An increase of $2 million to budget has council members discussing using some of $98 million in reserves.

With reserves expected to reach $98 million next fiscal year, Newport Beach officials indicated this week that they may be ready to spend some of the money.

The City Council gave preliminary approval to the 2012-13 plan Tuesday night, after Finance Director Tracy McCraner presented a balanced budget that invests slightly more in information technology and capital improvements, while generally keeping expenditures at the same level as this year.

But the city has a long list of deferred harbor and beach projects — like more than $30 million in identified dredging and a $68-million project to replace Balboa Island’s aging sea walls. While leaders have increased fees for mooring holders and others around the harbor, the “tidelands” revenue does not come close to fulfilling its more than $109-million needs.

I looked at this once in 2007, and again in 2010, so in celebration of May Day and International Workers’ Day 2012, I am going to celebrate the People’s Republic of Newport Beach city employees and the so-called republican (small r) City Council.

So, let me first reiterate my discontent for a statement by former Newport Beach City Manager Homer Bludau, stating that they were going to build a new city hall (back when it was still going to be on the Balboa Peninsula) to accommodate “future employee growth.”

Future Employee Growth. Makes my head explode.

So is there any doubt in your mind that our new, $100-million to $150-million White Elephant/Taj Mahal/City Hall/Civic Center will be built to also accommodate future employee growth?

Under the prior city manager’s regime, Newport Beach got lots and lots of employees, to the point where trailers were put up on the lawn to fit them all in.

And our council sat back and let it happen because times were good. So good that city employees were paid extremely well and earned amazing pensions and benefits. So good that the pension liability has grown large enough to choke multiple horses.