Newport Beach to adopt budget for upcoming fiscal year

Newport Beach City Council members will look at the budget for the upcoming fiscal year on Tuesday.

Members reviewed and offered revision to the proposed budget at a study session on May 25. A staff report prepared for Tuesday’s meeting explains the budget is composed of City Manager Grace Leung’s proposed operating budget and the proposed capital improvement program budget.

A third component to the budget includes the proposed revisions to the initial documents released last month.

As it stands, the operating budget is proposed to be $309.1 million, and the capital improvement program budget is $35.5 million in the upcoming fiscal year, which will begin on July 1.

About $195.9 million of capital spending is proposed over the six-year capital improvement program. The budget proposals assume that certain revenue resources will improve over the next year, though potentially not to pre-pandemic levels.

City staff said that at the time of the drafting of the budget the city’s most impacted revenue sources — sales tax and the transient occupancy tax, also known as the hotel tax — were coming in higher than predicted last year.

“Businesses pivoted in creative ways to reach their customers as they were able to open at some capacity sooner than expected resulting in relatively strong consumer spending,” said city staff.

“Recent sales tax information shows that retail and restaurants have been hit especially hard while transportation is showing quarter over quarter increases,” staff wrote. “There is still room for additional positive improvement in sales tax revenues in the coming year; however, staff remains conservative in projecting sales tax revenues and will wait ... before making additional adjustments to the sales tax revenue projection as the fiscal year gets underway.”

City staff said Newport Beach weathered the economic conditions of the pandemic. Officials made $33 million in cuts to balance the budget last year and were able to avoid a reduction in services.

“The fiscal year 2021-22 proposed budget furthers the same core budget priorities that have served the community well in recent years, while restoring the budget reductions that were implemented in response to the pandemic,” said city staff. “We endeavor to maintain all priorities in a manner that is consistent with prior years.”

Also up for discussion on the dais this Tuesday is a resolution of intention to disestablish the Newport Beach Restaurant Assn. Business Improvement District, the disestablishment of the Corona del Mar Business Improvement District and extension of emergency temporary use permits granted during the pandemic.

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