Coffers in ‘much better shape’

Newport Beach expects only sluggish growth in sales and property-tax revenue for the next fiscal year, but the city is still faring better than many other California municipalities, officials said Tuesday.

“It’s a challenge this year, but we are in much better shape than other communities,” said Councilman Keith Curry, who heads up the city’s budget committee. “I think the city is going to have to be restrained in terms of additional spending and prepared to take additional actions if the situation deteriorates further.”

Newport Beach plans to tighten its belt next year by slashing city department budgets by 2% and reducing spending on capital fund projects by 2%, resulting in a savings of about $5 million.

City officials continue to keep a watchful eye on the state’s ongoing budget crisis and what it will mean for Newport’s finances in the coming budget year.

The state is poised to snatch up $2 billion in property tax revenues from Newport Beach and other cities to help close its $24.3-billion budget gap. Newport could stand to lose $5.8 million to California if state lawmakers approve the plan later this year.

“It would be grossly unfair to taxpayers and residents of Newport Beach to see resources diverted to pay for wasteful state spending,” Curry said.

The Newport Beach City Council will hash out the details of next year’s $225.8-million budget at its next meeting, 7 p.m. Tuesday.

City officials expect property-tax revenue to grow by only 2% in the next budget year, or from $55.8 million to $56.9 million. Historically, property tax revenues have grown by about 6% to 8% each year, but property values have been trending downward, Newport Beach finance director Dennis Danner said.

The city is also budgeting conservatively for increases in sales tax revenues, or $20.2 million, compared with $19.8 million this year.

The proposed budget includes about $125 million in salaries and benefits, $60.8 million in maintenance and operations, and $30.5 million in capital improvements.

Next year’s total budget is about $40 million smaller than the current $265 million budget, but that’s mostly because the city will fund fewer capital improvement projects next year, such as the new Oasis Senior Center that is under construction in Corona del Mar.

Last year’s budget was so much larger in part because the city had included plans to finance part of the new senior center, which was estimated to cost about $20 million at the time, Danner said.

By The Numbers

Figures from the 2009-10 budget:

 Anticipated property-tax revenue: $56.9 million

 Anticipated sales-tax revenue: $20.2 million

 Cost of salaries and benefits: $125,722,910

 Cost of maintenance and operations: $60,891,237

 Cost of capital improvements: $30,526,600