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.
“It’s great that we have tremendous reserves,” said Mayor Nancy Gardner, “but at a certain point — I mean, I don’t think that the whole goal of a city is to build up the biggest reserves in the world.”
Gardner called on the city to review its reserve policies in the middle of the coming fiscal year, and to consider funding projects like dredging.
“You see so many cities having to cut services … because they have extinguished their reserves,” Councilman Keith Curry said. “Ours weren’t touched. Ours are as strong as they have ever been in our city’s history.”
The city’s proposed $208.6-million operating budget is up $2 million from last year. Some of the increases came from filling vacancies in the Police and Fire departments. Also, the city plans to add $1 million to its IT fund, for upgrades like fixing the nearly 20-year-old 911 emergency dispatch system.
“It’s budgets like this that will keep the city strong, and secure, and financially sustainable,” Curry said.
By shuffling some employees, adding a few new people and eliminating some positions for efficiency, the city plans to have a net loss of eight full-time positions in the 2012-13 fiscal year. Administrators plan a total of 755 full-time positions, down from 830 just a few years ago.
The Police Department plans to eliminate one captain position, and add a crime prevention specialist. Lifeguards plan to cut one officer and add a department assistant.
The biggest changes are planned for the Municipal Operations Department, which oversees the city’s trash and sewers. Its budget will see a $1.3-million cut, mostly from the utilities division. The budget eliminates some vacant and filled positions, including a safety officer and a utilities operations manager.
“We’re doing more services with fewer people, and that is a true management accomplishment,” Curry said.
Besides reviewing the department employment budgets, the council also tentatively approved a $51.5-million capital improvement budget for road improvements, parks and other infrastructure maintenance and repairs.
That is down from $139.9 million in capital spending this fiscal year, which included $98 million for building the new Civic Center.
The discretionary portion of the capital improvement budget, from the general fund, is planned to be $3.6 million next year, up from $2 million.
One capital project the council delayed is the rehabilitation of the lifeguard headquarters. Instead, the council approved $266,000 in design work on the 50-year-old building, but chose to wait another year for the $1.4-million overhaul.
Next fiscal year will be the third consecutive year the city expects minimal to flat revenue growth. On top of tax revenues, administrators can plan on a $2.5-million infusion from the sale of the Airborne Law Enforcement Program helicopters and related equipment.
City Manager Dave Kiff said he expects the budget to be ready for council approval June 12.