumulated depreciation/amortization for:
Intangible right to use land and right of way (127,825) (53,656) - (181,481)
Structures (325,569) (15,357) - (340,926)
Equipment (254,064) (12,569) - (266,633)
Intangible rights to use subscription - (29,866) - (29,866)
Infrastructure (79,893,907) (2,477,770) 253,220 (82,118,457)
Total accumulated depreciation (80,601,365) (2,589,218) 253,220 (82,937,363)
Net depreciable/amortizable 130,011,314 1,582,792 (1,617,988) 129,976,118
Net capital assets 136,639,207$ 7,123,026$ (4,338,145)$ 139,424,088$
107
119
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(6) Capital Assets (Continued)
Depreciation/amortization expense was charged in the following functions in the Statement of
Activities:
Internal Service Fund depreciation/amortization of $4,275,677 was allocated to the governmental
functions above.
(7) Long-Term Liabilities
Changes in Long-Term Liabilities
The long-term liabilities for governmental activities for the fiscal year ended June 30, 2025, are
as follows:
Governmental Business-type
Activities Activities
General Government 6,735,860$ -$
Public Safety 3,070,878 -
Public Works 144,478 -
Community Development 450,393 -
Community Service 9,784,118 -
Water - 1,949,684
Wastewater - 639,534
Totals 20,185,727$ 2,589,218$
Amounts
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
Other debt:
Certificates of participation - Series 2010B 87,800,000$ -$ (3,510,000)$ 84,290,000$ 3,675,000$
Certificates of participation - Series 2020A 5,725,000 - (725,000) 5,000,000 755,000
Bond premium - Series 2020A 864,633 - (142,131) 722,502 -
Other long-term liabilities:
Workers' compensation payable 23,450,563 7,108,865 (5,069,453) 25,489,975 4,497,885
Claims and judgments payable 10,841,318 7,829,776 (8,070,980) 10,600,114 3,941,299
Compensated absences(1)13,648,166 844,531 - 14,492,697 8,097,760
Lease liability 14,339,382 - (1,272,451) 13,066,931 1,273,326
Subscription liability 1,832,755 - (289,032) 1,543,723 243,771
Total governmental activities 158,501,817$ 15,783,172$ (19,079,047)$ 155,205,942$ 22,484,041$
(1) The change in the compensated absences liability is presented as a net change.
108
120
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(7) Long-Term Liabilities (Continued)
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, 2025, are
as follows:
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, 2025, the City has received $33,530,580 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 $3,675,000 to $7,245,000. The total outstanding
balance at June 30, 2025, amounted to $84,290,000. The use of the following assets has been
pledged as security for the outstanding balance: the Central Library and the Civic Center.
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Business-type activities:
Lease liability 3,776,654$ -$ (44,364)$ 3,732,290$ 44,608$
Subscription liability - 146,843 (36,460) 110,383 36,593
Total business-type activities 3,776,654$ 146,843$ (80,824)$ 3,842,673$ 81,201$
109
121
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 $755,000 to $915,000. The total outstanding balance at June 30, 2025,
amounted to $5,000,000. The use of the following assets has been pledged as security for the
outstanding balance: Fire Station 5 and Fire Station 7.
Year Ending
June 30,Principal Interest Total
2026 3,675,000$ 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 4,405,000 4,748,726 9,153,726
2031-2035 25,220,000 18,624,175 43,844,175
2036-2040 31,660,000 8,476,518 40,136,518
2041 7,245,000 259,661 7,504,661
Totals 84,290,000$ 54,020,770$ 138,310,770$
110
122
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, 2025, 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, 2025, for general liability and workers’ compensation
was $10,600,114 and $25,489,975, respectively.
Compensated Absences
The City's policies relating to compensated absences are described in Note (1). This liability at
June 30, 2025, is $14,492,697. Compensated absences are liquidated from the Compensated
Absences internal service fund.
Unused Credit
The City has a letter of credit in the amount of $300,938.
Year Ending
June 30,Principal Interest Total
2026 755,000$ 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 880,000 54,200 934,200
2031 915,000 18,300 933,300
Totals 5,000,000$ 622,400$ 5,622,400$
111
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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
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 1,226,036 48,964 1,275,000
2030 1,232,794 42,206 1,275,000
2031-2035 6,266,636 108,364 6,375,000
2036 636,189 1,312 637,501
Totals 13,066,931$ 388,095$ 13,455,026$
112
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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
recreation classes registrations, performance evaluations, public safety, etc. GASB 96 excludes
certain outflows (e.g., certain variable payments, etc.) from the measurement of SBITA liabilities.
Year Ending
June 30 Principal Interest Total
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 45,600 19,423 65,023
2031-2035 231,800 93,317 325,117
2036-2040 238,262 86,855 325,117
2041-2045 244,904 80,213 325,117
2046-2050 251,730 73,387 325,117
2051-2055 258,747 66,370 325,117
2056-2060 265,960 59,157 325,117
2061-2065 273,374 51,743 325,117
2066-2070 280,993 44,124 325,117
2071-2075 288,827 36,290 325,117
2076-2080 296,877 28,240 325,117
2081-2085 305,153 19,964 325,117
2086-2090 313,660 11,457 325,117
2091-2095 241,933 3,142 245,075
2096 14,557 27 14,584
Totals 3,732,290$ 753,888$ 4,486,178$
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(7) Long-Term Liabilities (Continued)
Estimates of the future subscription payments for the City’s SBITA liabilities for governmental
activities are as follows:
Estimates of the future subscription payments for the City’s SBITA liabilities for business-type
activities 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, 2025, for each district under the Bond Acts of
1911 and 1915 are as follows:
Fiscal
Year Ending
June 30,Principal Interest Total
2026 243,771$ 18,361$ 262,132$
2027 234,543 6,558 241,101
2028 235,836 5,266 241,102
2029 215,788 3,980 219,768
2030 174,164 2,937 177,101
2031-2033 439,621 3,130 442,751
Totals 1,543,723$ 40,232$ 1,583,955$
Fiscal
Year Ending
June 30,Principal Interest Total
2026 36,593$ 607$ 37,200$
2027 36,794 406 37,200
2028 36,997 203 37,200
Totals 110,384$ 1,216$ 111,600$
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, crime, fiduciary, and automotive liability. The City also purchases fidelity bonds
for employees in key positions. Settled claims from these risks have exceeded commercial
insurance coverage within the past three years, for the excess layers of the City’s prior insurance
program, which had lower limits than the current limits.
The City utilizes California Insurance Pool Authority (CIPA), a joint powers authority, to provide
excess insurance for the general liability and workers' compensation programs with the following
limits beyond the City’s self-insured retention:
Type of Coverage Self-Insured Retention Coverage Limits
General liability $500,000 $40,000,000 excess of
$3,000,000
Workers’ compensation $500,000 Statutory excess of
$2,000,000
CIPA was established for the purpose of creating a risk management pool for all California cities
in order to stabilize and reduce overall insurance costs for members. CIPA is governed by a Board
of Directors consisting of representatives from each member city.
Bonds Outstanding
Assessment District Original Issue June 30, 2025
Reassessment District 2012 $ 13,583,436 $ 130,813
Assessment District No. 117 2,955,000 2,135,000
Assessment District No. 116 1,575,000 1,230,000
Assessment District No. 116B 665,000 520,000
Assessment District No. 113 4,565,000 3,945,000
Assessment District No. 111 2,412,000 1,984,000
Assessment District No. 120-2 2,505,000 2,385,000
Assessment District No. 124 23,625,000 22,795,000
Totals 51,885,436$ 35,124,813$
115
127
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(9) Risk Management – General Liability and Workers’ Compensation (Continued)
The Insurance Reserve Fund was established to account for costs associated with general liability
and workers' compensation claims. 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
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 $36,090,089 at June 30, 2025, 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 $166,674,731 at June
30, 2025.
June 30, 2024 June 30, 2025 June 30, 2024 June 30, 2025
Unpaid claims, beginning of fiscal year 8,689,061$ 10,841,318$ 16,396,153$ 23,450,563$
Insured claims (including IBNR)25,766,286 7,829,776 11,588,497 7,108,865
Claim payments (23,614,029) (8,070,980) (4,534,087) (5,069,453)
Unpaid claims, end of fiscal year 10,841,318$ 10,600,114$ 23,450,563$ 25,489,975$
General Liability Workers' Compensation
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128
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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.
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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
The Plans’ provisions and benefits in effect for the measurement period ended June 30,
2024 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 32.59% - 34.09% 29.17% - 30.67% 29.76% - 31.17%
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 69.03% - 70.13% 69.03% - 70.13% 72.53% - 73.63%
Miscellaneous
Safety
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130
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
Employees Covered – At the measurement date of June 30, 2024, 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, 2024, using an annual actuarial valuation as of June 30, 2023
rolled forward to June 30, 2024 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 789 488
Inactive employees entitled to
but not yet receiving benefits 710 115
Active employees 547 275
Totals 2,046 878
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
Actuarial Assumptions – The total pension liabilities in the June 30, 2023, actuarial
valuations were determined using the following actuarial assumptions:
All other actuarial assumptions used in the June 30, 2023, 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, 2023 June 30, 2023
Measurement Date June 30, 2024 June 30, 2024
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%6.80%
Mortality Rate Table (1)
Post Retirement Benefit Increase
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
Derived using CalPERS' membership
Entry-Age Normal Cost Method
Varies by Entry Age and Services
(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
incorporate 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.
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132
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 Events – There were no subsequent events that would materially affect the
results presented in this disclosure.
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)
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133
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
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, 2023 521,082,608$ 400,096,182$ 120,986,426$
Changes in the Year:
Service cost 8,448,830 - 8,448,830
Interest on the total pension liability 35,431,016 - 35,431,016
Differences between expected and
actual experience 1,976,265 - 1,976,265
Net plan to plan resource movement - (59) 59
Contribution - employer - 21,544,170 (21,544,170)
Contribution - employee - 4,541,457 (4,541,457)
Net investment income - 38,107,605 (38,107,605)
Benefit payments, including refunds
of employee contributions (27,580,605) (27,580,605) -
Administrative expense - (325,559) 325,559
Net Changes 18,275,506 36,287,009 (18,011,503)
Balance at June 30, 2024 539,358,114$ 436,383,191$ 102,974,923$
Increase (Decrease)
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134
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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:
Miscellaneous Safety
1% Decrease 5.90%5.90%
Net Pension Liability 174,266,038$ 266,569,562$
Current Discount Rate 6.90%6.90%
Net Pension Liability 102,974,923$ 173,551,818$
1% Increase 7.90%7.90%
Net Pension Liability 44,241,390$ 96,648,799$
Safety Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2023 695,885,933$ 499,893,619$ 195,992,314$
Changes in the Year:
Service cost 10,840,966 - 10,840,966
Interest on the total pension liability 47,523,602 - 47,523,602
Differences between expected and
actual experience 7,193,012 - 7,193,012
Net plan to plan resource movement - 59 (59)
Contribution - employer - 36,653,740 (36,653,740)
Contribution - employee - 3,875,707 (3,875,707)
Net investment income - 47,875,335 (47,875,335)
Benefit payments, including refunds
of employee contributions (39,503,140) (39,503,140) -
Administrative expense - (406,765) 406,765
Net Changes 26,054,440 48,494,936 (22,440,496)
Balance at June 30, 2024 721,940,373$ 548,388,555$ 173,551,818$
Increase (Decrease)
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135
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, 2025, the City recognized pension expense of
$51,381,790 ($20,439,193 Miscellaneous Plan and $30,942,597 Safety Plan). At June 30,
2025, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Miscellaneous plan:
Pension contributions subsequent to
measurement date 21,712,457$ -$
Differences between expected and
actual experience 3,244,282 (87,145)
Change in assumptions 977,548 -
Net differences between projected and
actual earnings on plan investments 6,473,421 -
Total miscellaneous plan 32,407,708 (87,145)
Safety plan:
Pension contributions subsequent to
measurement date 37,081,470 -
Differences between expected and
actual experience 10,440,815 (926,141)
Change in assumptions 6,072,755 -
Net differences between projected and
actual earnings on plan investments 7,992,597 -
Total safety plan 61,587,637 (926,141)
Total all plans 93,995,345$ (1,013,286)$
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136
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
$58,793,927 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, 2026. 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, 2025, the City had no outstanding contributions to the pension plan required for
the year ended June 30, 2025.
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, 2025, the City's covered payroll for employees
participating in the plan was $3,554,314. Employees made contributions of $133,405
(3.75% of current covered payroll), which was matched by the employer in the same
amount. Assets of the plan totaled $2,610,514 at June 30, 2025.
Fiscal
Year Ending
June 30, Miscellaneous Safety Total
2026 3,309,810$ 8,789,078$ 12,098,888$
2027 10,912,787 17,409,634 28,322,421
2028 (1,498,140) 56,059 (1,442,081)
2029 (2,116,351) (2,674,745) (4,791,096)
Thereafter - - -
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137
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 2025 PEMHCA minimum contribution amount is $158 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 of 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
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138
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, 2025,
the liability for the conversion part of the RHS Plan was $800,925. 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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Employees Covered
As of the measurement date June 30, 2024, 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, 2025, the City’s cash contributions were $10,865,147 to the trust in premium
payments and $1,406,824 for the estimated implicit subsidy, resulting in a total payment of
$12,271,971.
Net OPEB Liability
The City’s net OPEB liability was measured as of June 30, 2024, 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 539
Inactive employees or beneficiaries entitled to but not receiving benefits 365
Active employees 849
Total 1,753
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
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 6.40%. The
OPEB Plan’s target asset allocation as of June 30, 2025 are summarized in the following table.
The discount rate used when the OPEB plan investments are insufficient to pay for future benefit
payments are selected from the range of indices as shown in the table on the following page,
where the range is given as the spread between the lowest and highest rate shown.
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.40%
Inflation 2.75%
Projected Salary Increase 2.80% per annum, in aggregate
Expected long term investment rate of return 6.40%
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
Assumed Long-Term
Asset Expected Real
Allocation Rate of Return
US Equity 36.00% N/A
Non-US Equity 18.00% N/A
US Real Estate 3.00% N/A
Listed Infrastructure 3.00% N/A
Fixed Income 38.00% N/A
Cash 2.00% N/A
Totals 100.00% 6.40%
Asset Class
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
The City’s funding policy is to fund the recommended actuarially determined contribution (ADC)
to fully fund the benefits over a reasonable period of time. The final equivalent single discount
rate used for this year’s valuation is 6.40% with the assumption that the City will eventually pay
the pay-go costs out of the OPEB trust when the Trust is expected to be able to pay all future
projected benefit payments. This discount rate assumes the City continues to fund for its retiree
health benefits through PARS under its investment allocation strategy.
Discount Rate
Under GASB 75, the discount rate used in valuing OPEB liabilities for funded plans as of the
Measurement Date must be based on the long-term expected rate of return on OPEB plan
investments that are expected to be used to finance future benefit payments to the extents that
(a) they are sufficient to pay for the projected benefit payments and (b) the OPEB plan assets are
invested using a strategy that will achieve that return. When the OPEB plan investments are
insufficient to cover future benefit payments, a yield for 20-year tax exempt general obligation
municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating
scale) must be used.
June 30,June 30,
Yield as of 2023 2024
Bond Buyer Go 20-Bond
Municipal Bond Index 3.65% 3.93%
S&P Municipal Bond 20-Year
High Grade Rate Index 4.13% 4.21%
Fidelity 20-Year Go Municipal
Bond Index 3.86% 3.97%
Bond Index Range 3.65%-4.13% 3.93%-4.21%
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
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, 2023 53,136,842$ 35,166,853$ 17,969,989$
Changes in the Year:
Service cost 800,218 - 800,218
Interest on the total OPEB liability 3,125,813 - 3,125,813
Changes of assumptions (1,705,049) - (1,705,049)
Differences between actual and
expected experience 99,265 - 99,265
Contribution - employer - 10,865,147 (10,865,147)
Net investment income - 3,933,617 (3,933,617)
Benefit payments, including refunds of
employee contributions (3,734,742) (3,734,742) -
Administrative expenses - (23,200) 23,200
Net Changes (1,414,495) 11,040,822 (12,455,317)
Balance at June 30, 2024 51,722,347$ 46,207,675$ 5,514,672$
Increase (Decrease)
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143
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Employment Health Care Benefits (OPEB) (Continued)
Change of Assumptions
There have been no substantive plan provision changes since the last full valuation, which was
for the fiscal year ending June 30, 2024. The City has migrated their OPEB assets from the
CERBT trust to the PARS trust.
Interim year valuation results have been projected from the prior year’s valuation with adjustments
for:
Updating the discount rate from 6.00% as of June 30, 2023 to 6.40% as of June 30, 2024.
This update led to a decrease in liabilities.
Updated pre-65 and post-65 healthcare trend rates with initial rates of 8.00% and 6.50%,
respectively, decreasing annually by 0.25% to an ultimate rate of 4.50%. This change
caused a slight increase in liabilities.
Claim cost calculations have been updated to account for the 2025 risk scores from the
CalPERS Risk Adjustments. This change caused an increase in liabilities.
PEMHCA minimum required contribution was updated for 2026, resulting in a decrease in
liabilities.
Claim costs and premiums were updated for 2025, resulting in an increase in liabilities.
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.
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, 2025, the City recognized OPEB expense of $3,019,952. At June
30, 2025, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
1% Decrease Discount Rate 1% Increase
(5.40%)(6.40%)(7.40%)
Net OPEB Liability 10,634,856$ 5,514,672$ 1,162,929$
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 $2,689,087 $5,514,672 $9,287,516
Healthcare Cost Trend Rates
Deferred Deferred
Outflows of Inflows of
Description Resources Resources
OPEB contributions subsequent to measurement date 2,254,152$ -$
Differences between projected and actual experience 4,256,028 (412,725)
Change of assumptions 1,882,666 (1,659,982)
Net difference between projected and actual earnings
on OPEB plan investments 413,087 -
Totals 8,805,933$ (2,072,707)$
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145
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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, eight-year period, nine-year period, or a ten-year period,
depending on the fiscal year the difference occurred. The net difference between projected and
actual earnings on plan investments is amortized over a five-year period.
An amount of $2,254,152, 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, 2026.
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, 2025, the City had no outstanding amount of contributions to the OPEB plan required
for the year ended June 30, 2025.
(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 $28,245,000 of
special tax refunding bonds to refinance the 2012 series; the City is not obligated in any manner
to repay the bonds. As of June 30, 2025, the contributions from property owners have been fully
Fiscal Year
Ending
June 30, Amount
2026 811,880$
2027 1,900,651
2028 467,772
2029 492,139
2030 839,258
Thereafter (32,626)
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CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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
$887,014. The City’s 10.75% interest in the net equity of this joint venture at June 30, 2025,
amounts to $339,272. 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, 2025.
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.
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147
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 previous
agreement was entered into on September 27, 2011, subsequently amended on January 28,
2014, and expired on December 31, 2024. Under this agreement, the City paid VNB 18% of the
total transient occupancy tax (TOT) collected during the fiscal year. On January 1, 2025, the City
entered into a new agreement with VNB increasing their share to 23% of hotel TOT collected
during the fiscal year, and eliminating their share of residential TOT. For the Fiscal Year ending
June 30, 2025, the City paid VNB a total $7,736,564 between the two agreements.
Contractual Commitments
Construction and contractual commitments for major construction projects are as follows:
Annual Project YTD Unexpended
Budget Expenditures Commitments
Irvine Terrace, Shorecliffs, Balboa Peninsula Water Line Replc 8,238,406$ 572$ 8,091,473$
CNG Fueling System 8,550,542 1,272,932 6,491,700
Central Library Lecture Hall 10,415,158 3,836,678 6,256,601
Big Canyon Restoration Phase 3 7,365,960 1,057,903 5,534,856
Cathodic Protection Program 4,147,420 54,398 4,092,555
Balboa Yacht Basin Dredging 3,899,344 - 3,898,344
Balboa Peninsula Trolley 4,037,247 604,212 3,325,504
Water Well Rehabilitation Program 2,127,021 97,135 2,028,183
Bristol St N Pavement Rehab 1,613,000 - 1,613,000
Library/ Fire Station No. 1 Replacement 15,991,120 77,241 1,514,712
Facilities Maintenance Master Plan 2,649,950 38,438 1,487,348
Spyglass Hill Rd Pavement Rehab 1,886,188 11,849 1,405,203
Bay Crossing Water Main Replc 3,086,736 155,131 1,163,121
Von Karman Ave Pvmt Rehab 1,722,373 622,874 733,714
Sewer Main Lining and Repairs 1,655,896 531,934 682,107
Collins Island Bridge Replacement 2,693,848 16,985 662,732
Facilities Maintenance Master Plan 2,388,922 1,703,165 642,916
Balboa Yacht Basin Docks 6,830,453 115,604 622,008
Balboa Island/CDM Transit Service 3,636,581 - 616,335
136
148
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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 Revenue Project
General Land - Operating Land - Harbor Capital Funds Funds Total
Oceanfront encroachment -$ -$ -$ 300,606$ -$ 300,606$
Cable franchise reserve - - - 7,883 - 7,883
Streets and highways - - - 2,973,396 2,647,359 5,620,755
Parks and community centers - - - - 10,199,616 10,199,616
Facilities - - - 1,574,952 1,353,763 2,928,715
Public arts and culture - - - 32,500 - 32,500
Capital re-appropriations - - - - 9,857,318 9,857,318
Beaches - 710,994 1,659,355 - - 2,370,349
Marinas - 12,591 - - - 12,591
Dredging - -100,625 - - 100,625
Equipment 684,664 188,990 - - - 873,654
Facilities Replacement - - - - 100 100
Drainage - - - - 454,505 454,505
Miscellaneous and studies - - - - 711,927 711,927
Contract services 1,027,561 - - - - 1,027,561
Supplies and materials 71,520 - - - - 71,520
Maintenance and repairs 791,737 - - - 1,934,019 2,725,756
General 59,250 - - - - 59,250
Total encumbrances 2,634,732$ 912,575$ 1,759,980$ 4,889,337$ 27,158,607$ 37,355,231$
Major Governmental Funds Other Governmental Funds
137
149
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(15) Fund Balance
Governmental Fund Balance at June 30, 2025, 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)1,371,697$ 63,529$ -$ -$ -$ 17,024$ -$ -$ 1,452,250$ Inventories (legally restricted)183,978 - - - - - - - 183,978 Long-term loan receivable (form restricted)4,426,659 - - - - - - - 4,426,659 Permanent endowment (legally restricted)- - - - - - - 4,629,781 4,629,781 Restricted:- Affordable housing - - - - - 634,021 - - 634,021 Oceanfront encroachment - - - - - 300,606 - - 300,606 Upper Newport bay restoration - 1,871,911 - - - - - - 1,871,911 Cable franchise reserve - - - - - 4,023,412 - - 4,023,412 Community development - - - - - - 3,586 - 3,586 Streets and highways - - - - - 2,973,396 - - 2,973,396 Public safety - - - - - 646,986 - - 646,986 Facilities - - - - - 1,703,264 306,531 - 2,009,795 Transportation - - - - - 314,333 - - 314,333 Environmental liability mitigation - - - - - 8,917,639 - - 8,917,639 Public arts and culture - - - - - 1,273,162 - - 1,273,162 Parking - - - - - 292,979 - - 292,979 Training - - - - - 634,388 - - 634,388 Libraries - - - - - - - 262,160 262,160 Scholarships - - - - - - - 230,819 230,819 Fiin - - - - - 1,226,580 - - 1,226,580 Debt service - - - - 2,024,393 - - - 2,024,393 Capital re-appropriations - 7,702,206 28,023,307 - - 8,877,643 15,880,007 - 60,483,163 Beaches - 710,994 1,659,355 - - - - - 2,370,349 Marinas - 12,591 - - - - - - 12,591 Dredging - - 27,820,484 - - - - 2,062,502 29,882,986 Equipment - 188,990 - - - - - - 188,990 General Plan Maintenance - 160,674 160,674 Committed: Facilities replacement - - - 23,540,709 - - 723,235 - 24,263,944 Facilities maintenance - - - - - - 1,225,515 - 1,225,515
Civic center and park - - - - - - 526,902 - 526,902 Oil and gas liabilities - 1,258,890 - - - - - - 1,258,890 Parking management - - - - - - 161,767 - 161,767
Neighborhood enhancement - - - - - - 8,084,238 - 8,084,238 Capital re-appropriations 374,822 - - - - - 7,000 - 381,822
Drainage - - - - - - 2,191,405 - 2,191,405
Streets and highways - - - - - - 13,934,462 - 13,934,462 Facilities - - - - - - 17,718,982 - 17,718,982
Miscellaneous and studies - - - - - - 1,561,927 - 1,561,927
Parks and community centers - - - - - - 15,631,073 - 15,631,073
Contract services 1,613,722 - - - - - - - 1,613,722
Supplies and materials 261,671 - - - - - - - 261,671
Maintenance and repairs 791,737 - - - - - 1,934,019 - 2,725,756
Equipment 684,664 684,664
General 59,250 - - - - - - - 59,250
Unassigned 98,379,310 - - - - (11) - - 98,379,299
Total fund balances 108,147,510$ 11,809,111$ 57,503,146$ 23,540,709$ 2,024,393$ 31,996,096$ 79,890,649$ 7,185,262$ 322,096,876$
Other Governmental Funds
138
150
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(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.
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) 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, 2025, the City recognized $17,763
of payments related to PPP receivables that were excluded from the measurement of the PPP
receivables. A discount rate of 1.50% was applied to the measurement of the PPP receivable.
The PPP agreement leases facilities to the operator for the continued operation of a ferry between
Balboa Island and Balboa Peninsula. The City retains the right to inspect the property anytime
without notice to the operator. Please see the Statement of Net Position for additional information
about the nature and amounts of the PPP receivable and PPP deferred inflow.
Special Revenue Funds:
OTS DUI Grant 11$
Internal Service Funds:
Compensated Absences 4,909,926
139
151
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(18) Subsequent Event
On November 6, 2025, the City entered into a cooperative agreement with the cities of Laguna
Beach and Fountain Valley to develop a new municipal groundwater well to enhance regional
water supply reliability. Under the agreement, Newport Beach will serve as the lead agency for
the planning, design and construction of the project. The City has agreed to provide $20 million
towards the $30 million estimated total project cost and is expecting to recover the investment
over time through reduced water supply costs, as groundwater is less expensive than imported
water. Construction is expected to start in 2026 with the new well being fully operational by 2028.
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152
REQUIRED SUPPLEMENTARY INFORMATION
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153
2025 2024 2023 2022 2021
Measurement Period June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020
Total Pension Liability
Service cost 8,448,830$ 8,045,390$ 8,261,032$ 7,438,050$ 7,347,708$ Interest on total pension liability 35,431,016 34,232,164 32,759,522 31,805,532 30,565,919
Differences between expected and actual experience 1,976,265 5,716,564 (1,394,332) 1,624,975 369,351
Changes in assumptions - - 15,640,771 - -
Changes in benefits - 474,137 - - -
Benefit payments, including refunds of employee contributions (27,580,605) (26,581,149) (24,940,419) (22,976,493) (21,516,515)
Net Change in Total Pension Liability 18,275,506 21,887,106 30,326,574 17,892,064 16,766,463
Total Pension Liability - beginning 521,082,608 499,195,502 468,868,928 450,976,864 434,210,401
Total Pension Liability - ending (a)539,358,114$ 521,082,608$ 499,195,502$ 468,868,928$ 450,976,864$
Plan Fiduciary Net Position
Contributions - employer 21,544,170$ 20,800,063$ 18,352,430$ 18,612,457$ 16,346,284$ Contributions - employee 4,541,457 4,113,185 3,974,974 4,057,107 4,067,751
Net investment income 38,107,605 23,270,469 (30,856,252) 76,031,841 16,074,793
Administrative expense (325,559) (278,531) (256,962) (336,753) (454,777)
Other miscellaneous income/(expense)- - - - -
Plan to plan resource movement (59) - - - - Benefit payments (27,580,605) (26,581,149) (24,940,419) (22,976,493) (21,516,515)
Net change in Plan Fiduciary Net Position 36,287,009 21,324,037 (33,726,229) 75,388,159 14,517,536
Plan Fiduciary Net Position - beginning 400,096,182 378,772,145 412,498,374 337,110,215 322,592,679
Plan Fiduciary Net Position - ending (b)436,383,191$ 400,096,182$ 378,772,145$ 412,498,374$ 337,110,215$
Net pension liability - ending (a)-(b)102,974,923$ 120,986,426$ 120,423,357$ 56,370,554$ 113,866,649$
Plan fiduciary net position as a percentage of the total pension liability 80.91%76.78%75.88%87.98%74.75%
Covered payroll 50,824,016$ 48,099,822$ 45,210,057$ 44,809,856$ 43,902,594$
Net pension liability as percentage of covered payroll 202.61%251.53%266.36%125.80%259.36%
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, 2025Last 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.
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.
142
154
2020 2019 2018 2017 2016
June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Total Pension Liability
Service cost 7,084,444$ 7,334,861$ 7,151,754$ 6,303,642$ 6,087,960$ Interest on total pension liability 29,409,624 28,226,598 27,069,673 26,375,073 25,427,094
Differences between expected and actual experience 403,676 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 (20,129,701) (18,458,539) (17,249,398) (16,714,022) (16,374,370)
Net Change in Total Pension Liability 16,768,043 16,824,681 34,675,600 13,277,879 4,095,430
Total Pension Liability - beginning 417,442,358 400,617,677 365,942,077 352,664,198 348,568,768
Total Pension Liability - ending (a)434,210,401$ 417,442,358$ 400,617,677$ 365,942,077$ 352,664,198$
Plan Fiduciary Net Position
Contributions - employer 15,700,833$ 15,797,595$ 10,509,243$ 9,904,636$ 6,615,920$ Contributions - employee 3,955,144 3,979,337 4,134,130 4,206,942 4,321,646
Net investment income 19,895,019 23,855,196 28,349,491 1,241,432 5,687,908
Administrative expense (216,502) (435,499) (375,172) (155,791) (287,862)
Other miscellaneous income/(expense)700 (827,021) - - -
Plan to plan resource movement 1,570 (700) - (2,387) 26,981 Benefit payments (20,129,701) (18,458,539) (17,249,398) (16,714,022) (16,374,370)
Net change in Plan Fiduciary Net Position 19,207,063 23,910,369 25,368,294 (1,519,190) (9,777)
Plan Fiduciary Net Position - beginning 303,385,616 279,475,247 254,106,953 255,626,143 255,635,920
Plan Fiduciary Net Position - ending (b)322,592,679$ 303,385,616$ 279,475,247$ 254,106,953$ 255,626,143$
Net pension liability - ending (a)-(b)111,617,722$ 114,056,742$ 121,142,430$ 111,835,124$ 97,038,055$
Plan fiduciary net position as a percentage of the total pension liability 74.29%72.68%69.76%69.44%72.48%
Covered payroll 42,153,383$ 41,468,634$ 41,727,563$ 40,031,404$ 38,512,011$
Net pension liability as percentage of covered payroll 264.79%275.04%290.32%279.37%251.97%
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, 2025Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
143
155
2025 2024 2023 2022 2021
Actuarially determined contribution 16,708,777$ 15,211,001$ 15,250,219$ 14,432,250$ 14,600,178$
Contributions in relation to the actuarially determined contributions (21,712,457) (21,537,720) (20,794,397) (18,372,473) (18,730,840)
Contribution deficiency (excess)(5,003,680)$ (6,326,719)$ (5,544,178)$ (3,940,223)$ (4,130,662)$
Covered payroll 53,975,509$ 50,824,016$ 48,099,822$ 45,210,057$ 44,809,856$
Contributions as a percentage of covered payroll 40.23%42.38%43.23%40.64%41.80%
Notes to Schedule:
Valuation date:6/30/2022 6/30/2021 6/30/2020 6/30/2019 6/30/2018
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% 2.30% 2.50% 2.50% 2.50%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 6.80% (3)6.80% (3)7.00% (3)7.00% (3)7.00% (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, 2025
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
144
156
2020 2019 2018 2017 2016
Actuarially determined contribution 13,080,630$ 12,374,026$ 11,924,053$ 10,412,963$ 9,943,342$
Contributions in relation to the actuarially determined contributions (16,351,592) (15,713,898) (15,742,587) (10,412,963) (9,943,342)
Contribution deficiency (excess)(3,270,962)$ (3,339,872)$ (3,818,534)$ -$ -$
Covered payroll 43,902,594$ 42,153,383$ 41,468,634$ 41,727,563$ 40,031,404$
Contributions as a percentage of covered payroll 37.25%37.28%37.96%24.95%24.84%
Notes to Schedule:
Valuation date:6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013
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 2.625% 2.75% 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.25% (3)7.375% (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, 2025
Last 10 Years
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
145
157
2025 2024 2023 2022 2021
Measurement Period June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Measurement Period
Total Pension Liability
Service cost 10,840,966$ 10,727,817$ 10,918,046$ 9,817,913$ 9,622,985$ Interest on total pension liability 47,523,602 45,793,334 43,860,290 42,760,906 41,449,511
Differences between expected and actual experience 7,193,012 9,833,536 (3,451,985) 196,690 957,686
Changes in assumptions - - 22,634,816 - - Changes in benefits - 268,557 - - -
Benefit payments, including refunds of employee contributions (39,503,140) (37,885,623) (35,654,758) (33,765,218) (32,285,653)
Net Change in Total Pension Liability 26,054,440 28,737,621 38,306,409 19,010,291 19,744,529
Total Pension Liability - beginning 695,885,933 667,148,312 628,841,903 609,831,612 590,087,083
Total Pension Liability - ending (a)721,940,373$ 695,885,933$ 667,148,312$ 628,841,903$ 609,831,612$
Plan Fiduciary Net Position
Contributions - employer 36,653,740$ 35,285,332$ 32,394,203$ 32,367,091$ 28,539,301$
Contributions - employee 3,875,707 3,577,340 3,417,660 3,347,740 3,249,005
Net investment income 47,875,335 28,993,124 (38,537,209) 93,813,435 19,685,354
Administrative expense (406,765) (345,814) (317,056) (413,178) (556,832)
Plan to plan resource movement 59 - - - -
Benefit payments (39,503,140) (37,885,623) (35,654,758) (33,765,218) (32,285,653)
Other miscellaneous income/(expense)- - - - -
Net change in Plan Fiduciary Net Position 48,494,936 29,624,359 (38,697,160) 95,349,870 18,631,175
Plan Fiduciary Net Position - beginning 499,893,619 470,269,260 508,966,420 413,616,550 394,985,375
Plan Fiduciary Net Position - ending (b)548,388,555$ 499,893,619$ 470,269,260$ 508,966,420$ 413,616,550$
Net pension liability - ending (a)-(b)173,551,818$ 195,992,314$ 196,879,052$ 119,875,483$ 196,215,062$
Plan fiduciary net position as a percentage of the total pension liability 75.96%71.84%70.49%80.94%67.82%
Covered payroll 38,168,411$ 36,538,774$ 35,231,003$ 34,863,204$ 34,279,062$
Net pension liability as percentage of covered payroll 454.70%536.40%558.82%343.85%572.40%
Notes to Schedule:
Benefit Changes:
Change in Assumptions:
CITY OF NEWPORT BEACH
an Agent Multiple-Employer Defined Benefit Pension PlanAs of June 30, 2025
Last 10 Years
Defined Benefit Plan for Safety 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.
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.
Page 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
146
158
2020 2019 2018 2017 2016
Measurement Period June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015
Total Pension Liability
Service cost 9,292,715$ 9,223,465$ 9,015,985$ 8,075,553$ 8,077,826$ Interest on total pension liability 40,081,524 38,458,387 37,083,966 36,239,226 35,098,055
Differences between expected and actual experience 4,798,077 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 (30,443,097) (29,183,598) (28,074,414) (27,447,982) (25,838,982)
Net Change in Total Pension Liability 23,729,219 20,146,227 45,943,254 15,252,812 8,661,063
Total Pension Liability - beginning 566,357,864 546,211,637 500,268,383 485,015,571 476,354,508
Total Pension Liability - ending (a)590,087,083$ 566,357,864$ 546,211,637$ 500,268,383$ 485,015,571$
Plan Fiduciary Net Position
Contributions - employer 28,344,445$ 26,779,897$ 19,260,537$ 18,496,776$ 21,529,513$
Contributions - employee 3,162,044 3,104,318 2,967,318 2,826,831 2,969,503
Net investment income 24,254,890 29,064,749 34,814,011 1,561,480 7,049,577
Administrative expense (263,991) (532,480) (462,427) (193,780) (357,866)
Plan to plan resource movement (1,570) (855) - 2,387 -
Benefit payments (30,443,097) (29,183,598) (28,074,414) (27,447,982) (25,838,982)
Other miscellaneous income/(expense)855 (1,011,188) - - -
Net change in Plan Fiduciary Net Position 25,053,576 28,220,843 28,505,025 (4,754,288) 5,351,745
Plan Fiduciary Net Position - beginning 369,931,799 341,710,956 313,205,931 317,960,219 312,608,474
Plan Fiduciary Net Position - ending (b)394,985,375$ 369,931,799$ 341,710,956$ 313,205,931$ 317,960,219$
Net pension liability - ending (a)-(b)195,101,708$ 196,426,065$ 204,500,681$ 187,062,452$ 167,055,352$
Plan fiduciary net position as a percentage of the total pension liability 66.94%65.32%62.56%62.61%65.56%
Covered payroll 33,935,043$ 32,866,620$ 32,450,020$ 30,816,246$ 30,189,633$
Net pension liability as percentage of covered payroll 574.93%597.65%630.20%607.03%553.35%
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, 2025
Last 10 Years
Defined Benefit Plan for Safety Employees
147
159
2025 2024 2023 2022 2021
Actuarially determined contribution 28,178,830$ 25,872,229$ 25,952,201$ 25,115,878$ 25,341,788$ Contributions in relation to the actuarially determined contributions (37,081,471) (36,635,838) (35,283,235) (32,317,538) (32,251,903) Contribution deficiency (excess)(8,902,641)$ (10,763,609)$ (9,331,034)$ (7,201,660)$ (6,910,115)$
Covered payroll 40,866,717$ 38,168,411$ 36,538,774$ 35,231,003$ 34,863,204$
Contributions as a percentage of covered payroll 90.74%95.98%96.56%91.73%92.51%
Notes to Schedule:
Valuation date:6/30/2021 6/30/2021 6/30/2020 6/30/2019 6/30/2018
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%2.30%2.50% 2.50% 2.50%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 6.80% (3)6.80% (3)7.00% (3)7.00% (3)7.00% (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, 2025
Last 10 Years
Defined Benefit Plan for Safety Employees
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal 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
Page 1 of 2
148
160
2020 2019 2018 2017 2016
Actuarially determined contribution 22,980,289$ 22,227,698$ 21,524,636$ 19,338,360$ 18,466,207$ Contributions in relation to the actuarially determined contributions (28,531,744) (28,346,069) (26,620,697) (19,338,360) (18,466,207) Contribution deficiency (excess)(5,551,455)$ (6,118,371)$ (5,096,061)$ -$ -$
Covered payroll 34,279,062$ 33,935,043$ 32,866,620$ 32,450,020$ 30,816,246$
Contributions as a percentage of covered payroll 83.23%83.53%81.00%59.59%59.92%
Notes to Schedule:
Valuation date:6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013
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 2.625% 2.75% 2.75% 2.75% 2.75%
Salary increases (2)(2)(2)(2)(2)
Investment rate of return 7.25% (3)7.375% (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, 2025
Last 10 Years
Defined Benefit Plan for Safety Employees
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
149
161
2025 2024 2023 2022
Measurement Period June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021
Total OPEB Liability
Service cost 800,218$ 635,096$ 530,843$ 529,600$
Interest 3,125,813 3,150,800 3,237,390 2,909,400
Differences between expected and actual experience 99,265 (393,810) 1,120,534 6,159,865
Changes in assumptions (1,705,049) 292,126 2,473,450 (302,512)
Changes in benefits terms - - - -
Benefit payments, including refunds of member contributions (3,734,742) (4,781,574) (4,731,846) (3,786,232)
Net change in Total OPEB Liability (1,414,495) (1,097,362) 2,630,371 5,510,121
Total OPEB Liability - beginning 53,136,842 54,234,204 51,603,833 46,093,712
Total OPEB Liability - ending (a)51,722,347$ 53,136,842$ 54,234,204$ 51,603,833$
Plan fiduciary net position
Contributions - employer 10,865,147$ 6,327,150$ 6,185,537$ 5,785,342$
Contributions - member - - - -
Net investment income 3,933,617 2,061,410 (4,845,154) 7,184,241
Benefit payments, including refunds of member contributions (3,734,742) (4,781,574) (4,731,846) (3,786,232)
Administrative expense (23,200) (9,385) (9,000) (9,908)
Other expense - - - -
Net change in plan fiduciary net position 11,040,822 3,597,601 (3,400,463) 9,173,443
Plan fiduciary net position - beginning 35,166,853 31,569,252 34,969,715 25,796,272
Plan fiduciary net position - ending (b)46,207,675$ 35,166,853$ 31,569,252$ 34,969,715$
City's Net OPEB liability - ending (a)-(b)5,514,672$ 17,969,989$ 22,664,952$ 16,634,118$
Plan fiduciary net position as a percentage of the total OPEB liability 89.34%66.18%58.21%67.77%
Covered-employee payroll (1)88,433,576$ 81,451,477$ 79,636,594$ 78,621,426$
City's Net OPEB liability as percentage of covered-employee payroll 6.24%22.06%28.46%21.16%
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 eight years are shown.
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2025
Last 10 Years *
Page 1 of 2
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
150
162
2021 2020 2019 2018
Measurement Period June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017
Total OPEB Liability
Service cost 521,285$ 524,717$ 509,434$ 478,341$
Interest 2,944,050 2,795,490 2,814,685 2,830,153
Differences between expected and actual experience (219,772) 2,532,319 - -
Changes in assumptions - 114,311 - -
Changes in benefits terms - - - -
Benefit payments, including refunds of member contributions (3,787,663) (3,627,695) (3,641,715) (3,513,406)
Net change in Total OPEB Liability (542,100) 2,339,142 (317,596) (204,912)
Total OPEB Liability - beginning 46,635,812 44,296,670 44,614,266 44,819,178
Total OPEB Liability - ending (a)46,093,712$ 46,635,812$ 44,296,670$ 44,614,266$
Plan fiduciary net position
Contributions - employer 4,674,814$ 4,460,937$ 4,675,193$ 4,594,772$
Contributions - member - - - -
Net investment income 900,087 1,495,861 1,605,114 1,875,536
Benefit payments, including refunds of member contributions (3,787,663) (3,627,695) (3,641,715) (3,513,406)
Administrative expense (12,037) (4,980) (11,076) (9,452)
Other expense - - (25,258) -
Net change in plan fiduciary net position 1,775,201 2,324,123 2,602,258 2,947,450
Plan fiduciary net position - beginning 24,021,071 21,696,948 19,094,690 16,147,240
Plan fiduciary net position - ending (b)25,796,272$ 24,021,071$ 21,696,948$ 19,094,690$
City's Net OPEB liability - ending (a)-(b)20,297,440$ 22,614,741$ 22,599,722$ 25,519,576$
Plan fiduciary net position as a percentage of the total OPEB liability 55.96%51.51%48.98%42.80%
Covered-employee payroll (1)77,637,171$ 75,814,626$ 73,999,059$ 74,484,613$
City's Net OPEB liability as percentage of covered-employee payroll 26.14%29.83%30.54%34.26%
SCHEDULE OF CHANGES IN THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years*
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2025
Last 10 Years *
Page 2 of 2
151
163
2025 2024 2023 2022
Actuarially determined contribution 2,155,209$ 3,289,777$ 4,359,593$ 4,124,923$
Contributions in relation to the actuarially determined contributions (2,254,152) (12,311,540) (7,154,265) (4,950,445)
Contribution deficiency (excess)(98,943)$ (9,021,763)$ (2,794,672)$ (825,522)$
Covered-employee payroll (1)93,299,224$ 88,433,576$ 81,451,477$ 79,636,594$
Contributions as a percentage of covered-employee payroll -2.42%-13.92%-8.78%-6.22%
Notes to Schedule:
Valuation date:June 30, 2023 June 30, 2023 June 30, 2021 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 eight years are shown.
Last 10 Years *
Page 1 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2025
152
164
2021 2020 2019 2018
Actuarially determined contribution 4,108,719$ 3,834,916$ 3,827,337$ 3,925,087$
Contributions in relation to the actuarially determined contributions (6,511,545) (5,379,799) (5,133,062) (5,309,626)
Contribution deficiency (excess)(2,402,826)$ (1,544,883)$ (1,305,725)$ (1,384,539)$
Covered-employee payroll (1)78,621,426$ 77,637,171$ 75,814,626$ 73,999,059$
Contributions as a percentage of covered-employee payroll -8.28%-6.93%-6.77%-7.18%
Notes to Schedule:
Valuation date:June 30, 2019 June 30, 2017 June 30, 2017 June 30, 2015
Last 10 Years *
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
CITY OF NEWPORT BEACH
Post-Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
153
165
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Taxes and assessments:
Property 149,296,403$ 152,582,263$ 154,182,579$ 1,600,316$
Sales 45,299,626 45,200,159 45,934,260 734,101
Transient occupancy 32,625,873 32,670,435 33,174,268 503,833
Other taxes 9,587,638 9,587,638 10,385,818 798,180
Intergovernmental 3,593,906 6,665,558 5,670,490 (995,068)
Licenses, permits and fees 5,952,271 5,952,271 6,350,277 398,006
Charges for services 25,230,457 25,743,157 26,966,719 1,223,562
Fines and forfeitures 3,996,299 3,996,299 4,344,836 348,537
Investment income 1,402,120 1,402,120 3,771,565 2,369,445
Net increase in fair value of investments 502,805 502,805 1,129,325 626,520
Property income 17,897,004 17,905,504 19,808,736 1,903,232
Donations 375,321 561,100 795,959 234,859
Other (228,676) 537,364 1,202,884 665,520
Total revenues 295,531,047 303,306,673 313,717,716 10,411,043
Expenditures:
General government:
City council 931,993 937,514 670,060 267,454
City clerk 1,310,158 1,328,375 1,146,406 181,969
City attorney 2,661,605 2,635,777 2,402,707 233,070
City manager 7,383,432 7,398,394 4,095,692 3,302,702
Finance 10,494,379 10,713,622 9,839,278 874,344
Human resources 3,947,492 4,063,492 3,765,892 297,600
Total general government 26,729,059 27,077,174 21,920,035 5,157,139
Public safety:
Police 78,156,707 82,104,977 77,309,265 4,795,712
Fire 65,865,961 69,749,033 68,498,140 1,250,893
Total public safety 144,022,668 151,854,010 145,807,405 6,046,605
Public works:
Public works - general services 34,629,137 37,023,633 35,362,361 1,661,272
Public works 14,051,846 14,064,912 13,629,170 435,742
Utilities 6,156,003 6,334,661 6,245,152 89,509
Total public works 54,836,986 57,423,206 55,236,683 2,186,523
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2025
Page 1 of 2
Budgeted Amounts
See accompanying notes to required supplementary information
154
166
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Community development:
Community development 15,943,481 16,116,984 15,236,583 880,401
Code and water quality enforcement 1,289,886 1,293,007 1,270,045 22,962
Total community development 17,233,367 17,409,991 16,506,628 903,363
Community services:
Parking operations 2,210,923 2,920,724 2,521,425 399,299
Library services 10,818,892 11,515,373 10,212,303 1,303,070
Recreation and senior services 16,151,132 16,547,903 15,727,677 820,226
Total community services 29,180,947 30,984,000 28,461,405 2,522,595
Debt service:
Principal - - 1,283,576 (1,283,576)
Interest and fiscal charges - - 77,188 (77,188)
Total debt service - - 1,360,764 (1,360,764)
Total expenditures 272,003,027 284,748,381 269,292,920 15,455,461
Excess of revenues
over expenditures 23,528,020 18,558,292 44,424,796 25,866,504
Other financing sources (uses):
Transfers in 19,767,775 20,317,944 20,317,944 -
Transfers out (39,255,611) (56,036,418) (53,036,418) 3,000,000
Total other financing
sources (uses)(19,487,836) (35,718,474) (32,718,474) 3,000,000
Net change in fund balance 4,040,184 (17,160,182) 11,706,322 28,866,504
Fund balance, beginning 96,441,188 96,441,188 96,441,188 -
Fund balance, ending 100,481,372$ 79,281,006$ 108,147,510$ 28,866,504$
Budgeted Amounts
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2025
Page 2 of 2
See accompanying notes to required supplementary information
155
167
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 92,200$ 92,200$ 110,943$ 18,743$
Charges for services 25,300 25,300 65,341 40,041
Fines and forfeitures 31,000 31,000 37,814 6,814
Investment income 134,976 134,976 332,181 197,205
Net increase in fair value of investments - - 52,743 52,743
Property income 14,476,011 14,624,011 16,739,019 2,115,008
Other - - 78 78
Total revenues 14,759,487 14,907,487 17,338,119 2,430,632
Expenditures:
General government 576,031 576,031 576,031 -
Public works 1,415,449 1,726,356 1,546,690 179,666
Community development 2,280 15,580 29,506 (13,926)
Community services 2,817,875 2,811,808 2,709,858 101,950
Capital outlay - 5,561,871 1,160,516 4,401,355
Total expenditures 4,811,635 10,691,646 6,022,601 4,669,045
Excess (deficiency) of revenues
over expenditures 9,947,852 4,215,841 11,315,518 7,099,677
Other financing sources:
Transfers in 12,256,805 12,263,815 12,263,815 -
Transfers out (19,767,775) (20,317,944) (20,317,944) -
Total other financing sources (7,510,970) (8,054,129) (8,054,129) -
Net change in fund balance 2,436,882 (3,838,288) 3,261,389 7,099,677
Fund balance, beginning 8,547,722 8,547,722 8,547,722 -
Fund balance, ending 10,984,604$ 4,709,434$ 11,809,111$ 7,099,677$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Tide and Submerged Land - Operating
For the Year Ended June 30, 2025
Budgeted Amounts
See accompanying notes to required supplementary information
156
168
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Taxes and assessments:
Investment income 707,038$ 707,038$ 2,170,732$ 1,463,694$
Net increase in fair value of investments - - 625,833 625,833
Property income 5,954,462 5,954,462 6,711,452 756,990
Total revenues 6,661,500 6,661,500 9,508,017 2,846,517
Expenditures:
Capital outlay - 10,422,952 945,092 9,477,860
Excess (deficiency) of revenues
over expenditures 6,661,500 (3,761,452) 8,562,925 12,324,377
Other financing sources:
Transfers in 5,832,875 5,832,875 5,832,875 -
Net change in fund balance 12,494,375 2,071,423 14,395,800 12,324,377
Fund balance, beginning 43,107,346 43,107,346 43,107,346 -
Fund balance, ending 55,601,721$ 45,178,769$ 57,503,146$ 12,324,377$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Tide and Submerged Land - Harbor Capital
For the Year Ended June 30, 2025
Budgeted Amounts
See accompanying notes to required supplementary information
157
169
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2025
(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.
158
170
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2025
(1) Budgetary Control and Compliance (Continued)
Expenditures exceeded appropriations in the following governmental fund:
Appropriations Expenditures Variance
Supplemental Law Enforcement Services $250,000 $250,045 $(45)
159
171
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160
172
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
OTHER GOVERNMENTAL FUNDS
161
173
This page left blank intentionally.
162
174
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.
163
175
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 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. The Park Fees Fund is used to account for park in-lieu fees collected in conjunction development
agreements and can only be used for specific acquisition, development, or improvement of public parks and recreational facilities. 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.
The Facilities Maintenance Fund is used to account for revenues and expenditures associated with the maintenance of existing facilities.
164
176
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.
165
177
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation
Assets
Cash and investments 4,112,410$ 1,397,293$ 646,928$ -$ 1,218,284$
Receivables:
Accounts (net of allowance)- - - - -
Interest 18,719 6,360 1,711 - 5,547
Intergovernmental receivables 204,277 409,218 - 76,000 -
Lease receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 4,335,406$ 1,812,871$ 648,639$ 76,000$ 1,223,831$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 51,191$ 133,786$ 1,653$ -$ -$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - 76,011 -
Total liabilities 51,191 133,786 1,653 76,011 -
Deferred inflows of resources:
Unavailable revenue - - - - -
Deferred amount from leases - - - - -
Total deferred inflows of resources - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 4,284,215 1,679,085 646,986 - 1,223,831
Committed - - - - -
Unassigned - - - (11) -
Total fund balances (deficits)4,284,215 1,679,085 646,986 (11) 1,223,831
Total liabilities, deferred inflows of resources
and fund balances 4,335,406$ 1,812,871$ 648,639$ 76,000$ 1,223,831$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 1 of 7
Special Revenue
166
178
Community Air Quality Supplemental
Building Excise Development Management Environmental Law Enforcement
Tax Block Grant District Liability Services
Assets
Cash and investments 446,514$ 65,752$ 1,926,464$ 10,264,864$ -$
Receivables:
Accounts (net of allowance)- - - 5,582 -
Interest 2,032 - 8,770 46,705 -
Intergovernmental receivables - - 28,688 - -
Lease receivables - 3,268,884 - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - 17,024 -
Total assets 448,546$ 3,334,636$ 1,963,922$ 10,334,175$ -$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 197,097$ 102,881$ -$ 79,752$ -$
Accrued payroll - - - 4,327 -
Unearned revenue - 26,297 - - -
Due to other funds - - - - -
Total liabilities 197,097 129,178 - 84,079 -
Deferred inflows of resources:
Unavailable revenue - - 28,688 - -
Deferred amount from leases - 3,162,503 - - -
Total deferred inflows of resources - 3,162,503 28,688 - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - 17,024 -
Permanent endowment - - - - -
Restricted 251,449 42,955 1,935,234 10,233,072 -
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits)251,449 42,955 1,935,234 10,250,096 -
Total liabilities, deferred inflows of resources
and fund balances 448,546$ 3,334,636$ 1,963,922$ 10,334,175$ -$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 2 of 7
Special Revenue
167
179
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Assets
Cash and investments 1,407,988$ 2,469,601$ 1,221,021$ 2,981,649$ 489,405$
Receivables:
Accounts (net of allowance)- 412,212 - 7,800 -
Interest - - 5,559 13,575 3,913
Intergovernmental receivables - - - - 1,282,940
Lease receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 1,407,988$ 2,881,813$ 1,226,580$ 3,003,024$ 1,776,258$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ 705,175$ -$ -$ 104,238$
Accrued payroll - - - - -
Unearned revenue 1,407,988 188,779 - - 394,810
Due to other funds - 696 - - -
Total liabilities 1,407,988 894,650 - - 499,048
Deferred inflows of resources:
Unavailable revenue - 412,211 - 7,800 806,435
Deferred amount from leases - - - - -
Total deferred inflows of resources - 412,211 - 7,800 806,435
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - 1,574,952 1,226,580 2,995,224 470,775
Committed - - - - -
Unassigned - - - - -
Total fund balances (deficits)- 1,574,952 1,226,580 2,995,224 470,775
Total liabilities, deferred inflows of resources
and fund balances 1,407,988$ 2,881,813$ 1,226,580$ 3,003,024$ 1,776,258$
(continued)
CITY OF NEWPORT BEACH
Special Revenue
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 3 of 7
168
180
Oceanfront Assessment
Encroachment PEG Fees Park Fees District Fire Station
Assets
Cash and investments 1,276,211$ 3,935,844$ 127,731$ -$ 9,585,255$
Receivables:
Accounts (net of allowance)18,355 69,652 - - -
Interest 5,809 17,916 581 121,120 43,633
Intergovernmental receivables - - - - -
Lease receivables - - - - -
Restricted cash and investments with fiscal agent - - - 19,933,423 306,531
Prepaid items - - - - -
Total assets 1,300,375$ 4,023,412$ 128,312$ 20,054,543$ 9,935,419$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 37,374$ -$ -$ 2,403,459$ 28,503$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - 1,771,077 -
Total liabilities 37,374 - - 4,174,536 28,503
Deferred inflows of resources:
Unavailable revenue - - - - -
Deferred amount from leases - - - - -
Total deferred inflows of resources - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted 1,263,001 4,023,412 128,312 15,880,007 306,531
Committed - - - - 9,600,385
Unassigned - - - - -
Total fund balances (deficits)1,263,001 4,023,412 128,312 15,880,007 9,906,916
Total liabilities, deferred inflows of resources
and fund balances 1,300,375$ 4,023,412$ 128,312$ 20,054,543$ 9,935,419$
(continued)
Page 4 of 7
June 30, 2025
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
Special Revenue Capital Projects
169
181
Balboa Village
Parks and Parking
Civic Center Newport Uptown Community Management
and Park Police Facility Undergrounding Centers District
Assets
Cash and investments 524,741$ 719,958$ 3,570$ 14,301,823$ 169,874$
Receivables:
Accounts (net of allowance)- - - - -
Interest 2,161 3,277 16 65,101 768
Intergovernmental receivables - - - - -
Lease receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 526,902$ 723,235$ 3,586$ 14,366,924$ 170,642$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable -$ -$ -$ 970,917$ -$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities - - - 970,917 -
Deferred inflows of resources:
Unavailable revenue - - - - -
Deferred amount from leases - - - - -
Total deferred inflows of resources - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - - 3,586 - -
Committed 526,902 723,235 - 13,396,007 170,642
Unassigned - - - - -
Total fund balances (deficits)526,902 723,235 3,586 13,396,007 170,642
Total liabilities, deferred inflows of resources
and fund balances 526,902$ 723,235$ 3,586$ 14,366,924$ 170,642$
(continued)
Capital Projects
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 5 of 7
170
182
Miscellaneous Unrestricted
Facilities Neighborhood Facilities Junior Capital
Maintenance Enhancement Financing Lifeguards Improvements
Assets
Cash and investments 4,198,589$ 8,844,258$ 7,168,328$ 56,181$ 19,555,928$
Receivables:
Accounts (net of allowance)- - - - -
Interest 19,114 40,258 32,630 256 -
Intergovernmental receivables - - - - -
Lease receivables - - - - -
Restricted cash and investments with fiscal agent - - - - -
Prepaid items - - - - -
Total assets 4,217,703$ 8,884,516$ 7,200,958$ 56,437$ 19,555,928$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 1,177,585$ 69,355$ 20,404$ -$ 1,099,910$
Accrued payroll - - - - -
Unearned revenue - - - - -
Due to other funds - - - - -
Total liabilities 1,177,585 69,355 20,404 - 1,099,910
Deferred inflows of resources:
Unavailable revenue - - - - -
Deferred amount from leases - - - - -
Total deferred inflows of resources - - - - -
Fund balances (deficits):
Nonspendable:
Prepaid items - - - - -
Permanent endowment - - - - -
Restricted - - - - -
Committed 3,040,118 8,815,161 7,180,554 56,437 18,456,018
Unassigned - - - - -
Total fund balances (deficits)3,040,118 8,815,161 7,180,554 56,437 18,456,018
Total liabilities, deferred inflows of resources
and fund balances 4,217,703$ 8,884,516$ 7,200,958$ 56,437$ 19,555,928$
(continued)
Capital Projects
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 6 of 7
171
183
Total
Other
Park Ackerman Governmental
Maintenance Bay Dredging Donation Funds
Assets
Cash and investments 2,225,058$ 5,892,680$ 1,264,903$ 108,499,105$
Receivables:
Accounts (net of allowance)- - - 513,601
Interest 10,128 26,822 5,758 508,239
Intergovernmental receivables - - - 2,001,123
Lease receivables - - - 3,268,884
Restricted cash and investments with fiscal agent - - - 20,239,954
Prepaid items - - - 17,024
Total assets 2,235,186$ 5,919,502$ 1,270,661$ 135,047,930$
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable 500,120$ -$ 4,901$ 7,688,301$
Accrued payroll - - - 4,327
Unearned revenue - - - 2,017,874
Due to other funds - - - 1,847,784
Total liabilities 500,120 - 4,901 11,558,286
Deferred inflows of resources:
Unavailable revenue - - - 1,255,134
Deferred amount from leases - - - 3,162,503
Total deferred inflows of resources - - - 4,417,637
Fund balances (deficits):
Nonspendable:
Prepaid items - - - 17,024
Permanent endowment - 3,857,000 772,781 4,629,781
Restricted - 2,062,502 492,979 50,724,688
Committed 1,735,066 - - 63,700,525
Unassigned - - - (11)
Total fund balances (deficits)1,735,066 5,919,502 1,265,760 119,072,007
Total liabilities, deferred inflows of resources
and fund balances 2,235,186$ 5,919,502$ 1,270,661$ 135,047,930$
Capital Projects Permanent Funds
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 7 of 7
172
184
SB1 Gas Tax Circulation and
State Gas Tax RMRA Asset Forfeiture OTS DUI Grant Transportation
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental 2,396,189 2,322,193 28,708 289,817 -
Charge for services - - - - -
Licenses, permits and fees - - - - 246,773
Property income - - - - -
Investment income 138,825 50,637 29,759 - 46,290
Net increase in fair value of investments 37,164 11,313 8,966 - 12,619
Donations - - - - -
Other - - - - -
Total revenues 2,572,178 2,384,143 67,433 289,817 305,682
Expenditures:
Current:
General government - - - - -
Public safety - - 237,845 289,817 -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 1,085,764 1,531,057 - - -
Total expenditures 1,085,764 1,531,057 237,845 289,817 -
Excess (deficiency) of revenues
over expenditures 1,486,414 853,086 (170,412) - 305,682
Other financing sources:
Transfers in - - - 148 -
Total other financing sources - - - 148 -
Net change in fund balances 1,486,414 853,086 (170,412) 148 305,682
Fund balances (deficits), beginning 2,797,801 825,999 817,398 (159) 918,149
Fund balances (deficits), ending 4,284,215$ 1,679,085$ 646,986$ (11)$ 1,223,831$
(continued)
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 1 of 7
Other Governmental Funds
CITY OF NEWPORT BEACH
Combining Statement of Revenues,
173
185
Community Air Quality Supplemental
Building Excise Development Management Environmental Law Enforcement
Tax Block Grant District Liability Services
Revenues:
Other taxes -$ -$ -$ 1,021,443$ -$
Intergovernmental - 256,812 109,233 - 250,045
Charge for services - - - - -
Licenses, permits and fees 116,386 - - - -
Property income - 419,494 - - -
Investment income 15,700 5,029 71,265 402,385 -
Net increase in fair value of investments 4,409 - 20,454 116,159 -
Donations - - - - -
Other - - - 48,261 -
Total revenues 136,495 681,335 200,952 1,588,248 250,045
Expenditures:
Current:
General government - - - - -
Public safety - - - - 250,045
Public works - - - 411,971 -
Community development - 197,235 - - -
Community services - - - - -
Capital outlay 255,865 211,523 10,987 887,170 -
Total expenditures 255,865 408,758 10,987 1,299,141 250,045
Excess (deficiency) of revenues
over expenditures (119,370) 272,577 189,965 289,107 -
Other financing sources:
Transfers in - - - - -
Total other financing sources - - - - -
Net change in fund balances (119,370) 272,577 189,965 289,107 -
Fund balances (deficits), beginning 370,819 (229,622) 1,745,269 9,960,989 -
Fund balances (deficits), ending 251,449$ 42,955$ 1,935,234$ 10,250,096$ -$
(continued)
Special Revenue
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 2 of 7
CITY OF NEWPORT BEACH
Combining Statement of Revenues,
Other Governmental Funds
174
186
Opioid Restricted
Remediation Contributions FIIN Programs Measure M
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - 1,931,959 - - 2,912,762
Charge for services - - - 92,129 -
Licenses, permits and fees - - - 75,000 -
Property income - - - 26,700 -
Investment income - 24 45,978 106,242 59,134
Net increase in fair value of investments - 10 13,453 30,155 28,380
Donations - 3,324,078 278,407 123,539 -
Other - - - 71,894 -
Total revenues - 5,256,071 337,838 525,659 3,000,276
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - 23,411 -
Community services - - 206,058 17,586 -
Capital outlay - 7,883,088 - - 5,061,553
Total expenditures - 7,883,088 206,058 40,997 5,061,553
Excess (deficiency) of revenues
over expenditures - (2,627,017) 131,780 484,662 (2,061,277)
Other financing sources:
Transfers in - 5,489 - - -
Total other financing sources - 5,489 - - -
Net change in fund balances - (2,621,528) 131,780 484,662 (2,061,277)
Fund balances (deficits), beginning - 4,196,480 1,094,800 2,510,562 2,532,052
Fund balances (deficits), ending -$ 1,574,952$ 1,226,580$ 2,995,224$ 470,775$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
Special Revenue
For the Year Ended June 30, 2025
Page 3 of 7
175
187
Oceanfront Assessment
Encroachment PEG Fees Park Fees District Fire Station
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - 287,312 125,786 - -
Property income 279,559 - - - -
Investment income 47,784 144,787 2,155 1,023,092 199,245
Net increase in fair value of investments 13,732 41,307 371 222,273 45,705
Donations - - - - -
Other - - - - -
Total revenues 341,075 473,406 128,312 1,245,365 244,950
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works - - - 10,327,269 -
Community development - - - - -
Community services - - - - -
Capital outlay 261,626 - - - 425,123
Total expenditures 261,626 - - 10,327,269 425,123
Excess (deficiency) of revenues
over expenditures 79,449 473,406 128,312 (9,081,904) (180,173)
Other financing sources:
Transfers in - - - - 6,800,000
Total other financing sources - - - - 6,800,000
Net change in fund balances 79,449 473,406 128,312 (9,081,904) 6,619,827
Fund balances (deficits), beginning 1,183,552 3,550,006 - 24,961,911 3,287,089
Fund balances (deficits), ending 1,263,001$ 4,023,412$ 128,312$ 15,880,007$ 9,906,916$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
Special Revenue Capital Projects
Page 4 of 7
For the Year Ended June 30, 2025
Expenditures and Changes in Fund Balances
176
188
Balboa Village
Parks and Parking
Civic Center Newport Uptown Community Management
and Park Police Facility Undergrounding Centers District
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 18,105 27,402 136 798,122 8,007
Net increase in fair value of investments 5,241 7,925 39 252,696 3,353
Donations - - - - -
Other - - - - -
Total revenues 23,346 35,327 175 1,050,818 11,360
Expenditures:
Current:
General government 1,610 - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay - - - 4,568,234 151,311
Total expenditures 1,610 - - 4,568,234 151,311
Excess (deficiency) of revenues
over expenditures 21,736 35,327 175 (3,517,416) (139,951)
Other financing sources:
Transfers in - - - 805,874 -
Total other financing sources - - - 805,874 -
Net change in fund balances 21,736 35,327 175 (2,711,542) (139,951)
Fund balances (deficits), beginning 505,166 687,908 3,411 16,107,549 310,593
Fund balances (deficits), ending 526,902$ 723,235$ 3,586$ 13,396,007$ 170,642$
(continued)
Other Governmental Funds
CITY OF NEWPORT BEACH
Combining Statement of Revenues,
Capital Projects
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 5 of 7
177
189
Miscellaneous Unrestricted
Facilities Neighborhood Facilities Junior Capital
Maintenance Enhancement Financing Lifeguards Improvements
Revenues:
Other taxes -$ -$ -$ -$ -$
Intergovernmental - - - - -
Charge for services - - - - -
Licenses, permits and fees - - - - -
Property income - - - - -
Investment income 219,646 403,858 266,597 2,746 -
Net increase in fair value of investments 68,496 125,543 76,346 1,234 -
Donations - - - - -
Other - - - - -
Total revenues 288,142 529,401 342,943 3,980 -
Expenditures:
Current:
General government - - - - -
Public safety - - - - -
Public works - - - - -
Community development - - - - -
Community services - - - - -
Capital outlay 3,916,165 3,445,072 185,216 74,984 10,021,184
Total expenditures 3,916,165 3,445,072 185,216 74,984 10,021,184
Excess (deficiency) of revenues
over expenditures (3,628,023) (2,915,671) 157,727 (71,004) (10,021,184)
Other financing sources:
Transfers in 2,500,000 - 500,000 5,295 12,757,055
Total other financing sources 2,500,000 - 500,000 5,295 12,757,055
Net change in fund balances (1,128,023) (2,915,671) 657,727 (65,709) 2,735,871
Fund balances (deficits), beginning 4,168,141 11,730,832 6,522,827 122,146 15,720,147
Fund balances (deficits), ending 3,040,118$ 8,815,161$ 7,180,554$ 56,437$ 18,456,018$
(continued)
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 6 of 7
Capital Projects
178
190
Total
Other
Park Ackerman Governmental
Maintenance Bay Dredging Donation Funds
Revenues:
Other taxes -$ -$ -$ 1,021,443$
Intergovernmental - - - 10,497,718
Charge for services - - - 92,129
Licenses, permits and fees - - - 851,257
Property income - - - 725,753
Investment income 103,050 224,280 48,181 4,508,461
Net increase in fair value of investments 34,123 64,865 13,969 1,260,300
Donations - - - 3,726,024
Other - - - 120,155
Total revenues 137,173 289,145 62,150 22,803,240
Expenditures:
Current:
General government - - - 1,610
Public safety - - - 777,707
Public works - - - 10,739,240
Community development - - 4,900 225,546
Community services - - 7,422 231,066
Capital outlay 1,661,709 - - 41,637,631
Total expenditures 1,661,709 - 12,322 53,612,800
Excess (deficiency) of revenues
over expenditures (1,524,536) 289,145 49,828 (30,809,560)
Other financing sources:
Transfers in 2,300,000 - - 25,673,861
Total other financing sources 2,300,000 - - 25,673,861
Net change in fund balances 775,464 289,145 49,828 (5,135,699)
Fund balances (deficits), beginning 959,602 5,630,357 1,215,932 124,207,706
Fund balances (deficits), ending 1,735,066$ 5,919,502$ 1,265,760$ 119,072,007$
Capital Projects Permanent Funds
Other Governmental Funds
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year Ended June 30, 2025
Page 7 of 7
CITY OF NEWPORT BEACH
179
191
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,153,871$ 2,153,871$ 2,396,189$ 242,318$
Investment income 95,646 95,646 138,825 43,179
Net increase in fair value of investments - - 37,164 37,164
Total revenues 2,249,517 2,249,517 2,572,178 322,661
Expenditures:
Capital outlay - 3,635,129 1,085,764 2,549,365
Net change in fund balance 2,249,517 (1,385,612) 1,486,414 2,872,026
Fund balance, beginning 2,797,801 2,797,801 2,797,801 -
Fund balance, ending 5,047,318$ 1,412,189$ 4,284,215$ 2,872,026$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
180
192
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,063,464$ 2,063,464$ 2,322,193$ 258,729$
Investment income 16,378 16,378 50,637 34,259
Net increase in fair value of investments - - 11,313 11,313
Total revenues 2,079,842 2,079,842 2,384,143 304,301
Expenditures:
Capital outlay - 2,038,000 1,531,057 506,943
Net change in fund balance 2,079,842 41,842 853,086 811,244
Fund balance, beginning 825,999 825,999 825,999 -
Fund balance, ending 2,905,841$ 867,841$ 1,679,085$ 811,244$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
SB1 Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
181
193
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ -$ 28,708$ 28,708$
Investment income - - 29,759 29,759
Net increase in fair value of investments - - 8,966 8,966
Total revenues - - 67,433 67,433
Expenditures:
Public safety 311,000 311,000 237,845 73,155
Net change in fund balance (311,000) (311,000) (170,412) 140,588
Fund balance, beginning 817,398 817,398 817,398 -
Fund balance, ending 506,398$ 506,398$ 646,986$ 140,588$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
182
194
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 522,434$ 289,817$ (232,617)$
Total revenues - 522,434 289,817 (232,617)
Expenditures:
Public safety - 522,434 289,817 232,617
Excess (deficiency) of revenues
over expenditures - - - -
Other financing sources:
Transfers in - 148 148 -
Net change in fund balance - 148 148 -
Fund balance (deficit), beginning (159) (159) (159) -
Fund balance (deficit), ending (159)$ (11)$ (11)$ -$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
183
195
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 33,462$ -$ 246,773$ 246,773$
Investment income 1,386 1,386 46,290 44,904
Net increase (decrease) in fair value of investments (1,747) (1,747) 12,619 14,366
Total revenues 33,101 (361) 305,682 306,043
Expenditures:
Capital outlay - 159,798 - 159,798
Net change in fund balance 33,101 (160,159) 305,682 465,841
Fund balance, beginning 918,149 918,149 918,149 -
Fund balance, ending 951,250$ 757,990$ 1,223,831$ 465,841$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
184
196
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 179,843$ 179,843$ 116,386$ (63,457)$
Investment income 4,748 4,748 15,700 10,952
Net increase in fair value of investments - - 4,409 4,409
Total revenues 184,591 184,591 136,495 (48,096)
Expenditures:
Capital outlay - 507,772 255,865 251,907
Net change in fund balance 184,591 (323,181) (119,370) 203,811
Fund balance, beginning 370,819 370,819 370,819 -
Fund balance, ending 555,410$ 47,638$ 251,449$ 203,811$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
185
197
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 385,974$ 836,956$ 256,812$ (580,144)$
Property income 305,000 305,773 419,494 113,721
Net increase in fair value of investments - - 5,029 5,029
Total revenues 690,974 1,142,729 681,335 (461,394)
Expenditures:
Community development 183,586 491,976 197,235 294,741
Capital outlay - 657,648 211,523 446,125
Debt service:
Principal 208,000 888 - 888
Interest and fiscal charges 2,548 - - -
Total expenditures 394,134 1,150,512 408,758 741,754
Net change in fund balance 296,840 (7,783) 272,577 280,360
Fund balance (deficit), beginning (229,622) (229,622) (229,622) -
Fund balance (deficit), ending 67,218$ (237,405)$ 42,955$ 280,360$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
186
198
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 109,900$ 109,900$ 109,233$ (667)$
Investment income 31,872 31,872 71,265 39,393
Net increase in fair value of investments - - 20,454 20,454
Total revenues 141,772 141,772 200,952 59,180
Expenditures:
Capital outlay - 986,616 10,987 975,629
Net change in fund balance 141,772 (844,844) 189,965 1,034,809
Fund balance, beginning 1,745,269 1,745,269 1,745,269 -
Fund balance, ending 1,887,041$ 900,425$ 1,935,234$ 1,034,809$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
187
199
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other taxes 711,563$ 711,563$ 1,021,443$ 309,880$
Investment income 153,829 153,829 402,385 248,556
Net increase in fair value of investments - - 116,159 116,159
Other revenue 68,409 68,409 48,261 (20,148)
Total revenues 933,801 933,801 1,588,248 654,447
Expenditures:
Public works 469,961 470,504 411,971 58,533
Capital outlay - 1,635,454 887,170 748,284
Total expenditures 469,961 2,105,958 1,299,141 806,817
Net change in fund balance 463,840 (1,172,157) 289,107 1,461,264
Fund balance, beginning 9,960,989 9,960,989 9,960,989 -
Fund balance, ending 10,424,829$ 8,788,832$ 10,250,096$ 1,461,264$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
188
200
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 250,000$ 250,000$ 250,045$ 45$
Expenditures:
Public safety 250,000 250,000 250,045 (45)
Net change in fund balance - - - -
Fund balance, beginning - - - -
Fund balance, ending -$ -$ -$ -$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Services Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
189
201
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Other -$ 350,790$ -$ (350,790)$
Expenditures:
General Government - 350,790 - 350,790
Net change in fund balance - - - -
Fund balance, beginning - - - -
Fund balance, ending -$ -$ -$ -$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Opioid Remediation Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
190
202
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental -$ 2,578,076$ 1,931,959$ (646,117)$
Investment income 2,945 2,945 24 (2,921)
Net increase in fair value of investments - - 10 10
Donations - 3,740,336 3,324,078 (416,258)
Other - 42,650 - (42,650)
Total revenues 2,945 6,364,007 5,256,071 (1,107,936)
Expenditures:
Capital outlay - 14,242,874 7,883,088 6,359,786
Excess (deficiency) of revenues
over expenditures 2,945 (7,878,867) (2,627,017) 5,251,850
Other financing sources:
Transfers in - 5,489 5,489 -
Total other financing sources - 5,489 5,489 -
Net change in fund balance 2,945 (7,873,378) (2,621,528) 5,251,850
Fund balance, beginning 4,196,480 4,196,480 4,196,480 -
Fund balance (deficit), ending 4,199,425$ (3,676,898)$ 1,574,952$ 5,251,850$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Contributions Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
191
203
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Investment income 21,727$ 21,727$ 45,978$ 24,251$
Net increase in fair value of investments 3,612 3,612 13,453 9,841
Donations - - 278,407 278,407
Total revenues 25,339 25,339 337,838 312,499
Expenditures:
Community services 223,759 224,830 206,058 18,772
Net change in fund balance (198,420) (199,491) 131,780 331,271
Fund balance, beginning 1,094,800 1,094,800 1,094,800 -
Fund balance, ending 896,380$ 895,309$ 1,226,580$ 331,271$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
FIIN Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
192
204
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Charges for services -$ -$ 92,129$ 92,129$
Licenses, permits and fees 150,000 150,000 75,000 (75,000)
Property income 31,749 31,749 26,700 (5,049)
Investment income - - 106,242 106,242
Net increase in fair value of investments - - 30,155 30,155
Donations 35,000 35,000 123,539 88,539
Other - - 71,894 71,894
Total revenues 216,749 216,749 525,659 308,910
Expenditures:
Community development - 35,000 23,411 11,589
Community services - 50,086 17,586 32,500
Total expenditures - 85,086 40,997 44,089
Net change in fund balance 216,749 131,663 484,662 352,999
Fund balance, beginning 2,510,562 2,510,562 2,510,562 -
Fund balance, ending 2,727,311$ 2,642,225$ 2,995,224$ 352,999$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Restricted Programs Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
193
205
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental 2,831,037$ 7,938,425$ 2,912,762$ (5,025,663)$
Investment income 48,285 48,285 59,134 10,849
Net increase in fair value of investments - - 28,380 28,380
Total revenues 2,879,322 7,986,710 3,000,276 (4,986,434)
Expenditures:
Capital outlay - 9,995,630 5,061,553 4,934,077
Net change in fund balance 2,879,322 (2,008,920) (2,061,277) (52,357)
Fund balance, beginning 2,532,052 2,532,052 2,532,052 -
Fund balance, ending 5,411,374$ 523,132$ 470,775$ (52,357)$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Measure M Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
194
206
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Property income 272,000$ 272,000$ 279,559$ 7,559$
Investment income 21,787 21,787 47,784 25,997
Net increase in fair value of investments - - 13,732 13,732
Total revenues 293,787 293,787 341,075 47,288
Expenditures:
Capital outlay - 1,126,814 261,626 865,188
Net change in fund balance 293,787 (833,027) 79,449 912,476
Fund balance, beginning 1,183,552 1,183,552 1,183,552 -
Fund balance, ending 1,477,339$ 350,525$ 1,263,001$ 912,476$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Oceanfront Encroachment Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
195
207
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees 360,000$ 360,000$ 287,312$ (72,688)$
Investment income 2,931 2,931 144,787 141,856
Net increase in fair value of investments - - 41,307 41,307
Total revenues 362,931 362,931 473,406 110,475
Expenditures:
General government - 7,883 - 7,883
Net change in fund balance 362,931 355,048 473,406 118,358
Fund balance, beginning 3,550,006 3,550,006 3,550,006 -
Fund balance, ending 3,912,937$ 3,905,054$ 4,023,412$ 118,358$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
PEG Fees Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
196
208
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Revenues:
Licenses, permits and fees -$ 558,389$ 125,786$ (432,603)$
Investment income - - 2,155 2,155
Net increase in fair value of investments - - 371 371
Total revenues - 558,389 128,312 (430,077)
Expenditures:
General government - - - -
Net change in fund balance - 558,389 128,312 (430,077)
Fund balance, beginning - - - -
Fund balance, ending -$ 558,389$ 128,312$ (430,077)$
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Park Fees Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
197
209
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198
210
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
INTERNAL SERVICE FUNDS
199
211
This page left blank intentionally.
200
212
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.
201
213
Total
Insurance Compensated Retiree Equipment Information Internal
Assets Reserve Absences Insurance Maintenance Technology Service Funds
Current assets:
Cash and investments 38,243,734$ 9,662,553$ 1,000,934$ 17,809,845$ 14,850,371$ 81,567,437$
Receivables:
Accounts (net of allowance)- - 5,909 28,750 - 34,659
Interest 161,728 43,317 4,034 80,845 67,041 356,965
Intergovernmental receivables - - - 195,387 - 195,387
Inventories - - - 502,830 - 502,830
Prepaid items - - 68,414 4,896,627 733,051 5,698,092
Total current assets 38,405,462 9,705,870 1,079,291 23,514,284 15,650,463 88,355,370
Noncurrent assets:
Capital assets:
Equipment - - - 46,823,756 3,568,652 50,392,408
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 - - - 1,723,597 375,566 2,099,163
Less accumulated depreciation/amortization - - - (31,198,677) (7,422,237) (38,620,914)
Total capital assets (net of accumulated
depreciation/amortization)- - - 17,388,257 1,246,331 18,634,588
Total assets 38,405,462 9,705,870 1,079,291 40,902,541 16,896,794 106,989,958
Deferred outflows of resources:
Deferred amount from pension plans - - - 599,572 1,201,767 1,801,339
Deferred amount from OPEB - - - 100,442 201,328 301,770
Total deferred outflows of resources - - - 700,014 1,403,095 2,103,109
Liabilities
Current liabilities:
Accounts payable 263,325 - - 541,557 150,885 955,767
Accrued payroll 14,833 123,099 183,122 63,202 125,614 509,870
Due to other funds - - 353,001 - - 353,001 Workers' compensation - current 4,497,885 - - - - 4,497,885
General liability - current 3,941,299 - - - - 3,941,299 Compensated absences - current - 8,097,760 - - - 8,097,760
Lease liability - current - - - - 67,339 67,339
Subscription liability - current - - - 170,375 - 170,375
Total current liabilities 8,717,342 8,220,859 536,123 775,134 343,838 18,593,296
Noncurrent liabilities:
Workers' compensation 20,992,090 - - - - 20,992,090
General liability 6,658,815 - - - - 6,658,815 Compensated absences - 6,394,937 - - - 6,394,937
Subscription liability - - - 1,130,571 - 1,130,571 Net pension liability - - - 1,905,114 3,818,611 5,723,725
Net OPEB liability - - - 60,711 121,697 182,408
Total noncurrent liabilities 27,650,905 6,394,937 - 3,096,396 3,940,308 41,082,546
Total liabilities 36,368,247 14,615,796 536,123 3,871,530 4,284,146 59,675,842
Deferred inflows of resources:
Deferred amount from pension plans - - - 1,613 3,231 4,844
Deferred amount from OPEB - - - 23,656 47,414 71,070
Total deferred inflows of resources - - - 25,269 50,645 75,914
Net Position
Invested in capital assets - - - 15,805,661 1,178,992 16,984,653
Unrestricted 2,037,215 (4,909,926) 543,168 21,900,095 12,786,106 32,356,658
Total net position 2,037,215$ (4,909,926)$ 543,168$ 37,705,756$ 13,965,098$ 49,341,311$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Net Position
June 30, 2025
202
214
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Operating revenues:
Charges for services 18,475,042$ 3,262,108$ 395,002$ 8,614,875$ 8,365,963$ 39,112,990$
Intergovernmental - - - 195,387$ - 195,387
Employee contributions - - 22,086 - - 22,086
Other 3,679,765 - 2,705,816 10,453 112 6,396,146
Total operating revenues 22,154,807 3,262,108 3,122,904 8,820,715 8,366,075 45,726,609
Operating expenses:
Salaries and wages 1,531 - - 1,408,150 3,244,603 4,654,284
Depreciation/amortization - - - 3,635,505 640,172 4,275,677
Professional services - - - 250,663 745,620 996,283
Maintenance and supplies - - - 2,260,337 1,842,503 4,102,840
Fleet parts and supplies - - - 545,348 - 545,348
Telecommunication - - - - 188,617 188,617
System maintenance - - - 27,692 - 27,692
Hardware - - - - 534,370 534,370
Software - - - - 369,728 369,728
Workers' compensation 7,107,333 - - - - 7,107,333
Claims and judgments 10,384,659 - - - - 10,384,659
Compensated absences - 2,576,984 - - - 2,576,984
OPEB - - 847,328 - - 847,328
Other - - 2,227,349 - - 2,227,349
Total operating expenses 17,493,523 2,576,984 3,074,677 8,127,695 7,565,613 38,838,492
Operating income (loss)4,661,284 685,124 48,227 693,020 800,462 6,888,117
Nonoperating revenues:
Investment income 1,315,623 334,620 19,677 697,625 548,867 2,916,412
Net increase in fair value of investments 459,747 92,326 7,872 231,339 155,388 946,672
Gain on sale of capital assets - - - 425,594 - 425,594
Interest expense - - - (7,660) (643) (8,303)
Total nonoperating revenues 1,775,370 426,946 27,549 1,346,898 703,612 4,280,375
Income (loss) before transfers 6,436,654 1,112,070 75,776 2,039,918 1,504,074 11,168,492
Transfers in - - - 6,160 15,729 21,889
Change in net position 6,436,654 1,112,070 75,776 2,046,078 1,519,803 11,190,381
Net position, beginning (4,399,439) (6,021,996) 467,392 35,659,678 12,445,295 38,150,930
Net position, ending 2,037,215$ (4,909,926)$ 543,168$ 37,705,756$ 13,965,098$ 49,341,311$
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2025
203
215
Total
Insurance Compensated Retiree Equipment Information Internal
Reserve Absences Insurance Maintenance Technology Service Funds
Cash flows from operating activities:
Receipts from user departments 18,501,258$ 3,262,108$ 389,950$ 8,586,125$ 8,365,963$ 39,105,404$
Payments to employees (5,066,472) (1,760,961) - (1,387,212) (3,226,564) (11,441,209)
Payments to suppliers (24,678,245) - (3,075,692) (7,910,764) (3,666,047) (39,330,748)
Other operating cash receipts 3,679,765 - 2,727,902 10,453 112 6,418,232
Net cash provided (used) by operating activities (7,563,694) 1,501,147 42,160 (701,398) 1,473,464 (5,248,321)
Cash flows from noncapital financing activities:
Cash received from other funds - - - 6,160 15,729 21,889
Net cash provided by noncapital financing activities - - - 6,160 15,729 21,889
Cash flows from capital and related financing activities:
Acquisition of capital assets - - - (3,401,778) (55,061) (3,456,839)
Lease liabilities and related - - - - (73,663) (73,663)
Subscription liabilities and related - - - (177,101) (35,446) (212,547)
Proceeds from sale of capital assets - - - 425,594 - 425,594
Net cash (used) for capital and related financing activities - - - (3,153,285) (164,170) (3,317,455)
Cash flows from investing activities:
Investment income 1,754,280 408,418 26,746 914,987 678,610 3,783,041
Net cash provided by investing activities 1,754,280 408,418 26,746 914,987 678,610 3,783,041
Net increase (decrease) in cash and cash equivalents (5,809,414) 1,909,565 68,906 (2,933,536) 2,003,633 (4,760,846)
Cash and cash equivalents, beginning 44,053,148 7,752,988 932,028 20,743,381 12,846,738 86,328,283
Cash and cash equivalents, ending 38,243,734$ 9,662,553$ 1,000,934$ 17,809,845$ 14,850,371$ 81,567,437$
Reconciliation to the statement of net position:
Cash and investments reported on statement of net position 38,243,734$ 9,662,553$ 1,000,934$ 17,809,845$ 14,850,371$ 81,567,437$
Cash and cash equivalents 38,243,734$ 9,662,553$ 1,000,934$ 17,809,845$ 14,850,371$ 81,567,437$
Reconciliation of operating income to net cash
provided by operating activities:
Operating income 4,661,284$ 685,124$ 48,227$ 693,020$ 800,462$ 6,888,117$
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation - - - 3,635,505 640,172 4,275,677
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 26,216 - (5,052) (28,750) - (7,586)
(Increase) in inventories - - - (39,048) - (39,048)
(Increase) decrease in prepaid items - - 1,451 (4,838,790) (64,855) (4,902,194)
Increase (decrease) in accounts payable and accrued
payroll (14,049,402) (28,508) (2,466) 70,455 94,486 (13,915,435)
Increase in workers' compensation 2,039,412 - - - - 2,039,412
(Decrease) in general liability (241,204) - - - - (241,204)
Increase in compensated absences - 844,531 - - - 844,531
(Decrease) in net pension liability and deferred cash flows - - - (23,676) (47,456) (71,132)
Increase in net OPEB liability and deferred cash flows - - - 25,273 50,655 75,928
Total adjustments (12,224,978) 816,023 (6,067) (1,394,418) 673,002 (12,136,438)
Net cash provided (used) by operating activities (7,563,694)$ 1,501,147$ 42,160$ (701,398)$ 1,473,464$ (5,248,321)$
Noncash financing and investing activities:
Capital assets financed by ending accounts payable - - - 281,650 - 281,650
Total of noncash activities -$ -$ -$ 281,650$ -$ 281,650$
CITY OF NEWPORT BEACH
Combining Statement of Cash Flows
For the Year Ended June 30, 2025
Internal Service Funds
204
216
FINANCIAL SECTION
SUPPLEMENTARY INFORMATION
CUSTODIAL FUNDS
205
217
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206
218
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.
207
219
Custodial Funds
Special Tourism Other Total
Assessment Business Business Police Custodial
District Improvement Improvement Custodial Funds
Assets
Cash and investments 1,332,953$ 6,420$ 4,106$ 239,043$ 1,582,522$ Restricted cash and investments with fiscal agent 2,699,066 - - - 2,699,066
Receivable:
Interest 15,167 - - - 15,167
Intergovernmental receivable 34,320 - - - 34,320
Total assets 4,081,506 6,420 4,106 239,043 4,331,075
Liabilities
Due to others 1,944 6,420 4,106 23,146 35,616
Total liabilities 1,944 6,420 4,106 23,146 35,616
Net Position
Restricted for:
Individuals, organizations, and other governments 4,079,562 - - 215,897 4,295,459
Total net position 4,079,562$ -$ -$ 215,897$ 4,295,459$
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Fiduciary Net Position
June 30, 2025
208
220
Special Tourism Other Total
Assessment Business Business Police Custodial
District Improvement Improvement Custodial Funds
Additions
Special assessments 3,022,899$ -$ -$ -$ 3,022,899$ Investment earnings 154,493 - - 700 155,193
Other - - - 101,760 101,760
Total additions 3,177,392 - - 102,460 3,279,852
Deductions
Debt service 3,317,230 - - - 3,317,230
Administrative 97,408 - - - 97,408
Other - - - 133,537 133,537
Total deductions 3,414,638 - - 133,537 3,548,175
Net change in fiduciary net position (237,246) - - (31,077) (268,323)
Net position, beginning of year 4,316,808 - - 246,974 4,563,782
Net position, end of year 4,079,562$ -$ -$ 215,897$ 4,295,459$
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
Custodial Funds
209
221
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210
222
STATISTICAL SECTION
211
223
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212
224
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.
213
225
20161 20172 20183 2019 2020
Net investment in capital assets 2,193,773,102$ 2,201,552,683$ 2,208,832,391$ 2,218,040,304$ 2,217,852,660$
Restricted 44,033,677 45,753,736 49,791,908 56,426,811 67,708,225
Unrestricted (130,468,268) (133,461,197) (122,024,754) (102,035,181) (90,214,086)
2,107,338,511$ 2,113,845,222$ 2,136,599,545$ 2,172,431,934$ 2,195,346,799$
Business-type activities:
Net investment in capital assets 117,055,576$ 116,238,944$ 119,375,596$ 119,346,350$ 120,291,689$
Unrestricted 23,430,189 28,890,311 29,183,382 30,331,669 30,276,662
140,485,765$ 145,129,255$ 148,558,978$ 149,678,019$ 150,568,351$
Primary government:
Net investment in capital assets 2,310,828,678$ 2,317,791,627$ 2,328,207,987$ 2,337,386,654$ 2,338,144,349$
Restricted 44,033,677 45,753,736 49,791,908 56,426,811 67,708,225
Unrestricted (107,038,079) (104,570,886) (92,841,372) (71,703,512) (59,937,424)
2,247,824,276$ 2,258,974,477$ 2,285,158,523$ 2,322,109,953$ 2,345,915,150$
(continued)
1
2
3
4
5
6
Page 1 of 2
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.
Fiscal Year
The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
Governmental activities:
Total governmental activities
Total business-type activities
Total primary government
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.
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.
Reflects restatement of net position due to unbilled receivables adjustments related to fiscal year ended June 30, 2023.
2025 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 and the decline of net pension and net OPEB liabilities.
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
214 226
2021 2022 20235 2024 2025
Net investment in capital assets 2,227,572,605$ 2,223,773,786$ 2,256,305,577$ 2,275,099,514$ 2,292,549,844$
Restricted 67,189,020 78,100,496 79,152,428 123,444,563 131,011,162
Unrestricted (72,301,558) (8,183,288) 20,117,377 28,001,461 58,401,174
2,222,460,067$ 2,293,690,994$ 2,355,575,382$ 2,426,545,538$ 2,481,962,180$
Business-type activities:
Net investment in capital assets 124,775,772$ 128,244,924$ 131,015,969$ 132,331,781$ 135,138,380$
Unrestricted 27,039,499 28,559,633 25,105,814 20,202,940 22,455,779
151,815,271$ 156,804,557$ 156,121,783$ 152,534,721$ 157,594,159$
Primary government:
Net investment in capital assets 2,352,348,377$ 2,352,018,710$ 2,387,321,546$ 2,407,431,295$ 2,427,688,224$
Restricted 67,189,020 78,100,496 79,152,428 123,444,563 131,011,162
Unrestricted (45,262,059) 20,376,345 4 45,223,191 48,204,401 80,856,953 6
2,374,275,338$ 2,450,495,551$ 2,511,697,165$ 2,579,080,259$ 2,639,556,339$
Page 2 of 2
Governmental activities:
Total governmental activities
Total business-type activities
Total primary government
Fiscal Year
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
215 227
2016 2017 2018 2019 2020
19,335,275$ 20,443,569$ 19,011,099$ 20,549,224$ 20,714,050$
91,046,455 102,494,314 107,647,562 111,556,065 119,194,302
45,443,988 54,039,601 47,615,000 53,339,878 60,054,860
9,943,868 12,056,086 12,377,394 11,493,204 12,842,020
22,700,052 26,583,440 27,307,115 27,758,097 26,668,079
7,615,094 7,472,188 7,381,743 7,187,971 7,064,521
Total governmental activities expenses 196,084,732 223,089,198 221,339,913 231,884,439 246,537,832
21,605,197 22,004,013 23,724,918 26,898,075 27,387,120
3,818,165 4,218,926 4,158,155 4,222,228 4,291,755
Total business-type activities expenses 25,423,362 26,222,939 27,883,073 31,120,303 31,678,875
Total primary government expenses 221,508,094 249,312,137 249,222,986 263,004,742 278,216,707
General government 3,722,557 5,089,123 5,355,887 5,887,265 3,846,962
Public safety 19,108,222 19,899,242 20,733,883 21,979,376 22,232,248
Public works 5,319,510 5,214,426 5,789,579 5,778,441 5,054,694
Community development 8,419,588 10,838,114 9,956,226 9,902,445 9,599,848
Community services 13,964,018 13,653,466 13,974,329 13,556,360 16,936,285
Operating grants and contributions:17,826,914 11,632,188 11,943,941 14,021,506 14,659,016
Capital grants and contributions:2,717,504 27,993,317 1 1,815,464 6,638,356 7,352,407
71,078,313 94,319,876 69,569,309 77,763,749 79,681,460
Water 24,499,952 25,371,307 26,931,193 26,843,751 27,100,429
Wastewater 3,065,762 3,161,114 3,445,772 4,069,265 4,110,815
Operating grants and contributions:- - - - -
27,565,714 28,532,421 30,376,965 30,913,016 31,211,244
98,644,027 122,852,297 99,946,274 108,676,765 110,892,704
(125,006,419) (128,769,322) (151,770,604) (154,120,690) (166,856,372)
2,142,352 2,309,482 2,493,892 (207,287) (467,631)
(122,864,067)$ (126,459,840)$ (149,276,712)$ (154,327,977)$ (167,324,003)$
General revenues and other changes in net position:
Property tax 91,516,611$ 96,964,060$ 101,593,290$ 108,365,261$ 113,313,535$
Sales tax 33,937,986 33,702,895 36,373,253 37,168,063 36,232,969
Sales tax in-lieu 2,870,474 - - - -
Transient occupancy tax 21,083,199 22,382,361 22,857,737 24,697,446 21,097,384
Business license tax 4,024,386 4,149,016 4,282,935 4,428,440 4,882,419
Franchise tax 4,047,584 4,026,005 4,228,469 4,286,496 4,394,156
Other taxes 327,009 358,209 3,346,987 2,633,720 2,592,369
Investment income 584,259 589,001 632,808 2,644,319 2,621,488 Net increase (decrease) in fair value of investments 376,311 - - 2,234,249 2,520,033 Other 4,001,486 2,290,482 3,416,348 3,495,085 2,116,884
Transfers - (3,500,000) - - -
162,769,305 160,962,029 176,731,827 189,953,079 189,771,237
Investment income 216,576 77,752 184,906 713,970 732,099
Net increase (decrease) in fair value of investments 148,527 - - 612,358 625,864
Other 2,375,000 - - - -
Capital contributions 22,516 - - - -
Transfers - 3,500,000 - - -
2,762,619 3,577,752 184,906 1,326,328 1,357,963
165,531,924 164,539,781 176,916,733 191,279,407 191,129,200
37,762,886 32,192,707 24,961,223 35,832,389 22,914,865
4,904,971 5,887,234 2,678,798 1,119,041 890,332
42,667,857$ 38,079,941$ 27,640,021$ 36,951,430$ 23,805,197$
(continued)
1
Interest on long-term debt
Expenses:
Governmental activities:
General government
Public safety
Public works
Community development
Community services
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:
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
Data varies from trend because of one-time receipt of developer contributions.
Changes in net position
Governmental activities
Business-type activities
Total primary government
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
Page 1 of 2
216 228
2021 2022 2023 2024 2025
20,177,482$ 19,374,179$ 26,911,510$ 28,392,550$ 20,365,624$
119,184,958 104,767,466 121,309,057 151,625,944 143,920,632
63,689,155 65,031,715 75,904,138 88,359,562 87,889,339
12,157,226 9,664,500 13,048,442 16,813,900 17,104,756
28,214,205 24,508,702 27,937,349 33,034,132 33,510,164
7,321,612 6,877,577 6,666,044 6,215,237 6,171,195
Total governmental activities expenses 250,744,638 230,224,139 271,776,540 324,441,325 308,961,710
28,943,243 27,117,471 30,701,834 37,322,293 36,561,497
5,223,245 4,094,448 5,343,891 6,959,273 6,282,179
Total business-type activities expenses 34,166,488 31,211,919 36,045,725 44,281,566 42,843,676
Total primary government expenses 284,911,126 261,436,058 307,822,265 368,722,891 351,805,386
General government 2,914,007 3,625,809 12,386,628 15,953,090 8,911,980
Public safety 22,038,904 23,156,703 26,273,944 27,903,642 30,839,794
Public works 5,067,478 7,538,103 8,770,525 9,397,103 8,890,609
Community development 10,491,970 11,119,757 11,269,905 10,849,048 12,723,330
Community services 17,601,288 22,302,788 15,753,446 17,370,410 18,883,733
Operating grants and contributions:20,361,620 16,800,039 20,131,513 34,497,961 22,765,783
Capital grants and contributions:7,658,387 8,693,429 5,809,562 35,646,295 5,260,117
86,133,654 93,236,628 100,395,523 151,617,549 108,275,346
Water 30,739,726 32,104,202 32,033,631 33,842,356 40,463,909
Wastewater 4,618,186 4,825,249 4,666,685 5,274,889 5,980,769
Operating grants and contributions:- 116,629 - 115,499 26,184
35,357,912 37,046,080 36,700,316 39,232,744 46,470,862
121,491,566 130,282,708 137,095,839 190,850,293 154,746,208
(164,610,984) (136,987,511) (171,381,017) (172,823,776) (200,686,364)
1,191,424 5,834,161 654,591 (5,048,823) 3,627,186
(163,419,560)$ (131,153,350)$ (170,726,426)$ (177,872,599)$ (197,059,178)$
General revenues and other changes in net position:
Property tax 119,157,057$ 124,335,985$ 138,358,730$ 146,136,873$ 154,182,579$
Sales tax 38,956,275 46,164,860 46,552,459 43,444,542 45,934,260
Sales tax in-lieu - - - - -
Transient occupancy tax 16,886,197 26,677,331 30,201,649 31,736,961 33,174,268
Business license tax 4,481,349 4,363,145 4,901,385 4,896,557 5,086,253
Franchise tax 4,204,224 4,561,278 4,996,526 5,152,384 5,052,778
Other taxes 4,166,549 4,333,071 181,800 203,135 246,787
Investment income 2,603,982 1,995,214 3,208,250 5,834,247 6,747,045 Net increase (decrease) in fair value of investments (2,086,189) (6,856,640) (687,766) 3,534,164 2,346,015 Other 3,354,808 2,644,194 5,552,372 2,855,069 3,333,021
Transfers - - - - -
191,724,252 208,218,438 233,265,405 243,793,932 256,103,006
Investment income 525,295 345,218 520,736 893,332 1,119,040
Net increase (decrease) in fair value of investments (469,799) (1,190,093) (262,867) 568,429 313,212
Other - - - - -
Capital contributions - - - - -
Transfers - - - - -
55,496 (844,875) 257,869 1,461,761 1,432,252
191,779,748 207,373,563 233,523,274 245,255,693 257,535,258
27,113,268 71,230,927 61,884,388 70,970,156 55,416,642
1,246,920 4,989,286 912,460 (3,587,062) 5,059,438
28,360,188$ 76,220,213$ 62,796,848$ 67,383,094$ 60,476,080$
Expenses:
Governmental activities:
General government
Public safety
Public works
Community development
Community services
Interest on long-term debt
Business-type activities:
Water
Wastewater
Program revenues:
Governmental activities:
Charges for services:
Total governmental activities program revenues
Business-type activities:
Charges for services:
Total business-type activities program revenues
Total primary government program revenues
Net revenues (expenses):
Business-type activities:
Total business-type activities
Total primary government
Changes in net position
Governmental activities
Business-type activities
Total net revenues (expenses)
Governmental activities:
Taxes:
Fiscal Year
Governmental activities
Business-type activities
Total primary government
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Page 2 of 2
Total governmental activities
217 229
2016 2017 2018 2019 2020
General fund:
Nonspendable 15,210,896$ 14,434,017$ 14,050,930$ 13,147,221$ 11,864,115$
Restricted 3,083,133 3,797,009 4,412,302 4,757,437 5,710,434
Committed 2,726,020 10,570,638 1 13,444,487 13,335,675 2,210,811
Assigned 4,201,311 567,132 590,368 1,199,682 2,598,828
Unassigned 56,618,041 60,009,244 61,415,049 64,146,123 76,699,284
Total general fund 81,839,401$ 89,378,040$ 1 93,913,136$ 96,586,138$ 99,083,472$
All other governmental funds:
Nonspendable 4,629,781$ 4,666,256$ 4,787,243$ 4,715,545$ 4,646,529$
Restricted 33,662,859 31,950,139 38,629,419 45,958,167 53,310,518
Committed 40,248,977 49,510,047 41,731,742 40,732,124 48,032,259
Unassigned (15,422,984) (6,308,331) (376,162) (253) (50,137)
Total all other governmental funds 63,118,633$ 79,818,111$ 84,772,242$ 91,405,583$ 105,939,169$
Total all governmental funds 144,958,034$ 169,196,151$ 178,685,378$ 187,991,721$ 205,022,641$
(continued)
1
2
3
4
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 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.
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
Page 1 of 2
218 230
2021 2022 2023 2024 2025
General fund:
Nonspendable 10,637,097$ 9,407,143$ 8,239,567$ 7,052,603$ 5,982,334$
Restricted 4,876,025 - 2 - - -
Committed 3,235,746 4,429,573 5,465,426 6,786,845 3,785,866
Assigned 1,489,350 - - - -
Unassigned 85,715,180 83,302,665 77,737,532 82,601,740 98,379,310
Total general fund 105,953,398$ 97,139,381$ 91,442,525$ 96,441,188$ 108,147,510$
All other governmental funds:
Nonspendable 4,707,330$ 4,690,430$ 4,650,931$ 4,771,150$ 4,710,334$
Restricted 63,914,627 73,013,208 73,657,409 112,762,753 4 120,738,919
Committed 47,863,154 73,243,534 3 78,218,834 81,317,521 88,500,124
Unassigned (136,299) (119,371) (11,625) (229,781) (11)
Total all other governmental funds 116,348,812$ 150,827,801$ 156,515,549$ 198,621,643$ 213,949,366$
Total all governmental funds 222,302,210$ 247,967,182$ 247,958,074$ 295,062,831$ 322,096,876$
CITY OF NEWPORT BEACH
Fiscal Year
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 2 of 2
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Fund Balances
Total General Fund
Total all other Governmental Funds
219 231
2016 2017 2018 2019 2020
Revenues:
Taxes 158,386,385$ 162,184,218$ 171,982,240$ 183,455,182$ 182,983,069$
Intergovernmental 17,262,147 17,073,653 16,148,754 15,818,543 12,672,931
Licenses, permits and fees 6,571,123 9,844,908 6,405,668 6,302,603 5,783,862
Charges for services 18,827,991 19,197,065 19,828,786 19,472,866 21,125,622
Fines and forfeitures 3,684,602 3,590,700 3,181,823 3,347,714 3,509,883
Investment income 1,157,539 772,546 1,143,210 3,490,992 3,765,753
Net increase (decrease) in fair value of investments 769,460 - - 2,938,136 3,477,299
Property income 22,259,425 23,553,188 25,430,217 26,674,107 25,651,360
Donations 4,190,822 16,827,889 414,123 402,709 795,561
Special assessments - - - - -
Other 2,982,924 2,277,322 2,893,770 5,173,716 5,950,279
Total revenues 236,092,418 255,321,489 247,428,591 267,076,568 265,715,619
Expenditures:
Current:
General government 14,629,672 15,086,397 16,099,310 16,769,920 15,968,085
Public safety 96,225,784 98,750,981 109,760,129 116,054,531 118,290,847
Public works 36,000,905 35,961,024 38,012,230 44,132,877 45,730,965
Community development 10,913,205 11,696,779 12,979,656 12,310,621 12,612,751
Community services 21,784,680 23,607,284 25,538,966 26,372,495 24,474,242
Capital outlay 31,934,463 30,822,972 24,054,866 26,347,312 20,376,106
Debt service:
Principal 4,272,000 4,401,000 3,335,000 3,470,000 3,576,000
Interest and fiscal charges 7,839,341 7,704,957 7,617,107 7,428,469 7,265,703
Total expenditures 223,600,050 228,031,394 237,397,264 252,886,225 248,294,699
12,492,368 27,290,095 10,031,327 14,190,343 17,420,920
Other financing sources (uses):
Transfers in 48,523,132 45,342,446 45,308,862 54,664,532 40,373,981
Transfers out (54,185,192)(49,390,226)(45,850,962)(59,548,532)(40,763,981)
Proceeds from sale - 995,802 - - -
Premium on certificates of participation issued - - - - -
Leases (as lessee)- - - - -
Inception of subscription-based IT arrangements - - - - -
(5,662,060)(3,051,978)(542,100)(4,884,000)(390,000)
Net change in fund balances 6,830,308$ 24,238,117$ 9,489,227$ 9,306,343$ 17,030,920$
Debt service as a percentage of
7.2%6.0%5.3%4.8%4.8%(continued)
1 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)
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
Page 1 of 2
220 232
2021 2022 2023 2024 2025
Revenues:
Taxes 188,351,057$ 211,259,402$ 226,067,296$ 232,533,623$ 244,698,368$
Intergovernmental 22,233,872 19,683,307 21,080,285 27,715,232 18,174,489
Licenses, permits and fees 6,566,555 6,995,700 6,719,969 6,688,111 7,312,477
Charges for services 18,434,439 22,897,475 25,214,184 25,217,364 27,124,189
Fines and forfeitures 3,923,726 4,191,518 3,892,875 4,195,196 4,382,650
Investment income 3,201,376 2,756,712 4,525,340 9,386,746 11,685,818
Net increase (decrease) in fair value of investments (2,634,682) (8,900,762) (465,873) 4,584,645 3,254,274
Property income 28,842,374 33,770,750 35,830,362 41,198,758 43,984,960
Donations 5,491,871 1,805,249 717,157 6,070,830 5,590,173
Special assessments - 8,086,594 4,948,430 26,843,142 -
Other 3,504,103 1,441,813 3,412,302 1,175,255 1,323,117
Total revenues 277,914,691 303,987,758 331,942,327 385,608,902 367,530,515
Expenditures:
Current:
General government 17,154,507 17,397,786 20,680,878 22,007,758 22,497,676
Public safety 126,006,313 127,590,486 132,441,032 140,132,544 146,585,112
Public works 46,817,293 54,293,534 56,046,234 65,532,190 67,522,613
Community development 12,996,840 13,021,562 14,735,582 15,734,543 16,761,680
Community services 26,745,189 26,421,141 27,558,760 30,060,134 31,402,329
Capital outlay 33,728,085 28,603,393 68,434,127 50,776,034 43,743,239
Debt service:
Principal 3,247,000 5,138,250 5,296,166 5,335,081 5,518,576
Interest and fiscal charges 7,306,143 7,141,264 6,908,693 6,698,344 6,443,356
Total expenditures 274,001,370 279,607,416 332,101,472 336,276,628 340,474,581
3,913,321 24,380,342 (159,145)49,332,274 27,055,934
Other financing sources (uses):
Transfers in 70,379,824 76,061,564 128,499,591 97,432,054 84,443,642
Transfers out (65,965,012)(74,776,934)(128,879,043)(103,234,554)(84,465,531)
Proceeds from sale - - - - -
Premium on certificates of participation issued 1,373,936 - - - -
Leases (as lessee)- - - 3,259,414 -
Inception of subscription-based IT arrangements - - 529,489 1 315,569 -
5,788,748 1,284,630 150,037 (2,227,517)(21,889)
Net change in fund balances 9,702,069$ 25,664,972$ (9,108)$ 47,104,757$ 27,034,045$
Debt service as a percentage of
4.2%4.8%4.5%4.2%4.0%
Fiscal Year
CITY OF NEWPORT BEACH
Excess (deficiency) of revenues over (under) expenditures
Total other financing sources (uses)
noncapital expenditures
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 2 of 2
221 233
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222
234
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.
223
235
Fiscal Year Ended
June 30 Residential Commercial Other Unsecured Total Taxable Assessed Value Change Total Direct Tax Rate
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%
2025 68,275,551,951 8,131,924,877 1,609,850,784 1,947,105,447 79,964,433,059 5.31%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
224 236
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
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 0.032 0.047 0.047 0.047 0.051 0.055 0.183 0.173 0.176 0.161 0.173 0.186 0.170 0.175 0.158 0.160
Total Overlapping Rate 0.230 0.220 0.223 0.208 0.205 0.233 0.217 0.222 0.209 0.214
Total Direct & Overlapping Rate 1.230$ 1.220$ 1.223$ 1.208$ 1.205$ 1.233$ 1.217$ 1.222$ 1.209$ 1.214$
NOTE:
Source: HdL, Coren & Cone
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
CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
Fiscal Year
225 237
Taxpayer Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value Taxable Assessed Value Rank
Percent of Total City Taxable Assessed Value
The Irvine Company 744,453,388$ 1 0.93%1,652,910,320$ 1 4.11%
Fashion Island Retail LLC 620,154,002 2 0.78%N/A -0.00%
PH Finance LLC 352,137,130 3 0.44%N/A -0.00%
Newport Center Hotel LLC 237,276,108 4 0.30%N/A -0.00%
520 Newport Center Drive LLC 196,982,672 5 0.25%N/A -0.00%
HG Newport Owner LLC 192,171,697 6 0.24%N/A -0.00%
Newport Bluffs LLC 177,028,000 7 0.22%149,368,474 3 0.37%
650 Newport Center Drive LLC 176,061,294 8 0.22%N/A -0.00%
Bay Island Club 166,670,502 9 0.21%98,384,212 7 0.24%
Balboa Bay Club Ventures 161,082,009 10 0.20%132,740,207 4 0.33%
3,024,016,802$ 3.79%2,033,403,213$ 5.05%
Source: HdL, Coren & Cone
CITY OF NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
2025 2016
226 238
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
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%1,087,720 127,725,613 98.63%
2025 136,129,648 133,012,676 97.71%- 3 133,012,676 97.71%
1
2
3
Source: Orange County Auditor Controller's Office
The total amount of Fiscal Year 2025 delinquent taxes collected in subsequent years was not available as of the
date 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.
227 239
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228
240
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.
229
241
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
2016 114,137,212 1,200,000 1,207,000 - - 116,544,212
2017 110,956,659 - 1,066,000 - - 112,022,659
2018 107,651,106 - 916,000 - - 108,567,106
2019 104,220,553 - 756,000 - - 104,976,553
2020 100,695,000 - 585,000 - - 101,280,000
2021 106,781,026 - 403,000 - - 107,184,026
2022 102,698,895 - 208,000 13,321,040 - 116,227,935
2023 98,616,764 - - 12,274,149 2,235,132 113,126,045
2024 94,389,633 - - 14,339,382 1,832,755 110,561,770
2025 90,012,502 - - 13,066,931 1,543,723 104,623,156
(continued)
NOTE:
1 Amounts include any applicable bond premium.
2
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.
These ratios are calculated using personal income and population for the prior calendar year.
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.
Page 1 of 2
Governmental Activities
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
230
242
Fiscal
Year
Ended
June 30 Leases 3
Subscription-
based
Information
Technology
Arrangements 3
Total Business-type
Activities
Total Primary
Government
Percentage of
Personal
Income 2
Debt Per
Capita 2
2016 - - - 116,544,212 1.77% 1,383
2017 - - - 112,022,659 1.66% 1,319
2018 - - - 108,567,106 1.48% 1,245
2019 - - - 104,976,553 1.36% 1,204
2020 - - - 101,280,000 1.24% 1,181
2021 - - - 107,184,026 1.31% 1,248
2022 1,512,574 - 1,512,574 117,740,509 1.34% 1,406
2023 3,820,774 - 3,820,774 116,946,819 1.27% 1,402
2024 3,776,654 - 3,776,654 114,338,424 1.22% 1,387
2025 3,732,290 110,383 3,842,673 108,465,829 1.32% 1,312
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Page 2 of 2
Business-type Activities
231
243
Fiscal Year
Ended
June 30
Certificates of
Participation1
Amounts
Restricted for
Debt Service Total
Percent of
Assessed
Value2
General
Bonded Debt
Per Capita
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
2025 90,012,502 (2,024,393) 87,988,109 0.11%1,065
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.
232 244
City Net Assessed Valuation:79,964,433,058$
Percentage
Applicable (1)Outstanding Debt
6/30/25
Estimated Share of
Overlapping DebtOVERLAPPING DEBT:Metropolitan Water District 1.964%17,155,000$ 336,924$ Coast Community College District 35.427%854,816,084 302,835,694 Rancho Santiago Community College District 2.508%132,145,756 3,314,216
Rancho Santiago Community College District School Facilities Improvement District No. 1 4.720%138,730,000 6,548,056
Laguna Beach Unified School District 14.573%7,690,000 1,120,664 Laguna Beach Unified School District Community Facilities District No. 98-1 100.000%6,005,000 6,005,000 Newport Mesa Unified School District 73.688%206,519,744 152,180,269 Santa Ana Unified School District 5.819%401,142,561 23,342,486
Irvine Ranch Water District Improvement Districts 2.658% -
100.000%384,477,033 41,027,239
100.000%10,390,000 10,390,000
100.000%8,110,000 8,110,000
City of Newport Beach 1915 Act Bonds 100.000%35,124,813 35,124,813 Orange County Newport Coast Assessment District No. 01-1 100.000%2,944,000 2,944,000 Orange County Newport Coast Reassessment District No. 17-1R 100.000%17,680,000 17,680,000 Orange County General Fund Obligations 9.863%429,065,000 42,318,681 Orange County Board of Education General Fund Obligations 9.863%9,120,000 899,506
Coast Community College District General Fund Obligations 35.427%660,000 233,818
Coast Community College District Pension Obligation Bonds 35.427%465,000 164,736 Santa Ana Unified School District General Fund Obligations 5.819%38,301,736 2,228,778 TOTAL OVERLAPPING DEBT 2,700,541,727$ 656,804,879$
DIRECT DEBT:City of Newport Beach Certificates of Participation 100.000%90,012,502$ 90,012,502$
Leases (3)100.000%13,066,931 13,066,931
Subscription-based Information Technology Arrangements (3)100.000%1,543,723 1,543,723
TOTAL DIRECT DEBT 104,623,156$ 104,623,156$
TOTAL DIRECT AND OVERLAPPING DEBT 761,428,035$
GROSS COMBINED TOTAL DEBT (2)761,428,035$
(1)
(2)
(3)
Ratios to 2024-25 Net Assessed Valuation:Total Overlapping Debt 0.82%
Total Direct Debt ($104,623,156)0.13%
Gross Combined Total Debt 0.95%
Source: California Municipal Statistics, Inc.
The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present-value calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96. The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022.
The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by
determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
CITY OF NEWPORT BEACH
Direct and Overlapping Debt Related to Governmental Activities
June 30, 2025
Bonita Canyon Public Facilities Financing Authority Community Facilities District No. 98-1
California Statewide Community Development Authority Community Facilities District No. 2018-3
233 245
2016 2017 2018 2019 2020
47,388,470,098$ 50,341,686,565$ 53,780,216,020$ 57,701,161,781$ 60,744,806,554$
25%25%25%25%25%
11,847,117,525 12,585,421,641 13,445,054,005 14,425,290,445 15,186,201,639
15%15%15%15%15%
1,777,067,629 1,887,813,246 2,016,758,101 2,163,793,567 2,277,930,246
General obligation bonds - - - - -
1,777,067,629$ 1,887,813,246$ 2,016,758,101$ 2,163,793,567$ 2,277,930,246$
as a percentage of debt limit 0.0%0.0%0.0%0.0%0.0%
(continued)
NOTE:
Source: City Administrative Services Department
Debt limit
Conversion percentage
CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
Page 1 of 2
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.
Fiscal Year
Assessed valuation
Total debt applicable to the limit
Debt limit percentage
Adjusted assessed valuation
Total net debt applicable to limit:
Legal debt margin
234
246
2021 2022 2023 2024 2025
63,689,666,681$ 66,579,730,598$ 71,329,756,011$ 75,930,033,156$ 79,964,433,059$
25%25%25%25%25%
15,922,416,670 16,644,932,650 17,832,439,003 18,982,508,289 19,991,108,265
15%15%15%15%15%
2,388,362,501 2,496,739,897 2,674,865,850 2,847,376,243 2,998,666,240
General obligation bonds - - - - -
2,388,362,501$ 2,496,739,897$ 2,674,865,850$ 2,847,376,243$ 2,998,666,240$
as a percentage of debt limit 0.0%0.0%0.0%0.0%0.0%
Source: City Administrative Services Department
Page 2 of 2
Fiscal Year
CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
Total net debt applicable to limit:
Legal debt margin
Total debt applicable to the limit
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
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248
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.
237
249
Fiscal Year Population1(1)Personal Income
(in thousands)
Per Capita
Income(2)
Unemployment
Rate2(3)
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%
2025 82,654 8,242,257 99,720 3.7%
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.
238 250
Employer
Number of
Employees Rank
Percent of Total
Employment
Number of
Employees Rank
Percent of Total
Employment
Hoag Memorial Hospital 5,690 1 7.15%4,800 1 5.90%
Pacific Life Insurance 1,734 2 2.18%1,274 2 1.57%
Irvine Management Company 1,483 3 1.86%N/A 2 -N/A
PIMCO 1,103 4 1.39%1,072 3 1.32%
Newport-Mesa Unified School District 810 5 1.02%988 5 1.21%
City of Newport Beach 775 6 0.97%730 8 0.90%
Balboa Bay Club and Resort 710 7 0.89%650 9 0.80%
Resort at Pelican Hill 650 8 0.82%756 7 0.93%
Glidewell Dental 635 9 0.80%1,043 4 1.28%
Tower Semiconductor 411 10 0.52%822 3 6 1.01%
Marriott Newport Coast Villas 375 11 0.47%N/A 2 -N/A
CBRE Inc.347 12 0.44%N/A 2 -N/A
1
2
3
Source: Data obtained from companies listed and compiled by City Administrative Services Department.
Figures reflect number of employees of employer at the time the information was collected.
Company listed was unable to provide employee data for 2016.
Tower Semiconductor was formerly Jazz Semiconductor.
CITY OF NEWPORT BEACH
Principal Employers1
Current Year and 9 years ago
2025 2016
239 251
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252
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.
241
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242
254
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
General government 77 77 79 80 78 80 81 85 94 95
Public safety 374 371 372 375 375 376 376 377 385 389
Community development 52 52 53 53 53 52 53 56 59 64
Public works 104 99 98 96 99 98 98 102 104 104
Community services 79 81 79 78 78 78 78 79 80 80
Water 32 31 33 33 33 33 33 32 34 33
Wastewater 12 13 11 11 11 11 11 11 10 11
Total 730 724 725 726 727 728 730 741 766 775
Source: City Administrative Services Department
Function
Fiscal Year
CITY OF NEWPORT BEACH
Full-time City Employees by Function
Last Ten Fiscal Years
243 255
2016 2017 2018 2019 2020
Police:
3,158 3,178 3,266 3,520 3,093
64,762 69,246 56,685 67,048 73,372
Fire:
300 247 248 209 11,913 1
1,201 1,216 1,307 1,033 2,842
General Services:
1,890 1,439 1,403 1,402 913
27,000 20,490 22,925 14,840 11,729
Recreation & Senior Services:
305,000 425,000 437,751 469,959 439,954
14,000 13,500 13,071 13,386 9,300
Water:
194 229 210 210 256
11.66 13.80 14.07 13.75 13.44
Sewer:
17 41 137 46 10
250 202 211 196 221
Library Services:
1,575,000 1,464,640 1,424,594 1,376,041 1,084,206
(continued)
1
2
3
Source: City of Newport Beach
Adult Arrests
Parking Citations Issued
Fire Responses
Fire Inspections
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
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.
Data varies with trend due to COVID-19 restrictions being lifted in 2022.
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Page 1 of 2
Fiscal Year
244 256
2021 2022 2023 2024 2025
Police:
2,872 2,650 2,800 2,615 3,259
86,439 83,307 85,003 86,002 76,012
Fire:
12,204 13,251 13,486 13,493 13,994
475 2 3,015 3 2,807 2,824 3,312
General Services:
920 901 903 739 1,016
7,805 13,590 12,885 16,069 12,368
Recreation & Senior Services:
455,442 392,605 454,418 527,754 502,722
6,287 8,805 10,048 10,190 10,599
Water:
160 252 184 176 160
14.87 14.28 11.06 10.77 11.89
Sewer:
25 3 12 9 13
240 209 178 192 230
Library Services:
1,043,629 1,195,151 1,172,951 1,213,486 1,213,252
Source: City of Newport Beach
Adult Arrests
Parking Citations Issued
Fire Responses
Fire Inspections
New Connections
Miles of Pipe Cleaned
Library Circulation of Materials
New Connections
Average Daily Consumption (hundred cubic feet)
Fiscal Year
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Page 2 of 2
Street Patching (tons of mix)
Sidewalk Repair (square feet)
Co-Sponsored Youth Organization Attendance
Senior Transportation Services
245 257
2016 2017 2018 2019 2020
Police:
Stations 1 1 1 1 1
Fire:
Fire Stations 8 8 8 8 8
Lifeguard Headquarters 1 1 1 1 1
Public works:
Streets (miles)399 400 400 400 400
Streetlights 5,978 5,978 5,978 5,971 5,972
Traffic Signals 808 808 808 808 808
Recreation & Senior Services:
Parks 64 64 64 65 65
Community Centers (includes leased property)15 15 15 15 15
Aquatic Center 1 1 1 1 1
Water:
Water Mains (miles)299.77 300.64 300.30 300.88 300.82
Maximum Daily Capacity (thousands of gallons)27,800 27,800 27,800 27,800 27,800
Wastewater:
Sanitary Sewers (miles)202.75 202.72 203.56 203.99 204.10
Storm Sewers (miles)92.08 94.74 95.12 95.35 95.89
Library Services:
Libraries 4 4 4 4 4
(continued)
Source: City of Newport Beach
Page 1 of 2
Fiscal Year
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
246 258
2021 2022 2023 2024 2025
Police:
Stations 1 1 1 1 1
Fire:
Fire Stations 8 8 8 8 8
Lifeguard Headquarters 1 1 1 1 1
Public works:
Streets (miles)400 400 401 399 399
Streetlights 5,973 5,974 5,974 5,974 5,974
Traffic Signals 808 808 808 808 808
Recreation & Senior Services:
Parks 65 66 66 66 66
Community Centers (includes leased property)15 14 14 15 15
Aquatic Center 1 1 1 1 1
Water:
Water Mains (miles)301.23 301.13 301.48 301.39 301.01
Maximum Daily Capacity (thousands of gallons)27,800 27,800 27,800 27,800 27,800
Wastewater:
Sanitary Sewers (miles)204.13 204.30 204.72 204.81 204.81
Storm Sewers (miles)96.18 97.37 97.81 104.28 105.81
Library Services:
Libraries 4 4 4 4 4
Source: City of Newport Beach
Page 2 of 2
Fiscal Year
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
247 259
2016 2017 2018 2019 2020
Type of Customer:
Residential 3,072,589 3,564,203 3,603,927 3,439,655 3,747,408
Commercial 1,847,372 2,142,952 2,201,254 2,075,812 2,081,860
Government 263,116 305,214 289,738 256,398 270,638
Total 5,183,077 6,012,369 6,094,919 5,771,865 6,099,906
Total direct rate
per 100 cubic ft.3.08$ 3.08$ 3.08$ 3.08$ 3.11$ 1
(continued)
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
6 Reflects increase in commodity rate effective January 1, 2025
Source: City Utilities Department
Page 1 of 2
Fiscal Year
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
248 260
2021 2022 2023 2024 2025
Type of Customer:
Residential 3,811,231 3,714,134 3,242,477 3,154,529 3,294,352
Commercial 2,231,809 2,078,199 1,728,975 1,698,963 1,868,134
Government 299,442 314,128 256,850 224,058 280,676
Total 6,342,482 6,106,461 5,228,302 5,077,550 5,443,162
Total direct rate
per 100 cubic ft.3.35$ 2 3.60$ 3 3.87$ 4 4.16$ 5 4.26$ 6
Source: City Utilities Department
Page 2 of 2
Fiscal Year
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
249 261
Fiscal Year
Ended June
30 Monthly
Base Rate
Rate per
100 cubic ft
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
2025 44.44 4.81
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.
250 262
Water Customer Water Charges Rank Percent of Total Water Revenues Water Charges Rank Percent of Total Water Revenues
Irvine Company Apartment 878,950$ 1 2.11%320,311$ 1 1 1.29%
Irvine Company Office 731,541 2 1.75%356,057 1 1 1.43%
Hoag Memorial Hospital 525,140 3 1.26%285,276 2 1.15%
Newport Beach Country Club 472,025 4 1.13%168,306 6 0.68%
Big Canyon Country Club 429,437 5 1.03%217,509 5 0.88%
UDR Newport Beach 364,956 6 0.87%243,261 3 0.98%
Bluffs Homeowners Association 363,672 9 0.87%156,211 8 0.63%
Newport-Mesa Unified School District 347,777 7 0.83%152,434 9 0.61%
Park Newport Ltd 324,952 11 0.78%230,698 4 0.93%
Irvine Company LLC 294,126 8 0.70%140,771 10 0.57%
Newport Dunes Resort 195,847 12 0.47%88,257 20 0.36%
Jasmine Creek Community Association 176,743 10 0.42%95,766 16 0.39%
Spyglass Hill Community Association 170,418 13 0.41%112,756 11 0.45%
Villa Balboa Community Association 164,010 14 0.39%111,351 12 0.45%
One Ford Road Community Association 162,498 15 0.39%94,645 17 0.38%
5,602,092$ 13.42%2,773,609$ 11.18%
1
Source: City Revenue Division
CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Nine Years Ago
2025 2016
Company listed operated under The Irvine Company in 2016.
251 263
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City of Newport Beach
100 Civic Center Drive Newport Beach, CA 92660 (949)644-3123www.newportbeachca.gov/acfr
266
ATTACHMENT B
REQUIRED AUDIT COMMUNICATIONS
267
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, 2025, and have issued our report
thereon dated January 28, 2026. 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 June 12, 2025, 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.
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
268
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
2
infrastructure records, assisting in preparation of the State Controller’s Report, and assisting
in entering City leases into the City’s software. 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. Management has reviewed the updates to infrastructure records and
compared amounts to underlying supporting documentation. In addition, management has
reviewed the information generated from the lease software, compared amounts to underlying
documentation and reviewed and posted the journal entries generated by the software.
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:
The new compensated absences accounting standard, Governmental Accounting
Standards Board (GASB) Statement No. 101. As a result, we reviewed the City’s
calculations and ensured the financial statements and footnotes are accurate and
complete.
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 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. As described in Note 7 to the financial statements, during the year,
the City changed its method of accounting for compensated absences by adopting
Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated
Absences. Additionally, the City changed accounting policies regarding risk disclosures
related to government vulnerabilities due to concentrations and constraints by adopting
Statement of Governmental Accounting Standards (GASB Statement) No. 102, Certain Risk
Disclosures. 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:
269
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
3
Management’s estimate of the net pension liability.
Management’s estimate of the net OPEB liability.
Management’s estimates of the claims payable liabilities related to general liability and
workers’ compensation claims.
Management’s estimate of the pension liability, OPEB liability and claims payable liabilities
are based on actuarial valuation reports. We evaluated the key factors and assumptions
used to develop the pension liability, OPEB liability, and claims payable liabilities 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. There were no uncorrected 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. There were no material misstatements recorded as a result of our audit
procedures.
270
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 January 28, 2026.
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
January 28, 2026
271
ATTACHMENT C
REPORT ON INTERNAL CONTROL AND OTHER MATTERS
272
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, 2025, and the related notes to
the financial statements, which collectively comprise the City’s basic financial statements, and
have issued our report thereon dated January 28, 2026.
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.
273
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
January 28, 2026
274
Financial Statement
Audit Results
February 12, 2026 275
2
Scope of Audit
Management Responsibilities
Auditor Responsibilities
Results of Audit
276
3
Annual financial audit of the City
Single Audit of Federal financial assistance
Agreed-upon procedures applied to Gann
limit
277
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
278
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
279
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
280
7
Initial communication to Finance
Committee at 5/8/25 meeting
Timing
Interim – June 2025
Final – November 2025 through January 2026
Unmodified (“clean”) opinion issued
281
8
Financial results at government-wide level:
Assets and deferred outflows decreased $6.4
million
Liabilities and deferred inflows decreased
$66.8 million
Net position increased $60.4 million
Revenues decreased $23.8 million
Expenses decreased $16.9 million
282
9
Significant Risks
Implementation of GASB 101, Compensated
Absences
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
283
10
No significant unusual transactions
No audit adjustments
No uncorrected misstatements
No difficulties or disagreements with management
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
284
Questions
February 12, 2026 285
CITY OF NEWPORT BEACH FINANCE COMMITTEE STAFF REPORT
Agenda Item No. 5B February 12, 2026
TO: HONORABLE CHAIRMAN AND MEMBERS OF THE COMMITTEE
FROM: Administrative Services Department Jason Al-Imam, Administrative Services Director / Treasurer 949-644-3126, jalimam@newportbeachca.gov
SUBJECT: SECOND QUARTER BUDGET UPDATE
SUMMARY:
The Administrative Services Department prepares quarterly financial reports to review the status of revenues and expenditures for the City’s General Fund and to monitor budgetary trends across other City funds. This report presents information on revenues,
expenditures, and the estimated fund balance for the second quarter of Fiscal Year 2025–26.
The second quarter financial report for FY 2025–26 provides an analysis of the City’s financial activity from October through December 2025. Based on information available through the end of the second quarter, an unrestricted General Fund operating surplus of
$12.9 million is projected for FY 2025–26. RECOMMENDED ACTION: Review and discuss this report and provide any recommendations for consideration by
the City Manager and City Council. DISCUSSION: Economic Overview Property tax, the City’s largest revenue source, is experiencing projected growth by 5.8% in FY 2025-26, driven primarily by strong property sales and rising median home prices.
Sales tax, the City’s second largest revenue source and approximately 15% of General
Fund revenues, grew 5.7% in FY 2024–25 and is projected to increase 3.0% in FY 2025–26, reflecting a resilient local economy.
286
Second Quarter Budget Update February 12, 2026 Page 2
Transient Occupancy Tax (TOT), the City’s third-largest revenue source, is declining in Fiscal Year 2025/26 due to both continued softness in international tourism and commercial hotel activity and the absence of a one-time increase in hotel stays that
occurred in the prior year. In Fiscal Year 2024/25, TOT demand was temporarily elevated
by regional displacement following the Los Angeles wildfires, which resulted in atypically high hotel occupancy. As this non-recurring demand has subsided and travel activity has returned to more typical levels, TOT revenues are projected to decrease year over year.
Overall, the City’s diverse and stable revenue base, coupled with prudent fiscal
management, positions it well to maintain long-term financial sustainability. General Fund Revenues General Fund Revenues are projected to end the year by approximately 0.27%, or $0.9
million, higher than projected in the first quarter. This is primarily due to increase in the
following categories: sales tax, license and permits, property income, miscellaneous revenues, fines and penalties. Projections for key revenue categories have been updated based on current economic conditions and revenue forecasts.
The table below summarizes the changes to projected General Fund revenues versus
the quarter one projected amounts for FY 2025–26. Details explaining the reasons for the material variances follow. FY 2025-26 Projected General Fund Revenues
*Gross TOT revenues are projected at approximately $39.8 million, consisting of $30.4 million in hotel TOT and $9.4 million in residential TOT. Effective January 1, 2025, VNB’s share increased to 23% of hotel TOT and 0% of residential TOT. VNB is projected to receive about $7.0 million, resulting in net TOT revenues of $32.8 million.
287
Second Quarter Budget Update February 12, 2026 Page 3
Property Tax – Property taxes are the City’s single largest General Fund revenue and represent approximately 50% of all General Fund revenues. As reported in the first quarter budget update, property tax revenue was projected at $163 million, reflecting an
increase of $1.5 million, or 1.3%, over the prior year. Second quarter projections remain
consistent with the previous forecast, and no adjustment is recommended. Accordingly, property tax revenues are expected to remain stable for the remainder of the fiscal year, supporting the City’s overall General Fund outlook.
Sales Tax – The second-largest funding source for the General Fund is sales tax
revenue, which accounts for more than 15 percent of total General Fund revenues. The City’s sales tax base is primarily generated from four industry groups: autos and transportation; general consumer goods; restaurants and hotels; and the State and County pools. As reported in the first quarter, sales tax revenue was projected at $48.1
million. However, an updated projection provided by the City’s sales tax consultant
reflects a 1.44 percent, or $0.7 million, increase over the first-quarter projection. Overall, sales tax revenue is now estimated at $48.8 million for the current fiscal year, which is $2.9 million, or 6.2 percent, higher than the prior year. A major contributor to this growth is the autos and transportation sector, which is projected to increase by $1.3 million, or
12.2 percent, compared to the prior year. Transient Occupancy Tax – The third largest funding source for the General Fund is TOT, making up more than 10% of General Fund revenues. TOT is projected to decline as temporary, non-recurring hotel demand related to Los Angeles wildfire displacement
in FY 2024–25 subsides and international tourism and commercial hotel activity remain
soft. For FY 2025–26, after distributions to Visit Newport Beach, net General Fund TOT revenues are projected at $32.8 million. This includes a downward revision of $0.9 million (2.8%) from the previous TOT forecast in the firs quarter.
All Other Revenue – This category includes all other revenue sources other than the top
three (property tax, sales tax and TOT). All other revenue is made up of other taxes, service fees and charges, parking revenue, licenses and permits, property income, fines and penalties, intergovernmental revenues, investment earnings, and miscellaneous revenues. Changes in projected amounts are proposed in the following categories:
• Property Income includes City owned and managed income producing properties, long-term ground leases to concessions, restaurants, hotels and other businesses and organizations, and rental of City facilities to the public. Second quarter projections show a $0.6 million, or 5.67% increase over first quarter projections
and are attributed to various properties around the City.
• Licenses and Permits include fees for processing building-related permits, street closure permits, dog licenses, and police tow franchise fees. Budget projections indicate an increase of $0.5 million, or 7.33%, above the first quarter projection.
This variance is primarily attributed to higher building and plumbing permits,
reflecting an overall increase in residential and commercial development projects.
288
Second Quarter Budget Update February 12, 2026 Page 4
• Miscellaneous Revenues include restricted revenue, damage to City property, bad debt recoveries, donations and contributions, non-operating revenues such as
proceeds from the sale of materials and equipment, and other miscellaneous
revenues. This category is projected to be $0.3 million, or 29.3% higher than first quarter projections. Contributing factors include an increase in one-time receipts.
• Fines & Penalties include parking citation fines collected by the City, administrative
citation fines, fines remitted to the City from the County for vehicle code violations,
and false alarm penalties. Second quarter projections are expected to exceed first quarter projections by $0.1 million, or 2.42% due to higher administrative citation fine activity in the Police Department.
General Fund Expenditures
The FY 2025-26 General Fund revised expenditure budget totals $363.4 million. Spending trends in FY 2025-26 are generally consistent with prior years and do not indicate any cause for concern. As of quarter two, additional expenditure savings of $1.7 million are projected at this time largely due to year-to-date savings from vacancies.
The following table summarizes budgeted expenditures compared to amounts based on data through the second quarter, along with expenditure savings by budget category. Details highlighting the reasons for the material variances follow.
FY 2025-26 Projected General Fund Expenditures
Significant expenditure budget variances are as follows:
• The revised salary and benefits budget totals $196.0 million. An analysis of second-quarter salary and benefit activity indicates that $1.9 million in personnel savings accrued during the quarter, in addition to the personnel salary savings realized in the first quarter.
289
Second Quarter Budget Update February 12, 2026 Page 5
• The contract services budget is expected to have $0.6 million in savings. As of the second quarter, the variance is primarily due to timing of projects. As these savings
are preliminary, staff will continue to monitor activity to refine projections as
additional data becomes available.
• The capital expenditures budgets are trending lower than first quarter projections due to timing of planned project expenditures.
• The utilities, supplies & materials, maintenance & repair, and general expense budget show a combined $0.9 million in overages due to higher-than-expected consumption related to facility usage, maintenance requirements, and increase operational demand.
General Fund Sources, Uses, and Projected Surplus
The City continues to maintain a strong and stable financial position. Conservative budgeting practices and adherence to sound financial policies have supported consistent General Fund operating surpluses and healthy reserve levels over the past several years. These practices position the City to sustain current service levels and strategically
allocate surplus resources toward key community priorities. Unrestricted General Fund
resources are currently projected to total $12.9 million at the end of FY 2025–26. As in prior years, staff anticipate that additional budget savings will be realized in subsequent quarters as the fiscal year progresses.
FY 2025-26 Projected General Fund Sources, Uses, and Budget Surplus
290
Second Quarter Budget Update February 12, 2026 Page 6
Major Funds Staff have evaluated the fiscal condition of other major operating funds.
An analysis of the budget performance for other major operating funds indicates that a
budget adjustment is not necessary and variances between budgeted and actual amounts are within reason. Conclusion
Staff recommends that the Finance Committee review and discuss this report and provide
any recommendations for City Manager and City Council consideration. Prepared and Submitted by:
/s/ Jessica Nguyen
____________________________
Jessica Nguyen Budget Manager
291
FISCAL YEAR 2025-26
SECOND QUARTER FINANCIAL REPORT
February 12, 2026
Finance Committee
Item No. 5B1Second Quarter Financial ReportStaff Presentation02/12/2026
29
2
PROJECTED GENERAL FUND REVENUES
2
Current Revised Budget $ 337.6 million
1st Quarter Projection $ 338.1 million
2nd Quarter Projection $ 339.0 million
•General Fund revenues are projected to
be $0.9 million higher than previously
forecasted. There is a projected decrease
in TOT, however it is offset by an increase
in sales tax, property income, and licenses
and permits. 163,128,525 163,128,525
48,091,080 48,793,625
33,747,971 32,821,827
72,412,799 73,540,545
20,753,116 20,753,116
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
Q1 Projected Q2 Projected
Mi
l
l
i
o
n
s
Property Tax Sales Tax TOT Other Operating Transfers In
29
3
123,224,714
128,483,552
138,358,730
146,136,871
154,182,580
163,128,525 163,128,525
100,000,000
110,000,000
120,000,000
130,000,000
140,000,000
150,000,000
160,000,000
170,000,000
2020-21
Actual
2021-22
Actual
2022-23
Actual
2023-24
Actual
2024-25
Actual
FY26 Q1
Projection
FY26 Q2
Projection
Mi
l
l
i
o
n
s
PROPERTY TAX REVENUE
3
•Property tax revenue is the City’s largest source of revenue and projected to
increase by $8.9 million (5.8%) over last fiscal year, which is $3.1million
higher than the adopted budget.
+4.4%
+5.8%
+4.3%
+7.7%
+5.6%
0.0%
29
4
38,956,275
46,164,860 46,552,459
43,444,542
45,934,260
48,144,125 48,793,625
$30,000,000
$32,000,000
$34,000,000
$36,000,000
$38,000,000
$40,000,000
$42,000,000
$44,000,000
$46,000,000
$48,000,000
$50,000,000
2020-21
Actual
2021-22
Actual
2022-23
Actual
2023-24
Actual
2024-25
Actual
FY26 Q1
Projection
FY26 Q2
Projection
Mi
l
l
i
o
n
s
SALES TAX REVENUE
4
•Sales tax revenue is the City’s second largest source of revenue and is
projected to increase by $1.5 million over the adopted budget. Projected
quarter two actuals show a 6.2% increase from the prior year actual.
-6.7%+5.7%
+18.5%
+0.8%4.8%
1.4%
29
5
SALES TAX REVENUE
MAJOR INDUSTRY GROUPS
5
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Autos & Transportation Restaurants & Hotels General Consumer Goods State & County Pools
FY 2024/25 & FY 2025/26
FY24/25 FY25/26 FY24/25 FY25/26 FY24/25 FY25/26 FY24/25 FY25/26
29
6
SALES TAX REVENUE
6
29
7
16,886,197
26,677,331
30,201,648
31,736,960
33,174,269 33,747,971 32,821,827
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
2020-21
Actual
2021-22
Actual
2022-23
Actual
2023-24
Actual
2024-25
Actual
FY26 Q1
Projection
FY26 Q2
Projection
Mil
l
i
o
n
s
TRANSIENT OCCUPANCY TAX
7
•Transient occupancy tax (TOT) revenue is the City’s third largest source of revenue
and is projected to fall below quarter one projections by $1 million (-2.7%) due to a
decrease in international tourism and on-going commercial hotel activities.
+13.2%
4.5%1.7%
+58.0%
+5.1%
-2.7%
29
8
OTHER GENERAL FUND REVENUES
8
•Other general fund revenues projected to exceed budget by $1.1
million:
•$573,718 in property income
•$455,320 in licenses and permits
•$107,214 in fines & penalties
29
9
GENERAL FUND EXPENDITURES
9
Revised Budget $351.3 million
Projected Actual $344.9 million
Q2 Projected Savings $6.4 million
•Budget savings of $6.4 million are currently projected, which is $1.7
million higher than previously estimated. The increase is primarily
due to additional savings from vacant positions and reducing
spending on contract services and capital expenditures.
30
0
GENERAL FUND SOURCES & USES
10
• Current projection of
$12.9 million surplus,
likely to grow in future
quarters
• Budget savings will likely
be identified as the year
progresses, as is usually
the case
30
1
RECOMMENDED ACTION
11
Staff recommends that the Finance Committee:
•Review and discuss this report
•Provide any recommendations for consideration by the City Manager
and the City Council
30
2
12
Questions?
30
3
2/12/26
Scheduled Date Agenda Title Report Type Agenda Description
Thursday, April 16, 2026
Facilities Financial Plan (FFP) and Harbor & Beaches Master Plan (HBMP)Presentation Staff will provide an update on the current status of FFP and HBMP.
Fiscal Year 2025-26 Fee Study Update Presentation Review and discuss the proposed fee updates for Fiscal Year 2025-26
Overview of Proposed Fiscal Year 2026–27 Revenues and Expenditures Presentation Staff will provide the Committee with an overview of revenue projections and
expenditure budget for Fiscal Year 2026-27.
Budget Amendments for Quarter Ending March 31, 2026 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 14, 2026
Follow-Up Discussion of Proposed FY 2026-27 Budget Discussion
Staff will provide the Committee with a copy of the Fiscal Year 2026-27 proposed budget document. Should the Committee wish to continue April's discussion of the Fiscal Year 2026-27 budget, this is also an opportunity to do so.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Tuesday, May 26, 2026 Joint City Council and Finance Committee Study Session Presentation Staff will present the Fiscal Year 2026-27 proposed budget to the City Council and Finance Committee.
Thursday, May 28, 2026 Committee Recommendation to Council for the FY 2026-27 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 2025-26 budget performance.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
Thursday, September 10, 2026
Financial Statement Auditor's Communication with the Finance Committee acting as the City's Audit Committee Presentation
The City's external auditors will discuss with the Audit Committee the planned
scope and timing of the financial statement audit for the Fiscal Year Ending
June 30, 2026.
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, 2026.
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, 2026 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.
August 2026
Committee Recess
Newport Beach Finance Committee Work Plan
April 2026
June 2026
Committee Recess
Committee Recess
July 2026
May 2026
September 2026
1
304
2/12/26
Scheduled Date Agenda Title Report Type Agenda Description
Newport Beach Finance Committee Work Plan
Thursday, October 15, 2026
Budget Amendments for Quarter Ending September 30, 2026 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 2025-26 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 12, 2026
First Quarter Budget Update Presentation Staff will provide a presentation regarding the year-to-date and projected Fiscal
Year 2026-27 budget performance.
OPEB Actuarial Valuation Report Update Presentation Staff will provide the Committee with an overview of the Fiscal Year 2025-26 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 2025-26 audit program.
Work Plan Review Receive and File Staff will report on the upcoming Finance Committee items.
October 2026
November 2026
December 2026
Committee Recess
2
305