Officials searching for Newport Coast money

June Casagrande

NEWPORT BEACH -- Newport Coast residents who paid about $13 million to

build a portion of Newport Coast Drive received only about $3.5 million

when part of the road was sold and became the toll road -- one of several

startling bookkeeping mysteries the city is investigating for its newest

residents.

Some say as much as $20 million may be unaccounted for and they want

answers.

“There’s a perception throughout our community that the funds were not

used appropriately by the county,” said Jim McGee, chairman of the

Newport Coast Committee of 2000 and an appointee to the city’s advisory

committee for the area. “We’re hoping the city will be able to determine

where the money went.”

Newport Coast’s 7,000 or so residents became Newport Beach residents

Tuesday when annexation of the area became official. One of the perks for

the community’s residents: a pre-annexation agreement that says city

staff will try to get answers to questions that county officials have

shrugged off regarding about $181 million in bonds sold to help build

Newport Coast -- bonds its residents pay off through their tax bill.

From a series of assessment district bonds issued in 1988, $40.3

million was used to pay for construction of the 6.1-mile Newport Coast

Drive, which runs from MacArthur Boulevard to Coast Highway.

At first, construction of the road was met with strong support, as it

promised to reduce the gridlock traffic that then could flow only through

Corona del Mar.

But then the Transportation Corridor Agency announced it would take

the northern two miles of Newport Coast Drive as part of the toll road.

And the agency valued the stretch of road at $3.5 million, although a

third of the road’s cost would have been $13.3 million.

“Not a very good deal for us,” McGee said.

The road now forms the border at the city of Irvine, with its southern

lanes officially part of Newport Beach.

Of further concern to residents: The $3.5 million was never put back

into the pool that originally paid for the road. Instead, it was put into

a fund set aside for road improvements that extend outside Newport Coast

into the city of Irvine.

“I think the biggest problem right now is just a lack of good

information provided to the residents and a lot of unanswered questions,”

said Assistant City Manager Dave Kiff, who is working on the problem. “We

hope to answer those questions and give them all the information.”

Though some in Newport Coast suspect misappropriation of money, Kiff

said the city is approaching the matter from a position that such

mishandling is unlikely.

“I’d be surprised if we find any wrongdoing,” he said.

The toll road has been a sore spot among Newport Coast residents since

the early 1990s because it requires them to pay a toll to use a road

they’re already paying for on their tax bills.

As residents of unincorporated Orange County, some tried to get

answers from county representatives.

“We sent the county a letter, but the answers they gave us were pretty

unsatisfactory,” McGee said.

Supervisor Tom Wilson, who represents the area, could not be reached

for comment. Marian Beacham of the county’s financing division said her

office is gathering information on all the assessments on Newport Coast

residents and plans to meet with Newport Beach officials in the near

future. She said she’s confident that once the numbers are laid out on

the table, residents will be assured that all their money is accounted

for.

“There’s no money missing,” Beacham said. “That’s not the case.”

The issue is just one of a number of challenges the city faces while

finishing the annexation. An advisory committee is expected to be formed

at Tuesday’s City Council meeting to tackle issues such as how the city

will use $18 million it received from the Irvine Ranch Water District to

help residents pay off some of their assessment district debt and whether

to use an additional $7 million to build a community center at the top of

Signal Peak or near the intersection of Newport Coast Drive and San

Joaquin Hills Drive.

“We’re going to start dealing with all these issues,” said City

Councilman John Heffernan, whose district now includes the area. “There’s

a lot to do up there.”

-- June Casagrande covers Newport Beach. She may be reached at (949)

574-4232 or by e-mail at o7 june.casagrande@latimes.comf7 .