It was kind of Jack Wu to credit me with swinging a Conan-like budget ax (the Barbarian, though sometimes I feel more like O'Brien), but that's not where credit is due.
The City Council adopts budgets, including cuts. All seven members spend many hours reviewing the budget documents by the time they vote. They rely upon their peers on the three-member Council Finance Committee to study every detail of the budget I propose.
In recent years, they have shrunk the number of staff positions beyond my initial proposals. Conan might be wielding an ax, but the council pushes the arm forward. That's how it works in a council-manager form of government. The council sets the tone, I follow it.
When developing the draft budget, I'm guided by two important documents developed by the council. The first is the 2010 Fiscal Sustainability Policy to protect reserves, require employees to pay more for pensions, set up a second plan for new hires and more. The second is 2011's Compensation Philosophy document, which directs staff to use private sector comparisons, stay toward the middle of comparable agencies and more. These policies have changed the way we do business. We've gone from 830 full-time employees in 2009 to 755 as proposed in the budget year that starts July 1, 2012.
Jack also compared us to neighboring cities. He's not the first to use the "employees per capita" method. While it might be as good as any to use, I dislike it because of the boatload of assumptions that come with it. The main problem is this: Which per capita number should we use?
We have about 85,000 residents. Another 60,000 to 80,000 people come here to work or visit each weekday. And 100,000 to 200,000 arrive on a nice weekend or summer day. So which number is best? If it's 85,000, you assume that city employees (police, fire, lifeguards) don't serve non-residents. (Now that would be barbaric!) Yet 285,000 wouldn't make sense either; we only reach that number a few days out of the year.
Cities around us are different and do things differently, making comparisons difficult. Consider:
•Geography. Newport Beach has bays in the middle, islands and a peninsula. For response-time reasons, that means up to four more fire stations and staffing. Even though Huntington and Newport both have lifeguards, we manage about 7 miles of beach while H.B. guards about 3.5.
Newport Harbor is both commercial and recreational, unlike Huntington Harbour.
We have a Central Library and three branch libraries — a well-loved and top-ranked system with 103,000 registered users (18,000 more than Newport's population!). Costa Mesa and Irvine are in the county system.
City workers collect most residential trash here.
Newport Beach has its own water and wastewater utilities. Some of our neighbors use special districts (still government employees) doing the work.
Newport Beach has 73 city parks and facilities and is among the most well-used recreation systems in Orange County, drawing people from cities around us. That takes staff, as does the great OASIS Center. User fees directly pay for a lot of these amenities.
See what I mean? When you actually consider the meaningful variables, such as geography and services provided, an apples to apples comparison is complicated.
Another flaw some make in analyzing our liabilities is to imply that the community's taxpayers alone are stuck with the bill. That's not so. City revenues come from property taxes (a large portion of which is paid by commercial property owners, such as the Irvine Co.), sales taxes (restaurants and auto sales are the leading producers), hotel bed taxes (paid by visitors who stay in community hotels), and city income properties (like the Balboa Bay Club, parking lots and more).
Most importantly, Newport Beach is in a strong fiscal situation, possessing the highest levels of reserves in its history. The city's assessed valuation is the second highest of any city in the county. It's behind only Irvine, which dwarfs us geographically and in population. City employees are paying more toward their pensions and new hires will come in at lower retirement formulas. All the while, we're investing more in our infrastructure and continuing to maintain the community at an exceptionally high standard.
It may be beyond easy comparison, but I believe our city budget reflects what Newport Beach values and needs. Still, we can always do better. We can always be more efficient. We will continue to work on that today, tomorrow and always.
DAVE KIFF is Newport Beach's city manager.