For now, a balanced budget awaits Newport Beach

Mathis Winkler

NEWPORT BEACH -- Taking on what’s probably their most important task

each year, City Council members began working their way through three

volumes of the proposed budget for fiscal year 2001-02.

The document is essentially an estimate of the city’s income and a

plan on how to spend the money. It can change throughout the year.

As things stand, income and expenses will be balanced, at $136.9

million and $135.5 million, respectively.

While City Manager Homer Bludau presented the inch-thick books as his

best stab at how to use the city money, he encouraged council members to

scrutinize it closely.

“If you have any questions, don’t feel there’s anything too small,” he

said. “This is really the document where your priorities are on record.”

And ask they did.

Councilman Tod Ridgeway wanted to know where the city could save money

by privatizing services.

“I just think that in light of the economy where we’re headed, we

should keep our radar screen on . . . privatization,” he said, adding

that such a debate had been neglected so far.

While emphasizing that he didn’t propose to do away with the city Fire

Department or trash pickup service, Ridgeway said city officials had cut

down costs by contracting with private companies for such things as the

maintenance of highway medians, tree trimming and restroom cleaning.

“It’s [costing] less money,” he said. “You lose your high-level

personnel and substitute it with [less expensive] persons.”

Bludau countered that he didn’t oppose privatization, adding that some

cities virtually contract for all services and make do with a skeletal

staff of 20 to 25 employees.

In the end, it depends on what service level the city’s leaders and

residents want for Newport Beach, Bludau said.

But Ridgeway said a deterioration of services didn’t have to follow

privatization.

“Five years out, we’ll look at this much more,” he said, adding that a

proposal in the budget to add 14 new positions to the city’s 728

employees might cause problems if there’s a recession.

That idea also didn’t get Councilwoman Norma Glover’s approval.

“I’m shocked that you have a budget with 14 new employees,” she told

Bludau. “What is making the [city] organization more difficult that we

need 14 more people?” While increased recreation fees, grants and lower expenditures because

of an increase in efficiency would pay for several of the new jobs, five

of the positions, such as a clerk in the human resources department,

would have to be fully financed with city funds, Bludau said.

Because each department head will make presentations during the next

two study sessions, council members agreed to revisit the issue at the

end of the process.

Bludau also recommended covering any increase in energy costs caused

by the state’s energy crisis through conservation and internal

adjustments.

“But . . . we may be back during the year” to revisit the issue if

prices skyrocket, read the fine print on one of Bludau’s presentation

slides.

Mayor Gary Adams said he didn’t feel comfortable taking this approach

and asked Bludau to come up with alternatives.

“I feel foolish here making that assumption” that the city will be

able to cover higher energy costs by conservation, he said. “It doesn’t

make sense.”

FYI

The next budget study session will take place May 22, followed by a

third one June 12. On that day, council members also will hold a public

hearing to discuss the document during their evening meeting. Adoption of

the budget is scheduled for June 26. The new fiscal year will begin July

1. All meetings take place at City Hall, 3300 Newport Blvd. Information:

(949) 644-3005

BOX

Budget highlights

City revenue

Property taxes $28.7 million

Sales taxes $20.9 million

Hotel taxes $8.4 million

Business licenses $2.1 million

Parking fines $2.15 million

Water services $17.16 million

Total revenues $136.9 million

City expenditures

Police $26.97 million

Fire $18.8 million

Public Works $17.6 million

Community services $7.65 million

Total city operations $86.14 million

Capital improvements $34.87 million

Total expenditures $135.5 million

* Source: Newport Beach City Hall. Note that not all the revenue and

spending is included.