The city of Newport Beach could slash spending by $1.5 million, institute a partial hiring freeze and halt $2.2 million in capital improvement projects to balance its budget this year in light of a projected $3.5-million shortfall in sales taxes revenues.
City officials met Saturday at the Newport Beach Public Library for the City Council’s annual goal-setting retreat and discussed how to keep the budget balanced in the current bleak economic climate.
“In this down economy, it is not business as usual and our No. 1 priority is services to the public,” said Newport Beach City Manager Homer Bludau.
The city faces a 30% to 40% reduction on its investment income yield from the previous year, slowing revenue from the city building department and sales tax revenues that are down about 20% from the previous year, said Dennis Danner, Newport Beach administrative services director.
“Still, we’re in so much better shape than most and we’re very fortunate,” Danner said.
The city has a good credit rating and about $70 million in reserves, Danner said.
Slowing revenue will probably force the city to trim numerous, small capital improvement projects on hold, such as landscaping.
“Probably where we need to tighten our belts the most is landscape improvement,” Bludau said. “And I’m going to go at this with great vigor.”
Projects such as renovating street medians on Avocado Avenue and refurbishing Back Bay View Park will probably have to be put on hold while the economy continues to spiral downward, Bludau said.
Other projects where funding might be deferred include improving street lights in Corona del Mar, studying an artificial play surface at Bonita Creek Park, replacing city tennis court fencing and remodeling the Balboa Peninsula fire station and the lifeguard headquarters.
Councilwoman Leslie Daigle voice concern over the proposed cuts.
“I don’t see these projects as fluff,” Daigle said. “I think these projects are very important to people...Maybe there is something we can cut there instead of cutting long-term improvements to the appearance of our city.”
Councilman Keith Curry said Newport Beach was relatively lucky, when other Orange County cities are slashing law enforcement funding because of slumping revenue.
“Nobody likes cuts,” Curry said. “We’re not talking about helicopter patrols or public safety issues. These will have a relatively imperceptible impact.”
BRIANNA BAILEY may be reached at (714) 966-4625 or at email@example.com.