Lean Times Have Newport Weighing Reorganization

A shrinking local economy has pressed city officials to create a plan for a new order at City Hall, one with fewer departments for the city’s slim-downed work force.

City Manager Kevin J. Murphy will take a proposal Monday to the City Council that, if approved, would consolidate six departments into three and eliminate 16 positions in the next year--some by attrition and reassignment--to help balance the city’s $98-million budget for fiscal 1995-96.

“The particulars are Kevin’s ideas and they were developed over time in response to budget constraints and the desires of the council to make our organization lean and efficient,” Assistant City Manager Ken Delino said.

Although Newport Beach is not unscathed by its $16.5-million investment in the Orange County bond pool, Delino said the budget cuts owe more to “flat or declining revenues, increased fees and newly imposed accounting requirements.”

The bright side of the reorganization plan is its emphasis on economic development, city officials said.

Delino, who has shepherded the city’s Economic Development Committee and helped create business improvement districts, would oversee the Planning and Building departments.

“The reason why I’m going over to planning and building is to try and integrate those functions,” Delino said. “The people who are in contact day-to-day with businesses are in the Planning Department. I need to refocus their efforts so when a restaurateur comes in with a zoning problem, we look at that from a business development standpoint.”

The change would coincide with the retirement of Planning Director James Hewicker, Delino said.

The Marine Department, most visible through its lifeguards, would become part of the Fire Department and would spend more time on disaster preparedness and community education during the off-season.

The Finance and Personnel departments would be merged into an Administrative Services Department under Finance Director Dennis Danner.

The Public Works and Utilities departments would be merged under Public Works Director Don Webb. Utilities Director Jeff Staneart would become the department’s utilities manager.

Newport Beach’s sales tax revenue has been flat over the past five years because of the recession and the fragmented business districts. Danner said in February that sales tax revenue for this year is expected to be $11.3 million, roughly the same amount collected in fiscal 1987-88. If sales tax collections had kept pace with the Consumer Price Index, revenue would be $14 million. Hotel taxes will generate about $750,000 this year, up slightly after five stagnant years.

The Legislature has decreased cities’ share of property taxes--the city’s largest source of revenue--over the past five years. Newport Beach property taxes grew by 8% from 1983 to 1991, but have slipped about 9% per year since then, Danner said. No increase is expected next year, especially since the recession has prompted many property owners to seek new, lower assessments.

Finally, the city has had to pay $7 million in legal settlements in the past two years: $4 million in a police shooting case and a Back Bay bicycle accident case, and an additional $3 million to former Police Department employees who claimed they were harassed by former Chief Arb Campbell and others.