Newport Beach city manager talks budget, capital improvement, ongoing issues in yearly goal updates
Newport Beach City Manager Grace Leung reiterated the council’s goals for this year and updated residents on how the city is tackling the upcoming budget, capital improvement projects and what is being done about other issues during a Speak Up Newport meeting Wednesday night.
Leung’s address to the organization largely centered on items established during a yearly goal-setting meeting held by the Newport Beach City Council in January.
“It’s been a really good beginning of this year. We have four new council members. It’s nice to have fresh new energy and perspectives,” Leung said at the start of her remarks to a nearly full room at the Newport Beach Civic Center on Wednesday. “We’re an older city with lots of different activities ... and a really ambitious capital improvement program, and [I’m] excited to talk about some of those projects.”
Leung noted that tax revenues are so far coming in higher than initially projected in June last year and have the potential to reach the highest levels seen to date.
Much of the city’s general fund comes from its property taxes, sales taxes and transient occupancy tax, the latter of which is also known as the hotel tax. Leung said the city’s sales tax has a very diverse base that has helped buoy the hotel tax, which took a big hit at the onset of the COVID-19 pandemic in 2020.
“We were a little concerned in 2021. At the end of 2019-20, we weren’t sure where it was going to go, but it really jumped up in 2021-22. We saw that instead of going on trips, people were staying home and saying things like, ‘I’m going to buying another car,’” Leung said, noting that auto and transportation does account for a significant portion of the sales tax reported in Newport Beach.
“Overall, our revenues are up over what we budgeted. We don’t like to budget too far out,” she continued. “We are watching pretty carefully. There’s talk about a recession, a pull back in spending — we’re looking at our sales tax numbers as it’s coming in. It lags by a quarter; we don’t have the final December numbers for the holiday season, but those are starting to come in and that will tell us how we look for this year.
“If there’s a pullback, we’ll have to make some adjustment.”
The City Council is expected to get first look at the budget in the spring, though whether that will be in March or April is so far unclear. Expenditures are trending down by about $4.6 million below initial estimates, but Leung noted that some challenges are showing in employee retention and recruitment, managing workloads and inflation, in addition to continuing to pay down future CalPERS pension liabilities.
Current issues in the city are focused around the general plan update, which includes the housing element, homelessness and limiting the impacts of nearby John Wayne Airport on the community.
Leung noted many existing services in the city go toward homelessness, but the next step to addressing the issue is finding permanent supportive housing for those who will accept the help.
“Our shelter is frequently full because we don’t have that next step for them to move into, but we’re going to continue to work on that,” Leung said.
Of capital improvement projects, she briefly touched on the junior lifeguard building, which broke ground in September and is expected to be completed by Memorial Day weekend; the Balboa Island drainage system; the Peninsula fire station and library; the new police headquarters; the Newport Bay trash interceptor, also known as a trash wheel; and the Superior Avenue bridge to Sunset View Park.
Residents were given the opportunity to ask questions of Leung on some of their concerns, which largely included public safety personnel retention and recruitment; the use of the Fairview facility in Costa Mesa; perceived increasing crime rates; and sea-level rise and its impacts on Balboa Island.
The city manager’s update can be watched in its entirety at speakupnewport.com/city-manager-update-2023.
All the latest on Orange County from Orange County.
Get our free TimesOC newsletter.
You may occasionally receive promotional content from the Daily Pilot.
