NEWPORT BEACH : Talks Get Underway on New City Budget

Newport Beach city officials on Monday began the first round of talks on the city’s 1992-93 budget, with much of the focus on how much cash the city should place in reserve for emergencies.

While other cities are laying off workers and cutting services, Newport Beach’s $90-million budget is in relatively good shape, but officials are worried that they will not be able to expand services as much as they had hoped and that backup funds are lower than usual.

An increase in the city’s general fund reserves “was attempted, but frankly not successful,” said City Manager Kevin J. Murphy. “I’d like to increase it, but this year we’re at the status quo.”

During a study session Monday afternoon, some council members said they are not convinced that the budget outlook is as rosy as it appears and questioned what other steps the city should be taking to ensure that revenues will be on target with estimates.

Those concerns will be incorporated into ongoing talks over the budget, which must be in place this summer.

City services to residents will remain at current levels, with no slashes to the budgets that pay for public safety workers such as lifeguards and police offices, or general city employees.

There will also be little expansion in city services, with most departments receiving increases of about 3% in their budgets, and the city government’s overhead limited to a 1% growth.

Council members will receive no raise in their $400 monthly pay.

As in most years past, Newport Beach will rely heavily on sales tax revenues, most of which are received through the city’s posh shopping districts and noted restaurants. In the current fiscal year, sales tax receipts were down 7% from the previous year, but for fiscal 1992 the city is projecting a 4.5% increase.

Property taxes, another main source of funding, are expected to increase from about 7% of the city’s general fund to about 8%. Also, tax revenue from hotel rooms in the city is expected to increase slightly.

The city spends most of its money--more than $30 million annually--on public safety, including police, fire and marine safety personnel and equipment. Capital expenditures are the next highest category, accounting for about $15 million.