Council Approves Balanced Budget Amid COVID-19 Economic Impacts
The City Council on Tuesday, June 9 approved a balanced, $339 million budget for the 2020-21 fiscal year that maintains service levels despite a projected drop in revenue due to ongoing impacts of the COVID-19 shutdowns.
The City is anticipating revenue decreases from declining sales taxes and transient occupancy (hotel) taxes, as well as revenue from licenses, permits, leases, parking revenues and other charges.
However, the current budget maintains current service levels, critical capital improvement spending, and the City’s aggressive payment schedule to CalPERS to reduce future pension liabilities.
The projected budget gap, estimated at $33 million, was closed by a number of budget-balancing strategies that rely on short-term solutions, primarily deferring several capital improvement projects to future years and using budget surpluses from prior fiscal years.
The City has developed various “tiers” of potential cuts that could go into effect if revenue decreases more than the projected amount, or reinstated if revenues are better than projected.
The City’s fiscally conservative budgeting approach in recent years – building reserves, managing debt, decreasing City pension costs and more – has helped Newport Beach prepare for an economic downturn, officials said.
The budget will be reviewed by the City Council after the first quarter of the new fiscal year.
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