Newport Beach City Council to discuss housing element, review year-end budget results

A view looking down 38th Channel Pl on Newport Island.
A view looking down 38th Channel Pl on Newport Island. The Newport Beach City Council will be discussing the housing element update at next week’s study session on Tuesday.
(Don Leach / Staff Photographer)

The housing element update is returning to the Newport Beach City Council dais again for discussion on Tuesday, this time with comments from the state’s housing and community development department.

The council will not be taking any action, but will be hearing comments from the state and city staff on their efforts to reconcile the draft housing element with the state.

Local jurisdictions are required to update their housing element every five or eight years. That element is included in each city’s general plan, which is a governmental “blueprint” on how a city or county will grow and adapt in the years between updates.

According to the state agency, in order for the private market to adequately address the critical need for more housing, local governments must adopt plans and regulatory systems that provide opportunities for development.

As part of that, Newport officials will need to plan for the required growth of at least 4,845 housing units, per the Southern California Assn. of Governments, which assigns the Regional Housing Needs Assessment numbers for Orange, Los Angeles and four other Southern California counties.

Newport Beach is joined by nearly half of the cities in Orange County that have objected to the exponential growth expected over the next decade, but all appeals of the numbers have failed.

To date, there have been five such housing element update “cycles,” according to the state department’s website. The next such update was supposed to have been adopted by Oct. 15, but the state also provided a 120-day grace period. That means that Newport Beach technically has until about Feb. 22 of next year to complete the process without facing any penalties.

The city submitted the element for review in August.

2020-21 budget to be reviewed

The city council will also be receiving a preliminary report on the revenues, expenditures and estimated fund balance for the fourth quarter of the last fiscal year, which ended in June.

City staff said revenues appear to be higher and expenditures lower than anticipated when the budget was being developed in April 2020 and the report acknowledges the impacts of the pandemic, the state’s subsequent reopening in June and the Delta variant of the coronavirus that causes COVID-19.

Both property tax and sales tax came in higher than expected, but the transient occupancy tax — also known as the hotel tax — was the most severely impacted revenue stream for the city.

The council will be considering city staff’s recommendation to allocate $31 million in surplus funds to be put toward the city’s annual unfunded liability contribution to CalPERS; facilities and infrastructure replacement liabilities within the Facilities Financing Plan and Harbor & Beaches Master Plan; and the city’s capital improvement plan and neighborhood enhancements.

They will also be considering the allocation of $10.1 million from the American Rescue Plan Act funds to the capital improvement program for the upcoming budget process for the next fiscal year.

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