THAT’S DEBATABLE:Controlling spending as Newport’s revenues rise

FOR THE RECORD

The That’s Debatable feature in Thursday’s paper, “Controlling spending as Newport’s revenues rise,” incorrectly indicated that Newport Beach City Councilman Michael Henn did not respond to an e-mailed question from the Daily Pilot.

Henn sent a response that was not received due to problems with the e-mail system at the paper.

Newport Beach City Council finance committee members have said they want to take a closer look at why the city’s operating costs have jumped along with recent spikes in revenue. As the city’s 2007-08 budget is being drawn up, the council will have to consider which new projects and programs should get taxpayers’ dollars. What, if anything, should the council do to rein in city spending, both now and over the long term?

Due to rapidly increasing property values and tax revenues from the enormous retail market, general fund revenues grew from $96 million in 2002 to a projected $147 million in 2007. The city must concern itself with revenue growth by taking even better care of our premium amenities — the harbor and the Back Bay, retaining the character of neighborhoods, and partnering with business on initiatives such as acquiring more land by the airport for auto sales. The city must restrict growth (8.4% compounded annual rate) in operating expenses so that more of your tax dollars are used to address important community needs such as improving ball fields, traffic signal synchronization, and refurbishing facilities for seniors. Increased expenditures is due in part to the city’s use of baseline budgeting, which ratifies the prior year’s spending and examines only proposed expenditures. The city is embarking on an objective fact-finding to sort out the city’s expense structure. The city will be fortifying and where necessary reshaping its policies on budgeting, purchasing and employee practices. The city will also look to its employees for creative ideas.

COUNCILWOMAN LESLIE DAIGLE

District 4

One of the biggest problems in controlling expenses is inadequate planning. Although there will always be unforeseen contingencies, establishing clear priorities for the upcoming year, which the council will be doing this month, is a critical first step in managing expenses. It is also important to look beyond 12 months to understand the long-term impact of employee pensions, infrastructure needs and the like to the city’s financial health and factor those costs into both short and long-term planning.

COUNCILWOMAN NANCY GARDNER

District 6

Did not respond

COUNCILMAN

MICHAEL HENN

District 1

Did not respond

COUNCILMAN

DON WEBB

District 3

Because the city has a significant need to reinvest in its civic facilities, senior center, parks, roads, libraries and fire stations, we must be prudent in setting priorities and holding the line on excessive spending increases related to operations. To do this, we must examine each service to see if it can be provided more efficiently. We must also tend to the underlying economic health of the community to prevent a precipitous drop in property values or sales tax revenues and protect our existing funding from additional raids by Sacramento. The finance committee is beginning the process of establishing benchmarks to measure our effectiveness, which is the first step in ensuring long-term fiscal stability.

COUNCILMAN KEITH CURRY

District 7

First of all, we need to hold down our growth in operating expenditures. We have enjoyed several years of high growth in city revenues and our operating budget has grown in line with that revenue increase. We need to keep our operating budget more in line with inflation. Most of our operating budget is in salaries and benefits. We have a large unfunded liability in pension costs. As numerous employee contracts are coming up for renewal this year, the City Council must hold the line and not increase the unfunded pension liability we have. Our community demands the highest level of service, whether it is public safety or recreation or whatever. It is incumbent upon us to provide those services at the highest level on the most cost-efficient basis. Setting a budgetary goal of using the rate of inflation as a maximum increase is a start. If we exceed that, then we must look at the services we are providing and justify going over an inflationary increase to provide them. Also, we would need to review each program we are funding and see if we can provide that program in a more cost-efficient manner.

COUNCILMAN ED SELICH

District 5

Did not respond

MAYOR

STEVE ROSANSKY

District 2