Commentary: Newport Beach can turn the page on its debt-heavy recent past
Recently, the Newport Beach City Council approved the budget, a $278 million spending plan that is actually $46 million less than last year.
It’s going in the right direction, in large part thanks to a new culture brewing at City Hall.
The new budget recognized $577 million in long-term debt, over $6,600 for every person in Newport. That’s $300 million in unfunded pension liabilities, $27 million in lifetime health insurance payments for employees, and $250 million remaining in bond debt for the “Taj Mahal.”
I was recently in a meeting with Newport Beach Finance Commissioner and City Council candidate Will O’Neill, who briefed us on the budget. (Full disclosure: I and many others are proudly endorsing Will O’Neill to replace outgoing Councilman Keith Curry).
O’Neill has crunched the numbers and concluded that 10 years ago Newport Beach’s debt was under $5 million. In a decade, the council has piled up more debt in 10 years than all the city councils combined.
Shockingly, when Mayor Diane Dixon, Councilman Scott Peotter and Finance Commissioner Will O’Neill started asking questions about the Taj Mahal debt they were told that a “make-whole” provision (a pre-payment penalty by another name) was negotiated, making it almost impossible to refinance the original $281 million Taj Mahal debt.
According to the city’s financial analyst, the previous council bet wrong on the market and stuck us with a $45 million penalty as bonds dropped to historic lows. I am reminded of former Orange County Treasurer Bob Citron’s bad bet on the county’s investment pool.
Remember, they even financed the $1,100 desk chairs, $10,600 conference tables, a $2 million “Bridge to Nowhere” and those $221,000 bunnies.
It’s time to turn the page.
In a few short months the architect of one of the most expensive city governments in our region will be gone.
I have confidence in Team Newport’s back-to-basics program.
Councilman Marshall “Duffy” Duffield has great ideas to improve our long-neglected harbor. He is a national expert and we should listen to him.
Led by the tireless efforts of Dixon, there’s a renaissance occurring on the Peninsula. Gone are the days when the city sued its long-time property owners.
Mariners Mile has new ownership with a clear vision and commitment to the community. It’s a diamond in the rough that can be polished with a City Council that has clear goals and commitment to private property rights
The fiscally conservative goals of Mayor Pro Tem Kevin Muldoon and Councilman Peotter will finally result in treating taxpayers as more than a pocket to be picked.
They understand the pile of debt needs to shrink, and voters need a voice in future debt. No more $281 million “Certificates of Participation” for city buildings without a vote of the people. It was wrong and an “end-run” around Proposition 13.
Team Newport has made some progress in changing the culture of tax and spend. With young, fiscal conservatives like and Lee Lowrey our future is bright.
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BOB MCCAFFREY is a Balboa Island resident.