Council Passes Budget, Considers Fees

Having declared that Newport Beach can no longer afford to be a “Cadillac-type” full-service town, the City Council this week passed a “spruced-up Chevrolet” budget of $129.5 million for fiscal 1996-97, which begins Monday.

Though no programs will be eliminated, the council resolved to consider charging fees for some services that are now free.

City Manager Kevin J. Murphy, who coined the Cadillac-Chevrolet phraseology at earlier budget hearings, said his staff recommends that the city levy about $300,000 in service fees in the new fiscal year.

An independent study by accounting firm KPMG Peat Marwick for the city found that the city subsidizes services by more than $1 million annually. The city is still studying what services would be targeted for new fees, Murphy said.

The city budget had a $4-million deficit for the fiscal year just ending. City experts said a sluggish economy plus state and federal changes, such as property tax shifts and requiring building retrofitting for the disabled, had drained city resources for five years.

In other action Monday, the council approved a 50-year ground lease agreement with one of its landmark tenants, the Balboa Bay Club.

The deal ended nearly 18 months of negotiations aimed at revitalizing the 48-year-old social club while maximizing the city’s opportunities to earn revenue from the 25-acre harbor property.