Newport Beach Municipal Code Art. XI Fiscal Administration

The fiscal year of the City government shall begin on the first day of July of each year and end on the thirtieth day of June of the following year.

At such date as the City Manager shall determine, each department head shall furnish to the City Manager estimates of revenue and expenditures for his or her department for the ensuing fiscal year, detailed in such manner as may be prescribed by the City Manager. In preparing the proposed budget, the City Manager shall review the estimates, hold conferences thereon with the respective department heads, and may revise the estimates as he or she may deem advisable.

(As amended effective December 20, 2010, and January 9, 2013)

At least thirty-five days prior to the beginning of each fiscal year, the City Manager shall submit to the City Council the proposed budget as prepared by him. After reviewing same and making such revisions as it may deem advisable, the City Council shall determine the time for the holding of a public hearing thereon and shall cause to be published a notice thereof not less than ten days prior to said hearing, by at least one insertion in the official newspaper. Copies of the proposed budget shall be available for inspection by the public in the office of the City Clerk at least ten days prior to said hearing.

At the time so advertised or at any time to which such public hearing shall from time to time be adjourned, the City Council shall hold a public hearing on the proposed budget, at which interested persons desiring to be heard shall be given such opportunity.

After the conclusion of the public hearing the City Council shall make any revisions of the proposed budget that it may deem advisable and on or before June 30, it shall adopt the budget. A copy thereof, certified by the City Clerk, shall be filed with the person retained by the City Council to perform auditing functions for the Council and a further copy shall be placed, and shall remain on file, in the office of the City Clerk where it shall be available for public inspection. The budget so certified shall be reproduced and copies made available for the use of the public and of departments, offices and agencies of the City.

From the effective date of the budget, the several amounts stated therein as proposed expenditures shall be and become appropriated to the several departments, offices and agencies for the respective objects and purposes therein named. All appropriations shall lapse at the end of the fiscal year to the extent that they shall not have been expended or lawfully encumbered.

At any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by the affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another purpose or to appropriate available funds not included in the budget or to cancel any appropriation not expended or encumbered.

Under the control and direction of the City Manager there shall be established a centralized purchasing system for all City departments and agencies, except as otherwise in this Charter provided.

(As amended effective April 28, 1966, and December 20, 2010)

The procedure for the assessment, levy and collection of taxes upon property, taxable for municipal purposes, may be prescribed by ordinance of the City Council.

(a) General Obligation Bonds. The City shall not incur an indebtedness evidenced by general obligation bonds which shall in the aggregate exceed the sum of fifteen percent (15%) of the total assessed valuation, for purposes of City taxation, of all the real and personal property within the City.

No bonded indebtedness which shall constitute a general obligation of the City may be created unless authorized by the affirmative votes of two-thirds (2/3rds) of the electors voting on such proposition at any election at which the question is submitted to the electors and unless in full compliance with the provisions of the State Constitution and of this Charter.

(b) Debt Issuance Limit on Certificates of Participation or Lease-Revenue Bonds. On or after January 1, 2019, the City may not issue Certificates of Participation or Lease-Revenue Bonds funded via a leaseback arrangement at an amount over fifty million dollars ($50,000,000.00), adjusted annually beginning January 1, 2019 by the US Bureau of Labor Statistics’ Final Demand—Construction Index (WPUFD43 or its successor), to fund a Single Capital Project unless the debt issuance is first authorized by the affirmative votes of at least fifty-five percent (55%) of the electors voting on such a proposition at any election at which the question is submitted to the electors. A Single Capital Project shall not be piecemealed to circumvent this voterapproved debt requirement.

(1) If Certificates of Participation or Lease-Revenue Bonds are issued for a Single Capital Project in an amount less than fifty million dollars ($50,000,000.00, as adjusted annually per this Subsection), and further Certificates of Participation or Lease-Revenue Bonds are proposed for a separate Single Capital Project, the subsequent issuance is not subject to the voter approval requirement unless the subsequent issuance alone exceeds fifty million dollars ($50,000,000.00, as adjusted annually per this Subsection).

(2) For purposes of this section, the following terms shall be defined as follows: (i) “City” shall mean the City Council or any entity created, controlled, or managed by the City of Newport Beach or City Council; (ii) “Certificate of Participation” shall mean a financial instrument that provides an investor a share of, or interest in, lease revenue; (iii) “Lease-Revenue Bond” shall mean a bond, note or other financial instrument secured by lease payments; and (iv) “Single Capital Project” shall mean a project where all project elements are analyzed under a single California Environmental Quality Act review.

(c) Disaster Exemption. The voter approval requirement in Subsection “b” above shall not apply to Certificates of Participation or Lease-Revenue Bonds that are in any way related to the funding of the design, environmental review, permitting, replacement, construction, and/or repairs to public infrastructure, the failure of which would cause material damage to the property of others, or which is damaged by a disaster that also includes: (1) a declaration by the President of the United States of a national emergency; (2) a declaration by the Governor of a state of emergency; or (3) a declaration by the City Council of a local emergency.

(d) Refinancing Exemption. The voter approval requirement in Subsection “b” above shall not apply to the refinancing of existing General Obligation Bonds, Certificates of Participation, Lease-Revenue Bonds, or any other debt.

(As amended effective December 18, 2018)

Every project for the construction or improvement of public buildings, works, streets, drains, sewers, utilities, parks or playgrounds, and every purchase of supplies or materials for any such project, when the total expenditures required for the project exceed One Hundred and Twenty Thousand Dollars ($120,000.00), or such lesser amount as may be established by ordinance, shall be let by the City Council by contract to the lowest responsible bidder after notice by publication in the official newspaper by one or more insertions, the first of which shall be at least ten (10) days before the time for opening bids. This formal bid dollar amount shall be adjusted annually pursuant to an index specified by City Council resolution. Projects for the maintenance or repair of such facilities are excepted from the requirements of this paragraph if the City Council determines that such work can be performed more economically by a City department than by contracting for the doing of such work.

All bids shall be accompanied by either a certified or cashier’s check, or a bidder’s bond executed by a corporate surety authorized to engage in such business in California, made payable to the City. Such security shall be in an amount not less than that specified in the notice inviting bids or in the specifications referred to therein, or if no amount be so specified then in an amount not less than ten percent (10%) of the aggregate amount of the bid. If the successful bidder neglects or refuses to enter into the contract, within the time specified in the notice inviting bids or in the specifications referred to therein, the amount of his or her bidder’s security shall be declared forfeited to the City and shall be collected and paid into its general fund, and all bonds so forfeited shall be prosecuted and the amount thereof collected and paid into such fund.

The City Council may reject any and all bids presented and may readvertise in its discretion.

The City Council, without advertising for bids, or after rejecting bids, or if no bids are received, may declare and determine that, in its opinion, based on estimates approved by the City Manager, the work in question may be performed better or more economically by the City with its own employees or the supplies or materials may be purchased more economically on the open market, and after the adoption of a Resolution to this effect by at least five (5) affirmative votes of the Council may proceed to have said work done or said supplies or materials purchased in the manner stated, without further observance of the provisions of this Section. Such contracts likewise may be let without advertising for bids, if such work or supplies or materials shall be deemed by the City Council to be of urgent necessity for the preservation of life, health or property, and shall be authorized by Resolution passed by at least five (5) affirmative votes of the Council and containing a declaration of the facts constituting such urgency.

The City Council shall have the power to establish standards, procedures, rules or regulations in order to implement the provisions of this section.

(As amended effective April 28, 1966, June 6, 1974, November 4, 1986, and December 20, 2010)

The City Council may prescribe by ordinance rules and regulations for the purchasing of supplies, materials and equipment. When making purchases for the City, merchants maintaining an established place of business within the City shall be given the preference, quality and prices being equal.

The City Council may maintain a revolving fund, to be known as the “Cash Basis Fund,” for the purpose of placing the payment of the running expenses of the City on a cash basis. A balance may be built up in this fund from any available sources in an amount which the City Council deems sufficient with which to meet all lawful demands against the City for the first five months, or other necessary period, of the succeeding fiscal year prior to the receipt of ad valorem tax revenues. Transfers may be made by the City Council from such fund to any other fund or funds of such sum or sums as may be required for the purpose of placing such funds, as nearly as possible, on a cash basis. All money so transferred from the Cash Basis Fund shall be returned thereto before the end of the fiscal year.

A fund for capital improvement generally is hereby created, to be known as the “Capital Improvement Fund.” The City Council may create by ordinance a special fund or funds for a special capital improvement purpose. The City Council may transfer to any such fund any unencumbered surplus funds remaining on hand in the City at any time.

Once created, such fund shall remain inviolate for the purpose for which it was created; if for capital improvement generally, then for any such purposes, and if for a special capital improvement, then for such purpose only, unless the use of such fund for some other capital improvement purpose is authorized by the affirmative votes of a majority of the electors voting on such proposition at a general or special election at which such proposition is submitted.

If the purpose for which any special capital improvement fund has been created has been accomplished, the City Council may transfer any unexpended or unencumbered surplus remaining in such fund to the fund for capital improvement generally, established by this Charter.

(As amended effective April 28, 1966, and December 20, 2010)

Except as otherwise provided by the provisions of State law applicable to chartered cities, all claims and demands against the City shall be filed as prescribed by ordinance. Class claims and representative claims are prohibited and may not be pursued against the City, including, but not limited to, a claim for the refund of taxes and/or fees.

(As amended effective January 20, 1959, April 28, 1966, and January 9, 2013)

Notwithstanding any conflicting provision of this Charter, no City Council sponsored proposal to impose, extend, or increase a tax shall be presented at an election unless the ordinance or resolution proposing to impose, extend, or increase such tax is approved by at least five (5) of seven (7) votes of the City Council. As used in this section, the term “tax” shall mean both a “general tax” and a “special tax” as defined in Article XIIIC, Section 1, subdivisions (a) and (d), respectively, of the California Constitution.

(As amended effective January 20, 1959, and January 9, 2013, and December 19, 2016)

The City Council shall employ at the beginning of each fiscal year, a qualified certified public accountant who shall, at such time or times as may be specified by the City Council, and at such other times as he or she shall determine, examine the books, records, inventories and reports of all officers and employees who receive, handle or disburse public funds and of all such other officers, employees or departments as the City Council may direct. Within 270 days after the end of the fiscal year, a final audit and report shall be submitted by such accountant to the City Council, one copy thereof to be distributed to each member, one to the City Manager, Director of Finance, and City Attorney, respectively, and sufficient additional copies of the audit shall be placed on file in the office of the City Clerk where they shall be available for inspection by the general public, available on the City’s website or electronic equivalent, and a summary of the financial statement as of the close of the fiscal year shall be published in a newspaper of general circulation within the City.

(As amended effective January 20, 1959, April 28, 1966, and January 9, 2013)