Newport Beach also will have about $8 million less to spend next fiscal year compared with last year’s roughly $200-million budget because of slumping tax revenues, city officials said earlier this month.
In 2012, Newport Beach will have to match a $4-million grant for dredging in parts of Newport Harbor, which will also widen the budget gap.
The city also faces rising pension costs.
Two years from now, the city will see an additional $6-million spike in what it pays into California Public Employees Retirement System, because the troubled financial markets of 2008 wreaked havoc on the public retirement system.
The spike will extend into what the city pays into the system for the next 30 years.
Newport is negotiating new labor contracts with its public safety employee unions, and hopes to get the unions to agree to shoulder more of the burden for the city’s pension costs.
City Manager Dave Kiff said he has come up with a five-point plan to address the city’s budget gap. The plan includes looking at creating new sources of revenue for the city, slashing operating costs, outsourcing some city services, suspending some city-sponsored special events and reorganizing the city’s staffing structure.
“We really need to restructure the organization,” Kiff said. “Times have changed, and they’re probably not going to go back to the way they were.”
In other business, the City Council in closed session Tuesday approved a legal settlement with the buyers of a crumbling, vacant Mariner’s Mile shopping center.
The city sued in Orange County Superior Court earlier this month to force the owners of the shopping center at West Coast Highway and Dover Drive to clean up the property.
The property is now in escrow and has been divided between two buyers, according to a news release on the settlement.
The settlement with the two buyers calls for a cleanup and landscaping of the property within 60 days after the close of escrow. Newport Beach also will receive $10,000 to cover its staff costs and attorneys fees amassed while trying to force the owners to clean up the area.