May 2015.

The Newport Beach City Council this week approved a budget for the fiscal year beginning July 1. The vote was 4 to 3, with Councilmen Scott Peotter, Kevin Muldoon and Duffy Duffield opposed.

I voted for it.

I agree with Peotter’s statement at the meeting that this budget has not been thoroughly vetted by the finance committee and the council, because it was presented to us under tight time constraints. That has indeed been frustrating. It’s a very large and arcane document, and we new council members very much want to get an understanding of and control over city spending.

The result is a budget that none of us new members is completely happy with.

But here’s the thing: This is not the end of it. We will continue in the coming weeks, through the finance committee and council itself, to review and revise this budget using the budget-amendment process.

There is plenty of time to keep working — deliberately and in consultation with the community, other stakeholders and staff — to achieve our budget goals.

I am encouraged that we have made many fiscally responsible decisions already:

• We have eliminated the Balboa Performing Arts Center from the capital budget, at a savings of $5.8 million in project costs and hundreds of thousands a year in future operating costs. Plus the city will get income from the sale of the property.

• We have dealt with rapidly escalating cost estimates for a West Newport community center by drawing a line in the sand on its price tag and rolling back those estimates from $34 million to $25 million.

• We are getting ready to audit the civic center project and learn lessons that I believe will save us millions on future projects.

• We are moving forward on reducing city staff this year by considering the outsourcing of several more city functions. City staffing levels also will continue to shrink through attrition. We will definitely end this next fiscal year with fewer full-time employees than the current year, even including the four police officers added to improve public safety.

• We are paying more now to reduce long-term obligations like unfunded pension liabilities. This up-front payment of nearly $9 million is a new, higher cost in the budget, and it’s what is making the 2015-16 spending plan slightly larger than the current one. But it’s also what everyone knows must be done and avoids millions in future interest costs.

These are real accomplishments that directly reflect the platform that we new council members ran on last year. We can be proud of them.

Are these changes occurring at a rate that satisfies Peotter, Muldoon and Duffield? No. And I am not satisfied either.

But I know that we are working hard and making real progress, and we’re doing it in a way that is well-considered and not disruptive to the community. And there will be many more changes in the coming weeks and months.

Then, once we go through this process, we will direct and set parameters for the city staff in the preparation of next year’s budget — something we did not have the opportunity to do this year. We will be able to set revenue and spending targets at the very beginning of the process, toward the end of this calendar year. The draft budget we get next spring will more clearly reflect our fiscal restraint and caution.

Managing a quarter-billion-dollar budget is a serious and multiyear process that involves listening to many stakeholders, reviewing program and spending plans with staff, making sometimes hard choices, and being vigilant and diligent in following through.

It’s a long road, but I’m confident we will get to where we want to be.

DIANE DIXON is mayor pro rem of Newport Beach.

Team Newport leader Councilman Kevin Muldoon put it best, “I can’t in good conscience … support this budget that I view as too large and not taking care of the needs of Newport Beach first.”,0,7438872.story


A family explores Newport Beach's new Civic Center and Park on its opening day in 2013.

A family explores Newport Beach’s new Civic Center and Park on its opening day in 2013. (KEVIN CHANG / Daily Pilot/ May 4, 2013)

Two Newport Beach City Council members are calling for an audit of the city’s hotly debated Civic Center project.

The request from Mayor Pro Tem Diane Dixon and Councilman Kevin Muldoon comes on the heels of a city inquiry into whether Assistant City Manager Steve Badum failed to report gifts and meals from companies doing business with the city.

A memo from City Manager Aaron Harp and the City Council identified C.W. Driver, a Pasadena-based company that acted as construction manager for the $142.5 million Civic Center project, as one of the businesses that may have provided gifts to Badum.

The city sent a complaint about the matter to the Orange County district attorney’s office for review. The office has not filed charges against Badum.

Members of city staff and the council declined to comment on the inquiry or its relationship to the proposed audit.

“We are not looking for someone to blame,” Dixon said of the audit. “I personally don’t believe anything criminal or corrupt was going on, but I do believe there are lessons to be learned about how to better manage major public works projects in this city.”

When the Civic Center opened in May 2013, some residents saw it as a symbol of irresponsible spending by a city government that was out of touch with the needs of the community.

Dixon, Muldoon and Councilmen Scott Peotter and Marshall “Duffy” Duffield were elected to the council in November after running as a slate known as “Team Newport.” They were among the project’s harshest critics leading up to the election.

The audit idea was floated months before the Badum inquiry. When the new council members took their seats in January, city staff presented a cost analysis of the Civic Center project, explaining why some aspects cost more than others. While the rest of the council appeared to be satisfied by the presentation, Dixon expressed a desire for an outside company to look at the city’s process for construction projects.

And she and Muldoon said they have been approached by many residents who continue to question the Civic Center’s price tag.

Dixon said she is not concerned about the city’s current construction endeavors, including the $38.3 million Marina Park project that is scheduled to be completed by January on the Balboa Peninsula. But she said she hopes an audit would help the city improve its processes for future large-scale projects.

“We need to be able to go before the citizens and say, ‘Here’s what happened — the good, the bad and the ugly — and here’s what we’re going to do going forward,'” Dixon said. “Only then will we begin to restore the people’s trust in their city government.”

Muldoon said that if the council approves an audit, the city likely would contract with an agency to conduct it. A cost estimate for an external audit was not available, but Mayor Ed Selich said it would likely be “very expensive.”

“I don’t quite understand the reason for it,” Selich said. “My initial thought on it is that it will be … a waste of city money, unless there’s some specific reason why we should do it.”

Selich said he has not been approached by residents demanding an audit.

Muldoon said the audit’s benefit to the city would outweigh its potential cost in the long run.

“I think in the end the benefit in cost reduction on future projects is going to justify any expense,” he said.

Dixon and Muldoon plan to present the idea to the rest of the council at its next meeting May 12.


Newport taxpayers will pay over $666,000 this month in mortgage payments on the Civic Center, or “Taj Mahal.” That’s $8 million per year for 26 more years.

We should remember that it was Councilman Keith Curry and former council members Mike Henn, Steve Rosansky and Rush Hill who stuck us with a debt debacle that includes a $28-million pre-payment penalty. Who agrees to a pre-payment penalty?

Recently Councilman Scott Peotter simply wanted to have a discussion on the Taj debt and our long-term pension debt — one of the highest per-capita in the county — but he was dissuaded by the civic center supporters on the council. I applaud him for advocating for transparency.

The media reports about the assistant city manager possibly accepting gifts from the Taj Mahal contractor is yet another reason the City Council should commission a full audit of the civic center project. We need to know what the city manager and council knew.

An audit would determine if the 700-plus change orders were properly approved without influence.

Last November’s election was a reflection of the public’s distaste for runaway spending by our local government, symbolized by the civic center, it’s fancy chairs and artistic foibles.

At their first meeting after election, the new City Council members requested an audit of the Civic Center project. It died in the crib.

Two weeks later, the city manager delivered a report chronicling the project’s explosion to $140 million because of elements the voters never contemplated in the 2008 Measure B election.

The city manager’s report was a historical review — not an audit. It was a weak attempt to pacify curious new council members who had just won campaigns pledging to audit the Taj project.

Irvine has learned the value of a forensic audit that revealed massive overspending for the Great Park project. Newport should learn from our border city.

Bob McCaffrey

Volunteer chairman, Residents for Reform

Balboa Island


Clean up the boulevard

Many residents and visitors enter Costa Mesa every day via the 55 Freeway/Newport Boulevard.

For what seems like forever, we have been greeted by shoddy construction equipment and a group of palm trees that were last trimmed at the turn of the century. Enough is enough. I know there are probably jurisdictional issues among numerous government agencies, but can’t the city take charge and clean up the mess?

Bruce Major

Newport Beach


Give credit to those who have cut water use

Almost a year ago, I stopped hosing off my driveway and sidewalks.

I stopped washing my car. (I use a hand-held vacuum and a detail spray.) I only flush when necessary and don’t run the water while brushing and shaving. Additionally I turn the shower off while soaping.

I cannot reduce my usage anymore. Now that water conservation and penalties are coming, will I be fined for not cutting back?

Gary Philips

Costa Mesa