Last year was an incredibly low crime year in Newport Beach– a city known already for its low crime rates. As we look at the closed out numbers, we’ve seen a reduction in crime across the board, and two of the last three years have been the “lowest crime rates in the history of Newport Beach”.
But last council meeting, Mayor Diane Dixon proposed adding two additional police officers. There’s only two problems with that: The police are going to great lengths to avoid flatly saying “we don’t need them” (which would embarrass Dixon, their boss), and we also can’t afford them.
For a city with an eye-popping income of about $250m in annual revenues, we are an even-more-eye-popping $2b in debt. That’s a debt-to-income ratio of 20:1. We couldn’t qualify for a home loan in rural Kansas with a DTI like that. “But we have assets”, the big-spenders will claim. Yes, we do. They’ll point out that we have parks, city-owned lease property, and city buildings under our belt. There’s only one problem: Assets only matter if you plan on liquidating them. If we are touting our assets as reasons why we could pay down our debt, it’s because our cash financials simply don’t add up– and the people who claim this, know that.
So where’s all this debt coming from? The bulk of it– about $1.3 billion– is in unfunded pension liabilities. These are the retirement funds that are created for each employee of the city, which the city literally hasn’t budgeted for. They are quite literally not funded. This reckless behavior would send people to jail in the free market, but the government says it’s fiscally reasonable when they do it.
We’ve got another $250m tied up in the catastrophically expensive city hall which was built, and the rest of the money is varied throughout other smaller objects– but unfunded pensions are #1 on the list, by a long shot.
But why wouldn’t the police department want more police? Because they’re already swelling with excess police today, by their own count. The city authorizes X amount of police officers to be hired, and the police hire up to that number (in rare cases, they exceed that number, but they usually simply meet it, when they need it.)
Since the last police increase during the first lowest-ever-crime-year we had in the last 3 years, we added authorization for whopping 5 officers down on the Balboa Peninsula at a cost of about $2 million per year, per position– that’s if we account for pensions.
But here’s the catch: They didn’t need them then, and they don’t need them now. How do I know? Well, aside from the Police Chief refusing to officially ask for them when Councilman Will O’Neill asked them about it point-blank last council meeting, we can easily determine this by the number of allocated positions actually filled. To be clear, most well-run departments overstaff. Why? Because if we have 5 cops retiring, we don’t want to hire 5 rookies to take their place. We want to train those 5 people well beforehand, so we don’t miss a beat (pun!). Since people are always retiring or moving on, we have a regular surplus that aren’t really needed in total numbers, but serve to act as a backfill. And here’s a history of our allocated positions since the turn of the decade:
As you can see, we are hiring under-allocation for 8 of the last 9 years– and the only year where we were above-allocation, we’ve risen the total allocation by 10 positions since then.
Now you might think that Newport Beach has a lot of police officers. You’d be right. With about 16 officers per 10,000 people, we are the most-policed city in the entire county– and not by a small margin. Our neighbors, Huntington Beach, Costa Mesa, and Irvine, have 10.5, 9.8, and 8.0 per 10,000 people, respectively. No data was available for Laguna Beach.
In addition to us being wildly over-staffed, we’re also a city that is– let’s call it like it is– broke. We have absolutely no pathway to repay $2billion in debt. To reduce these numbers to something that the average household can relate to, at a 20:1 ratio of DTI, that is the same as a person who earns $100,000 per year being $2million in debt. There are really only likely two options for this scenario: The person sells off assets, or they default on the debt. But escalating already insane spending is definitely not the best option.
And yet, that is precisely what Dixon is proposing.
The City Council is voting on this tomorrow evening. If you would like to send them your voice, please do so at email@example.com. You can read the letter I sent them, here: http://savenewport.com/wp-content/uploads/2019/06/New-Police-Officers.pdf Feel free to copy any/all of that and send it off to them as your own, also!
The real downside of continuing to add to our massive pension debt? It threatens the very pensions of our CURRENT officers and city employees. This is reckless to them, as well to our citizens.