HomeMy WebLinkAbout2013-42 - Adopting Revised City Council PoliciesRESOLUTION NO. 2013-42
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NEWPORT BEACH
ADOPTING REVISED CITY COUNCIL POLICIES
WHEREAS, the City of Newport Beach is governed, in part, by its Charter,
Municipal Code and adopted City Council Policies;
WHEREAS, City Council Policy D -3 requires that the City Manager annually
review the Council Policy Manual for any needed additions, changes or deletions;
WHEREAS, the City Manager recently completed his review of the Council Policy
Manual and recommends revising various City Council Policies as shown in the revised
redline policies attached to this resolution, and incorporated by reference herein (Exhibit
1); and
WHEREAS, the City Manager's proposed revisions bring the City Council Policies
into conformity with recent amendments to the Charter, promote efficiencies, and
update agenda posing locations resulting from the move into the new Civic Center,
among others
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
Section 1: The Qty Council hereby amends the various City Council Policies as
shown in Exhibit 1.
Section 2: All prior versions of the City Council Policies that are in conflict with
the revisions adopted by this resolution are hereby repealed.
Section 3: If any section, subsection, sentence, clause or phrase of this
resolution is for any reason held to be invalid or unconstitutional, such decision shall not
affect the validity or constitutionality of the remaining portions of this resolution. The
City Council hereby declares that it would have passed this resolution and each section,
subsection, clause or phrase hereof, irrespective of the fact that any one or more
sections, subsections, sentences, clauses and phrases be declared unconstitutional.
Section 4: The recitals provided in this resolution are true and correct and are
incorporated into the substantive portion of this resolution.
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Section 5: Except as expressly modified in this resolution, all other City
Council Policies, sections, subsections, terms, clauses and phrases set forth in the
Council Policy Manual shall remain unchanged and shall be in full force and effect.
Section 6: The City Council find the adoption of this resolution and the
amendment of the specified City Council Policies 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.
Section 7: This resolution shall take effect immediately upon its adoption by
the City Council, and the City Clerk shall certify the vote adopting this resolution.
ADOPTED this 14�t day of May, 2013.
ATTEST:
09W - !M)
Leilani I, Brow— P -
City Clerk
,'' ,
Keith D. Curry,
Mayor
Attachment: Exhibit 1 - Redline Draft of Revised City Council Policies
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REQUESTS FOR RESEARCH OR INFORMATION
PURPOSE
A -3 (New)
Like most California cities, the City of Newport Beach is a City Council -City Manager form of
government. The City Council appoints a City Manager to implement policy, to ensure laws are
enforced, to direct the daily operations of city government, and to prepare and monitor the
municipal budget. Because Council Policy is implemented on a daily basis through City staff, it
is critical that the relationship between the City Council and City staff be well understood by all
parties so that policies and programs may be implemented successfully.
Charter Section 406 (Interference in Administrative Service) reinforces this relationship — it
reads as follows:
Neither the City Council nor any of its members shall interfere with the execution by the City
Manager of his or her powers and duties, or order, directly or indirectly, the appointment by the
City Manager or by any of the department heads in the administrative service of the City, of any
person to an of lce or employment or his or her removal therefrom. Except for the purpose of
inquiry, the City Council and its members shall deal with the administrative service under the
City Manager solely through the City Manager and neither the City Council nor any member
thereof shall give orders to any subordinates of the City Manager, either publicly or privately.
The purpose of this Council. Policy is to further guide the implementation of Charter Section 406
so that the long tradition of positive relationships between members of the City Council and City
staff is maintained.
POLICY
A. General. Interactions with City Staff: The City Manager, City Attorney, and City Clerk
are appointed directly by the City Council to provide executive, administrative and legal
services. In many cases, the City Manager encourages direct contact with department directors
within this Policy's guidelines, thus enabling the Council Member to get appropriate information
quickly and easily. When interacting with City staff, Council Members should keep in mind the
work of City staff on current projects, assignments and City Council priorities before requesting
action or detailed information because these requests may take staff time away from this work.
B. Requests for Information or Research:
I. For new issues, actions, or research proposed by a Council Member which require approval
by the City Council, Council Members will follow Council Policy A -6.
A -3 (New)
2. For issues or actions that have been previously approved by the City Council, or which do
not require City Council approval, Council Members will, depending on the nature of the
request, route the request for information or research through the City Manager, City
Attorney, or City Clerk. It shall be the responsibility of the City Manager, City Attorney, or
City Clerk to promptly respond as to their recommended disposition of the request. Upon
authorization by the City Manager, City Attorney, or City Clerk, the Council Member may
communicate directly with other city staff members (such as department directors) or City
consultants.
3. Council Members' contact with City staff or City consultants, other than City Council
appointees, is limited to asking questions and obtaining information and not giving direction
or assignments.
4. If a Council Member's request is expected to take more than thirty (30) minutes (or in the
case of a request from the Mayor, two hours) to research, gather information, report on or
otherwise respond to any inquiry, the City Manager, City Attorney, or City Clerk shall ask
that the Council Member or Mayor place the request on the agenda for formal Council action
per Council Policy A -6 before the staff spends time or resources on the request.
Adopted i41ay 14, 2013
OPEN MEETING POLICIES
PURPOSE
A -6
The Newport Beach City Council and certain Boards, Commissions and Committees are
required to comply with the Ralph M. Brown Act (Brown Act). The Brown Act requires
public entities to deliberate and take action, in open session. The City Council has adopted
these rules to ensure compliance with the Brown Act and to promote full citizen participation
in the discussions and decisions of their elected and appointed representatives.
POLICY
A. Regular Meetings. The City Council shall hold regular meetings on the second and
fourth Tuesdays of each month except in December and August when there shall be at
least one regular meeting held on the second Tuesday. The meetings shall be held in a
location allowed by the Charter. The regular meeting shall 'begin at 4.00 p.m., or as
otherwise scheduled due to the demand of business, for Study Session, Closed Session
to follow immediately thereafter, recess after Closed Session, and reconvene at
7:00 p.m. or as otherwise scheduled due to the demand of business. The December
meeting of evert- numbered years shall begin at 4:00 p.m., or as otherwise scheduled
due to the demand of business, without reconvening at 7:00 p.m.
The City Councii may hold a regular meeting, special meeting, or adjourned regular or
special meeting at another location within the Citv, or locations outside the
jurisdiction of the City provided appropriate notice is given pursuant to, and the
location of the meeting is consistent with, the Brown Act. When the day for any
regular meeting falls on a legal holiday, no meeting shall be held on such holiday, but
a regular meeting shall. be held at the same hours on the following business day.
B. All regular, special and adjourned meetings of the City Council, Boards, Commissions,
and Committees created by the Charter or formal action of the City Council and which
have continuing subject matter jurisdiction shall be called, noticed and conducted in
compliance with the Brown Act.
C. Regular City Council Meeting Agenda.
7. Staff shall provide the City Clerk with the title and recommendation of all items
to be placed on a regular Council meeting agenda no later than
5:00 p.m. two Fridays before the next regular City Council meeting. The City
Clerk shall prepare the regular meeting agenda of all such matters under the
direction of the City Manager. This agenda shall be deliv-e�provided to the
City Council Members on the "Thursday preceding the Tuesday Council
meeting to which it pertains.
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The agenda and staff reports will be available for the public and media in the
Office of the City Clerk and shall be posted on the City's public website no later
than 3:30 p.m. on the Friday preceding the meeting.
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32. The regular meeting agenda shall contain a brief description of each item of
business to be transacted or discussed and a statement that members of the
public may offer testimony as to any matter on the agenda and may speak on
non - agenda items during the public comment section of the agenda. The
agenda shall be posted on the City's website, as well as at the entrance to the
City Council Chambersb lleti b0al.a ^ ° ^:a^ t ,,-1,in-entrance e'er— r f'- }° 11-11
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least 72 hours before each regular meeting, and the City Clerk shall maintain
records of the name of the person posting the agenda, and the date and time of
posting.
3. Items ma- be placed on a City Council agenda in the following manner:
A. of the City Ceia w will A Council Member
may during the Council meeting that a matter be s`C2ed-ulcu Cacd—fv%—a
m..,.t a fld Or- ,7:,-n, .. a.. r es ;.,,> the ..,tea- �-.,,- h,. - I-eell ..,� a'h„
ax. ^L=cc..zca -c cnc x. �ccrcc.x a�irzrzccI eR- he
agenda for action brought to the City Council at a future meeting. The
matter will be brought back at the next Council meeting (if possible). At
that Council meeting, if a majority of the City Council wishes to examine
the issue, staff will prepare an appropriate report and return in the item
to the Citv Council with r, eater° detail for discussion and /or action.
p'lace~a «... tte F..+,+,.,. �.... , —1- b -5-1 _-WOR Witbe tt
B. In addition to the above, the Mavor may ask the Citv Manager to place
an item on the Council's agenda outside of a Council meeting. If so, the
matter will be brought back at the next Council meeting (if possible). At
that Council meeting, if a majority of the Council wishes to examine the
issue, the staff will prepare an appropriate report and return the item to
the City Council with greater detail for discussion and /or action.
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C. The City Manager may place an item on the agenda in the course of
berating the City.
CLOSED SESSION AGENDA
The eCoosed sSession agenda shall be prepared by the City Attorney. The dosed session
agenda shall strictly conform to the format specified in the Brown Act. The City Attorney
shall prepare a written report, or give an oral report, of any action taken in closed session that
is required to be reported in open session by the Brown Act.
COUNCIL CORRESPONDENCE
The City Clerk is authorized to open and examine all mail or other written communications
addressed to the City Council and to immediately give a copy to the City Manager. The City
Manager shall give immediate attention to administrative business referred to in the
communication that does not require Council action and may be promptly concluded or shall
prepare a staff report for the next available Council meeting. Except as otherwise permitted
by law, all mail or written communications from the public /residents /applicants shall be
submitted to the City Council by 5:00 p.m. on the Monday immediately prior to the meeting
at which the City Council will consider the item that is the subject of the mail or written
communications to allow time for the City Council to adequately consider the mail or written
communications.
ORDER OF BUSINESS
The agenda for regular meetings of the City Council shall contain the following items in the
order listed:
Study Session
Public Comments, including public comments about items on the Closed Session
agenda.
Closed Session - After Study Session - Council Chambers Conference Room
Recess
Reconvene at 7:00 p.m. for Regular Meeting
Roll Call
Closed Session Report
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Pledge of Allegiance
Invocation
Presentations
Notice to the Public
City Council Announcements or Matters Which Council Members Would Like Placed
on a Future Agenda 'or isc (Non- discussion Item)
Public Comments on Consent Calendar
Consent Calendar:
A. Reading of Minutes/Ordinances and Resolutions
B. Ordinances for Introduction
C. Ordinances .for Adoption
D. Resolutions for Adoption
E. Contracts and Agreements
F. Miscellaneous (for example, Planning Commission Agendas, budget
amendments, and permit applications)
Items Removed from the Consent Calendar
Public Comments on Non-Agenda Items
Oral Reports from City Council on Committee Activities
Public Hearings
Continued Business
Current Business
Motions for Reconsideration
Continued Closed Session, if necessary (report if applicable)
Adjournment
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The order of business shall not be changed except by majority vote of the City Council.
PREPARATION OF MINUTES
The City Clerk shall have the exclusive responsibility for preparation of the minutes, and any
directions for changes in the minutes shall be made only by majority action of the City
Council.
READING OF MINUTES
Unless the reading of the minutes of a Council meeting is ordered by a majority vote of the
Council, such minutes may be approved without reading if the City Clerk previously
furnished each Council Member and the public binder and website with a copy.
Adopted - November 13,1967
Amended - March 28,1994
Amended - June 13,1977
Amended - June 27,1994
Amended - October 25, 1977
Amended - December 12,1994
Amended - February 9,1981
Amended - February 26,1996
Amended - December 9,1996
Amended - May 26,1998
Amended - November 8,1999 (ef£.1/1 /2Q00)
Amended - March 14, 2000
Amended - February 27, 2001
Amended - March 27, 2001
Amended - August 28, 2001
Amended - January 27, 2004
Amended - March 9, 2004
Amended - March 28, 2006
Amended - February 26, 2008
Amended - October 27, 2009
Amended - December 6, 2010
Amended - February 22, 2011
Amended - November 27, 2012
Amended - January 8, 2013
Amended - May 14, 2013
PARK FEE POLICY
PURPOSE
W
The City of Newport Beach maintains an extensive park and open space system. The
acquisition and development of our park and open space properties is funded, in part,
through the payment of park fees paid by persons or entities who subdivide properties.
The Subdivision Map Act requires park fees to be used only for the purpose of
developing new or rehabilitating existing neighborhood or community park or
recreational facilities to serve the subdivision that paid the fees. The City is required to
develop a schedule specifying how, when and where the park fees will be used. The
purpose of this Policy is to establish the criteria to be used in deciding which facilities
serve subdivision residents and schedule whereby park fees are properly and timely
committed to appropriate projects,
POLICY
A, Service Criteria.
The Recreation and Open Space Element of the General Plan states that
community parks and view parks serve the entire City. Community parks are
those with improvements such as community buildings, parking, swimming,
facilities for picnicking, active sports and other facilities that serve a larger
population. Neighborhood parks which include unique recreational facilities,
such as basketball courts, tennis courts, turf areas, active sports fields,
community buildings, unique play areas or view parks are also considered City-
wide resources used by all citizens. Accordingly, park fees generated by any
subdivision within the City may be used to develop new or rehabilitate existing
community parks, view parks, and those neighborhood parks listed on
Exhibit A.
The Recreation and Open Space Element divides the City into 11 service areas
consisting of relatively discrete residential communities. These service areas
were created for the purpose of determining whether particular geographical
areas were deficient in terms of park and recreational facilities and to identify
acquisitions or improvements which would provide residents with greater
recreational opportunities. Accordingly, park fees generated by a subdivision
within any services are may be used to create new, or rehabilitate, existing park
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or recreational facilities within that services area and as provided in the
Recreation and Open Space Element..
B. Implementation Schedule.
Park fees shall be placed in the G�na Facilities Financial Planning
Reserve Fund immediately upon receipt with a special designation as Park Fees.
"These funds, after special designation, shall be used solely for the acquisition or
establishment of new, or the rehabilitation of existing, park, open space and
recreational facilities. The park fees shall also 'be placed on a schedule that lists
the location of the subdivision, the fees paid, the date on which the fees were
paid or the date on which building permits had been issued for 1/2 of the lots
created by the subdivision (whichever occurs later), the service area within
which the subdivision is located, the neighborhood park, recreation and open
space facilities eligible for park fees generated by that subdivision, the date on
which the park fees must be committed to specific project of improvements. The
park fees shall be used only for the park and recreation facilities identified in the
Recreation and Open Space Element and shall be utilized in accordance with the
policies and standards specified in the General Plan. Designations for
expenditures will be made as part of the annual budget adoption.
[Attachment - Exhibit A]
Adopted- June 27,1994
Amended - April 23, 2002
Amended and Reassigned - April 8, 2003
Amended - April 13, 2004
Amended - September 13, 2005
Amended - August 11, 2009
Amended - 2013
Formerly I -1
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EXHIBIT A
PARK DEDICATION POLICY
PARKS GUIDE
RM
The following view parks serve as citywide resources by reason of their unusual beauty
and the view provided:
Back Bay View Park
Bayview Park
Begonia Park
Channel Place Park
Civic Center Park
Cliff Drive Park
Corona del Mar State Beach Park
Ensign View Park
Galaxv View Park
I.nspiration Point
Irvine Terrace Park
Castaways Park
Jasmine View Park
Kings Road Park
Lido Park
Lookout Point
Newport Island Park
Peninsula Park
Rhine Wharf Park
West Jetty View Park
Westcliff Park
The following Community and Neighborhood Parks serve as citywide resources by
reason of the unique recreational opportunities they offer:
Arroyo Park - Lighted multi - purpose field, basketball court, picnic areas and
playground.
Bonita Canyon Sports Park - Pour youth baseball fields, one multi- purpose field,
one soccer field, tennis courts, basketball court, 2 playgrounds and connecting
trail to Arroyo Park.
Bonita Creek Park - Community center, lighted softball and multi - purpose field,
and basketball court.
Buffalo Hills Park - Basketball court, baseball/ softball diamond, volleyball court,
multi - purpose fields.
Carroll Beek Community Center and Balboa Island Park - Basketball court, tot
playground and community center.
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Coastal Peak Park - Two baseball fields, playground, two picnic pavilions and
basketball court.
Community Youth Center / Grant Howald Park - Basketball court, tennis courts,
community center, softball and multi- purpose field.
Bastbluff Park - Baseball diamond, multi - purpose field, and view of the Back
Bay.
Harbor View Nature Park - Natural vegetation area.
Las Arenas Park - Lighted tennis courts, basketball court and community center.
Lincoln Athletic Center - Gymnasium, lighted baseball /softball diamond and
multi- purpose fields.
Marina Park - Community center, sailing center, picnic area, playground.{
basketball courts and fitness course.
Mariners Park - Multi- purpose room, baseball/ softball facilities, racquetball
courts, lighted tennis courts, multi - purpose fields, and an ADA equipped play
area.
OASIS Senior Center - Multi - purpose senior facility with classrooms and large
multi- purpose room.
Peninsula Park - Beach sited multi - purpose field, playground (ADA compliant),
picnic and barbecue facilities, baseball/ softball diamond and gazebo.
San Joaquin Hills Park - Tennis courts, pentanque courts and lawn bowling
facility.
San Miguel Park - Ball diamond; athletic field, four racquetball courts, basketball
court and an ADA equipped play area.
Sunset Ridge Park - Baseball field, soccer field, butterfly garden and playground.
Theater Arts Center - Ninety seat community theater.
West Newport Park - Tennis courts, racquetball courts, basketball court, and 3
playgrounds.
38th Street Park - Basketball courts and playground (ADA compliant).
In
PUBLIC USE OF CITY FACILITIES
PURPOSE
B -13
City of Newport Beach (City) facilities, which include parks, playing fields,
gymnasiums, community rooms and swimming pools, are available to the public for
civic, social, educational, athletic, cultural activities and limited commercial use. It is the
intent of this Policy to provide use regulations and application and scheduling
procedures to accommodate groups that wish to use City facilities.
PROCEDURE
A. Applications to use the City facilities must be made on forms provided by the
Recreation and Senior Services Department (Department). Applicants must
provide all information as may be required by the Department to assure
compliance with the requirements and regulations of this Policy.
B. Applicants will be required to pay a security deposit in an amount that will
promote use of the Recreation and Senior Services facilities in an orderly manner
without damage to the facilities. Security deposits will be refunded upon
inspection of facilities and confirmation that no property damage has occurred or
additional cle m up is required.
C. Applicants will be required to acknowledge that neither the City nor the
Department assumes any liability for injury or loss of personal property. Prior to
the use of the facility, the application must have approval of the Recreation and
Senior Services Director or designated representative.
D. Approval of denial of a reservation request will be provided within five working
days of receipt of a completed application.
E. Reservations for use of Department facilities may be made up to six months in
advance, but no later than ten working days before the event with the exception
of park reservations which may be made no later than five working days before
the event.
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R The City is not liable for any and all accidental injury to any and all persons or
loss or damage to group or individual property. When it is deemed to be in the
best interest of the general public, the City will require the permittee to furnish a
Certificate of Insurance naming the City of Newport Beach as an additional
insured. The amount of the insurance shall not be less than $1,000,000 per
occurrence of commercial general liability insurance.
G. A contract shall not be transferred, assigned or sublet, All contracts will be issued
for specific facilities and for specific hours, and the premises must be vacated as
scheduled.
H. The reservation request and rental agreement must be completed and signed by
an adult age 21 and over who will attend, supervise and be responsible for the
entire event or activities. Proof of residency is required at the time of application
in order to receive the resident rate. Proof of non - profit status is required at the
time of application in order to receive the non - profit rate.
1. A Facility Use Agreement which authorizes the rental of facilities may be
revoked for violation of any rental policies.
REGULATIONS AND RESTRICTIONS
All uses of Department facilities will be subject to the following regulations and
restrictions:
A. Use of Alcohol.
1. Alcoholic beverages are prohibited and shall not be permitted in or on any
municipal facilities operated by the Department, except beer and wine
may be served for special occasions at the OASIS Senior Center, Newport
Theatre Arts Center (NTAC), and— Newport Coast Community Center
(NCCC ),-Civic Center Community Room (CCCR), and Marina Park when
done in compliance with State of California Department of Alcoholic
Beverage Control (ABC) regulations and approved in writing by the
Recreation and Senior Services Director. Approval to serve beer and wine
shall not be deemed to approve service of alcohol in violation of Section
25604 of the Business and Professions Code. The Recreation and Senior
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Services Director will require the pern-dttee to pay City costs to provide
additional security when alcohol is served.
2. The use of alcoholic beverages is by written permission only and must be
requested at the time the facility use request is submitted. The Department
reserves the right to place restrictions on the use of alcoholic beverages in
accordance with State Law and these guidelines. "Alcohol use" means the
presence of any beverage that contains any amount of alcohol.
3. Alcohol is not allowed when an event is designated for minors such as
school age award programs, birthday parties and/or receptions.
4. When alcohol is served, there shall be a minimum of two security guards
present at the facility at all times. The guards must arrive 30 minutes
before guest arrival time and remain until the contract end time. One
guard must be positioned at the entrance of the event and one guard
positioned in the event area. The parking lot must be monitored every 30
minutes. The security guards shall have the authority to enforce all rules
and regulations governing facility rentals. In the event that the Police are
called, the cost of their services shall be deducted from the applicant's
security deposit. The applicant will be billed for any costs exceeding the
security deposit.
S. No alcoholic beverage shalt be served to any person less than 21 years of
age. Injuries caused to any person as a result of alcoholic beverages being
served to or consumed by someone under the age of 21 while on the City's
premises, shall be the sole responsibility of the organization or individual
renting the facility.
6. The distribution or consumption of alcoholic beverages shall be in
compliance with all applicable laws, including regulations of the ABC.
Any organization using City facilities shall be solely responsible for
obtaining all permits or licenses relating to the distribution and
consumption of alcoholic beverages on the premises.
T Alcohol may only be served by an adult 21 years of age or older. If
evidence is found that alcohol is being served that was not authorized by
the Department or to a minor the Police will be notified and the event will
be terminated and all fees and deposits will be forfeited.
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8. The City shall require the applicant to carry general liability insurance
when alcohol is available, but not sold. The City shall require a full liquor
liability premium in addition to general liability insurance when alcohol is
sold in exchange for money. The cost of the required liability insurance
shall be borne by the applicant.
B. Smoking is prohibited in all City facilities including restrooms and within 25 feet
of all entrances, windows, and playgrounds.
C. For all indoor facility rentals involving youth, 27 years and under, there shall be
at least one adult for every 20 minors, or increments thereof, in attendance, who
shall remain in. the facility for the duration of the activity.
D. No group's activities shall interfere with the administration of the Department.
E. Non - profit 502 (c) (3) groups may use the facility for fundraising activities and
charge entrancce fees and collect donations provided that a detailed plan of the
event, including the expenses, marketing plan and procedure for collecting fees,
is submitted with the rental application.
F. Facilities and equipment are to be left in the same condition as they were prior to
the rental. The permittee is responsible to pay for any damage to property or loss
of property. A fee equal to total replacement cost will be charged. It shall be the
responsibility of the permittee to see that unauthorized portions of the facility are
not used. Continued or repeated use of City facilities will be contingent upon
care of the facility, property and equipment, and observance of all approved
rules and regulations.
G. No gambling of any kind shall be conducted on, or in, City facilities, and the
permittee shall insure that no disorderly or illegal conduct shall be allowed in
any facility.
H. The use of public address equipment will be limited to that provided by the
facility, unless written approval has been secured by the Department through a
Special Event Permit.
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L Private groups wishing to collect fees, donations or admission charges, or those
using the facility to market a product, give a presentation, or advertise their
business, will be considered commercial users.
J, The posted occupancy of City facilities shall not be exceeded.
K. Storage space will not be granted at anytime.
L. Facilities are not available for reservations on the following holidays: Christmas
Eve, Christmas Day, Easter, President's Day, Independence Day, Labor Day,
Martin Luther King Day, Memorial Day, New Year's Eve, New Year's Day,
Thanksgiving and Veteran's Day,
M. All persons using the facilities shall observe and obey regulations of this policy,
the rules of the Department and all applicable City, State and Federal laws, rules
and regulations.
N. Vehicles are not permitted on park grass or fields. Parking is permitted in
designated spaces.
O. Minors must remain in the rented facility room and shall not be allowed to roam
unsupervised throughout the facility.
FEE CLASSIFICATIONS - PRIORITIES OF USE
Permission for use of City facilities shall be granted on a first come first served basis,
subject to the following priorities:
A. All official Department initiated and/or conducted activities, including those of
the Friends of OASIS at the OASIS Senior Center, and exemptions noted in City
Council Policies B -5 and B -10.
B. All official City of Newport Beach activities.
C. All official City co- sponsored groups and /or activities such as community
groups and activities which are non - profit, self governing, privately organized
and of an educational nature which may be brought under the sponsorship of the
Department.
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D. Official public agency sponsored programs and activities not included in A, B,
and C above.
E. Youth Sports Commission Member Organizations.
F. Resident non - profit youth serving organizations with 50°% or more of
membership consisting of Newport Beach residents.
G. Recreational, social or civic activities of groups which are resident promoted and
sponsored by local non - profit* organizations which are open to the public and
have 50% or more of memberships consisting of Newport Beach residents.
H. Recreational or social activities of private Newport Beach residents which are not
open to the public. (private parties)
I. Recreational, social or civic activities and/or groups which are non - resident
promoted and sponsored by non - profit organizations which are open to the
public, but nst qualifying under D above.
J. Schools, colkr es, hospitals and other similar civic groups not qualifying under
the definition: of non- profit.
K. Others.
* Non - profit status is defined as an organization that is so defined by the Internal Revenue
Service, § 501(c) (3) and has a State of California 'Tax Identification Number.
FEES, DEPOSITS AND CANCELLATION PROCEDURES
Fees may be charged for the use of City facilities and shall be established and
periodically adjusted and approved by the City Council. Fees are imposed to cover
overhead, processing, deposits, maintenance and replacement costs for application and
scheduling and maintenance of the facilities.
A. A security deposit will be required for all room rentals. All or a portion of the
deposit may be retained by the Department after inspection of the facility by the
Recreation and Senior Services Director or a designated representative and a
determination that the facility has not been left clean and/or in good repair.
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B. A separate additional cleaning fee will be charged for rental of the OASIS Event
Center, Newport Coast Community Center- aar-d- Community Youth Center,
Civic Center Community Room, and Marina Park.
C. No fee or deposit shall be charged for use of City facilities by the City of
Newport Beach, or events co- sponsored by the City of Newport Beach or its
departments, with the exception of set -up charges.
D. Cancellations for any facility other than the OASIS Event Center, Newport Coast
Community Center -an4- Community Youth Center, Civic Center Community
Room and Marina Park —may occur seventy -two hours prior to the scheduled
use of facilities without forfeiting fees collected by the City, with exception of a
City service refund processing fee. Cancellations with less than seventy -two
hours notice will be charged a cancellation fee established by resolution of the
City Council. In the event of cancellation by the City, notice will be given as far
in advance of the scheduled use as possible.
E. Cancellation of rentals by users for the OASIS Event Center, Newport Coast
Community Center.-and- Community Youth Center, Civic Center.Community
Rom and I - 'farina Park that occur less than thirty days prior to the scheduled
use of the facility will be charged 25% of the rental fee. Cancellations with less
than seventy -two hours notice will be charged the entire rental fee.
Adopted - May 26,1998
Amended - May 8, 2001
Amended - April 23, 2002
Amended and Reassigned - April 8, 2003
Amended - July 22, 2003
Amended - September 13, 2005
Amended - October 10, 2006
Amended - August 11, 2009
Formerly 1 -25
9
D -4
PURPOSE
To establish a method for employees to submit suggestions of,,,-to improveing City
business practices. The objective of the program is to achieve efficiencies in City
operations by providing employees an opportunity and incentive to contribute their
ideas. Ideas resulting in measurable cost savings, increased efficiency or increased
revenue to the City will be given priority over intangible sup estions. T4 m
ct, ^12 F.., .,., +. +t.,.d it«. „7,,..,,, A..�.,
POLICY
Review Committer' °t ^ ^i^^+ieffa ' ucture: The City Manager's Office shall designate
an Innovation Im rovement Incentive Program coordinator in addition to a five
member review committee made up of three members of the management team; and
one standing advisory member from both the City_ Manager's Office and Finance
Department. The review board , all be - ��^bli^T� —will review each idea
submitted. The review v-H. be---,--' -cuir^n x, -aaa„ 4 1---
. - 1- izc p v
--- - -- - ��-' -'-'_
Cite Manager The C.+., Man
t $- 2- :rte =- — — - crrc-c ----
t{3'ru'e %fie -ciS- 4T[ertrG.. ......... .... �� . .
c pr + r iu=fi a F Nt ,air,. , +i., review beard.
Application Period Employee suggestions will be accepted by the
Innovation/Improvement Incentive Program coordinator year-round.
Submittal and Review Procedure. Employee suggestions must be submitted to the
• appFeved mu A 'emInnovation/ Improvement Incentive
acknowledged Program coordinator.
will be .+ + Improvement
11
FIM,
Incentive Program Committee eoerdinater ^' ^" ' ^�owill forward a copy of the lPE
f eff i,+- any approved idea to the appropriate department(s) for evaluation. R-*fll-be-the
respoRsibi4ity ef ' .at A 4
I -ePar�..ent to assigR oHe or- more
to investigate eae sub.—mitte A :A
idea. After review by the affected department(s), a
written response signed by the department director shall be returned to the IDEA
Innovation /Improvement Incentive Program Committee eoerdinato with a
recomrnendation--to-ac� pt, F Allell— :
mplementa"on, The affected department(s)
shall provide a summary of_ On Weas recommended
projected cost or operational benefit to the City and
prepaFe a su ar-y for p sen. a+ -Matienfor suggestions
recommended for adoption. The fev4ew-boardcomrnittee will make a determination to
adopt, reject or defer the matter for further investigation.
The decision` of the rev4ew-4oaf4committee shall be communicated directly to the
emFloyee. 4etEef--4-re@egi�'isAon fer a.. ideas w-411 be fervy'arded to 4--- d--p--'--.en4:
I the committee ad-opj�. the U�
pilot .stud~ -1nav b,1 conducted to determine the actual savings/revenue or cost
avoidance.
Emplovee Award Eli6bilitv-. All current City of Newport Beach full time and part time
employees, actively in the workplace, are eligible to receive awards with the exception
of Department Directors, AdFnin4sLTahve Manager-smembers of the City_ Council
members of appointed advisory boards or commissions, and members of the
MUM
Subject Matter Eligjhi4jyT All areas of activity within the City of Newport Beach are
eligible for IDE 4- Innovation /Improvement Incentive Program submission with the
following exceptions:
A. Personnel grievances
2
D -4
B. Matters within the scope of collective bargaining
C. Suggestions awarded in the prior three ors
D. Matters that are a result of assigned or contracted audits, studies surveys
review, or other research projects
E. Enforcement of existing federal, state, or local rules regulations and laws
including printed City policies, rules and procedures
F. Recommendations for purchase or replacement of parts from a different source
at a lesser price
G. Suggestions that would result in increased fees or costs to the City of Newport
Beach residents
H. Matters which are considered part of the normal job duties of the employee
Time Period Eligibility: Any employee who submits an- videaa suggestion retains the
right to any award during the period of time that the i4ea— suggestion is being
evaluated, plus an additional twelve months from the date of notification that the idea
was rejected or deferred for further investigation. ^ oy an s
i�- cwcrve
I}_4
Criteria for jud ing Suggestion& leas- 5gZgestions that result in one of the following
outcomes will have the greatest ehimee- likelihood of adoption:
A. Measurable Cost Savings
B. n =ire ^mod ewe hemp Improved Customer Service
C. Increased Efficiency
D. Improved Work Environment
E. Improved Safety and Health
F. Increased Employee Morale
IDEA- Awards: If an- itleaa sug eg_ stion is adopted, the amount of the award will depend
on whether the idea is one which results in tangible or intangible savings as determined
by thedcommittee. Tangible ,d ^;
value. i,.k..,,gible ;deal de not rns le Pe -a measurab ..,. --l—, -4 �.,.. +L..,
We andy €in ^ ^ ^; ^' mae, + a^„ + t^ d— Ideas Suggestions involving working
conditions, employee morale, customer service or safety may fall in the
intangible category.
year's "'--af Awards are given for
4
D-4
implemented suggestions for which monetary savings can be precisely determined.
Cost avoidance awards are given for suggestions that are implemented that reduce time
required for an existing process or avoid future cost increases without reducing current
level of service. The amount of these awards is 1 % of savings or avoided costs capped at
1000.00."1, FRaXimum awaF,4 C,,,. y r ;nm idea nk n be $10,000.00.
,000.00.
Intangible Suggestionldeas: Awards are given for suggestions implemented which
improve customer service, working conditions, result in a chance in procedures,
revision of forms, or improvement in employee morale, health or safety. Ra^rthe
ffill extent f s,,, e.—Itat.an a ci .,cc ..t tt.„ ...,t;.,., The minimum
award for these sug estions isof- $94-50 and- -with a maximum not to exceedef $388
500 VAIF -via wed.
Group Suggestion Tomas Awards for aff4deaa s estion presented by a group of
employees shall be determined on the same basis as if the idea - suggestion had been
submitted by one employee. The amount of the award shall be equally divided among
those employees submitting the ideasug esg tion.
Special Awards The City Manager, upon recommendation of the
Innovation /Improvement Incentive Program Committee, may determine a special
award for a submitted suggestion. Special awards will be considered only for unusual
suggestions that result in superior savings, and /or innovative safety or customer
service improvements.
i _ a
board will e TSa.TJrSC RTtVS�i3"1P1
fifkal
deCfJIenr
5
D -4
Decision of the City Shall Be Final: The decision by the T' =cam v d am ^i
cecr ateFlnnovation /Improvement Incentive Pro gam Committee, the City Manager
or the City Council regarding any action governed by this policy shall be at the sole
discretion of such decision making authority and shall be final and binding. Nothing
contained in this policy shall be deemed to create any contract or other legally binding
obligation upon the City to adopt any idea - suggestion submitted. Submittal of an idea
°he DE- -ferma suZgestion shall constitute a waiver of all claims against the City
with regard to such idea and an agreement by the employee to be bound by the
decision of the City.
Adopted v January 24,1994
Amended - March 22,1999
Amended - May 14._213
Forme, -ly 4-3
0
RESERVE POLICY
PURPOSE
F -2
To establish City Council policy for the administration of Reserves defined as fund
balances in governmental funds and net working capital in proprietary funds.
BACKGROUND
Prudent financial management dictates that some portion of the funds available to the
City be reserved for future use.
As a general budget principle concerning the use of reserves, the City Council decides
whether to appropriate funds from Reserve accounts. Even though a project or other
expenditure qualifies as a proper use of Reserves, the Council may decide that it is more
beneficial to use current year operating revenues or bond proceeds instead, thereby
retaining the Reserve funds for future use. Reserve funds will not be spent for any
function other than the specific purpose of the Reserve account from which they are
drawn without specific direction in the annual budget; or by a separate City Council
action. Information regarding Annual Budget Adoption and Administration is
contained in City Council Policy F -3.
GOVERNMENTAL. FUNDS AND FUND BALANCE DEFINED
Governmental Funds including the General Fund, Special Revenue Funds, Capital
Projects Funds, Debt Service Funds and Permanent Funds have a short -term or current
flow of financial resources, measurement focus and basis of accounting and therefore,
exclude long -term assets and long -term liabilities. The term Fund Balance, used to
describe the resources that accumulate in these funds, is the difference between the
fund assets and fund liabilities of these funds. Fund Balance is similar to the measure of
net working capital that is used in private sector accounting. By definition, both Fund
Balance and Net Working Capital exclude long -term assets and long -term liabilities.
PROPRIETARY FUNDS AND NET WORKING CAPITAL DEFINED
Proprietary Funds including Enterprise Funds and Internal Service Funds have a long-
term or economic resources measurement focus and basis of accounting and therefore,
include long -term assets and liabilities. This basis of accounting is very similar to that
used in private sector. However, instead of Retained Earnings, the term Net Assets is
used to describe the difference between fund assets and fund liabilities. Since Net
Assets include both long -term assets and liabilities, the most comparable measure of
1
F -2
proprietary fund financial resources to governmental Fund Balance is Net Working
Capital, which is the difference between current assets and current liabilities. Net
Working Capital, like Fund Balance, excludes long -term assets and long -term liabilities.
GOVERNMENTAL FUND RESERVES (FUND BALANCE)
For Governmental Funds, the Governmental Accounting Standards Board ( "GASB ")
Statement No. 54 defines five specific classifications of fund balance. The five
classifications are intended to identify whether the specific components of fund balance
are available for appropriation and are therefore "Spendable." The classifications also
are intended to identify the extent to which fund balance is constrained by special
restrictions, if any. Applicable only to governmental funds, the five classifications of
fund balance are as follows:
CLASSIFICATIONS
NATURE OF RESTRICTION
Non - spendable
Cannot be readily converted to cash
Restricted
Externally imposed restrictions
Committed
City Council imposed commitment
Assigned
City Manager assigned purpose /intent
Unassigned
Residual balance not otherwise restricted
A. Non - amendable fund balance: That portion of fund balance that includes amounts
that are either (a) not in a spendable .form, or (b) legally or contractually required to
be maintained intact. Examples of Non - spendable fund balance include:
1. Reserve for Inventories: The value of inventories purchased by the City but not
ye, issued to the operating Departments is reflected in this account.
2. Reserve for Long Texan Receivables and Advances: This Reserve is used to
identify and segregate that portion of the City's financial assets which are not
due to be received for an extended period, so are not available for appropriation
during the budget year.
3. Reserve for Prepaid Assets: This reserve represents resources that have been
paid to another entity in advance of the accounting period in which the resource
is deducted from fund balance. A common example is an insurance premium,
which is typically payable in advance of the coverage period. Although prepaid
assets have yet to be deducted from fund balance, they are no longer available
for appropriation.
2
F -2
4. Reserve for Permanent Endowment - Bay Dredging: The endowment specifies
that the principal amount will not be depleted and represents the asset amounts
to be held in the Bay Dredging Fund.
5. Reserve for Permanent Endowment - Ackerman Fund: The endowment specifies
that the principal amount will not be depleted and represents the asset amount
to be held in the Ackerman Fund,
B. Restricted fund balance: The portion of fund balance that reflects constraints placed
on the use of resources (other than non - spendable 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. Examples of restricted fund balance are:
1. Reserve for Debt Service: Funds are placed in this Reserve at the time debt is
issued. The provisions governing the Reserve, if established, are in the Bond
Indenture and the Reserve itself is typically controlled by the Trustee.
2. ,Affordable I kousinZ: A principal provision of the Newport Beach Housing
Klement regedres developers to provide housing units for lower income
households, the number of which is to be negotiated for each development
project. In lier of constructing affordable housing, developers have paid into this
reserve whic'1 is used at the City Council's discretion to provide alternate
methods for the delivery of affordable housing for lower income households.
3. Park In Lieu: Per NBMC 19.52 and California Government Code Section 664777
(The 1975 "Quimby_Act' � -_w �__ � a dedication of land or nayment of
fens for park or recreational purposes in conjunction with residential
t rejopment is required. The fees collected can only be used forspecific park or
recreationTjgRoses as outlinedin NBMC 19.52.030 and 19.52.070.
34_Upper Newport BayRestoration Reserve: This reserve is the repository for funds
mandated by SB573, as well as special fees charged to permit holders as an
alternative to meeting certain specified mitigation criteria. In addition to the
mitigation fees, ten percent (10 %) of Beacon Bay lease revenue is placed in this
Reserve. Funds in the Reserve are c-erran»ed— torestricted for Upper Newport
Bay restoration projects.
3
F -2
4-.S.Permanent Endowment for Bay Dredging: The endowment also specifies that
the interest earnings on the principal amount can only be used for dredging
projects in the Newport Bay.
S:b.Permanent Endowment for Ackerman Fund: The endowment also specifies that
the interest earnings on the principal amount can only be used for scholarships
provided by the City.
C. 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 considers a resolution to
constitute a formal action for the purposes of establishing committed, fund balance.
The action to constrain resources must occur within the fiscal reporting period;
however the amount can be determined subsequently. City Council imposed
Commitments are as follows:
1. Continency Reserve: The Contingency Reserve shall have a target balance of
fifteen percent (15 %) of General Fund "Operating Budget" as originally adopted.
Operating Budget for this purpose shall include current expenditure
appropriations and shall exclude Capital Improvement Projects and Transfers
Out. Appropriation a+W -and or access to these funds are reserved for emergency
situations only. The parameters by which the Contingency Reserve could be
accessed wou td include the following circumstances:
a. A catastrophic loss of critical infrastructure requiring an expenditure of
greater than or equal to five percent (5 %) of the General Fund, Operating
Budget, as defined above.
b. A State or Federally declared state of emergency where the City response or
related City loss is greater than or equal to five percent (5 %) of the General
Fund, Operating Budget.
c. Any settlement arising from a claim or judgment where the loss exceeds the
City's insured policy coverage by an amount greater than or equal to five
percent (5 %) of the General Fund, Operating Budget.
d. Deviation from budgeted revenue projections in the top three General Fund
revenue categories, namely, Property Taxes, Sales "Taxes and Transient
Occupancy Taxes in a cumulative amount greater than or equal to five
percent (5 %) of the General Fund, Operating Budget_
5!
F -2
Any action by another government that elin- dnatesting or sh ft - shifts
revenues from the City amounting to greater than or equal to five percent
(5 %) of the General Fund, Operating Budget_
Inability of the City to meet its debt service obligations in any given year.
f.
&_,Any combination of factors 1) a. -fe, amounting to greater than or equal to five
percent (5 %) of the General Fund, Operating Budget in any one fiscal year.
Use of the Contingency Reserve must be approved by the City Council. Should
the Contingency Reserve commitment be used, the City Manager shall present a
plan to City Council to replenish the reserve within five years.
2. Facilities Financial Replacement Planning Reserve: In conjunction with the City's
Facilities Financial Rep�Plan, a sinking fund has been established to
amortize the cost of critical City facilities such as, but not limited to, the Civic
Center,Qty--T- al' — <d- Police Department buildings, Fire Stations, Library
Branches and other Facility Improvement Projects.
The Facilities FinancialR^ruefft Planning—Program establishes a level charge
to the General Fund that will perpetually replenish the cash flows necessary to
finance the construction of critical City facilities. This plan will be updated
annually as part of the budget process, or as conditions change. The City shall
strive to maintain fund balance in the Facilities FinancialReWaeement - Planning
Reserve at a level equal to or greater than the maximum annual debts of existing
obligations.
The eligible uses of this reserve include the cash funding of public facility
improvements or the servicing of related debt.
3. Oceanfront Encroachment Reserve: In the early 1990's, it was discovered by
survey that improvements to several ocean front parcels were encroaching onto
the public beach. The encroachment was relatively minor. The negotiated
solution was for the property owners to pay a permit fee each year to the City.
Revenue thus generated may only be used for ocean front restoration projects
and incidental costs of improvements and maintenance to enhance public access
and use of ocean beaches as approved by the City Council. This Reserve is the
repository for those funds. City Council Policy L -12 contains additional
background and details about the encroachment issue.
61
F -2
4. Senior Citizen Center and Recreation Facilitv Rental ReserveSite: Citv Council
Policy B- 2rquires ten percent (_10 %) of gross revenues derived from gasisOASIS
Senior Center and Recreation facilities rental fees to be set aside annually for
equipment replacement and/or facility refurbishment. 5 w
'per-cent - (1&°rf 11_4 fevennc�ed- frekii.- rcictirl -x.
set -asi 4ef eEluip
7„ .,,,+ .,...7 /„r »„F 1 `•i'an<.nct- atzz"ke �ente.r. '1'h1fi
c,,c�mrcc�n-x�,?R� -1+i c.crcc— crcz�- vs���.u�.-vxu c
p.,liey was as .- ,,.,7,,ced TZ„ ., A,.,.,,.,,�.,.,,,+ ,..; #i, +F,., i~ «;.,,, rar �.�' rI ACTC J.ery
or+cy -ccu ..,mt-cczr-C < <
, - ti-- �+ Y' 7�' r 'a:�- crf"z'r""i-c'c'r'r�c^vix.. ccccc: i.rzi— uzgti'nt
iriuc"r "'£ - e b ne new funds, -are beinfl,
- .,+ C t, 1 + 7 / o
ceecezrzr iiif rres -e�- trey; ac:- r'eineni-- car/?' xi `S-- °�SpCax- +c.�cq"-a'�'�mc�zx rt °- '�":iecti^.cne^- iitaizcr/-v'r
„C,a- cruri�rar�'miirrc -amts the -ez rtes .
5. Off Street Parking: Per NBMC 12.44.025 fifty percent (50 %) of parking meter
revenue collected in designated areas is set aside for acquisition, development
and improvement of off street parking facilities within those areas.
6. Paramedic Program (Hoag): In addition to the debt issuance agreements with
Hoag Hospital which required an original deposit, effective July 1, 2000, any
excess revenues generated by this program, after accounting for General City
Overhead of fifteen percent (15 %), were to be accumulated for future paramedic
related purposes. Funds accumulated may be used only for paramedic related
purposes as directed by the City Council.
;._Recreational instruction: City Council Policy B -2 requires ten percent (10 %) to
twenty percent (20 %) of gross annual revenues derived from specified
recreational classes to be set aside for the refurbishment of certain recreational
facilities, fee -based activity Drograms and equipment used in connection with
fee -based recreation classes.
7:8.Senior Fitness Center Reserve: City Council .Policy B -2 requires ten percent (10 °i))
of theme -ross annual revenues derived from fitness center membership fees to be
set aside and used for new or replacement fitness equipment.
8.9.ln Lieu Parking: Per NBMC 12.44.125 the City requires commercial businesses to
provide adequate off - street parking or where this is not possible, businesses are
afforded the opportunity to pay an annual fee and use parking spaces in a
municipal lot, providing such a lot is located within specified proximity to the
business. These funds can only be used to provide additional parking.
6
F -2
10. Neighborhood Enhancement - A: NBMC 12.44.027 directs revenues from
parking meters in Zone 9 shall be apportioned to this Neighborhood
Enhancement A. Funds accumulated will only be used for the purpose of
enhancing and supplementing services to the West Newport area. Both the
nature of the supplemental services and the definition of the area served are set
forth in the Code Section above.
11. Neighborhood Enhancement - B: NBMC 12.44.027 directs that fifty percent (50 %)
of revenues from parking meters in the Balboa Peninsula be apportioned to this
Neighborhood Enhancement B. Funds accumulated will only be used for the
purpose of enhancing and supplementing services in the Balboa Peninsula.
Specific details are contained in the Code Section.
12. Cable Franchise: Pursuant to the provisions of the Newport Beach Municipal
Code, Title 5, Business Licenses &z Regulations, Chapter 5.44, in return for the use
of the City's streets and public ways for the purpose of installing, operating,
maintaining, or reconstructing a cable system, to provide cable service, fees are
collected by the City from cable providers. Those fees are to be used by the City
for support o Public, Education, and Government access programming only.
13, START Pr am: The Fire Department's START Program developed by the Fire
Department and Hoag Hospital helps prepare emergency personnel to quickly
organize their resources to handle multi - casualty emergencies. Training video
and training materials are sold to other agencies. Any excess revenues generated
by this program shall only be used for production expenses related to future
START training materials and to enhance paramedic, EMT, and MICN pre -
hospital education as directed by the City Council.
14. Oil and Gas Reserve: The annual $40,000 which is being set aside from the oil
and gas field production revenues is to be used to fund abandoned wells and
facilities as they go out of service.
D. 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 but that are not
restricted or committed. This policy hereby delegates the authority to the City
Manager or designee to modify or create new assignments of fund balance.
Constraints imposed on the use of assigned amounts may be changed by the City
Manager or his designee. Appropriations of balances are subject to Council Policy
F -2
F -3 concerning budget adoption and administration. Examples of assigned fund
balance may include but are not limited to:
1. Appropriations Reserves:: This is a temporary repository for funds not yet fully
appropriated in the annual budget. It is normally used during the budget
process to set aside funds for known or strongly anticipated expenses that will
need to be addressed by budget amendment during the budget year, Sometimes
the dollar amount and/or appropriate account breakdown for such expenses
cannot be specifically identified at the time the budget is adopted, even though
the funds will be needed. In such cases, the funds will normally be budgeted to
the Reserve for Appropriations.
2. Change in Fair Market Value of Investments:.. As dictated by GASB 31, the City
is required to record investments at their fair value (market value). This
accounting practice is necessary to insure that the City's investment assets are
shown at their true value as of the balance sheet. However, in a fluctuating
interest rate environment, this practice records market value gains or losses
which may never be actually realized. The City Manager may elect to reserve a
portion of fund balance associated with an unrealized market value gain.
However, it is impractical to assign a portion of fund balance associated with an
unrealized market value loss.
3. PERS Rate Reserve:. This Reserve may be established for the specific purpose of
helping to smooth out the year -to -year fluctuations in PERS rates.
When the City Manager or his designee authorizes a change in General Fund, Assigned
Fund Balance, City Council shall be notified quarterly.
E. Unassigned fund balance:— The residual portion of available fund balance that is not
otherwise restricted, committed or assigned.
PROPRIETARY FUND RESERVES (NET WORKING CAPITAL)
In the case of Proprietary Funds (Enterprise and Internal Service Funds), Generally
Accepted Accounting Principles ( "GAAP ") does not permit the reporting of reserves on
the face of City financial statements. However, this does not preclude the City from
setting policies to accumulate financial resources for prudent financial management of
its proprietary fund operations. Since proprietary funds may include berth long -term
capital assets and long -term liabilities, the most comparable measure of liquid financial
resources that is similar to fund balance in proprietary funds is net working capital
which is the difference between current assets and current liabilities. For all further
0
F -2
references to reserves in Proprietary Funds, Net Working Capital is the intended
meaning.
A. Water Enterprise Fund
1, Stabilization and Contingency Reserve: This Reserve is used to provide
sufficient funds to support seasonal variations in cash flows and in more extreme
conditions, to maintain operations for a reasonable period of time so the City
may reorganize in an orderly manner or effectuate a rate increase to offset
sustained cost increases. The intent of the Reserve is to provide funds to offset
cost increases that are projected to be short - lived, thereby partially eliminating
the volatility in annual rate adjustments. It is not intended to offset ongoing,
long -term pricing structure changes. The target level of this reserve is fifty
percent (50 %) of the annual operating budget. This reserve level is intended to
provide a reorganization period of b months with zero income or 24 months at a
twenty -five percent (25 %) loss rate. The City Council must approve the use of
these funds, based on City Manager recommendation. Funds collected in excess
of the Stabilization reserve target would be available to offset future rate
adjustments, while extended reserve shortfalls would be recovered from future
rate increases. Should catastrophic losses to the infrastructure system occur, the
Stabilization and. Contingency Reserve may be called upon to avoid disruption to
water distribution.
2. Infrastructure, Replacement Funding Policy: This funding policy is intended to
be a temporary repository for cash flows associated with the funding of
infrastructure replacement projects provided by the Water Master Plan. The
contribution rate is intended to level- amortize the cost of infrastructure
replacement projects over a long period, The annual funding rate of the Water
Master Plan is targeted at an amount that _when combined with prior or future
year contributions, is sufficient to provide for the eventual replacement of assets
as scheduled in the lan. $2 5 illie ^ 'Base ea, — ,ar Irma 10
—lir ��
'_a`_^ : t ?:� }�eenfi { 5 °}leer mar -This contribution policy is based on the
eSlEa funding requirements of the most current Water Master Plan. There are no
minimums or maximums balances contemplated by this funding policy.
However, the contributions level should be reviewed periodically or as major
updates to the Water Master Plan occur. Annual funding is contingent on many
factors and may ultimately involve a combined strategy of cash funding and debt
issuance with the intent to normalize the burden on Water customer rates.
B. Wastewater Enterprise Fund
0
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1. Stabilization and Contingency Reserve: This Reserve is used to provide
sufficient funds to support seasonal variations in cash flows and in more extreme
conditions, to maintain operations for a reasonable period of time so the City
may reorganize in an orderly manner or effectuate a,rate increase to offset
sustained cost increases. The intent of the Reserve is to provide funds to offset
cost increases that are projected to be short - lived, thereby partially eliminating
the volatility in annual rate adjustments. It is not intended to offset ongoing,
long -term pricing structure changes. The target level of this reserve is fifty
percent (50 %) of the annual operating budget This reserve level is intended to
provide a reorganization period of 6 months with zero income or 24 months at a
twenty -five percent (25 %) loss rate. The City Council must approve use of these
funds, based on City Manager recommendation. Funds collected in excess of the
Stabilization reserve target would be available to offset future rate adjustments,
while extended reserve shortfalls would be recovered from future rate increases.
Should catastrophic losses to the infrastructure system occur, the Stabilization
and Contingency Reserve may be called upon to avoid disruption to wastewater
service.
2. Infrastructure Replacement Funding Policy: This funding policy is intended to
be a temporary repository for cash flows associated with the funding of
infrastructure replacement projects provided by the Wastewater Master Plan.
The contribution rate is intended to level - amortize the cost of infrastructure
replacement projects over a long period of time. The annual funding rate of the
Wastewater Master Plan is targeted at an amount that when combined with
prior or future year contributions, is sufficient to provide for the eventual
replacement of assets as scheduled in the plan. lT9f} pew year {scear
Fiseal Ycai 20' I 11)) � 1. Ye� - - This contribution
policy should be updated periodically based on the most current Wastewater
Master Plan. There are no minimum or maximum balances contemplated by this
funding policy. However, the contributions level should be reviewed
periodically or as major updates to the Wastewater Master Plan occur. Annual
funding is contingent on many factors and may ultimately involve a combined
strategy of cash funding and debt issuance with the intent to normalize the
burden on Wastewater customer rates.
C. Internal Service Funds
Background.
Internal Service Funds are used to centrally manage and account for specific
program activity in a centralized cost center. Their revenue generally comes from
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internal charges to departmental operating budgets rather than direct
appropriations. They have several. functions.
- -They work well in normalizing departmental budgeting for programs that have
life- cycles greater than one year; thereby facilitating level budgeting for
expenditures that will, by their nature, be erratic from year to year. This also
facilitates easier identification of long term trends.
- -They act as a strategic savings plan for long -term assets and liabilities.
- -From an analytical standpoint, they enable appropriate distribution of city -wide
costs to individual departments, thereby more readily establishing true costs of
various operations.
Since departmental charges to the internal service fund duplicate the ultimate
expenditure from the internal service fund, they are eliminated when consolidating
entity -wide totals.
The measurement criteria, cash flow patterns, funding horizon and acceptable
funding levels are unique to each program being funded. Policy regarding target
balance and( or contribution policy, gain/loss amortization assumption., source data,
and gov(,mancc: for each of the City's Internal Service Funds is set forth as follows:
1. For all.Internal Service Funds:. the Finance Director may transfer part or all of any
unencumbered fund balance between the Internal Service Funds provided that
the withdrawal of funds from the transferred fund would not cause insufficient
reserve levels or insufficient resources to carry out its intended purpose. This
action is appr riate when the decline, in cash balance in any fund is precipitated
by in off -trend non - recurring event. The Finance Director will make such
recommendations as part of the annual budget adoption or through separate
Council action.
2. Equipment Maintenance Fund and Equipment Replacement Fund:. The
Equipment Maintenance and Replacement Funds receive operating money from
the Departments to provide equipment maintenance and to fund the regular
replacement of major pieces of equipment (mostly vehicles) at their economic
obsolescence.
a. Equipment Maintenance Fund:.. The Equipment Maintenance Fund acts solely
as a cost allocation center (vs. a pre - funding center) and is funded on a pay -
as- you -go basis by departmental maintenance charges by vehicle type and
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usage requirement. Because of this limited function, the target year -end
balance is zero.
Contribution rates (departmental charges) are set to include the direct costs
associated with maintaining the City vehicle fleetfleet, including fleet
maintenance employee salary and benefits, operating expenses and
maintenance related capital outlay. Administrative overhead and
maintenance facility improvements and replacement costs are to be provided
outside of this cost unit.
Because of the limited purpose of this fund, a gain f loss assumption is not
needed.
Source data is ongoing city fleet inventory and maintenance cost information.
Governance is achieved through annual management adjustment of
contribution rates on the basis of maintenance cost by vehicle and
distribution of costs based on fleet use by department.
b. Equipment Replacement Fund:- Operating Departments are charged am -tual
amounts sufficient to accumulate funds for the replacement of Felling
steskvehicles, communications equipment, parking equipment and other
ec ui - ment replacement determined appropriate by the Finance Director. in
w eunc-' n _
Guidelines, The City Manager appreves—recommends annual rate
adjustments as part of the budget preparation process. These adjustments are
based on pricing, future replacement schedules and other variables.
The age and needs of the equipment €tee�mventory vary from year to year.
Therefore the year -end fund balance will fluctuate in direct correlation to
accumulated depreciation. In general, it will increase in the years preceding
the scheduled replacement of relatively large percentage of the
€leete uipment, on a dollar value basis. However, rising vehiele- equipment
costs, dissimilar future needs, replacing vel4elese�meet faster than their
expected life or maintaining vehicles t uipment longer than their expected
life all contribute to variation from the projected schedule.
In light of the above, the target funding level is not established in terms of a
flat dollar figure or even a percentage of the overall value of the
fleete uipment inventory. It is established at fifty percent (50 %) of the current
accumulated depreciation value of the equipment inventoryfleet, calculated
on a replacement value basis. This will be reconciled annually as part of the
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year -end close out process by the Finance Department if departmental
replacement charges for eaehr -°-tee equipment prove to be excessive or
insufficient with regard to this target funding level, new rates established
during the next budget cycle will be adjusted with a view toward bringing
the balance back to the target level over a three -year period.
3. Insurance Reserve Funds:. The Insurance Reserve funds account for the activities
of general Iiability and elai workers' compensation claims.
Background.
The City employs an actuary to estimate the liabilities associated with the general
liability and workers compensation activities. The costs typically associated with
these programs include: claims administration, legal defense, insurance
premiums, self insured retention and the establishment of appropriate loss
reserves including "incurred -but -not reported" (IBNR) claims. In a prescribed
measurement methodology, the Actuary estimates the liabilities in conformity
with Generally Accepted Accounting Principles (GAAP).
The Actuary refers to this measurement level in his report as the "Expected
Level." However, because actuarial estimates are subject to significant
uncertainties, actuaries typically recommend that a target funding level be set at
an amount in excess of expected liability as a margin to cover contingencies. A
typical target funding level would be set to obtain a specified confidence level
(the percent chance that resources set -aside will be sufficient to cover existing
claims).
Full funding of the Actuary's "Target Funding Level" establishes a seventy -five
percent (75 %) confidence there will be sufficient resources (including projected
interest) to pay the full amount of existing claims without future contributions. .
Funding at the "Expected Level" produces a confidence level of only fifty percent
to sixty -five percent (50 % -65 %). Therefore, the target funding of insurance
reserves should exceed the "Expected Level" to account for adverse estimate
deviation.
Policy & Practice.
The City should target funding of its risk management obligations at not less
than the Expected Level, described above; and not more than an amount
sufficient to establish a seventy -five percent (75 %) Confidence Level. Actuarial
losses should be recovered over a rolling 3 -year basis while actuarial gains
should be amortized over a rolling 5 -year basis. As part of the operating budget,
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each department will be charged a rate equal to its proportionate share of the
total "revenue" required to fund the Insurance Reserve Fund at this level.
To lessen the impact of short -term annual rate change fluctuation, City
management may implement one -time fund transfers (rather than department
rate increases) when funding shortfalls appear to be due to unusually sharp and
non - recurring factors. Excess reserves in other areas may be transferred to the
internal service fund in these instances but such transfers should not exceed the
funding necessary to reach a seventy -five (75 %) confidence level interval. The
be :«. F.,,- ..,.,, -I .,t +1.,, F:,,r+ f :+.> c-d'3'dRe i•-meebR. :aiici
+ .. .,F
xzaz-c�ccz -acziva=c.
4. Compensated Absences Fund:.
Background.
The primary purpose of flex leave, vacation leave and sick leave is to provide
compensated time off as appropriate and approved. However, under .certain
circumstances, typically at separation from service, some employees have the
option of receiving cash -out payments for some accumulated leave balances. The
Compensate.: Absences Fund is utilized primarily as a budget smoothing
technique for any such leave bank liquidations. The primary purpose of the
Compensated Absences Fund is to maintain a balance sufficient to facilitate this
smoothing.
Policy and Practice.
The contribution rate will be set to cover estimated annual cash flows based on a
three -year trailing average:
high- eash4low years, -as "u- r4her dcsertbed velE)No
The minimum cash reserve should not fall below that three -year average,--plus
the —Mara- �u -rn ,s nua- '-- v�. The maximum cash reserve should not exceed
fifty percent (50 %) of the long term liability. The target cash reserve shall be the
median difference between the minimum and maximum figures.
Each department will make contributions to the Compensated Absences Fund
through its operating budget as a specified percentage of salary. The Finance
Director will review and recommend adjustments to the percentage of salary
required during the annual budget development process. This percentage will be
set so as to maintain the reserve within the parameters established above, In
adelit in" ~ ' F ^ " ^' ,� th
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...
5. Post Retirement Funding Policies:-
a. Pension Funding:-
(i) California Public Employees Retirement System (CalPERS):: The City's
principal Defined Benefit Pension program is provided through contract
with CaIPERS. The City's contributions to the plan include a fixed
employer paid member contribution and an actuarially determined
employer contribution that fluctuates each year based on an annual
actuarial plan valuation. This variable rate employer contribution includes
the normal cost of providing the contracted benefits plus or minus an
amortization of plan changes and net actuarial gains and losses since the
last valuation period.
it is the City's policy to make contributions to the plan equaling at least
one hundred percent (100 %) of the actuarially required contribution
(annual pension cost). Because the City pays the entire actuarially
required contribution each year, by definition, its net pension obligation at
the en I of each year is $0. Any unfunded actuarial liability (UAL) is
amortized and paid in accordance with the actuary's funding
recommendations. The Citv will strive to maintain its UAL within a range
that is considered acceptable to actuarial standards. The City Council
shall consider increaser the annual CaIPERS contribution should the
UAL status fall below acjce
T table actuarial standards.
(ii) Laborer's International Union of North America (LIUNAj:, The City
provides funds to support a supplemental pension plan for some
employee associations through con, i act with LIUNA. This is funded at a
fixed percentage of total compensation on a pay -as- you -go basis. The City
is not contractually required to guarantee the level of the ultimate LIUNA
benefit to retirees, nor does it do so. Therefore the City's liability for this
program is full funded each year.
b. Other Post Employment Benefits(OPEB Funding)::
Background.
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The City's OPEB funding obligations consists of two retiree medical plans.
New Plan. Effective January 2006, the City and its employee associations
agreed to major changes to the Post Employment Healthcare Plan. New
employees and all current employees participate in a program that requires
certain defined employee and employer contributions while the employee is
in active service. However, once the contributions have been made to the
employee's account, the City has obligation to the
Ialantransferred asubstantial portion of the funding risk to the employee.
Old Plan. Eligible employees who retired prior to the "New Plan" and
certain active employees were eligible to continue to receive post - retirement
medical benefits (a defined benefit plan). The cost was divided among the
City, current employees and retirees. In the past, this program was largely
funded on a pay -as- you -go basis, so there was a significant unfunded
liability. Recognizing this problem, the City began contributing to this
obligation in 2001. In 2008, these assets were placed. in a pre - funding trust.
The City's intention is to amortize the remaining unfunded liability within 20
years.
Policy &Practice.
New Plan. Consistent with agreements between the City and Employee
Associations, the new defined contribution plan will be one hundred percent
(100 %) funded, on an ongoing basis, as part of the annual budget process.
Funds to cover this expenditure will be contained within the salary section of
each department's annual operating budget.
Old Plan. The City's policy is to pre fund the explicit (cash subsidy) portion
of the Actuarial Accrued Liability (AAL) of the remnants of the old plan over
a 20 -year amortization period, or less. This amount will be based on the
Annual Required Contribution (ARC) determined by a biennial actuarial
review; subject to review and analysis by the City. The City will strive to
maintain nu a. la^rget reserve balan4 a funded status -that will be within a
range that is considered acceptable to actuarial standards. The City Council
shall consider increasing the annual OPEB contribution should the funded
status fall below acceptable actuarial standards. established -an =,�', -;5 a na i =
s press.
�.
16
5
Ift
!. •
Adopted - January 24,1994
Amended - April 10, 1995
Amended - April 27,1998
Amended a March 14, 2000
Amended - May 8, 2001
Amended - April 23, 2002
Amended - April 13, 2004
Amended - September 15, 2008
Amended - November 12, 2008
Amended - May 24, 2011
Amended - September 27, 2011
W-j
MA
DEBT MANAGEMENT POLICY
A. PURPOSE
F -6 (New)
The purpose of this policy is to establish guidelines and parameters for the effective
governance, management and administration of City debt.
E t
The City is committed to fiscal sustainability by employing long -term financial
planning efforts, maintaining appropriate reserves levels and employing prudent
practices in governance, management, budget administration and financial reporting.
Debt Levels and their related annual costs are important long -term obligations that must
be managed within available resources. A disciplined thoughtful approach to debt
management includes policies that provide guidelines for the City to manage its debt
program in -line with those resources. Therefore, the objective of this policy is to provide
written guidelines and restrictions concerning the amount and type of debt issued by
Hie City and the caip, i.ng management of the debt portfolio.
This debt management policy is intended to improve the quality of decisions, provide
�
U,- >tification for the structure of debt issuance, identify policy goals and demonstrate a
coniriiitrnent to long-term financial planning, including a multi -year capital plan.
Adherence to a debt management policy signals to rating agencies and the capital
markets that a government is well managed and should meet its obligations in a timely
manner.
C. CONDITIONS AND PURPOSES OF DEBT ISSUANCE
1. Acceptable Conditions for the Use of Debt
The City believes that prudent amounts of debt can be an equitable and cost -
effective means of financing major infrastructure and capital project needs of the
City. Debt will be considered to finance such projects if:
a) It meets the City's goal of distributing the payments for the asset over its
useful life so that benefits more closely match costs for both current and
future residents.
b) It is the most cost - effective funding means available to the City, taking into
account cash flow needs and other funding alternatives.
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F -5 (New)
c) It is fiscally prudent and meets the guidelines of this Policy. Any
consideration of debt financing shall consider financial alternatives, including
pay -as- you -go funding, proceeds derived from development or
redevelopment of existing land and capital assets owned by the City, and use
of existing or future cash reserves, or combinations thereof.
2. Acceptable Uses of Debt
The City will consider financing for the acquisition, substantial refurbishment,
replacement or expansion of physical assets, including land improvements, The
primary purpose of debt is to finance one of the following:
a) Acquisition and or improvement of land, right -of -way or long -term
easements.
b) Acquisition of a capital asset with a useful life of 3 or more years.
c) Construction or reconstruction of a facility.
d) Refunding, refinancing, or restructuring debt, subject to refunding objectives
and parameters discussed in Section E.
e) Although not the primary purpose of the financing effort, project
reirnbursables that include project planning design, engineering and other
preconstrrrction efforts; project - associated furniture fixtures and equipment;
capitalized interest, original issuer's discount, underwriter's discount and
other costs of issuance.
f) Interim or cash flow .financing, such as anticipation notes.
g) Refinancing or advance funding of City pension obligations, but only to the
extent significant financial benefit is achieved and limited by Section E.
3. Prohibited Uses of Debt
Prohibited uses of debt include the following:
a) Financing of operating costs except for anticipation notes with a term of less
than one year.
b) Debt issuance used to address budgetary deficits.
c) Debt issued for periods exceeding the useful life of the asset or projects to be
financed_
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F -6 (New)
D. USE OF ALTERNATIVE DEBT INSTRUMENTS
The City recognizes that there are numerous types of financing structures and funding
sources available, each with specific benefits, risks, and costs. All potential funding
sources are reviewed by management within the context of the Debt Policy and the
overall portfolio to ensure that any financial product or structure is consistent with the
City's objectives. Regardless of what financing structure(s) is utilized, due - diligence
review must be performed for each transaction, including the quantification of potential
risks and benefits, and analysis of the impact on City creditworthiness and debt
affordability and capacity.
1. Variable Rate Debt
Variable rate debt affords the City the potential to achieve a lower cost debt
depending on market conditions. However, the City will seek to limit the use of
variable -rate debt due to the potential risks of such instruments.
a) Purpose
The City shall consider the use of variable rate debt for the purposes of:
i. Reducing the costs of debt issues.
ii. Increasing flexibility for accelerating principal repayment and
amortization.
iii. Enhancing the management of assets and liabilities (matching short-
term "priced debt" with the City's short -term investments).
iv. Diversifying interest rate exposure.
b) Considerations and Limitations on Variable -Rate Debt
The City may consider the use of all alternative structures and modes of variable
rate debt to the extent permissible under State law and will make determinations
among different types of modes of variable -rate debt based on cost, benefit, and
risk factors. The Finance Director shall consider the following factors in
considering whether to utilize variable rate debt:
i. Any variable rate debt should not exceed 20% of total City General
Fund supported debt.
ii. Any variable rate debt should be fully hedged by expected future
Facility Financing Plan reserves or unrestricted General Fund reserve
levels.
3
F -6 (New)
iii. Whether interest cost and market conditions (including the shape of
the yield curves and relative value considerations) are unfavorable for
issuing fixed rate debt.
iv. The likelihood of projected debt service savings when comparing the
cost of fixed rate bonds.
V. Costs, implementation and administration are quantified and
considered.
vi. Cost and availability of liquidity facilities (lines of credit necessary for
variable rate debt obligations and commercial paper in the event that
the bonds are not successfully remarketed) are quantified and
considered.
vii. Ability to convert debt to another mode (daily, monthly, fixed) or
redeem at par at any time is permitted.
viii. The findings of a thorough risk management assessment.
c) Risk Management
Any issuance of variable rate debt shall require a rigorous risk assessment,
including, but not limited to factors discussed in this section. Variable rate debt
subjects the City to additional financial risks (relative to fixed rate bonds),
including interest rate risk, tax risk, and certain risks related to providing
liquidity for certain types of variable rate debt.
The City will properly manage the risks as follows:
i. Interest Rate Risk and Tax Risk The risk that market interest rates
increase on variable -rate debt because of market conditions, changes in
taxation of municipal bond interest, or reductions in tax rates.
Mitigation - Limit total variable rate exposure per the defined limits
and match the variable rate liabilities with short term assets.
ii. Liquidity/Remarketing Risk - The risk that holders of variable rate
bonds exercise their "put" option, tender their bonds, and the bonds
cannot be remarketed requiring the bond liquidity facility provider to
repurchase the bonds. This will result in the City paying a higher rate
of interest to the facility provider and the potential rapid amortization
of the repurchased bonds. Mitigation - Limit total direct variable -rate
exposure. Seek liquidity facilities which allow for longer (5 -10 years)
amortization of any draws on the facility. Secure credit support
4
F -6 (New)
facilities that result in bond ratings of the highest short -term ratings
and long -term ratings not Iess than AA. If the City's bonds are
downgraded below these levels as a result of the facility provider's
ratings, a replacement provider shall be sought.
iii. LiquiditylRollover Risk - The risk that arises due to the shorter term
of most liquidity provider agreements (1 -5 years) relative to the longer-
term amortization schedule of the City's variable -rate bonds. In
particular, (1) the City may incur higher renewal fees when renewal
agreements are negotiated and (2) the liquidity bank market constricts
such that it is, difficult to secure third party liquidity at any interest
rate. Mitigation - Negotiate longer terms on provider contracts to
minimize the number of rollovers
2. Derivatives
The use of certain derivative products to hedge variable rate debt, such as interest
rate swaps, may be considered to the extent the City has such debt outstanding or
under considerasion. The City will exercise extreme caution in the use of derivative
iTtstrusaent,, for hedging purposes, and will consider their utilization only when
sufficient understanding of the products and sufficient expertise for their
al)p.ropriate u;;e has been developed. A comprehensive derivative policy will be
adopted bY the City prior to any utilization of such instruments.
E. REFUNDING GUIDELINES
The Finance Director shall monitor at least annually all outstanding City debt
obligations for potential refinancing opportunities. The City will consider refinancing of
outstanding debt to achieve annual savings. Absent a compelling economic reason or
financial benefit to the City, any refinancing should not result in any increase to the
weighted average life of the refinanced debt.
The City will generally seek to achieve debt service savings which, on a net present
value basis, are at least 3% of the debt being refinanced. The net present value
assessment shall factor in all costs, including issuance, escrow, and foregone interest
earnings of any contributed funds on hand. Any potential refinancing shall
additionally consider whether an alternative refinancing opportunity with higher
savings is reasonably expected in the future.
9
F -6 (New)
Any potential refinancing executed more than 90 days in advance of the outstanding
debt optional call date shall require a higher savings threshold. Consideration of this
method of refinancing shall place greater emphasis on determining whether an
alternative refinancing opportunity with higher savings is reasonably expected in the
future.
F. MARKET COMMUNICATION, ADMINISTRATION, AND REPORTING
1, Rating Agency Relations and Annual or Ongoing Surveillance - The Finance
Director shall be responsible for maintaining the City's relationships with
Standard & Poor's Ratings Services, Fitch Ratings and Moody's Investor's
Service. The City is committed to maintaining its existing rating levels. In
addition to general communication, the Finance Director shall`
a) Ensure the rating agencies are provided updated financial information of
the City as it becomes publically available.
b) Communicate with credit analysts at each agency at least once each year,
or as may be requested by the agencies,
c) Prior to each proposed new debt issuance, schedule meetings or
conference calls with agency analysts and provide a thorough update on
the City's financial position, including the impacts of the proposed debt
issuance.
2. Council and Finance Committee Communication - The Finance Director should
report feedback from rating agencies, when and if available, regarding the City's
financial strengths and weaknesses and recommendations for addressing any
weaknesses as they pertain to maintaining the City's existing credit ratings.
3. Continuing Disclosure Compliance - The City shall remain in compliance with
Security and Exchange Commission Rule 15c2 -12 by filing its annual financial
statements and other financial and operating data for the benefit of its
bondholders within 270 days of the close of the fiscal year, or as required in any
such agreement for any debt issue. The City shall maintain a log or file
evidencing that all continuing disclosure filings have been made promptly.
4. Debt Issue Record - Keeping - A copy of all debt - related records shall be retained
at the City's offices. At minimum, these records shall include all official
statements, bond legal documents / transcripts, resolutions, trustee statements,
leases, and title reports for each City financing (to the extent available).
5. Arbitrage Rebate - The use of bond proceeds and their investments must be
monitored to ensure. compliance with all Internal Revenue Code Arbitrage
Rebate Requirements. The Finance Director shall ensure that all bond proceeds
6
F -6 (New)
and investments are tracked in a manner which facilitates accurate calculation,
and, if a rebate payment is due, such payment is made in a timely manner.
G. CREDIT RATINGS
The City will consider published ratings agency guidelines regarding best financial
practices and guidelines for structuring its capital funding and debt strategies to
maintain the highest possible credit ratings consistent with its current operating and
capital needs.
H. LEGAL DEBT LIMIT
Newport Beach Charter section 1109 indicates that the City shall not incur an
indebtedness evidenced by general obligation bonds which shall in the aggregate
exceed the sum of fifteen percent (15 %) of the total assessed valuation, for purposes of
City taxation, of all the real and personal property within the City. While this limit
defines the absolute maximum legal debt limit for the City, it is not an effective
indicator of the City's affordable debt capacity.
I. AFFORDABILITY
Prior to the issuance of debt to finance a project, the City will carefully consider the
overall long -term affordability of the proposed debt issuance. The City shall not assume
more debt without conducting an objective analysis of the City's ability to assume and
support additional debt service payments. The City will consider its long -term revenue
and expenditure trends, the impact on operational flexibility and the overall debt
burden on the tax payers. The evaluation process shall include a review of generally
accepted measures of affordability and will strive to achieve and or maintain debt levels
consistent with its current operating and capital needs. The Finance Director shall
review benchmarking results of other California cities of comparable size with the
City's Finance Committee prior to any significant project financing.
1. General Fund - Supported Debt - General Fund Supported Debt generally
include Certificates of Participation (COPS) and Lease Revenue Bonds (LRBs)
which are lease obligations that are secured by an installment sale or by a lease-
back arrangement between the City and another public entity. The general
operating revenues of the City are pledged to pay the lease payments, which are,
in turn, used to pay debt service on the bonds or Certificates of Participation.
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F -5 (New)
These obligations do not constitute indebtedness under the state constitutional
debt limitation and, therefore, are not subject to voter approval.
Payments to be made under valid leases are payable only in the year in which
use and occupancy of the leased property is available, and lease payments may
not be accelerated. Lease financing requires the fair market rental value of the
leased property to be equal to or greater than the required debt service or lease
payment schedule. The lessee (City) is obligated to place in its Annual Budget
the rental payments that are due and payable during each fiscal year the lessee
has use of the leased property.
The City should strive to maintain its net General Fund - backed debt service at or
less than 8% of available annually budgeted revenue. This ratio is defined as the
City's annual debt service requirements on Certificates of Participation and Lease
Revenue Bonds compared to total General Fund Revenues net of interfund
transfers. This ratio, which pertains to only general fund backed debt, is often
referred to as "lease burden."
2.. fievenu-- Bonds - Long -term obligations payable solely from specific pledged
sources, in general, are not subject to a debt limitation. Examples of such long -
term obligations include those which achieve the financing or refinancing of
projects provided by the issuance of debt instruments that are payable from
restricted revenues or user fees (Enterprise Revenues) and revenues generated
from a project.
In determining the affordability of proposed revenue bonds, the City will
perform an analysis comparing projected annual net revenues (exclusive of
depreciation which is a non -cash related expense) to estimated annual debt
service. The City should strive to maintain a coverage ratio of 125% using
historical and/or projected net revenues to cover annual debt service for bonds.
The City may require a rate increase to cover both operations and debt service
costs, and create debt service reserve funds to maintain the required coverage
ratios.
3. Special Districts Financing - The City's Special Districts primarily consist of
Community Facilities Districts (CFDs) and 1913/1915 Act Assessment Districts
(Assessment Districts). The City will consider requests for Special District
8
F -6 (New)
formation and debt issuance when such requests address a public need or
provide a public benefit. Each application will be considered on a case by case
basis, and the Finance Department may not recommend a financing if it is
determined that the financing could be detrimental to the debt position or the
best interests of the City.
4. Conduit Debt - Conduit financing provides for the issuance of securities by a
government agency to finance a project of a third party, such as a non - profit
organization or other private entity. The City may sponsor conduit financings for
those activities that have a general public purpose and are consistent with the
City's overall service and policy objectives. Unless a compelling public policy
rationale exists, such conduit financings will not in any way pledge the City's
faith and credit.
J. STRUCTURE OF DEBT
1. Term of Debt - Debt will be structured with the goal of distributing the
payrents for the asset over its useful life so that benefits more closely match
costs for both current and future residents. Borrowings by the City should be of
a duration that does not exceed the useful life of the improvement that it
finances. The standard term of long -term borrowing is typically 15 -30 years.
2. Rapidity of Debt Payment - Accelerated repayment schedules reduce debt
burden faster and reduce total borrowing costs. The Finance Department will
amortize debt through the most financially advantageous debt structure and to
the extent possible, match the City's projected cash flow to the anticipated debt
service payments. "Backloading" of debt service will be considered only when
one or more of the following occur:
a) Natural disasters or extraordinary or unanticipated external factors make
payments on the debt in early years prohibitive.
b) The benefits derived from the debt issuance can clearly be demonstrated
to be greater in the future than in the present.
c) Such structuring is beneficial to the City's aggregate overall debt payment
schedule or achieves measurable interest savings.
d) Such structuring will allow debt service to more closely match project
revenues during the early years of the project's operation.
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F -6 (New)
3. Level Payment - To the extent practical, bonds will be amortized on a level
repayment basis, and revenue bonds will be amortized on a level repayment
basis considering the forecasted available pledged revenues to achieve the lowest
rates possible. Bond repayments should not increase on an annual basis in
excess of 2% without a dedicated and supporting revenue funding stream.
4. Serial Bonds, Term Bonds, and Capital Appreciation Bonds - For each
issuance, the City will select serial bonds or term bonds, or both. On the
occasions where circumstances warrant, Capital Appreciation Bonds (CABs) may
be used. The decision to use term, serial, or CAB bonds is driven based on
market conditions.
5. Reserve Funds - The City shall strive to maintain fund balance in the Facilities
Replacement Plan Reserve at a level equal to or greater than the maximum
annual debt service of existing obligations.
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F -7
INCOME PROPERTY
The City owns and manages an extensive and valuable assortment of property including streets,
parks, beaches, public buildings and service facilities. The City also owns and operates a yacht
basin, a mobile home park, a luxury residential development and various other income
properties. Most of the income property is tidelands, filled tidelands or waterfront.
Unencumbered fee value of income property is estimated at upwards of one hundred million
dollars, and income typically contributes ten percent of all City revenues.
As ownertmanauer of property, the City is the steward of a public trust, and state law requires the
City to maximize its returns on state— manatted property or be subject to a charge of making a gill,
of public funds. Nevertheless, the City Council recognizes the importance of this property not
only as a revenue generator, but also as a means to provide otherwise unfeasible uses and
facilities to benefit the community.
In managing its property, the City will continually evaluate the potential of all City owned
property to produce revenue. This may include leasing unused land, renting vacant space, and
establishing concessions in recreation areas or other similar techniques. The City Council will
evaluate the appropriateness of establishing new income properties using sound business
k principlcspfineipals and after receiving input from neighbors and users.
The policy of the City Council is that income property be managed in accordance with the
following:
A. Whenever a lease, management contract, concession, sale or similar action regarding
income property is considered by the City, an analysis shall be conducted to determine
the maximum or open market value of the property. This analysis shall be conducted
using appraisals or other techniques to determine the highest and best use of the property
and the highest value of the property.
& All negotiations regarding the lease, management contract, concession, sale or similar
action, regarding income property shall include review of an appraisal or analysis of the
use being considered for the property conducted by a reputable and independent
professional appraiser, real estate consultant or business consultant.
C. The City shall seek, whenever practical and financially advantageous, to operate or
manage all property and facilities directly with City staff or contractors.
D. In all negotiations regarding the lease, management contract, concession, sale or similar
action regarding a non - residential income property, the City shall seek revenue equivalent
to the open market value of the highest and best use; and, whenever possible the City
shall conduct an open bid or proposal process to insure the highest financial return.
E. Whenever less than the open market or appraised value is received or when an open bid
process is not conducted, the City shall make specific findings setting forth the reasons
thereof.
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Such finding's may include but need not be limited to the following:
1. The City is prevented by tideland grants, Coastal Commission guidelines or
other restrictions from selling the property or converting it to another use.
2. Redevelopment of the property would require excessive time, resources and
costs which would outweigh other financial benefits.
3. Converting the property to another use or changing the manager,
concessionaire or lessee of the property would result in excessive vacancy,
relocation or severance costs, which would outweigh other financial benefits.
4. Converting residential property to another use or opening residential leases to
competitive bid would create recompensable liabilities and other inequities for
long -term residents.
5. The property provides an essential or unique service to the community that
might not otherwise be provided were full market value of the property be
required.
6. The property serves to promote other goals of the City such as affordable
lousing, preservation of open space or marine related services.
F. Generally, lengths of leases, management contracts, concessions or similar agreements
vriid be limited to the minimum necessary to meet market standards and will contain
appropriate re €appraisal and inflation protection provisions. Also, all agreements shall
contain provisions to assure complete audits periodically through their terms.
G. All negotiations regarding the lease, management contract, concession, sale or similar
action regarding income property shall be conducted by the City Manager or his /her
designee under the direction of any appropriate City committees, prior to eoas:deratiefi
Is r
-- Gounei-
H. To provide an accurate accounting of actual net revenues generated by the City's income
property, all costs and charges directly attributable to the management of a specific
income property shall be debited against the gross revenues collected on that property in
the fiscal year the costs are incurred. Costs and charges include property repairs and
maintenance, property appraisals, and consultant fees, as authorized by the City Council,
City Manager or by this Income Property Policy.
1. The City Manager or his/her designee is authorized to sign a lease,
management contract, concession or similar agreement or any amendment thereto, on
behalf of the
elarify ,. «....,,i ,..
s z were e IIISaac, .,r en . . .,..t: the b g,—cac� =aTY
Y'fui l4evenu s
2
F -7
ir.cl4,400-or-�. Notwithstanding tlYe foregoing, the Gitager
or bis/her designee, ar a City Council member, marefer any lease, management
contract concession or sirriilar agreement or any _amendment thereto, to the City Council
for its consideration and/or action.
Adopted - July 27, 1992
Amended - January 24,1994
Amended - February 27,1995
Amended - February 24,1997
Amended - May 26, 1998
Amended — August 11, 2009
Amended — Ma_y_ .2013
Formerly F -24
F -28
FACILITIES FINANCIAL PLANNING T'EPT A^.C"RL'XTT PROGRAM
PURPOSE
To establish the policy for the administration of the City's Facilities Financial PlanninZ
ReProgram.
DISCUSSION
In addition to the annual Capital Improvement Projects Program (CIP)- program, the
City has established a long term plan for replacement of aging General Fund supported
facilities. The primary focus of the program is the replacement or major renovation of
existing physical infrastructure. The addition of new facilities is also a goal of the
program. The emphasis is on structures and adjacent grounds, rather than
transportation, environmental, or other projects funded either in whole or in part by the
General Fund.
OBJECTIVES
A. To insure that a long -term program addressing large, non - recurring projects for
replacement of facilities is addressed as part of the budget process each year.
B. To insure that development fees, proceeds derived from redevelopment ox
redeployment of existing land and capital assets owned by the City, and other
non - recurring revenues are dedicated to the replacement of infrastructure
facilities, rather than ongoing operating expenses.
C. To provide a consistent, level funding plan that will minimize the 'peaks and
valleys' in General Fund support levels for elements of the program.
D. To insure that projects are properly prioritized and scheduled, taking into
consideration the relative age, condition, and functional viability of current
facilities; pairing of projects where prudent; and cost implications of immediate
projects for the overall long -term program.
1
.a
E. Budgeting the cost of facilities while those facilities are in use is consistent with
good government management practices. However, creating a legacy of
excessive fixed costs for debt service is not. Therefore one of the objectives of this
program is to insure that future generations will not be required to carry a
disproportionate fiscal burden for previously completed projects.
SOURCES AND USES OF FUNDS
Funding for the program comes from development fees, proceeds derived from
redevelopment or redeployment of existing land and capital assets owned by the City,
contributions from individuals and organizations within the community, annual budget
allocations from the General Fund, net proceeds of Certificates of Participation or other
financing instruments, and investment earnings on temporarily idle funds.
Program funds are used for actual site acquisition, design, construction, and directly
related costs; as well as debt service expenses.
POLICY AND PROCEDURE
A. Each year, as part of the budget process, staff shall prepare an update of the
Facilities R-c-�.":xecrreRt-Financial Planning,Pegram -Tool for review, modification,
and approval by the City Council.
B. Unless otherwise specified in individual development agreements, other
governing documents, or as otherwise specifically directed by the City Council,
all development fees received by the City will be dedicated to the Facilities
pi,�^- Financial Plaiutingl= 'regr- an�Reserve fund.
C. Prudent assumptions regarding revenue and expenditure growth, inflation, and
all relevant factors will be included in each year's update of the Facilities
m
^nr° Financial Planning P�Tool.
nom. E
F -28
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P g shall b — acvd fi ea
General + n r . im�+ c ccrcc :n�rmar« a fs, r u+cs' orr�-;-- .,.25 ... .1., . .....1.. 1 0.1 .. +.4., . ..,t.•, . .. t>,,i w
Fund contributions to the Program shall not be less than 3.0% of the total
General Fund OPeratinR Bud e� t. If there is a shortfall in General Fund revenue
due to a decline in economic actii, and it is necessary to reduce expenditures,
General Fund contributions to the Facilities Financial Planning Program can be
temporarily modified to maintain contributions under the 3% threshold.
F. The financing duration for any borrowed funds shall not exceed 30 years or the
protected. life of the new facility, whichever is less.
E The Facilities Replac-ement Financial Planning P+egYaxnr Toot may be amended by
City C otcnci3 action in the event of a natural disaster or financial crisis.
Adopted - August 11, 2009
Amended - 2013
3
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TEMPORARY BANNERS EXTENDING OVER
THE PUBLIC RIGHT -OF -WAY
FINDINGS AND PURPOSE
Temporary banners and signs pose risks to the public in the form of potential physical
obstructions in or over the right of way and by distracting an individual who otherwise
would, and should, focus on other users. The City Council also finds that, in the
absence of the size and number limits specified in this policy, temporary banners or
sign could reduce property values, adversely impact land uses, and interfere with the
recreational objectives of visitors to the City of Newport Beach. A total prohibition on
the installation of temporary banners and signs is appropriate with the exception of the
provisions of this Policy and Chapter 20.67 of the Newport Beach Municipal Code
because there are adequate alternative means of communication for those wishing to
engage in commercial or non - commercial speech except for temporary real estate signs
and non - profit groups organizations conducting community wide events co- sponsored
by the City of Newport Beach and open to the general public. Finally, the City Council
has determined that the restrictions contained in this policy and the provisions of
Title 20 of the New)ort Beach Municipal Code are the least restrictive means available
to accomplish the public safety, economic and aesthetic objectives of the City Council.
GENERAL PROVISIONS
Temporary banners and signs shall not be permitted within or over any public street or
pedestrian right of way with the exception of temporary real estate signs as specified in
Chapter 20.67 of the Newport Beach Municipal Code and banners notifying the general
public of a community wide event, open to the general public without charge,
conducted by a non - profit corporation or organization, and co- sponsored by the City of
Newport Beach. Temporary banners and signs shall be installed in strict compliance
with the provisions of this Policy and any conditions imposed on the permit by the
Public Works Director and, if required, by the Municipal Operations L-4A ties
[di;Director.
PERMIT PROCESS
A. Except as provided in Title 20 of the Newport Beach Municipal Code, no person
shall install any temporary banner or sign within any public right of way
without first obtaining a permit issued by the Public Works Department.
L -16
B. Applications for a temporary banner permit shall be submitted to the Public
Works Department on a form supplied by the City, and prior to 30 days of
planned installation date.
C. The Public Works Director shall determine if the application complies with the
standards specified in this policy.
D. The Public Works Director shall approve/ deny/ recommend City Council
approval of the application within five (5) working days. If City Council
approves the request,, subsequent requests forfrom the same event maybe
approved by the City Manager, provided that the size, number, location and
banner type (Iangcaage and raaohics, )are unchangad �
E. The Public Works Director shall approve the permit if the application conforms
with the standards contained in this policy.
F. The Public Works Director shall deny the permit if the application does not
conform to the standards in this policy and shall give the applicant written notice
of, and the reasons for, the denial.
G. The Public Works Director may impose a refundable security deposit to be
applied to any damages, repairs to standards or poles not corrected by permittee
within 14 days of banner removal or any special services required by City.
H. The Permittee shall agree to indemnify and hold harmless the City of Newport
Beach
1. The Permittee shall maintain a minimum of $1,000,000 in liability insurance from
a company with a Best's Key Rating Guide parameter of "A" or better and a
financial size category of "VIII" or higher.
STANDARDS
A. Manner of Installation.
1. Permittee shall install no more than one hundred (100) banners;
2. a) Banners on streetlight poles shall be no more than 2.5 feet wide and
8.0 feet high and approved by the tl¢unic�al "?perations Utilities,
2
L -16
Department. Wind load calculations, determined by a registered
engineer, will be required for banners greater than 20 square feet;
b) Banners other than streetlight pole banners shall be no more than
4' x 8' wide and are subject to review and approval by the Public
Works Department for safety sight distance and clearance issues.
3 6 ay
pit lidy isatc ehles [d3)
4.3. No more than one (1) banner shall be installed on any pole or standard
and banners may not be installed between poles or standards;
5-1. The banners shall contain only the name of the permittee and the date,
time and the name of the event to be conducted by the permittee;
675. All banner brackets on streetlight poles must be mounted at least fourteen
(14) feet above the ground surface;
.. All banner brackets on streetlight poles must be installed using stainless
steel band clamps and the brackets must be sufficiently strong to
withstand wind -load generated by ninety (90) mile per hour winds.. Each
bairn r shall h.a,ce a minimum of two 2 5 -inch half circle wind slits are
rtqui1Led_,"[d41
87. Poles or standards must be wrapped with forty five (45) ml thick black
rubber sheet or other pre- approved material under all steel brackets and
clamps and no portion of any bracket shall be in direct contact with the
surface of any street light pole or standard. In addition, all street light
pole(s) being used must be inspected and approved by the Municipal
Qperations L-tilitit-,-Department;
P:8. Banners shall be installed only at locations specified on the permit,
[ ?. Permittee shall install and remove banners in strict compliance with the
traffic control, signage and warning device criteria specified in the
WATCH handbook and/or the C 4r-an -California mmi anual on er
Uniform tTraffic cControl Devices [dsi and
3
L -16
t -1:10. If more than one permittee requests the use of the same street light pole(s)
at the same time, the City may require removal of some of the banners to
allow other organizations to install banners authorized under City
policies.
B. Time of Installation.
Permittee shall contact the Municipal Ox-,rations City l leetria a �t he
Utiliiic,�- Department of the City of Newport Beach at least forty eight (48)
hours prior to the installation of any banner on streetlight poles pursuant
to the permit;
2, All banners and supporting material shall be removed within thirty (30)
days after the date of installation;
C. Place of Installation.
Banners shall only be installed on City owned poles and standards, or
pre= €exta l} p6japproved locations in roadway medians, in City parks, and
on other City owned facilities;
2. Banners shall not be installed on any pole or standard which could create
sight distance problems for pedestrian or vehicular traffic;
3. Banners shall not be installed on poles or standards in any residential
district,
4. Banners shall only be installed at the approved locations indicated on the
plan submitted with the banner application.
Adopted - January 24,1994
Amended - February 26,1996
Amended - February 24,1997
Amended - May 8, 2001
Amended - April 8, 2003
Amended - October 10, 2006
Formerly M4
Ell
STATE OF CALIFORNIA }
COUNTY OF ORANGE
CITY OF NEWPORT BEACH }
1, Leilani 1. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the
whole number of members of the City Council is seven; that the foregoing resolution, being Resolution
No. 2013 -42 was duly and regularly introduced before and adopted by the City Council of said City at a
regular meeting of said Council, duly and regularly held on the 141h day of May, 2013, and that the same
was so passed and adopted by the following vote, to wit:
Ayes: Gardner, Petros, Hill, Selich, Henn, Daigle, Mayor Curry
Nays: None
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of
said City this 15th day of May, 2013.
City Clerk
Newport Beach, California
(Seal)