June 14, 2022
Item No. 22
City Council
June 14, 2022
✓Strong budget surplus for FY 2021-22
✓Record General Fund revenues for FY 2022-23
✓Proposed General Fund budget is balanced
✓Increased budget accuracy
✓Updated and comprehensive savings plans for long-term needs ✓Increased pension UAL payment of $45.0 million resulting in paydown of the liability one year earlier than previously planned ✓Structural
General
Fund
budget surplus of $7.8 million subject to the
Council's
direction
as to
possible
additional
resource allocations
City of Newport Beach — Finance Department
• Minor revisions area
normal part of the
budget process as
items come to light
following publication
of the budget
document
• This year's revisions
include:
• Addressing fuel
cost increases
• MOU / contract
approvals
• Miscellaneous
error and
omission
corrections
GENERALFUND
Budget
Increase (Decrease
Expenditures
1 Fuel Costs
$
145,179
2 Student Aides reclassified to Interns
$
25,966
3 Janitorial Services
$
114,993
4 Lifeguard Management Association MOU
$
38,626
5 City Clerk Agreement
$
9,553
Total Expenditure Budget Changes
$
334,316
Total General Fund Changes: $ (334,316)
OTHERFUNDS
Budget
Increase (Decrease
Expenditures
1 Janitorial Services - Fund 701 (Water Enterprise Fund) $
1,000
2 Janitorial Services - Fund 711 (Wasterwater Enterprise Fund) $
501
3 Fuel Budgets - Fund 701 (Water Enterprise Fund)
$
26,000
4 Fuel Budgets - Fund 752 (Equipment Fund)
$
15,000
5 CIP Protect - 19F13 Junior Lifeguards Building
$
450,000
Total Expenditure Budget Changes $ 492,501
Revenue
1 Park Zone 9 - Residence at Newport Center $ 846,076
2 Park Zone 10 - Estimated Parcel Maps $ 90,000
3 Contributions Fund - 19F13 Junior Lifeguards Building $ 450,000 Total Revenue Budget Changes $ 1,386,076
Total Other Fund Changes: $ 893,575
City of Newport Beach — Finance Department
KI
• The budget remains balanced and now incorporates $334,000 of Proposed Budget Revisions and the resulting decrease in beginning unrestricted fund balance due to 25% of that amount being added to the contingency reserve
BEGINNING UNRESTRICTED FUND BALANCE
SOURCES:
Operating Revenues
Transfers In from Other Funds
TOTAL SOURCES
USES:
Operating Expenditures
Transfers Out
TOTAL USES
ENDING UNRESTRICTED FUND BALANCE
14,421,264 14,337,685 (83,579)
265, 030, 502
265, 030, 502 -
18, 550, 724
18, 550, 724 -
283,581,226
283,581,226 -
244,186,089 244,520,405 334,316
31,597,269 31,597,269 -
275,783,358 276,117,674 334,316
225219,132 21,801,236 (417,896)
City of Newport Beach — Finance Department
n
• Budget Amendment No. 23-001 will implement the
appropriation of the structural budget surplus
• $5.0 million allocation to the CalPERS UAL payment
• $1.0 million transfer to FFP Fund for future park facility projects • $1.5 million transfer to the CIP Fund for FY 2023-24 CIP development
City of Newport Beach — Finance Department 5
• Citywide new positions discussed previously
• Various routine position reclassifications have also been included in the budget for approval as further detailed in the staff report
• Approval of recommended changes to position
classifications required by NBMC Section 2.2.8.030
• Approved annually during the budget process
• CalPERS requires pay schedules to be publicly available, to be Council -approved, and to meet various requirements • Approval of the attached salary ranges by the Council meets these requirements
• Revised LMA MOU salary schedule for one position
City of Newport Beach — Finance Department
• As part of the Finance Committee's review of the City's various long-term funding programs, certain required changes were identified to City Council Policies • City Council Policy F-28 — Facilities and Harbor and Beaches Financial Planning Programs
• FFP contributions should equal or exceed debt service • Harbor and Beaches Master Plan contributions should adequately fund projects and account for inflation
• FFP and Harbor and Beaches Master Plan transfers for debt service, if any, should be differentiated from transfers to fund balance • FFP minimum fund balance language relocated from Policy F-2 • City Council Policy F-2
• FFP language relocated to Policy F-28
• Updates insurance reserve language to be consistent with current practice • Removes specific dollar reference for Oil and Gas Reserve contribution • Various minor adjustments for clarify, consistency, and conformity with current accounting standards
City of Newport Beach — Finance Department 7
• The Finance Committee met to consider the proposed
budget at their May 26t" meeting
• The Committee voted unanimously to recommend the City Manager's proposed FY 2022-23 budget to the City
Council for approval as presented
• The Committee voted unanimously to recommend the
allocation of
the structural
surplus
and anticipated
year-
end
surplus
as discussed
with
the
Council
on
May
24tn
City of Newport Beach — Finance Department
1. Conduct a public hearing to receive input on the proposed budget.
2. Review and approve the Proposed Budget Revisions.
3. Review and approve the recommended list of position
classifications and salary ranges.
4. Approve a Budget Amendment appropriating the structural budget surplus.
5. Adopt a resolution approving the changes to City Council Policies F-2 and F-28.
6. Adopt resolution approving the budget and make the
required CEQA determination.
City of Newport Beach — Finance Department
City of Newport Beach — Finance Department 10