HomeMy WebLinkAbout10 - Financial Statement Audit Results and Related Communication for the Fiscal Year Ended June 30, 2025Q �EwPpRT
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FROM:
CITY OF
NEWPORT BEACH
City Council Staff Report
March 10, 2026
Agenda Item No. 10
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
Jason AI -Imam, Adminstrative Services Director/Treasurer - 949-
644-3126, jalimam@newportbeachca.gov
PREPARED BY: Trevor Power, Accounting Manager - 949-644-3125,
tpower@newportbeachca.gov
TITLE: Financial Statement Audit Results and Related Communication for
the Fiscal Year Ended June 30, 2025
ABSTRACT:
The City of Newport Beach 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. On February 12, 2026, the Finance Committee met with
representatives of Davis Farr LLP and reviewed the result of the audit in detail. A copy of
the City's Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June
30, 2025, is attached to this report. Also attached are the auditors' required
communications with the Finance Committee in its capacity as the City's Audit Committee
and the auditors' Report on Internal Control Over Financial Reporting and on Compliance
and Other Matters.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Receive and file.
DISCUSSION:
The auditors' opinion letter can be found within the ACFR (Attachment A), 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 first letter, included as Attachment B, is intended to communicate to the Finance
Committee and the City Council matters of particular significance as required by auditing
standards.
Financial Statement Audit Results and Related Communication for the Fiscal Year
Ended June 30, 2025
March 10, 2026
Page 2
These include:
• Planned Scope and Timing of the Audit
• Compliance with All Ethics Requirements Regarding Independence
• Significant Risks Identified
• Qualitative Aspects of the City's Significant Accounting Practices
• Significant Unusual Transactions
• Significant Difficulties Encountered During the Audit
• Uncorrected and Corrected Misstatements
• Disagreements with Management
• Representations Requested from Management
• Management Consultations with Other Accountants
• Other Significant Matters Findings, or Issues
• Other Information Included in the Annual Comprehensive Financial Report
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.
The second letter, included as Attachment C, is intended to communicate information
regarding deficiencies in internal control, instances of non-compliance, and other related
matters as required by auditing standards. The auditors did not identify any deficiencies
in internal control that would need to be communicated to the Finance Committee, nor
did they identify any instances of noncompliance or other matters to report.
The Single Audit, a compliance audit of federally assisted grant programs, is still ongoing.
While no audit findings are anticipated as a result of the Single Audit, staff will
communicate any findings, should they occur, to the Finance Committee at a future
meeting.
FISCAL IMPACT:
There is no fiscal impact related to this item
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
Financial Statement Audit Results and Related Communication for the Fiscal Year
Ended June 30, 2025
March 10, 2026
Page 3
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A — Annual Comprehensive Financial Report for the Fiscal Year Ended June
30,2025
Attachment B — Auditors' Required Communications with the Audit Committee
Attachment C — Auditors' Report on Internal Control Over Financial Reporting and on
Compliance Matters
Attachment A
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30,2025
ANNUAL
COMPREHENSIVE
FINANCIAL REPOR
7.9
D��-ram'=
= T
FISCAL YEAR ENDED
J U N E 30, 2025
City of Newport Beach
California
t�F
Annual Comprehensive Financial Report
For the Fiscal Year Ended June 30, 2025
Prepared by the Administrative Services Department
Jason AI -Imam,
Administrative Services and Finance Director/Treasurer
/FW P 0 tN*%
The City of Newport Beach was incorporated September 1, 1906
The present City Seal was adopted July 22,1957
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CITY OF NEWPORT BEACH
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2025
TABLE OF CONTENTS
INTRODUCTORY SECTION
(Unaudited)
Tableof Contents.......................................................................................................................1
Letterof Transmittal................................................................................................................... 5
GFOA Certificate of Achievement for Excellence in Financial Reporting................................19
Listof City Officials..................................................................................................................20
OrganizationChart...................................................................................................................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:
BalanceSheet..............................................................................................................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
Q
Schedule of Contributions.............................................................................................148
Post -Employment Health Care Benefits (OPEB):
Schedule of Changes in the Net OPEB Liability and Related Ratios ............................150
Scheduleof Contributions.............................................................................................152
Budgetary Comparison Statements:
GeneralFund...............................................................................................................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
FundBalances..............................................................................................................173
Budgetary Comparison Schedules:
StateGas Tax Fund......................................................................................................180
SB1 Gas Tax RMRA Fund............................................................................................181
AssetForfeiture 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
ContributionsFund........................................................................................................191
FIINFund......................................................................................................................192
Restricted Programs Fund............................................................................................193
MeasureM Fund...........................................................................................................194
Oceanfront Encroachment Fund...................................................................................195
PEGFees Fund............................................................................................................196
ParkFees 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
Changes in Net Position.....
.................. 214
.................. 216
2
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
PrincipalEmployers............................................................................................................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
UtilityRates.........................................................................................................................250
Major Water Customers......................................................................................................
251
I
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CITY OF NEWPORT BEACH
100 Civic Center Drive
Newport Beach, California 92660
949 644-3127 1 949 644-3339 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
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:
Los
Angeles f
County San
Bernardino
County
1p
® Riverside
Orange County
®1county
NEWPORT
BEACH
v
San
Diego
County
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.
� r
' 1 Airport Area
l
Costa Mesa
Fi
>
--
/
41
irvine
Eas(bldff�
'+°
\
Mariners
/ We K6Wport
\•
ti
Harbor View
Fashion isiand
Lido isle
City Hall Spyglass
Newport Pier
Baiboa island
Balboa Pier
New art Coast
Coro na.[,elMar l p
The Wedge
Crystal Cove
. Crystal Cove _
S(a(e Park
40
.�� J
Laguna Beach
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
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 (1 a) 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.
Population
100,000
90,000
80,000
000
60,000
000
�
000
30,000
000
000 0�
2019 2020 20210
Fiscal Year
i
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.
Median2024 - -
City of Newport Beach $132,670
Orange County 115,229
California 100,149
USA 81,604
Source: U.S. Census Bureau, 2024
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.
Historical Unemployment Rates
12 0% Kates are not seasonaljl adjusted
Newport Beach
10.0% +Orange Coun y
+California
8.0%
6.0%
4.0%
2.0%
0.0%
2016 2017 2018 2019 2020 2021 2 2023 2024 2025*
Calendar Year * through August 31, 2025
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.
i
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.
General Fund Revenues
■ Properly Taxes
■ Sales Taxes
A37.1
4 Transient Occupancy Taxes
* Other Taxes
■ All Other 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
10
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.
Calendar
Year
Sales
Median
Price
Median %
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
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.
I
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
I
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.
Transient Occupancy Tax (TOT) Revenue
$35
$30
$25
$20
0
$15
$10
$5
$-
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
■Residential (Short-term Rental) TOT Revenue ■Commercial (Hotel) TOT Revenue
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
13
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
14
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
15
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.
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
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.
a
• 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
17
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 AI -Imam
Administrative Services and
Finance Director/Treasurer
18
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
19
City Councilmembers
Councilmember
Sara J. Weber
District 1
Councilmember
District 7
City Executive Staff
Aaron Harp Seimone Jurjis Lena Shumway
City Attorney City Manager City Clerk
Tara Finnigan..........................................................................................................................
Assistant City Manager
Jason AI-Imam.....................................................................Administrative
Services and Finance Director/Treasurer
JeffBoyles....................................................................................................................................................Fire
Chief
PaulBlank.............................................................................................................................................
Harbormaster
Melissa Hartson....................................................................................................................
Library Services Director
Vacant.........................................................................................................................Municipal
Operations Director
DaveMiner...............................................................................................................................................
Police Chief
DaveWebb...............................................................................................................................
Public Works Director
Sean Levin.......................................................................................................
Recreation & Senior Services Director
Mark Vukojevic.................................................................................................................................Utilities
Director
20
ELECTORATE
Board of Library
Harbor Commission
Trustees It ■
Building & Fire 6 Parks, Beaches &
Board of Appeals creation Commission
MAYOR &
City Arts CNCIL Planning
CommissionLOUCommission
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Civil Service Board city
Committees
CITY CITY CITY
CLERK MANAGER ATTORNEY
Community _ _ Library
Development Services
Administrative
Services Police
Fire Public
Works LIM
Harbor Recreation &
Senior Services
Municipal Utilities
Operations
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22
23
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24
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
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.
25
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.
26
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
27
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.
17) d6;.t L L
Irvine, California
January 28, 2026
28
FINANCIAL SECTION
MANAGEMENT'S DISCUSSION AND ANALYSIS
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30
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: IndependentAuditors' 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.
31
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
32
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.
33
Current and other assets
Capital assets
Total assets
Deferred outflows of resources
Current liabilities
Long-term liabilities
Total liabilities
Deferred inflows of resources
Net position
Net investment in capital assets
Restricted
Unrestricted
Total net position
Figure 1
Net Position
June 30
(in thousands)
Governmental Activities
2024 2025
Business -Type Activities
2024 2025
$ 699,910
$ 725,870
$ 30,548
$ 34,266
2,391,089
2,399,825
136,639
139,424
3,090,999
3,125, 695
167,187
173,690
145,027
99,604
5,341
3,197
58,840
40,164
4,986
6,356
482,299
428,268
14,928
12,822
541,139
468,432
268,341
274,905
2,275,100
2,292,550
123,445
131,011
28,001
58,401
19,914
19,178
79
115
132,332
135,138
20,203
22,456
Total
2024
2025
$ 730,458 $
760,136
2,527,728
2,539,249
3,258,186
3,299,385
150,368
102,801
63,826
46,520
497,227
441,090
561,053
487,610
268,420
275,020
2,407,432
2,427,688
123,445
131,011
48,204
80,857
$ 2,426,546 $ 2,481,962 $ 152,535 $ 157,594 $ 2,579,081 $ 2,639,556
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.
34
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.
Revenues:
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
Total program revenues
General revenues:
Taxes:
Property taxes
Sales tax
Transient occupancy taxes
Othertaxes
Investment related income
Other
Total general revenues
Total revenues
Expenses:
General government
Public safety
Public works
Community development
Community services
Interest
Water
Wastewater
Total expenses
Increases in net position
Net position at beginning of year
Restatement
Net position at beginning of year, as restated
Figure 2
Changes in Net Position
For the Years Ended June 30
(in thousands)
Governmental Activities
Business -Type Activities
Total
2024
2025
2024
2025
2024
2025
$ 81,473
$ 80,249
$ 39,117
$ 46,445
$ 120,590
$ 126,694
34,498
22,766
115
26
34,613
22,792
35,647
5,260
-
-
35,647
5,260
151,618
108,275
39,232
46,471
190,850
154,746
146,137
154,183
-
-
146,137
154,183
43,445
45,934
43,445
45,934
31,737
33,174
31,737
33,174
10,252
10,386
-
-
10,252
10,386
9,368
9,093
1,462
1,432
10,830
10,525
2,855
3,333
-
-
2,855
3,333
243,794
256,103
1,462
1,432
245,256
257,535
395,412
364,378
40,694
47,903
436,106
412,281
28,392
20,366
-
-
28,392
20,366
151,626
143,921
151,626
143,921
88,360
87,889
88,360
87,889
16,814
17,105
16,814
17,105
33,034
33,510
33,034
33,510
6,215
6,171
6,215
6,171
-
-
37,322
36,562
37,322
36,562
-
-
6,959
6,282
6,959
6,282
324,441
308,962
44,281
42,844
368,722
351,806
70,971
55,416
(3,587)
5,059
67,384
60,475
2,355,575
2,426,546
157,717
152,535
2,513,292
2,579,081
-
-
(1,595)
-
(1,595) '
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
' Prior year net position was restated due to unbilled receivables adjustment in Fiscal Year 2022-23.
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.
35
Figure 3
Governmental Activities Revenue Sources
For the Year Ended June 30, 2025
67%
g% ■ Charges for Services
■ Contributions and Grants
■ Taxes
22% Other
3%
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.
36
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.
37
Figure 4 below summarizes the Governmental Activities expenses shared across functions.
Figure 4
Governmental Activities Functional Expenses
For the Year Ended June 30, 2025
2%
5%
7%
d Public Safety
11%
■ Public Works
47% • Community Services
General Government
Community Development
Interest
28%
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.
General government
Public safety
Public works
Community development
Community services
Interest
Figure 5
Governmental Activities
For the Years Ended June 30
(in thousands)
2024
Total Cost Net (Cost)
of Service of Service
$ 28,392
$ (10,212)
151,626
(115,049)
88,360
(22,387)
16,814
(5,338)
33,034
(13,622)
6,215
(6,215)
$ 324,441 $ (172,823)
2025
Total Cost Net (Cost)
of Service of Service
$ 20,366 $
(10,522)
143,921
(108,994)
87,889
(58,605)
17,105
(3,717)
33,510
(12,677)
6,171
(6,171)
$ 308,962 $ (200,686)
38
$160.0
$140.0
$120.0
$100.0
$80.0
$60.0
$40.0
$20.0
$0.0
Figure 6
Program Expenses and Revenues — Governmental Activities
For the Year Ended June 30, 2025
(in millions)
General Public Safety Public Works Community Community Interest
Government Development Services
■Total Expenses ■Program Revenues
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.
39
Figure 7
Program Expenses and Revenue — Business -type Activities
For the Year Ended June 30, 2025
(in millions)
$45.0
$40.0
$35.0 —
$30.0
$25.0
$20.0
$15.0 —
$10.0
$5.0 —
$0.0
Water Wastewater
Total Expenses ■ Program Revenues
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.
40
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)
General Fund
Tide and Submerged Land - Operating
Tide and Submerged Land - Harbor Capital
Facilities Financial Planning Reserve
Debt Service Fund
Non -major special revenue
Non -major capital projects
Non -major permanent
2024
2025
Change
$ 96,441
$ 108,148
$ 11,707
8,548
11,809
3,261
43,107
57,503
14,396
20,436
23,541
3,105
2,323
2,024
(299)
32,274
31,996
(278)
85,087
79,891
(5,196)
6,846
7,185
339
$ 295,062
$ 322,097
$ 27,035
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
41
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 mostly
due 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 increase
in property taxes as the City's assessed valuation continued to increase due primarily to
the appreciation of property values and due to an increase in residual tax revenue from
the dissolution of a former redevelopment agency; supplemented with a $2.5 million
increase in sales taxes due to strong consumer spending in key industry groups, including
restaurants 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 occupancy
rates. Additionally, charges for services increased $1.8 million compared to the previous
year 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 recreation
classes; and, an increase in paramedic services fees, which tend to fluctuate from year to
year. General Fund expenditures finished $6.6 million or 2.5% higher than the prior fiscal
year mostly due to the expected increase in salaries and benefits related to routine step
increases, cost of living adjustments, new positions, and increased pension costs. Though
revenues exceeded expenditures by about $44.4 million, there were substantial transfer
activity 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 in
the General Fund increased $11.7 million and ended the year at $108.1 million.
42
• 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 1 st 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.
43
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 '/2 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.
44
• 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.
Land
Intangible right to use
land and rights of way
Structures
Intangible right to use structures
Equipment
Intangible right to use equipment
Intangible right to use subscriptions
Infrastructure
Work in progress
Totals
Figure 9
Capital Assets
June 30
(net of depreciation/amortization, in thousands)
Governmental
Activities
2024 2025
$ 1,922,330 $ 1,923,977
199,676 201,794
14,045
12,823
19,050
18,670
162
78
2,145
1,722
211,479
225,774
22,200
14,988
$ 2,391,087
$ 2,399,826
Business -Type
Activities
Total
2024
2025
2024
2025
$ 2,219 $
2,219
$ 1,924,549
$ 1,926,196
3,755
3,702
3,755
3,702
363
347
200,039
202,141
-
-
14,045
12,823
126
113
19,176
18,783
-
-
162
78
-
117
2,145
1,839
125,767
125,697
337,246
351,471
4,408
7,229
26,608
22,217
$ 136,638 $ 139,424 $ 2,527,725 $ 2,539,250
45
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
Certificates of participation
Bond premium
Totals
Figure 10
Outstanding Debt
June 30
(in thousands)
Governmental
Activities
2024 2025
$ 93,525 $ 89,290
865 723
Business -Type
Activities
2024 2025
Total
2024 2025
$ 93,525 $ 89,290
865 723
$ 94,390 $ 90,013 $ - $ - $ 94,390 $ 90,013
46
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.
47
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.
48
49
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50
CITY OF NEWPORT BEACH
Statement of Net Position
June 30, 2025
Assets:
Cash and investments (note 2)
Receivables:
Accounts (net of allowance)
Interest
Intergovernmental receivables
Lease receivables (note 3)
Public -private partnership receivable (note 17)
Restricted cash and investments with fiscal agent (note 2)
Internal balances
Investment in joint ventures (note 13)
Inventory
Prepaid items
Capital assets (note 6):
Non-depreciable/non-amortizable
Depreciable/amortizable
Accumulated depreciation/amortization
Total assets
Deferred Outflows of Resources:
Deferred amount from pension plans (note 11)
Deferred amount from OPEB (note 12)
Total deferred outflows of resources
Liabilities:
Accounts payable
Accrued payroll
Accrued interest payable
Deposits payable
Unearned revenue
Noncurrent liabilities:
Due within one year:
Lease liability (note 7)
Subscription liability (note 7)
Other (note 7)
Due in more than one year:
Net pension liability (note 11)
Net OPEB liability (note 12)
Lease liability (note 7)
Subscription liability (note 7)
Other (note 7)
Governmental
Business -type
Activities
Activities
Total
$ 381,192,951
$ 29,631,436 $
410,824,387
13,473,448
6,554,867
20,028,315
1,812,524
145,252
1,957,776
14,363,166
451
14,363,617
276,374,011
-
276,374,011
629,813
629,813
27, 782,192
27, 782,192
2,065,843
(2,065,843)
-
339,272
339,272
686,808
686,808
7,150, 342
7,150, 342
1,938,964,243 9,447,970 1,948,412,213
790,941,765 212,913,481 1,003,855,246
(330,081,448) (82,937,363) (413,018,811)
3,125,694,930 173,690,251 3,299,385,181
91,256,632 2,738,713 93,995,345
8,347,130 458,803 8,805,933
99,603,762 3,197,516 102,801,278
19,990,178
6,006,188
25,996,366
7,752,498
320,013
8,072,511
3,109,569
-
3,109,569
3,658,843
29,784
3,688,627
5,652,744
-
5,652,744
1,273,326
44,608
1,317,934
243,771
36,593
280,364
20,966,944
-
20,966,944
267,824,528
8,702,213
276,526,741
5,237,348
277,324
5,514,672
11,793,605
3,687,682
15,481,287
1,299,952
73,790
1,373,742
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
Net Position:
Net investment in capital assets
Restricted for:
Public safety
Public works
Community services
Community development
Debt service
Permanent funds:
Nonexpendable
Expendable
Unrestricted
Total net position
274,904,862 115,413 275,020,275
2,292,549,844 135,138,380 2,427,688,224
759,073
759,073
44,563,786
44,563,786
75,003,024
75,003,024
1,475,624
1,475,624
2,024,393
2,024,393
4,629,781 4,629,781
2,555,481 - 2,555,481
58,401,174 22,455,779 80,856,953
$ 2,481,962,180 $ 157,594,159 $ 2,639,556,339
See accompanying notes to basic financial statements
51
CITY OF NEWPORT BEACH
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
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
See accompanying notes to basic financial statements
52
Net (Expense) Revenue and Changes in Net Position
Primary Government
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
See accompanying notes to basic financial statements
53
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54
FINANCIAL SECTION
FUND FINANCIAL STATEMENTS
GOVERNMENTAL FUNDS
hill rll;li
�=
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56
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.
57
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2025
Page 1 of 2
Assets
Cash and investments (note 2)
Receivables:
Accounts (net of allowance)
Interest
Intergovernmental receivables
Lease receivables (note 3)
Public -private partnership receivable (note 17)
Restricted cash and investments with fiscal agent (note 2)
Due from other funds (note 4)
Advance to other funds (note 4)
Prepaid items
Inventory
Total assets
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Deposits payable
Unearned revenue
Due to other funds (note 4)
Advance from other funds (note 4)
Total liabilities
Deferred Inflows of Resources:
Unavailable revenue
Deferred amount from leases (note 3)
Deferred amount from public -private partnerships (note 17)
Total deferred inflows of resources
Fund balances:
Nonspendable:
Prepaid items
Inventories
Long-term loan receivable
Permanent endowment
Restricted:
Upper Newport Bay restoration
Other (note 15)
Committed:
Capital re -appropriations
Oil and gas
Other (note 15)
Unassigned
Total fund balances
Total liabilities, deferred inflows of
resources and fund balances
al Revenue Funds
Tide and Tide and
Submerged Submerged
Land - Operating Land - Harbor Capital
$ 96,363,732 $
9,167,630 $ 62,161,008
6,115,707
2,165,513 -
520,192
66,363 254,095
11,162,624
- -
79, 878, 799
193,226,328
-
629,813
8,718,563
4,426,659
-
1,371,697
63,529
183,978
- -
$ 208,741,951 $
205,319,176 $ 62,415,103
$ 9,586,771 $
1,269,942 $
485,298
7,162,759
75,542
-
3,345,409
313,434
2,654,437
980,433
-
-
4,426,659
22,749,376
2,639,351
4,911,957
77, 845, 065
190,240,713
-
630,001
77, 845, 065
190,870,714
1,371,697
63,529
183,978
-
4,426,659
1,871,911
-
-
8,614,781
57,503,146
374,822
-
-
-
1,258,890
3,411,044
-
98,379,310
108,147,510
11,809,111
57, 503,146
$ 208,741,951 $ 205,319,176 $ 62,415,103
See accompanying notes to basic financial statements
58
Assets
Cash and investments (note 2)
Receivables:
Accounts (net of allowance)
Interest
Intergovernmental receivables
Lease receivables (note 3)
Public -private partnership receivable (note 17)
Restricted cash and investments with fiscal agent (note 2)
Due from other funds (note 4)
Advance to other funds (note 4)
Prepaid items
Inventory
Total assets
Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:
Accounts payable
Accrued payroll
Deposits payable
Unearned revenue
Due to other funds (note 4)
Advance from other funds (note 4)
Total liabilities
Deferred Inflows of Resources:
Unavailable revenue
Deferred amount from leases (note 3)
Deferred amount from public -private partnerships (note 17)
Total deferred inflows of resources
Fund balances:
Nonspendable:
Prepaid items
Inventories
Long-term loan receivable
Permanent endowment
Restricted:
Upper Newport Bay restoration
Other (note 15)
Committed:
Capital re -appropriations
Oil and gas
Other (note 15)
Unassigned
Total fund balances
Total liabilities, deferred inflows of
resources and fund balances
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2025
Page 2 of 2
Capital Project Fund
Debt Service Fund
Facilities
Other
Financial Planning
Debt Service
Governmental
Reserve
Fund
Funds
Totals
$ 23,434,039
$
$ 108,499,105 $
299,625,514
4,643,968
513,601
13,438,789
106,670
508,239
1,455,559
-
1,004,032
2,001,123
14,167,779
-
3,268,884
276,374,011
-
-
629,813
7,542,238
20,239,954
27,782,192
-
-
8,718,563
-
4,426,659
17,024
1,452,250
-
-
-
183,978
$ 28,184,677
$ 8,546,270
$ 135,047,930 $
648,255,107
$ -
$ 4,099
$ 7,688,301 $
19,034,411
-
4,327
7,242,628
-
3,658,843
-
2,017,874
5,652,744
6,517,778
1,847,784
8,365,562
-
-
4,426,659
-
6,521,877
11,558,286
48,380,847
4,643,968
-
1,255,134
5,899,102
-
3,162,503
271,248,281
630,001
4,643,968 4,417,637 277,777,384
17,024 1,452,250
- 183,978
- 4,426,659
4,629,781 4,629,781
- - 1,871,911
2,024,393 50,724,688 118,867,008
374,822
- - 1,258,890
23,540,709 63,700,525 90,652,278
- (11) 98,379,299
23,540,709 2,024,393 119,072,007 322,096,876
$ 28,184,677 $ 8,546,270 $ 135,047,930 $ 648,255,107
See accompanying notes to basic financial statements
59
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60
CITY OF NEWPORT BEACH
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2025
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 2010E
(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
See accompanying notes to basic financial statements
61
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
Revenues:
Taxes and assessments:
Property tax
Sales tax
Transient occupancy tax
Other taxes
Intergovernmental
Licenses, permits and fees
Charges for services
Fines and forfeitures
Investment income
Net increase in fair value of investments
Property income
Donations
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in (note 5)
Transfers out (note 5)
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning
Fund balances, ending
Special Revenue Funds
Tide and
Tide and
Submerged
Submerged
General
Land - Operating
Land - Harbor Capital
$ 154,182,579
$
$
45,934,260
33,174,268
10,385,818
5,670,490
6,350,277
110,943
26,966,719
65,341
4,344,836
37,814
-
3,771,565
332,181
2,170,732
1,129,325
52,743
625,833
19,808,736
16,739,019
6,711,452
795,959
-
-
1,202,884
78
-
313,717,716
17,338,119
9,508,017
21,920,035
576,031
145,807,405
-
55,236,683
1,546,690
16,506,628
29,506
28,461,405
2,709,858 -
-
1,160,516 945,092
1,283,576
- -
77,188
- -
269,292,920
6,022,601 945,092
44,424,796
11,315,518 8,562,925
20,317,944 12, 263, 815
(53,036,418) (20,317,944)
5,832,875
(32,718,474) (8,054,129) 5,832,875
11,706,322 3,261,389 14,395,800
96,441,188 8,547,722 43,107,346
$ 108,147,510 $ 11,809,111 $ 57,503,146
See accompanying notes to basic financial statements
62
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
Capital Project Fund Debt Service Fund
Facilities Other
Financial Planning Debt Service Governmental
Reserve Fund Funds
Revenues:
Taxes and assessments:
Property tax $
Sales tax
Transient occupancy tax
Other taxes
Intergovernmental
Licenses, permits and fees
Charges for services
Fines and forfeitures
Investment income
Net increase in fair value of investments
Property income
Donations
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in (note 5)
Transfers out (note 5)
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning
Fund balances, ending
Totals
$
$ $
154,182,579
45,934,260
33,174,268
1,021,443
11,407,261
2,006,281 10,497,718
18,174,489
- 851,257
7,312,477
92,129
27,124,189
- -
4,382,650
857,449
45,430 4,508,461
11,685,818
186,073
- 1,260,300
3,254,274
-
725,753
43,984,960
1,068,190
3,726,024
5,590,173
-
- 120,155
1,323,117
2,111,712
2,051,711 22,803,240
367,530,515
-
- 1,610
22,497,676
777,707
146, 585,112
10,739,240
67,522,613
225,546
16,761,680
231,066
31,402,329
41,637,631
43,743,239
4,235,000 5,518,576
6,366,168 6,443,356
10,601,168 53,612,800 340,474,581
2,111,712 (8,549,457) (30,809,560) 27,055,934
12,104,412
(11,111,169)
8,250,735
25, 673, 861 84,443,642
(84,465,531)
993,243
8,250,735
25,673,861
(21,889)
3,104,955
(298,722)
(5,135,699)
27,034,045
20,435,754
2,323,115
124,207,706
295,062,831
$ 23,540,709 $
2,024,393 $
119,072,007
$ 322,096,876
See accompanying notes to basic financial statements
63
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
Net change in fund balances - total governmental funds
$ 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
See accompanying notes to basic financial statements
64
IUD
65
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66
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.
67
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Net Position
June 30, 2025
Assets and Deferred Outflows of Resources
Current assets:
Cash and investments (note 2)
Receivables:
Accounts (net of allowance)
Interest
Intergovernmental receivables
Inventories
Prepaid items
Total current assets
Noncurrent assets:
Capital assets (note 6):
Land
Intangible right to use land
Structures
Equipment
Intangible right to use equipment
Software
Intangible right to use subscriptions
Infrastructure
Work in progress
Less: accumulated depreciation/amortization
Total capital assets (net of accumulated
depreciation/amortization )
Total assets
Deferred outflows of resources:
Deferred amount from pension plans (note 11)
Deferred amount from OPEB (note 12)
Total deferred outflows of resources
Liabilities and Deferred Inflows of Resources
Current liabilities:
Accounts payable
Accrued payroll
Deposits payable
Due to other funds (note 4)
Workers' compensation - current
General liability - current
Compensated absences - current
Lease liability - current
Subscription liability - current
Total current liabilities
Noncurrent liabilities:
Workers' compensation (note 7)
General liability (note 7)
Compensated absences (note 7)
Lease liability (note 7)
Subscription liability (note 7)
Net pension liability (note 11)
Net OPEB liability (note 12)
Total noncurrent liabilities
Total liabilities
Deferred inflows of resources:
Deferred amount from pension plans (note 11)
Deferred amount from OPEB (note 12)
Total deferred inflows of resources
Net Position
Net investment in capital assets
Unrestricted
Total net position
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Net position of business -type activities
Enterprise Funds
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
$ 26,580,770 $ 3,050,666 $ 29,631,436 $ 81,567,437
5,661,146 893,721
6,554,867
34,659
131,775 13,477
145,252
356,965
- 451
451
195,387
-
-
502,830
5,698,092
32,373,691 3,958,315
36,332,006
88,355,370
2,219,450 - 2,219,450 -
3,883,062 3,883,062 -
688,396 - 688,396 39,581
344,080 35,988 380,068 50,392,408
- - - 363,725
- - 4,360,625
146,843 - 146,843 2,099,163
158,988,518 48,826,594 207,815,112 -
6,379,733 848,787 7,228,520 -
(60,383,202) (22,554,161) (82,937,363) (38,620,914)
112,266,880 27,157,208 139,424,088 18,634,588
144, 640, 571 31,115, 523 175, 756, 094 106, 989, 958
1,978,791 759,922 2,738,713 1,801,339
331,497 127,306 458,803 301,770
2,310,288 887,228 3,197,516 2,103,109
5,654,480
351,708 6,006,188
955,767
244,519
75,494 320,013
509,870
29,784
- 29,784
-
-
- -
353,001
4,497,885
-
- -
3,941,299
-
-
8,097,760
44,608
- 44,608
67,339
36,593
- 36,593
170,375
6,009,984 427,202 6,437,186 18,593,296
-
- -
20,992,090
6,658,815
-
- -
6,394,937
3,687,682
3,687,682
-
73,790
- 73,790
1,130,571
6,287,587
2,414,626 8,702,213
5,723,725
200,373
76,951 277,324
182,408
10,249,432 2,491,577 12,741,009 41,082,546
16,259,416 2,918,779 19,178,195 59,675,842
5,320 2,044 7,364 4,844
78,070 29,979 108,049 71,070
83,390 32,023 115,413 75,914
108,424,207 26,714,173 135,138,380 16,984,653
22,183,846 2,337,776 24,521,622 32,356,658
$ 130,608,053 $ 29,051,949 $ 159,660,002 $ 49,341,311
(2,065,843)
$ 157,594,159
See accompanying notes to basic financial statements
68
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Revenues,
Expenses and Changes in Net Position
For the Year Ended June 30, 2025
Enterprise Funds
Operating revenues:
Charges for sales and services:
Water sales
Charges for services
Sewer service and connection fees
Intergovernmental
Employee contributions
Other
Total operating revenues
Operating expenses:
Purchase of water
Salaries and benefits
Depreciation/amortization
Professional services
Maintenance and supplies
System maintenance
Utilities
Fleet parts and supplies
Telecommunication
Hardware
Software
Workers' compensation
Claims and judgments
Compensated absences
OPEB ARC - cash subsidy
Other
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Investment income
Net increase in fair value of investments
Gain on sale of capital assets
Interest expense
Total nonoperating revenues
Income (loss) before transfers
Transfers in (note 5)
Change in net position
Net position, beginning of year
Net position, end of year
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Change in net position of business -type activities
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
$ 40,173,666
$ -
$ 40,173,666
$ -
-
-
-
39,112,990
-
5,929,991
5,929,991
-
15,456
10,728
26,184
195,387
-
-
-
22,086
290,243
50,778
341,021
6,396,146
40,479,365
5,991,497
46,470,862
45,726,609
14,258,486
-
14,258,486
-
6,057,868
1,923,456
7,981,324
4,654,284
1,949,684
639,534
2,589,218
4,275,677
3,270,486
698,697
3,969,183
996,283
3,392,569
1,359,247
4,751,816
4,102,840
2,921,079
940,192
3,861,271
27,692
2,293,501
102,163
2,395,664
-
-
-
-
545,348
-
-
-
188,617
-
-
-
534,370
-
-
-
369,728
-
-
-
7,107,333
-
-
-
10,384,659
-
-
2,576,984
-
-
-
847,328
4,688,299
890,710
5,579,009
2,227,349
38,831,972
6,553,999
45,385,971
38,838,492
1,647,393
(562,502)
1,084,891
6,888,117
995,850
123,190
1,119,040
2,916,412
275,733
37,479
313,212
946,672
-
-
-
425,594
(21,399)
-
(21,399)
(8,303)
1,250,184
160,669
1,410,853
4,280,375
2,897,577
(401,833)
2,495,744
11,168,492
- - - 21,889
2,897,577 (401,833) 2,495,744 11,190,381
127,710,476 29,453,782 38,150,930
$ 130,608,053 $ 29,051,949 $ 49,341,311
2,563,694
$ 5,059,438
See accompanying notes to basic financial statements
69
CITY OF NEWPORT BEACH
Proprietary Funds
Statement of Cash Flows
For the Year Ended June 30, 2025
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
Total of noncash activities
Enterprise Funds
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
(1,617,988) (1,617,988)
$ 1,764,831 $ 443,036 $ 2,207,867 $
See accompanying notes to basic financial statements
70
71
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72
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.
73
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Fiduciary Net Position
June 30, 2025
Assets
Cash and investments (note 2)
Restricted cash and investments with fiscal agent (note 2)
Receivable:
Interest
Intergovernmental receivable
Total assets
Liabilities
Due to others
Total liabilities
Net Position
Restricted for:
Postemployment benefits other than pensions
Individuals, organizations, and other governments
Total net position
Custodial OPEB
Funds Trust
$ 1,582,522 $ -
2,699,066 48,292,264
15,167 3,624
34,320 -
4,331,075 48,295,888
35,616 -
35,616 -
- 48,295,888
4.295.459 -
$ 4,295,459 $ 48,295,888
See accompanying notes to basic financial statements
74
CITY OF NEWPORT BEACH
Fiduciary Funds
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
Additions
Special assessments
Investment earnings
Other
Total additions
Deductions
Debt service
Benefit payments for OPEB trust
Administrative
Other
Total deductions
Net increase in fiduciary net position
Net position, beginning of year
Net position, end of year
Custodial OPEB
Funds Trust
$ 3,022,899 $ -
155,193 4,904,074
101.760 -
3,279,852 4,904,074
3,317,230 -
- 2,682,141
97,408 121,382
133,537 -
3,548,175 2,803,523
(268,323) 2,100,551
4,563,782 46,195,337
$ 4,295,459 $ 48,295,888
See accompanying notes to basic financial statements
75
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76
77
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78
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.
79
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
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
81
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
b. Basis of Accountina 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.
82
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)
Proorietary & 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:
83
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
C. Fund Classifications (Continued)
GPnPrA 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 Proiect 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.
84
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,
85
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 Investme
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
86
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.
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).
87
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
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
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:
(1)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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
I. 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
89
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(1) Summary of Significant Accounting Policies (Continued)
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
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
a
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.
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
(CaIPERS) 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
a
(1)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Summary of Significant Accounting Policies (Continued)
s
t.
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)
Measurement Date (MD)
Measurement Period (MP)
June 30, 2023
June 30, 2024
July 1, 2023 to June 30, 2024
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 (CaIPERS) 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)
Measurement Date (MD)
Measurement Period (MP)
Lease Liabilities and Receivables
June 30, 2023
June 30, 2024
July 1, 2023 to June 30, 2024
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.
93
(1)
(2)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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.
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
Cash and investments with fiscal agent
Fiduciary funds:
Cash and investments
Cash and investments with fiscal agent
Total cash and investments
$ 410,824,387
27, 782,192
1,582,522
50,991,330
$ 491,180,431
94
(2)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Cash and Investments (Continued)
Cash and investments as of June 30, 2025, consist of the following:
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
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.
Authorized Investment Type
Maximum
Maturity*
Local Agency Bonds
5 years
FHLMC
5 years
U.S. Treasury Obligations
5 years
U.S. Agency Securities
5 years
Commercial Paper
270 days
Negotiable Certificates of Deposit
2 years
Reverse Repurchase Agreements
30 days
Medium -Term Notes
5 years
Mutual Funds
N/A
Money Market Mutual Funds
N/A
Mortgage Pass -Through Securities
5 years
LA County Pooled Investment Funds
N/A
California Asset Management Program (CAMP)
N/A
Local Agency Investment Fund (LAIF)
N/A
Supranationals
5 years
Percentage Investment in Minimum
of Portfolio*
One Issuer*
Rating*
30%
5%
A -
No Limit
30%
None
No Limit
No Limit
None
No Limit
30%
None
40%
5%
A 1
30%
5%
A 1
10%
5%
None
30%
5%
A-
20%
10%
AAA
20%
20%
AAAm
20%
5%
AAA
5%
5%
$75 million
$75 million
None
$75 million
$75 million
N/A
20%
10%
AA -
*Excluding amounts held by bond trustee and by the OPEB trust that are not subject to California Government
Code restrictions.
95
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.
Authorized Investment Type
Maximum Maturity
U.S. Treasury Obligations
6 months - No Limit
U.S. Agency Securities
6 months - No Limit
Banker's Acceptances
6 months - 1 Year
Commercial Paper
180 days - 6 months
Money Market Mutual Funds
N/A
Investment Agreements
6 months - No Limit
Certificates of Deposit
6 months - No Limit
Demand Deposits
Time Deposits
Local Agency Bonds
Forward Delivery Agreement
Forward Purchase Agreement
Repurchase Agreements
Local Agency Investment Fund (LAIF)
Municipal Obligations
County Pooled Investment Funds
Disclosures Relating to Interest Rate Risk
6 months - No Limit
6 months - No Limit
Maximum
Maximum
Percentage
Investment in
Allowed
One Issuer
No Limit
No Limit
No Limit
No Limit
0% - No Limit
No Limit
No Limit
10%
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
No Limit
6 months - No Limit No Limit No Limit
6 months - No Limit 0% - No Limit No Limit
6 months - No Limit 0% - No Limit No Limit
6 months - No Limit No Limit No Limit
N/A No Limit No Limit
6 months - No Limit No Limit No Limit
N/A 0% - No Limit No Limit
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.
96
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:
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.
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:
97
(2)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Cash and Investments (Continued)
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
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:
Maturity
May 2027
April 2029
Total
Value Call Date
$ 2,996,331 April 2027
1,521,192 April 2028
$ 4,517,523
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
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
98
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 Hiahly 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 Relatina 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.
Minim
Legalm
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
34094,969
A-1
-
-
- - - 25,817,304 -
- 8,277,665 - -
U.S. Agency Bonds
7:522,679
None
-
-
7,522,679 - - - -
- - - -
U.S.AgencyCMBS
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
54865,897
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
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.
99
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 uncollateral ized 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 Manaaement 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
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
(2)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(3) Lease Receivables
Citv 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
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:
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
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:
Due From Due To
General Fund $ 4,426,659 $ -
Tide and Submerged Land - Harbor Capital Fund - 4,426,659
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:
Harbor Capital Fund Advance - Repayment Terms
(Zero -Interest Advance)
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
104
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:
Transfers In
Tide and
Tide and
Facilities
Submerged
Submerged
Financial
Internal
Other
Land -
Land - Harbor
Planning Debt Service
Service
Governmental
General Fund Operating
Capital
Reserve Fund
Funds
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
20,317,944 -
-
- -
-
-
20,317,944
y Operating
Facilities Financial Planning
-
11,111,169
11,111,169
co Reserve
r 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
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;
105
(5)
(6)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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.
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
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:
General Capital Assets, net
Internal Service Fund Capital Assets, net
Total
Business -type Activities:
Non-depreciable/non-amortizable:
Land
Work in progress
Total non-depreciable/non-amortizable
Depreciable/amortizable:
Intangible right to use land and right of way
Structures
Equipment
Intangible rights to use subscription
Infrastructure
Total depreciable/amortizable
Less accumulated depreciation/amortization for:
Intangible right to use land and right of way
Structures
Equipment
Intangible rights to use subscription
Infrastructure
Total accumulated depreciation
Net depreciable/amortizable
Net capital assets
Beginning
Balance Additions
$ 2,219,450 $ -
4,408,443 5,540,234
6,627,893 5,540,234
3,883,062 -
688,396 -
380,068 -
- 146,843
205,661,153 4,025,167
210,612,679 4,172,010
$ 2,381,189,972
18, 634, 588
$ 2,399,824,560
Balance
Deletions June 30, 2025
$ - $ 2,219,450
(2,720,157) 7,228,520
(2,720,157) 9,447,970
- 3,883,062
- 688,396
- 380,068
- 146,843
(1,871,208) 207,815,112
(1,871,208) 212,913,481
(127,825)
(53,656)
- (181,481)
(325,569)
(15,357)
- (340,926)
(254,064)
(12,569)
- (266,633)
-
(29,866)
- (29,866)
(79,893,907)
(2,477,770)
253,220 (82,118,457)
(80,601,365)
(2,589,218)
253,220 (82,937,363)
130,011,314 1,582,792 (1,617,988) 129,976,118
$ 136,639,207 $ 7,123,026 $ (4,338,145) $ 139,424,088
107
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:
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
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:
Amounts
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
Other debt:
Certificates of participation -Series 2010B
$ 87,800,000 $
Certificates of participation - Series 2020A
5,725,000
Bond premium - Series 2020A
864,633
Other long-term liabilities:
Workers' compensation payable
23,450,563
Claims and judgments payable
10,841,318
Compensated absences(')
13,648,166
Lease liability
14,339,382
Subscription liability
1,832,755
- $ (3,510,000) $ 84,290,000 $ 3,675,000
- (725,000) 5,000,000 755,000
- (142,131) 722,502 -
7,108,865 (5,069,453)
25,489,975
4,497,885
7,829,776 (8,070,980)
10,600,114
3,941,299
844,531 -
14,492,697
8,097,760
- (1,272,451)
13,066,931
1,273,326
- (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
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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:
Business -type activities:
Lease liability
Subscription liability
Total business -type activities
2010 Certificates of Participation
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
$ 3,776,654 $ - $ (44,364) $ 3,732,290 $ 44,608
- 146,843 (36,460) 110,383 36,593
$ 3,776,654 $ 146,843 $ (80,824) $ 3,842,673 $ 81,201
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.
109
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Long -Term Liabilities (Continued)
The annual amortization requirements of the outstanding Series 2010B Certificates of
Participation are as follows:
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
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.
M
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Long -Term Liabilities (Continued)
The annual amortization requirements of the outstanding Series 2020A Certificates of
Participation are as follows:
Year Ending
June 30.
2026
2027
2028
2029
2030
2031
Totals
Claims and Judgments
Principal
Interest
Total
$ 755,000
$ 184,900 $
939,900
785,000
154,100
939,100
815,000
122,100
937,100
850,000
88,800
938,800
880,000
54,200
934,200
915,000
18,300
933,300
$ 5,000,000 $ 622,400 $ 5,622,400
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.
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
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
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Long -Term Liabilities (Continued)
Estimates of the future lease payments for the City's lease liability for business -type activities are
as follows:
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
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.
113
(7)
(8)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Long -Term Liabilities (Continued)
Estimates of the future subscription payments for the City's SBITA liabilities for governmental
activities 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
Estimates of the future subscription payments for the City's SBITA liabilities for business -type
activities are as follows:
Fiscal
Year Ending
June 30,
2026
2027
2028
Totals
Limited Obligation Bonds
Principal Interest Total
$ 36,593 $ 607 $ 37,200
36,794 406 37,200
36,997 203 37,200
$ 110,384 $ 1,216 $ 111,600
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:
114
(8)
(9)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
Limited Obligation Bonds (Continued)
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
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.
115
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%.
Unpaid claims, beginning of fiscal year
Insured claims (including IBNR)
Claim payments
Unpaid claims, end of fiscal year
(10) Deferred Compensation Plan
General Liability
Workers' Compensation
June 30, 2024
June 30, 2025
June 30, 2024
June 30, 2025
$ 8,689,061
$ 10,841,318
$ 16,396,153
$ 23,450,563
25,766,286
7,829,776
11,588,497
7,108,865
(23,614,029)
(8,070,980)
(4,534,087)
(5,069,453)
$ 10,841,318 $ 10,600,114 $ 23,450,563 $ 25,489,975
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.
116
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.
117
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:
Miscellaneous
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%
118
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:
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
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 CaIPERS' 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.
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:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll growth
Projected salary increases
Investment Rate of Return
Mortality Rate Table (1)
Post Retirement Benefit Increase
Miscellaneous
June 30, 2023
Safety
June 30, 2023
June 30, 2024 June 30, 2024
Entry -Age Normal Cost Method
6.90%
6.90%
2.30%
2.30%
2.80%
2.80%
Varies by Entry Age and Services
6.80% 6.80%
Derived using CaIPERS' membership
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
(1) The mortality table used was developed based on CalPERS-specific
data. The probabilities of mortality are based on the 2021 CaIPERS
Experience Study and Reviewof 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 CaIPERS mbsite.
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.
120
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:
Asset Class(l)
Assumed
Asset
Allocation
Real Return
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%
(1 ) An expected inflation of 2.30% used for this period.
(2) Figures are based on the 2021 Asset Liability Management study.
Subsequent Events — There were no subsequent events that would materially affect the
results presented in this disclosure.
121
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:
Balance at June 30, 2023
Changes in the Year:
Service cost
Interest on the total pension liability
Differences between expected and
actual experience
Net plan to plan resource movement
Contribution - employer
Contribution - employee
Net investment income
Benefit payments, including refunds
of employee contributions
Administrative expense
Net Changes
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
$ 521,082,608 $ 400,096,182 $ 120,986,426
8,448,830 - 8,448,830
35,431,016 - 35,431,016
1,976,265 - 1,976,265
- (59) 59
- 21,544,170 (21,544,170)
- 4,541,457 (4,541,457)
- 38,107,605 (38,107,605)
(27,580,605) (27,580,605) -
- (325,559) 325,559
18,275,506 36,287,009 (18,011,503
Balance at June 30, 2024 $ 539,358,114 $ 436,383,191 $ 102,974,923
122
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(11) Pension Plans (Continued)
Safety Plan:
Balance at June 30, 2023
Changes in the Year:
Service cost
Interest on the total pension liability
Differences between expected and
actual experience
Net plan to plan resource movement
Contribution - employer
Contribution - employee
Net investment income
Benefit payments, including refunds
of employee contributions
Administrative expense
Net Changes
Balance at June 30, 2024
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
$ 695,885,933 $ 499,893,619 $ 195,992,314
10,840,966 - 10,840,966
47,523,602 - 47,523,602
7,193,012 - 7,193,012
- 59 (59)
- 36,653,740 (36,653,740)
- 3,875,707 (3,875,707)
- 47,875,335 (47,875,335)
(39,503,140) (39,503,140) -
(406,765) 406,765
26,054,440 48,494,936 (22,440,496)
$ 721,940,373 $ 548,388,555 $ 173,551,818
Sensitivity of the Net Pension Liability to Changes in the Discount Rate — The fol lowing
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
123
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:
Miscellaneous plan:
Pension contributions subsequent to
measurement date
Differences between expected and
actual experience
Change in assumptions
Net differences between projected and
actual earnings on plan investments
Total miscellaneous plan
Safety plan:
Pension contributions subsequent to
measurement date
Differences between expected and
actual experience
Change in assumptions
Net differences between projected and
actual earnings on plan investments
Total safety plan
Total all plans
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 21,712,457 $ -
3,244,282 (87,145)
977,548 -
6,473,421 -
32,407,708 (87,145)
37, 081,470 -
10,440,815 (926,141)
6,072,755 -
7,992,597 -
61,587,637 (926,141)
$ 93,995,345 $ (1,013,286)
124
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:
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
-
-
-
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.
125
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
126
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.
127
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:
Inactive employees, spouses, or beneficiaries currently receiving benefits 539
Inactive employees or beneficiaries entitled to but not receiving benefits 365
Active employees 849
Total
Contributions
1,753
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:
128
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Emplovment Health Care Benefits (OPEB) (Continued)
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Projected Salary Increase
Expected long term investment rate of return
Healthcare Cost Trend Rates
Post -Retirement Turnover
Mortality
June 30, 2023
June 30, 2024
Entry -Age Normal Cost Method
6.40%
2.75%
2.80% per annum, in aggregate
6.40%
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.
Derived from CalPERS pension plan
From Society of Actuaries Pub-2010 Public
Retirement Plans Mortality Table Report
The actuarial assumptions used in the June 30, 2023, valuation were based on a standard set of
assumptions the actuary has used for similar valuations, modified as appropriate for the City.
The long-term expected rate of return on OPEB plan investment is assumed to be 6.40%. The
OPEB Plan's target asset allocation as of June 30, 2025 are summarized in the following table.
Assumed
Long -Term
Asset
Expected Real
Asset Class 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%
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.
129
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Emplovment Health Care Benefits (OPEB) (Continued)
Yield as of
Bond Buyer Go 20-Bond
Municipal Bond Index
S&P Municipal Bond 20-Year
High Grade Rate Index
Fidelity 20-Year Go Municipal
Bond Index
Bond Index Range
June 30, June 30,
2023 2024
3.65% 3.93%
4.13% 4.21 %
3.86% 3.97%
3.65%-4.13% 3.93%-4.21 %
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.
130
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Emplovment Health Care Benefits (OPEB) (Continued)
Changes in the Net OPEB Liability
The changes in the net OPEB liability are as follows:
Increase (Decrease)
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
131
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.
132
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:
1 % Decrease Discount Rate 1 % Increase
(5.40%) (6.40%) (7.40%)
Net OPEB Liability $10,634,856 $ 5,514,672 $ 1,162,929
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:
1 % Decrease
Healthcare Cost Trend Rates
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
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:
Deferred Deferred
Description
OPEB contributions subsequent to measurement date
Differences between projected and actual experience
Change of assumptions
Net difference between projected and actual earnings
on OPEB plan investments
Totals
Outflows of Inflows of
Resources Resources
$ 2,254,152 $ -
4,256,028 (412,725)
1,882,666 (1,659,982)
413,087
$ 8,805,933 $ (2,072,707)
133
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(12) Post-Emplovment 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:
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)
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
134
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 Autho
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.
135
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:
Irvine Terrace, Shorecliffs, Balboa Peninsula Water Line Replc
CNG Fueling System
Central Library Lecture Hall
Big Canyon Restoration Phase 3
Cathodic Protection Program
Balboa Yacht Basin Dredging
Balboa Peninsula Trolley
Water Well Rehabilitation Program
Bristol St N Pavement Rehab
Library/ Fire Station No. 1 Replacement
Facilities Maintenance Master Plan
Spyglass Hill Rd Pavement Rehab
Bay Crossing Water Main Replc
Von Karman Ave Pvmt Rehab
Sewer Main Lining and Repairs
Collins Island Bridge Replacement
Facilities Maintenance Master Plan
Balboa Yacht Basin Docks
Balboa Island/CDM Transit Service
Annual
Project YTD
Unexpended
Budget
Expenditures
Commitments
$ 8,238,406
$ 572
$ 8,091,473
8,550,542
1,272,932
6,491,700
10,415,158
3,836,678
6,256,601
7,365,960
1,057,903
5,534,856
4,147,420
54,398
4,092,555
3,899,344
-
3,898,344
4,037,247
604,212
3,325,504
2,127,021
97,135
2,028,183
1,613,000
-
1,613,000
15,991,120
77,241
1,514,712
2,649,950
38,438
1,487,348
1,886,188
11,849
1,405,203
3,086,736
155,131
1,163,121
1,722,373
622,874
733,714
1,655,896
531,934
682,107
2,693,848
16,985
662,732
2,388,922
1,703,165
642,916
6,830,453
115,604
622,008
3,636,581
-
616,335
136
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:
Major Governmental Funds
Other Governmental Funds
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
137
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:
Other Golemmental Fund.
Mde and
Md. and
Facilities
Special
CepRel
Submerged
Submerged
Financial Planning
Debt SeMce
Retenue
Pmfect
Peanan-
General
Land - Operating Land - Harbor Capital
Resene
Fund
Fund.
Fund.
Fund.
Totals
Nonspendable:
Prepaid items( legally restnctatl)
$ 1,371,697 $
0,529 $
- $
- $
- $
17,024 $
- $
- $
1,452,250
Ines (legally astncted)
183,978
-
-
-
-
-
-
-
183,978
Long-term loan receivable(b-Weted)
4,426.659
-
-
-
-
-
-
-
4,426,659
Permanent endowment (legally-rictetl)
-
-
-
-
-
-
-
4,629,781
4,629,781
Restricted:
-
Aftalable hausing
-
-
-
-
-
634,U1
-
-
634,021
Oceanfront encroachment
-
-
-
-
-
300,606
-
-
300,606
Upper Newport bay rostoatlon
-
1.871,911
-
-
-
-
-
-
1,871,911
Cable fanchiseresene
-
-
-
-
-
4,023,412
-
-
4,023,412
Community tleielopment
-
-
-
-
-
-
3,586
-
3,586
Streets and! highways
-
-
-
-
-
2,9M,396
-
-
2,W3,396
Punic safety
-
-
-
-
-
646,986
-
-
646,986
Facllitles
-
-
-
-
-
1.703,264
306.531
-
2,009,195
Tancpotlaticn
-
-
-
-
-
314,333
-
-
314,333
EnNmnmental liability mitigation
-
-
-
-
-
8,917,09
-
-
8,917,639
Punic ade and culture
-
-
-
-
-
1,2M,162
-
-
1,273,162
Parking
-
-
-
-
-
292,979
-
-
292,979
Maining
-
-
-
-
-
634,388
-
-
634,388
262,160
262,160
Scholarships
-
-
-
-
-
-
-
230,819
23"8"
Fiin
-
-
-
-
-
1,226,580
-
-
1,226,580
Debt seruce
-
-
-
-
2,024,393
-
-
-
2,024,393
Capital re-appropdatlons
-
7.702,206
28,023.307
-
-
8,8P,643
15,880,007
-
60,483,163
Beaches
-
T10,984
1, 09,3M
-
-
-
-
-
2,370,349
Man-
-
12,591
-
-
-
-
-
-
12,591
Oredginq
-
-
27,820,484
-
-
-
-
2.062,502
29,882,986
Equipment
-
188,990
-
-
-
-
-
-
188,990
Geneal Plan Maintenance
-
160,674
160,674
Committed:
Facilities replacement
-
-
-
23,540,709
-
-
T23,235
-
24,263,944
Facilities maintenance
-
-
-
-
-
-
1,225.515
-
1,225,515
auc center and park
-
-
-
-
-
-
526.902
-
526,902
as Oil and gliabilities
-
1,258,890
-
-
-
-
-
-
1,258,890
Parking management
-
-
-
-
-
-
161,767
-
161,767
Neighborhood enhancement
-
-
-
-
-
-
8,084,238
-
8,084,238
Capital re-appropnatiune
374,822
-
-
-
-
-
7,000
-
381,822
Dalnege
-
-
-
-
-
-
2,191,405
-
2,191,405
Streets and highways
-
-
-
-
-
-
13,934.462
-
13,934,462
Facilities
-
-
-
-
-
-
17,718,982
-
171718,982
Miscellaneous antl dudies
-
-
-
-
-
-
1,561,927
-
1,561,927
Parks and community centers
-
-
-
-
-
-
15,631.073
-
1%31,013
Contract-ces
1,613,722
-
-
-
-
-
-
-
1,613,122
Supplies and matedals
261.671
-
-
-
-
-
-
-
261,671
Maintenance antl repairs
791,737
-
-
-
-
-
1,934,019
-
2,725,7%
Equipment
fi34,664
684,664
General
59,250
-
-
-
-
-
-
-
59,250
Unassigned
98, 379,310
(11)
98,379,299
Total MM balances
$ 108,147,510 $
11,809,111 $
57,503,146 $
23,540,109 $
2,024,393 $
31,9%,096 $
79,890,649 $
7,185,262 $
322,096,876
138
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2025
(16) Deficit Fund Equity
The following funds reported deficit equity balances:
Special Revenue Funds:
OTS DUI Grant $ 11
Internal Service Funds:
Compensated Absences 4,909,926
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.
139
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.
140
141
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 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
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
Total Pension Liability - ending (a)
Plan Fiduciary Net Position
Contributions - employer
Contributions - employee
Net investment income
Administrative expense
Other miscellaneous income/(expense)
Plan to plan resource movement
Benefit payments
Net change in Plan Fiduciary Net Position
Plan Fiduciary Net Position - beginning
Plan Fiduciary Net Position - ending (b)
Net pension liability - ending (a)-(b)
Plan fiduciary net position as a percentage of the total pension liability
521,082,608 499,195,502 468,868,928 450,976,864 434,210,401
$ 539,358,114 $ 521,082,608 $ 499,195,502 $ 468,868,928 $ 450,976,864
$ 21,544,170
$ 20,800,063
$ 18,352,430
$ 18,612,457
$ 16,346,284
4,541,457
4,113,185
3,974,974
4,057,107
4,067,751
38,107,605
23,270,469
(30,856,252)
76,031,841
16,074,793
(325,559)
(278,531)
(256,962)
(336,753)
(454,777)
(59)
(27,580,605)
(26,581,149)
(24,940,419)
(22,976,493)
(21,516,515)
36,287,009
21,324,037
(33,726,229)
75,388,159
14,517,536
400,096,182 378,772,145 412,498,374 337,110,215 322,592,679
$ 436,383,191 $ 400,096,182 $ 378,772,145 $ 412,498,374 $ 337,110,215
$ 102,974,923 $ 120,986,426 $ 120,423,357 $ 56,370,554 $ 113,866,649
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:
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.
Change in Assumptions:
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, CaIPERS 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 CaIPERS 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
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
CHANGES IN THE NET PENSION LIABILITY AND RELATED
RATIOS
Last Ten Fiscal Years
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
Contributions - employee
Net investment income
Administrative expense
Other miscellaneous income/(expense)
Plan to plan resource movement
Benefit payments
Net change in Plan Fiduciary Net Position
Plan Fiduciary Net Position - beginning
Plan Fiduciary Net Position - ending (b)
Net pension liability- ending (a)-(b)
Plan fiduciary net position as a percentage of the total pension liability
Covered payroll
Net pension liability as percentage of covered payroll
$ 15,700,833
$ 15,797,595
$ 10,509,243
$ 9,904,636
$ 6,615,920
3,955,144
3,979,337
4,134,130
4,206,942
4,321,646
19,895,019
23,855,196
28,349,491
1,241,432
5,687,908
(216,502)
(435,499)
(375,172)
(155,791)
(287,862)
700
(827,021)
-
-
-
1,570
(700)
(2,387)
26,981
(20,129,701)
(18,458,539)
(17,249,398)
(16,714,022)
(16,374,370)
19,207,063
23,910,369
25,368,294
(1,519,190)
(9,777)
303,385,616
279,475,247
254,106,953
255,626,143
255,635,920
$ 322,592,679
$ 303,385,616
$ 279,475,247
$ 254,106,953
$ 255,626,143
$ 111,617,722 $ 114,056,742 $ 121,142,430 $ 111,835,124 $ 97,038,055
74.29% 72.68%
$ 42,153,383 $ 41,468,634 $
264.79% 275.04%
69.76 % 69.44 % 72.48
41,727,563 $ 40,031,404 $ 38,512,011
290.32% 279.37% 251.97%
143
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 1 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
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) Retirement assumptions are based on retirement rates resulting
from the most recent CalPERS Experience Study adopted by the CalPERS Board
(5) Mortality assumptions are based on mortality rates resulting
from the most recent CalPERS Experience Study adopted by the CalPERS Board
144
CITY OF NEWPORT BEACH
an Agent Multiple -Employer Defined Benefit Pension Plan
As of June 30, 2025
Last 10 Years
Actuarially determined contribution
Contributions in relation to the actuarially determined contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered payroll
Notes to Schedule:
Valuation date:
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method
Asset valuation method
Inflation
Salary increases
Investment rate of return
Retirement age
Mortality
Defined Benefit Plan for Miscellaneous Employees
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
2020
2019
2018
2017
2016
$ 13,080,630 $
12,374,026
$ 11,924,053
$ 10,412,963 $
9,943,342
(16,351,592)
(15,713,898)
(15,742,587)
(10,412,963)
(9,943,342)
$ (3,270,962) $
(3,339,872)
$ (3,818,534)
$ $
$ 43,902,594 $
42,153,383
$ 41,468,634
$ 41,727,563 $
40,031,404
37.25 %
37.28 %
37.96 %
24.95 %
24.84
6/30/2017
6/30/2016
6/30/2015
6/30/2014
6/30/2013
Entry age
Entry age
Entry age
Entry age
Entry age
(1)
(1)
(1)
(1)
(1)
Market Value
Market Value
Market Value
Market Value
Market Value
2.625 %
2.75 %
2.75 %
2.75 %
2.75
(2)
(2)
(2)
(2)
(2)
7.25 % (3)
7.375 % (3)
7.5 % (3)
7.5 % (3)
7.5 % (3)
(4)
(4)
(4)
(4)
(4)
(5)
(5)
(5)
(5)
(5)
145
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 1 of 2
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
2025
2024
2023
2022
2021
Measurement Period
June 30,2024
June 30,2023
June 30, 2022
June 30, 2021
June 30,2020 N
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:
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.
Change in Assumptions:
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.
146
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 CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years
2020 2019 2018 2017 2016
leasurement 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
Contributions - employee
Net investment income
Administrative expense
Plan to plan resource movement
Benefit payments
Other miscellaneous income/(expense)
Net change in Plan Fiduciary Net Position
Plan Fiduciary Net Position - beginning
Plan Fiduciary Net Position - ending (b)
Net pension liability - ending (a)-(b)
Plan fiduciary net position as a percentage of the total pension liability
Covered payroll
Net pension liability as percentage of covered payroll
$ 28,344,445 $ 26,779,897 $ 19,260,537 $ 18,496,776 $ 21,529,513
3,162,044 3,104,318 2,967,318 2,826,831 2,969,503
24,254,890 29,064,749 34,814,011 1,561,480 7,049,577
(263,991) (532,480) (462,427) (193,780) (357,866)
(1,570) (855) 2,387
(30,443,097) (29,183,598) (28,074,414) (27,447,982) (25,838,982)
855 (1,011,188)
25,053,576 28,220,843 28,505,025 (4,754,288) 5,351,745
369,931,799 341,710,956 313,205,931 317,960,219 312,608,474
$ 394,985,375 $ 369,931,799 $ 341,710,956 $ 313,205,931 $ 317,960,219
$ 195,101,708 $ 196,426,065 $ 204,500,681 $ 187,062,452 $ 167,055,352
66.94 % 65.32 % 62.56 % 62.61 % 65.56
$ 33,935,043 $ 32,866,620 $ 32,450,020 $ 30,816,246 $ 30,189,633
574.93 % 597.65 % 630.20 % 607.03 % 553.35
147
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 1 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years
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) Retirement assumptions are based on retirement rates resulting from the most recent CaIPERS Experience Study adopted by the CaIPERS Board
(5) Mortality assumptions are based on mortality rates resulting from the most recent CaIPERS Experience Study adopted by the CaIPERS Board
148
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
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)
149
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'
Measurement Period
Total OPEB Liability
Service cost
Interest
Differences between expected and actual experience
Changes in assumptions
Changes in benefits terms
Benefit payments, including refunds of member contributions
Net change in Total OPEB Liability
Total OPEB Liability - beginning
Total OPEB Liability - ending (a)
2023 2022
$ 800,218 $
635,096 $
530,843 $
529,600
3,125,813
3,150,800
3,237,390
2,909,400
99,265
(393,810)
1,120,534
6,159,865
(1,705,049)
292,126
2,473,450
(302,512)
(3,734,742)
(4,781,574)
(4,731,846)
(3,786,232)
(1,414,495)
(1,097,362)
2,630,371
5,510,121
53,136,842
54,234,204
51,603,833
46,093,712
Plan fiduciary net position
Contributions - employer
$ 10,865,147
Contributions - member
-
Net investment income
3,933,617
Benefit payments, including refunds of member contributions
(3,734,742)
Administrative expense
(23,200)
Other expense
Net change in plan fiduciary net position
11,040,822
Plan fiduciary net position - beginning 35,166,853
$ 6,327,150 $ 6,185,537 $ 5,785,342
2,061,410 (4,845,154) 7,184,241
(4,781,574) (4,731,846) (3,786,232)
(9,385) (9,000) (9,908)
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("
$ 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.
150
CITY OF NEWPORT BEACH
Post -Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2025
Last 10 Years "
Page 2 of 2
SCHEDULE OF CHANGES IN
THE CITY'S NET OPEB LIABILITY AND RELATED RATIOS
Last Ten Fiscal Years'
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 terns
-
-
-
-
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 (')
$ 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 %
151
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 CONTRIBUTIONS
Last Ten Fiscal Years*
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 i'i
$ 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.
152
CITY OF NEWPORT BEACH
Post -Employment Health Care Benefits (OPEB) Retirement Plan
As of June 30, 2024
Last 10 Years
Page 2 of 2
SCHEDULE OF CONTRIBUTIONS
Last Ten Fiscal Years*
2021 2020
Actuarially determined contribution
Contributions in relation to the actuarially determined contributions
Contribution deficiency (excess)
Covered -employee payroll (1)
Contributions as a percentage of covered -employee payroll
Notes to Schedule:
Valuation date:
2019 2018
$ 4,108,719 $
3,834,916 $
3,827,337 $
3,925,087
(6,511,545)
(5,379,799)
(5,133,062)
(5,309,626)
$ (2,402,826) $
(1,544,883) $
(1,305,725) $
(1,384,539)
$ 78,621,426 $
77,637,171 $
75,814,626 $
73,999,059
-8.28%
-6.93%
-6.77%
-7.18%
June 30, 2019
June 30, 2017 June 30, 2017 June 30, 2015
153
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2025
Page 1 of 2
Variance with
Final Budget
Budgeted
Amounts
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
Othertaxes
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
See accompanying notes to required supplementary information
154
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
General Fund
For the Year Ended June 30, 2025
Page 2 of 2
Variance with
Final Budget
Budgeted Amounts
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
See accompanying notes to required supplementary information
155
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Tide and Submerged Land - Operating
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
Transfers out
Total other financing sources
Net change in fund balance
Fund balance, beginning
Fund balance, ending
12,256,805 12,263,815 12,263,815 -
(19,767,775) (20,317,944) (20,317,944) -
(7,510,970) (8,054,129) (8,054,129) -
2,436,882 (3,838,288) 3,261,389 7,099,677
8,547,722 8,547,722 8,547,722 -
$ 10,984,604 $ 4,709,434 $ 11,809,111 $ 7,099,677
See accompanying notes to required supplementary information
156
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Tide and Submerged Land - Harbor Capital
For the Year Ended June 30, 2025
Revenues:
Taxes and assessments:
Investment income
Net increase in fair value of investments
Property income
Total revenues
Expenditures:
Capital outlay
Excess (deficiency) of revenues
over expenditures
Other financing sources:
Transfers in
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
$ 707,038 $ 707,038 $ 2,170,732 $ 1,463,694
- - 625,833 625,833
5,954,462 5,954,462 6,711,452 756,990
6,661,500 6,661,500 9,508,017 2,846,517
- 10,422,952 945,092 9,477,860
6,661,500 (3,761,452) 8,562,925 12,324,377
5,832,875 5,832,875 5,832,875 -
12,494,375 2,071,423 14,395,800 12,324,377
43,107,346 43,107,346 43,107,346 -
$ 55,601,721 $ 45,178,769 $ 57,503,146 $ 12,324,377
See accompanying notes to required supplementary information
157
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
(1)
CITY OF NEWPORT BEACH
Notes to Required Supplementary Information
June 30, 2025
Budgetary Control and Compliance (Continued)
Expenditures exceeded appropriations in the following governmental fund:
Supplemental Law Enforcement Services
Appropriations Expenditures Variance
$250,000 $250,045 $(45)
159
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160
161
This page left blank intentionally.
162
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
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
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
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 1 of 7
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)
166
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 2 of 7
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)
167
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 3 of 7
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)
168
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 4 of 7
Capital Projects
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)
169
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 5 of 7
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)
170
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 6 of 7
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)
171
CITY OF NEWPORT BEACH
Other Governmental Funds
Combining Balance Sheet
June 30, 2025
Page 7 of 7
Capital Projects
Permanent Funds
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
172
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 1 of 7
(Revenue
S B 1 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
Public works
Community development
Community services
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources:
Transfers in
Total other financing sources
Net change in fund balances
Fund balances (deficits), beginning
Fund balances (deficits), ending
237,845 289,817 -
1,085,764 1,531,057
1,085,764 1,531,057 237,845 289,817
1,486,414 853,086 (170,412) 305,682
148
148
1,486,414 853,086 (170,412) 148 305,682
2,797,801 825,999 817,398 (159) 918,149
$ 4,284,215 $ 1,679,085 $ 646,986 $ (11) $ 1,223,831
(continued)
173
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 2 of 7
Special Revenue
Community
Air Quality
Supplemental
Building Excise
Development
Management
Environmental
Law Enforcement
Tax
Block Grant
District
Liability
Services
Revenues:
Other taxes $
- $
- $
- $
1,021,443
$ -
IntergovernmeMal
-
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)
174
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 3 of 7
Revenue
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)
175
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 4 of 7
Special Revenue
Capital Projects
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)
176
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 5 of 7
Capital Projects
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)
177
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
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 -
Netincreaseinfairvalueofinvestments
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
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources:
Transfers in
Total other financing sources
Net change in fund balances
Fund balances (deficits), beginning
Fund balances (deficits), ending
3,916,165
3,445,072
185,216
74,984
10,021,184
3,916,165
3,445,072
185,216
74,984
10,021,184
(3,628,023) (2,915,671) 157,727 (71,004) (10,021,184)
2,500,000
500,000
5,295
12,757,055
2,500,000
500,000
5,295
12,757,055
(1,128,023) (2,915,671)
657,727
(65,709)
2,735,871
4,168,141 11,730,832
6,522,827
122,146
15,720,147
$ 3,040,118 $ 8,815,161 $
7,180,554 $
56,437 $
18,456,018
(continued)
178
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 7 of 7
Capital Projects Permanent Funds
Total
Other
Park
Ackerman
Governmental
Maintenance Bay Dredging
Donation
Funds
Revenues:
Othertaxes
$ - $ - $
- $
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
179
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Intergovernmental
Investment income
Net increase in fair value of investments
Budgeted Amounts
Original Final
$ 2,153,871 $
95,646
Actual
Variance with
Final Budget
Positive
(Negative)
2,153,871 $ 2,396,189 $ 242,318
95,646 138,825 43,179
- 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
180
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
SB1 Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Intergovernmental
Investment income
Net increase in fair value of investments
Budgeted Amounts
Original Final
$ 2,063,464 $
16,378
Actual
Variance with
Final Budget
Positive
(Negative)
2,063,464 $ 2,322,193 $ 258,729
16,378 50,637 34,259
- 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
181
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Intergovernmental
Investment income
Net increase in fair value of investments
Total revenues
Expenditures:
Public safety
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Budgeted Amounts
Original Final
Variance with
Final Budget
Positive
Actual (Negative)
$ 28,708 $ 28,708
29,759 29,759
- - 67,433 67,433
311,000 311,000 237,845 73,155
(311,000) (311,000) (170,412) 140,588
817,398 817,398 817,398 -
$ 506,398 $ 506,398 $ 646,986 $ 140,588
182
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Intergovernmental
Total revenues
Expenditures:
Public safety
Excess (deficiency) of revenues
over expenditures
Other financing sources:
Transfers in
Net change in fund balance
Fund balance (deficit), beginning
Fund balance (deficit), ending
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ 522,434 $ 289,817 $ (232,617)
- 522,434 289,817 (232,617)
- 522,434 289,817 232,617
148 148 -
- 148 148 -
(159) (159) (159) -
$ (159) $ (11) $ (11) $ -
183
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Licenses, permits and fees
Investment income
Net increase (decrease) in fair value of investments
Total revenues
Expenditures:
Capital outlay
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 33,462 $ - $ 246,773 $ 246,773
1,386 1,386 46,290 44,904
(1,747) (1,747) 12,619 14,366
33,101 (361) 305,682 306,043
- 159,798 - 159,798
33,101 (160,159) 305,682 465,841
918,149 918,149 918,149 -
$ 951,250 $ 757,990 $ 1,223,831 $ 465,841
184
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
185
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
186
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
187
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts 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
Expenditures:
Public works
Capital outlay
Total expenditures
Net change in fund balance
Fund balance, beginning
Fund balance, ending
933,801 933,801 1,588,248 654,447
469,961
470,504 411,971 58,533
1,635,454 887,170 748,284
469,961 2,105,958 1,299,141 806,817
463,840 (1,172,157) 289,107 1,461,264
9,960,989 9,960,989 9,960,989 -
$ 10,424,829 $ 8,788,832 $ 10,250,096 $ 1,461,264
188
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Services Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts 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 $ - $ - $ - $ -
189
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Opioid Remediation Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Other
Expenditures:
General Government
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ - $ 350,790 $ - $ (350,790)
- 350,790 - 350,790
190
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Contributions Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
191
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
FIIN Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
Original Final
Revenues:
Investment income $ 21,727 $
Net increase in fair value of investments 3,612
Donations -
Total revenues
Expenditures:
Community services
Net change in fund balance
Fund balance, beginning
Variance with
Final Budget
Positive
Actual (Negative)
21,727 $ 45,978 $ 24,251
3,612 13,453 9,841
- 278,407 278,407
25,339 25,339 337,838 312,499
223,759 224,830 206,058 18,772
(198,420) (199,491) 131,780 331,271
1,094,800 1,094,800 1,094,800 -
Fund balance, ending $ 896,380 $ 895,309 $ 1,226,580 $ 331,271
192
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Restricted Programs Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
193
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Measure M Special Revenue Fund
For the Year Ended June 30, 2025
Budgeted Amounts
Original Final
Revenues:
Intergovernmental $ 2,831,037 $
Investment income 48,285
Net increase in fair value of investments -
Variance with
Final Budget
Positive
Actual (Negative)
7,938,425 $ 2,912,762 $ (5,025,663)
48,285 59,134 10,849
- 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)
194
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Oceanfront Encroachment Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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
195
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
PEG Fees Special Revenue Fund
For the Year Ended June 30, 2025
Revenues:
Licenses, permits and fees $
Investment income
Net increase in fair value of investments
Total revenues
Expenditures:
General government
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
360,000 $ 360,000 $ 287,312 $ (72,688)
2,931 2,931 144,787 141,856
- - 41,307 41,307
362,931 362,931 473,406 110,475
- 7,883
362,931 355,048
- 7,883
473,406 118,358
3,550,006 3,550,006 3,550,006 -
$ 3,912,937 $ 3,905,054 $ 4,023,412 $ 118,358
196
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Park Fees Special Revenue Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budgeted Amounts
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)
197
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198
199
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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
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Net Position
June 30, 2025
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
202
CITY OF NEW PORT BEACH
Internal Service Funds
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2025
Total
Insurance
Compensated
Retiree
Equipment
Information
Internal
Reserve
Absences
Insurance
Maintenance
Technology
Service Funds
Operating revenues:
Charges for services
S 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:
I nvestment 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
203
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Cash Flows
For the Year Ended June 30, 2025
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
204
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205
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206
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
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Fiduciary Net Position
June 30, 2025
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:
I nterest
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
208
CITY OF NEWPORT BEACH
Custodial Funds
Combining Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
Custodial Funds
Special Tourism
Other
Total
Assessment Business
Business
Police
Custodial
District Improvement
Improvement
Custodial
Funds
Additions
Special assessments
$ 3,022,899 $
$
$ -
$ 3,022,899
Investment earninqs
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
209
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210
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212
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
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Page 1 of 2
Fiscal Year
20161 20172 2018'
2019 2020
Governmental activities:
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)
Total governmental activities
$
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
Total business -type activities
$
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)
Total primary government
$ 2,247,824,276
$ 2,258,974,477
$ 2,285,158,523
$ 2,322,109,953
$ 2,345,915,150
(continued)
1 Reflects restatement of net position due to deferred outflow adjustments related to fiscal year ended June 30, 2017.
2 Reflects restatement of net position due to implementation of GASB 75 in fiscal year ended June 30, 2018.
s Reflects restatement of net position due to adjustments for capital assets and compensated absences liability in fiscal year ended June
30, 2019.
4 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.
5 Reflects restatement of net position due to unbilled receivables adjustments related to fiscal year ended June 30, 2023.
s 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.
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.
The City of Newport Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
214
CITY OF NEWPORT BEACH
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
Page 2 of 2
Fiscal Year
2021
2022
2023'
2024
2025
Governmental activities:
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
Total governmental activities
$ 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
Total business -type activities
$ 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
Total primary government
$ 2,374,275,338
$ 2,450,495,551
$ 2,511,697,165
$ 2,579,080,259
$ 2,639,556,339
215
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Page 1 of 2
Fiscal Year
2016
2017
2018
2019
2020
Expenses:
Governmental activities:
General government
$
19,335,275
$ 20,443,569
$ 19,011,099
$
20,549,224
$
20,714,050
Public safety
91,046,455
102,494,314
107,647,562
111,556,065
119,194,302
Public works
45,443,988
54,039,601
47,615,000
53,339,878
60,054,860
Community development
9,943,868
12,056,086
12,377,394
11,493,204
12,842,020
Community services
22,700,052
26,583,440
27,307,115
27,758,097
26,668,079
Interest on long-term debt
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
Business -type activities:
Water
21,605,197
22,004,013
23,724,918
26,898,075
27,387,120
Wastewater
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
Program revenues:
Governmental activities:
Charges for services:
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
Total governmental activities program revenues
71,078,313
94,319,876
69,569,309
77,763,749
79,681,460
Business -type activities:
Charges for services:
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:
-
-
-
-
-
Total business -type activities program revenues
27,565,714
28,532,421
30,376,965
30,913,016
31,211,244
Total primary government program revenues
98,644,027
122,852,297
99,946,274
108,676,765
110,892,704
Net revenues (expenses):
Governmental activities
(125,006,419)
(128,769,322)
(151,770,604)
(154,120,690)
(166,856,372)
Business -type activities
2,142,352
2,309,482
2,493,892
(207,287)
(467,631)
Total net revenues (expenses)
$
(122,864,067)
$ (126,459,840)
$ (149,276,712)
$
(154,327,977)
$
(167,324,003)
General revenues and other changes in net position:
Governmental activities:
Taxes:
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
Othertaxes
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)
-
-
-
Total governmental activities
162,769,305
160,962,029
176,731,827
189,953,079
189,771,237
Business -type activities:
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
-
-
-
Total business -type activities
2,762,619
3,577,752
184,906
1,326,328
1,357,963
Total primary government
165,531,924
164,539,781
176,916,733
191,279,407
191,129,200
Changes in net position
Governmental activities
37,762,886
32,192,707
24,961,223
35,832,389
22,914,865
Business -type activities
4,904,971
5,887,234
2,678,798
1,119,041
890,332
Total primary government
$
42,667,857
$ 38,079,941
$ 27,640,021
$
36,951,430
$
23,805,197
(continued)
1 Data varies from trend because of one-time receipt of developer contributions.
216
CITY OF NEWPORT BEACH
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Page 2 of 2
Fiscal Year
2021
2022
2023
2024
2025
Expenses:
Governmental activities:
General government
$
20,177,482
$
19,374,179
$
26,911,510
$
28,392,550
$
20,365,624
Public safety
119,184,958
104,767,466
121,309,057
151,625,944
143,920,632
Public works
63,689,155
65,031,715
75,904,138
88,359,562
87,889,339
Community development
12,157,226
9,664,500
13,048,442
16,813,900
17,104,756
Community services
28,214,205
24,508,702
27,937,349
33,034,132
33,510,164
Interest on long-term debt
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
Business -type activities:
Water
28,943,243
27,117,471
30,701,834
37,322,293
36,561,497
Wastewater
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
Program revenues:
Governmental activities:
Charges for services:
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
Total governmental activities program revenues
86,133,654
93,236,628
100,395,523
151,617,549
108,275,346
Business -type activities:
Charges for services:
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
Total business -type activities program revenues
35,357,912
37,046,080
36,700,316
39,232,744
46,470,862
Total primary government program revenues
121,491,566
130,282,708
137,095,839
190,850,293
154,746,208
Net revenues (expenses):
Governmental activities
(164,610,984)
(136,987,511)
(171,381,017)
(172,823,776)
(200,686,364)
Business -type activities
1,191,424
5,834,161
654,591
(5,048,823)
3,627,186
Total net revenues (expenses)
$
(163,419,560)
$
(131,153,350)
$
(170,726,426)
$
(177,872,599)
$
(197,059,178)
General revenues and other changes in net position:
Governmental activities:
Taxes:
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
Othertaxes
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
-
-
-
-
-
Total governmental activities
191,724,252
208,218,438
233,265,405
243,793,932
256,103,006
Business -type activities:
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
-
-
-
Total business -type activities
55,496
(844,875)
257,869
1,461,761
1,432,252
Total primary government
191,779,748
207,373,563
233,523,274
245,255,693
257,535,258
Changes in net position
Governmental activities
27,113,268
71,230,927
61,884,388
70,970,156
55,416,642
Business -type activities
1,246,920
4,989,286
912,460
(3,587,062)
5,059,438
Total primary government
$
28,360,188
$
76,220,213
$
62,796,848
$
67,383,094
$
60,476,080
217
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 1 of 2
Fiscal Year
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 '
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 '
$ 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 Data varies from trend due to additional funds set aside for seawall construction and pension -related items.
2 Data varies from trend due to the relocation of restricted funds to special revenue funds.
3 Data varies from trend due to additional funds set aside mainly in the Facilities Financial Planning Reserve Fund and
Unrestricted Capital Improvements Fund.
4 Data varies from trend due to issuance of special Assessment District bonds.
218
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 2 of 2
Fiscal Year
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 s
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
Fund Balances
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000, $-0 L 7 m
S- I u I M I- L
2016 2017 2018 2019 2020 M1JIL_2023 2024 2025
■Total General Fund
■Total all other Governmental Funds
219
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 1 of 2
Fiscal Year
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
Excess (deficiency) of revenues over (under)
expenditures
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(aslessee)
-
-
-
-
-
Inception of subscription -based IT arrangements
-
-
-
-
-
Total other financing sources (uses)
(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
noncapital expenditures
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.
220
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Page 2 of 2
Fiscal Year
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
Excess (deficiency) of revenues over (under)
expenditures
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(aslessee)
-
-
-
3,259,414
-
Inception of subscription -based IT arrangements
-
-
529,489
315,569
-
Total other financing sources (uses)
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
noncapital expenditures 4.2 % 4.8 % 4.5 % 4.2 % 4.0
221
This page left blank intentionally.
222
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
CITY OF NEWPORT BEACH
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Secured
Fiscal Year
Ended
Total Taxable
Total Direct
June 30
Residential
Commercial
Other
Unsecured
Assessed Value
Change
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:
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 few
exceptions, 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 above
represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
Source: HdL, Coren & Cone
224
CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
Fiscal Year
City Direct Rates
City basic rate
$ 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
School districts
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:
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.
Source: HdL, Coren & Cone
225
CITY OF NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
2025
2016
Percent of Total
Percent of Total
Taxable Assessed
City Taxable
Taxable Assessed
City Taxable
Taxpayer
Value
Rank
Assessed Value
Value
Rank
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
226
CITY OF NEWPORT BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the Fiscal
Year of Levy
Total Collections
to Date
Fiscal Year
Collections in
Ended
Taxes Levied for
Percent of
Subsequent
Percent of
June 30
the Fiscal Year
Amount'
Levy
Years 2
Amount
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%
Net collections reflect deductions for refunds and impoundments.
2 Exclusive of penalty charges.
3 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.
Source: Orange County Auditor Controller's Office
227
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228
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
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Page 1 of 2
Governmental Activities
Subscription -
Fiscal
based
Year
Pre-
Information
Total
Ended
Certificates of
Annexation
Technology
Governmental
June 30
Participation 1
Agreement
CDBG Loan
Leases 3
Arrangements 3
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:
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.
Amounts include any applicable bond premium.
2 These ratios are calculated using personal income and population for the prior calendar year.
3 The GASB 87 and GASB 96 debts on this schedule are not money borrowed by the City, but are present -value
calculations of estimated future payments by the City based on assumptions specified in GASB 87 and GASB 96.
The City of Newport Beach implemented GASB 87 for the fiscal year ended June 30, 2022. The City of Newport
Beach implemented GASB 96 for the fiscal year ended June 30, 2023.
230
Fiscal
Year
Ended
June 30
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Page 2 of 2
Business -type Activities
Subscription -
based
Information
Technology
Leases 3 Arrangements 3
1,512,574
3,820,774
3,776,654
3,732,290
110,383
Total Business -type Total Primary
Activities Government
1,512,574
3,820,774
3,776,654
3,842,673
116,544,212
112,022,659
108,567,106
104, 976, 553
101,280,000
107,184,026
117,740,509
116,946,819
114,338,424
108,465,829
Percentage of
Personal
Income 2
1.77%
1.66%
1.48%
1.36%
1.24%
1.31 %
1.34%
1.27%
1.22%
1.32%
Debt Per
Capita 2
1,383
1,319
1,245
1,204
1,181
1,248
1,406
1,402
1,387
1,312
231
Fiscal Year
Ended
June 30
Certificates of
Participation'
2016
114,137,212
2017
110,956,659
2018
107,651,106
2019
104,220,553
2020
100,695,000
2021
106,781,026
2022
102,698,895
2023
98,616,764
2024
94,389,633
2025
90,012,502
CITY OF NEWPORT BEACH
Ratios of General Bonded Debt
Last Ten Fiscal Years
Amounts
Percent of
General
Restricted for
Assessed
Bonded Debt
Debt Service
Total
Value
Per Capita
(2,362,904)
111,774,308
0.24%
1,326
(2,364,034)
108,592,625
0.22%
1,279
(2,384,338)
105,266,768
0.20%
1,207
(2,362,228)
101,858,325
0.18%
1,168
(1,159,389)
99,535,611
0.16%
1,160
(2,255,795)
104,525,231
0.16%
1,217
(2,199,363)
100,499,532
0.15%
1,200
(2,183,979)
96,432,785
0.14%
1,156
(2,323,115)
92,066,518
0.12%
1,117
(2,024,393)
87,988,109
0.11 %
1,065
' Amounts include any applicable bond premium.
2 Assessed value was used because the actual value of taxable property is not readily available in the
State of California.
232
CITY OF NEWPORT BEACH
Direct and Overlapping Debt Related to Governmental Activities
June 30, 2025
City Net Assessed Valuation:
OVERLAPPING DEBT:
Metropolitan Water District
Coast Community College District
Rancho Santiago Community College District
Rancho Santiago Community College District School Facilities Improvement District No. 1
Laguna Beach Unified School District
Laguna Beach Unified School District Community Facilities District No. 98-1
Newport Mesa Unified School District
Santa Ana Unified School District
Irvine Ranch Water District Improvement Districts
Bonita Canyon Public Facilities Financing Authority Community Facilities District No. 98-1
California Statewide Community Development Authority Community Facilities District No.
2018-3
City of Newport Beach 1915 Act Bonds
Orange County Newport Coast Assessment District No. 01-1
Orange County Newport Coast Reassessment District No. 17-1 R
Orange County General Fund Obligations
Orange County Board of Education General Fund Obligations
Coast Community College District General Fund Obligations
Coast Community College District Pension Obligation Bonds
Santa Ana Unified School District General Fund Obligations
TOTAL OVERLAPPING DEBT
DIRECT DEBT:
City of Newport Beach Certificates of Participation
Leases (3)
Subscription -based Information Technology Arrangements (3)
TOTAL DIRECT DEBT
TOTAL DIRECT AND OVERLAPPING DEBT
GROSS COMBINED TOTAL DEBT (2)
Percentage
Applicable (')
$ 79,33,964,4 058
Outstanding Debt
6/30/25
Estimated Share of
Overlapping Debt
1.964%
$
17,155,000
$
336,924
35.427%
854,816,084
302,835,694
2.508%
132,145,756
3,314,216
4.720%
138,730,000
6,548,056
14.573%
7,690,000
1,120,664
100.000%
6,005,000
6,005,000
73.688%
206,519,744
152,180,269
5.819%
401,142,561
23,342,486
2.658%-
384,477,033
41,027,239
100.000%
100.000%
10,390,000
10,390,000
100.000%
8,110,000
8,110,000
100.000%
35,124,813
35,124,813
100.000%
2,944,000
2,944,000
100.000%
17,680,000
17,680,000
9.863%
429,065,000
42,318,681
9.863%
9,120,000
899,506
35.427%
660,000
233,818
35.427%
465,000
164,736
5.819%
38,301,736
2,228,778
$
2,700,541,727
$
656,804,879
100.000%
$
90,012,502
$
90,012,502
100.000%
13,066,931
13,066,931
100.000%
1,543,723
1,543,723
$
104,623,156
$
104,623,156
$ 761,428,035
761,428,035
(1)
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.
(2)
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non -bonded capital lease obligations.
(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.
Ratios to 2024-25 Net Assessed Valuation:
Total Overlapping Debt
Total Direct Debt ($104,623,156)
Gross Combined Total Debt
Source: California Municipal Statistics, Inc.
0.82%
0.13%
0.95%
233
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limit:
General obligation bonds
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
Page 1 of 2
Fiscal Year
2016 2017 2018 2019 2020
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
$ 1,777,067,629 $ 1,887,813,246 $ 2,016,758,101 $ 2,163,793,567 $ 2,277,930,246
0.0% 0.0% 0.0% 0.0% 0.0%
(continued)
NOTE:
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.
Source: City Administrative Services Department
234
Assessed valuation
Conversion percentage
Adjusted assessed valuation
Debt limit percentage
Debt limit
Total net debt applicable to limit:
General obligation bonds
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
Page 2 of 2
Fiscal Year
2021 2022 2023 2024 2025
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
$ 2,388,362,501 $ 2,496,739,897 $ 2,674,865,850 $ 2,847,376,243 $ 2,998,666,240
Source: City Administrative Services Department
0.0%
0.0%
0.0% 0.0% 0.0%
235
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236
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
CITY OF NEWPORT BEACH
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal Year
Population'(')
Personal Income
Per Capita
Unemployment
(in thousands)
Income
Rate
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
9,308,659
112,622
3.7%
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.
2 Unemployment rate represents an average of all monthly unemployment rates within a
fiscal year.
Sources:
(') 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.
(2) U.S. Census Bureau - American Community Survey 1-Year Estimates
(3) State of California, Employment Development Department
(4) HdL, Coren & Cone
238
CITY OF NEWPORT BEACH
Principal Employers'
Current Year and 9 years ago
2025
2016
Number of
Percent of Total
Number of
Percent of Total
Employer
Employees
Rank
Employment
Employees
Rank
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
' Figures reflect number of employees of employer at the time the information was collected.
2 Company listed was unable to provide employee data for 2016.
3 Tower Semiconductor was formerly Jazz Semiconductor.
Source: Data obtained from companies listed and compiled by City Administrative Services Department.
239
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240
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
CITY OF NEWPORT BEACH
Full-time City Employees by Function
Last Ten Fiscal Years
Fiscal Year
Function
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
243
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Page 1 of 2
Fiscal Year
2016
2017
2018
2019
2020
Police:
Adult Arrests
3,158
3,178
3,266
3,520
3,093
Parking Citations Issued
64,762
69,246
56,685
67,048
73,372
Fire:
Fire Responses
300
247
248
209
11,913 '
Fire Inspections
1,201
1,216
1,307
1,033
2,842
General Services:
Street Patching (tons of mix)
1,890
1,439
1,403
1,402
913
Sidewalk Repair (square feet)
27,000
20,490
22,925
14,840
11,729
Recreation & Senior Services:
Co -Sponsored Youth Organization Attendance
305,000
425,000
437,751
469,959
439,954
Senior Transportation Services
14,000
13,500
13,071
13,386
9,300
Water:
New Connections
194
229
210
210
256
Average Daily Consumption (hundred cubic feet)
11.66
13.80
14.07
13.75
13.44
Sewer:
New Connections
17
41
137
46
10
Miles of Pipe Cleaned
250
202
211
196
221
Library Services:
Library Circulation of Materials
1,575,000
1,464,640
1,424,594
1,376,041
1,084,206
(continued)
' Data varies with trend due to inclusion of responses to fires, hazardous materials, medical and other emergencies.
2 Data varies with trend due to COVID-19 restrictions in 2021.
3 Data varies with trend due to COVID-19 restrictions being lifted in 2022.
Source: City of Newport Beach
244
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Page 2 of 2
Fiscal Year
2021
2022
2023
2024
2025
Police:
Adult Arrests
2,872
2,650
2,800
2,615
3,259
Parking Citations Issued
86,439
83,307
85,003
86,002
76,012
Fire:
Fire Responses
12,204
13,251
13,486
13,493
13,994
Fire Inspections
475 2
3,015
3 2,807
2,824
3,312
General Services:
Street Patching (tons of mix)
920
901
903
739
1,016
Sidewalk Repair (square feet)
7,805
13,590
12,885
16,069
12,368
Recreation & Senior Services:
Co -Sponsored Youth Organization Attendance
455,442
392,605
454,418
527,754
502,722
Senior Transportation Services
6,287
8,805
10,048
10,190
10,599
Water:
New Connections
160
252
184
176
160
Average Daily Consumption (hundred cubic feet)
14.87
14.28
11.06
10.77
11.89
Sewer:
New Connections
25
3
12
9
13
Miles of Pipe Cleaned
240
209
178
192
230
Library Services:
Library Circulation of Materials
1,043,629
1,195,151
1,172,951
1,213,486
1,213,252
Source: City of Newport Beach
245
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
Page 1 of 2
Fiscal Year
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
246
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
Page 2 of 2
Police:
Stations
Fire:
Fire Stations
Lifeguard Headquarters
Public works:
Streets (miles)
Streetlights
Traffic Signals
Recreation & Senior Services:
Parks
Community Centers (includes leased property)
Aquatic Center
Water:
Water Mains (miles)
Maximum Daily Capacity (thousands of gallons)
Wastewater:
Sanitary Sewers (miles)
Storm Sewers (miles)
Library Services:
Libraries
Source: City of Newport Beach
Fiscal Year
2021
2022
2023
2024
2025
1
1
1
1
1
8
8
8
8
8
1
1
1
1
1
400
400
401
399
399
5,973
5,974
5,974
5,974
5,974
808
808
808
808
808
65
66
66
66
66
15
14
14
15
15
1
1
1
1
1
301.23
301.13
301.48
301.39
301.01
27,800
27,800
27,800
27,800
27,800
204.13
204.30
204.72
204.81
204.81
96.18
97.37
97.81
104.28
105.81
4 4 4 4 4
247
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
Page 1 of 2
Fiscal Year
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
(continued)
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
248
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
Page 2 of 2
Fiscal Year
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
249
CITY OF NEWPORT BEACH
Utility Rates'
Last Ten Fiscal Years
Fiscal Year
Ended June
Monthly
Rate per
30
Base Rate
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
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.
Source: City Revenue Division
250
Water Customer
Irvine Company Apartment
Irvine Company Office
Hoag Memorial Hospital
Newport Beach Country Club
Big Canyon Country Club
UDR Newport Beach
Bluffs Homeowners Association
Newport -Mesa Unified School District
Park Newport Ltd
Irvine Company LLC
Newport Dunes Resort
Jasmine Creek Community Association
Spyglass Hill Community Association
Villa Balboa Community Association
One Ford Road Community Association
CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Nine Years Ago
2025
2016
Percent of Total
Percent of Total
Water Charges
Rank
Water Revenues
Water Charges
Rank
Water Revenues
$ 878,950
1
2.11%
$ 320,311
1
1.29%
731,541
2
1.75%
356,057
1
1.43%
525,140
3
1.26%
285,276
2
1.15%
472,025
4
1.13%
168,306
6
0.68%
429,437
5
1.03%
217,509
5
0.88%
364,956
6
0.87%
243,261
3
0.98%
363,672
9
0.87%
156,211
8
0.63%
347,777
7
0.83%
152,434
9
0.61 %
324,952
11
0.78%
230,698
4
0.93%
294,126
8
0.70%
140,771
10
0.57%
195,847
12
0.47%
88,257
20
0.36%
176,743
10
0.42%
95,766
16
0.39%
170,418
13
0.41 %
112,756
11
0.45%
164,010
14
0.39%
111,351
12
0.45%
162,498
15
0.39%
94,645
17
0.38%
$ 5,602,092
13.42%
$ 2,773,609
11.18%
Company listed operated under The Irvine Company in 2016.
Source: City Revenue Division
251
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City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
(949) 644-3123
www.newportbeachca.gov/acfr
Attachment B
Auditors' Required Communications with the Audit Committee
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
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
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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:
2
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
• 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.
3
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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.
r�{f L!
Irvine, California
January 28, 2026
0
Attachment C
Auditors' Required on Internal Control Over Financial Reporting and
on Compliance Matters
DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 1 Irvine, CA 92612
Main: 949.474.2020 1 Fax: 949.263.5520
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.
The Honorable Mayor and
Members of the City Council
City of Newport Beach
Newport Beach, California
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.
LLe�t "�r�
Irvine, California
January 28, 2026
2