Commentary: Newport Beach City Council made a trio of sound financial decisions

As someone who is occasionally critical of the City Council, I think it is appropriate to offer a word of thanks when it is due.

On Tuesday, the council rejected Councilman Scott Peotter’s proposal to implement the city of Irvine political patronage model for the Newport Beach city finance committee.

This 6-1 vote ensures that the finance committee will continue to enjoy the strong participation of experienced members of the council and not become a place to use political appointees to wage surrogate battles in backrooms.

More importantly, the closed session report indicates that the council has put to rest efforts to sell the old city hall/Lido House Hotel site. This project will generate tens of millions in revenue for the benefit of Newport residents in the years ahead. Selling the property has been a longstanding objective of Councilman Peotter.

Third, the council adopted a sound budget. I give the council credit for finding ways to expand needed public safety services, improve the harbor and fund capital improvement projects.

Council members Will O’Neill and Diane Dixon made special note of our efforts to accelerate the pay down our unfunded pension liability. This continues efforts begun by the prior council and is to be commended.

Here again, on a 6-1 vote, the council decisively rejected a last-minute effort by Councilman Peotter to divert $8 million of our pension pay-down into a separate investment fund. In essence, he believed the city could beat the stock market on its own.

The city gets no credit for reducing its pension liabilities, and the liabilities continue to accrue interest at 7.25% unless and until we pay down the money with the California Public Employee Retirement System (CalPERS). The council was right in rejecting this reckless proposal by Peotter, who alone voted against the budget.

Finally, the council decided to send the Peotter proposal to require a vote on lease obligation debt to the finance committee for fiscal review.

I expect there will be an effort to provide emergency exemptions, raise the threshold level for a vote and otherwise address the many problems of this proposal.

At the end of the day, you cannot fix bad legislation with cosmetic changes. Hopefully, the council will continue to separate itself from Peotter on these financially costly and misguided ideas. The last council meeting was a good start.

KEITH CURRY is a former Newport Beach mayor.