The city of Newport Beach’s litigation budget is $295,000 in the red, and the city is leveraging $650,000 in reserves just so it can keep paying its legal bills through the end of the year.
The biggest item on the city’s ballooning legal bill is a lawsuit over an ordinance that regulates group homes, which has thus far cost the city $350,000 in preparation costs alone, according to a staff report. Additional expenses are expected when the trial begins in August.
Another drain on the city coffers is a lawsuit against the city over an access road to Sunset Ridge Park. Environmental activists who filed the suit say that the road is the first step toward wider development of an open space known as Banning Ranch.
Though most of the council Tuesday signed off on the new funding allocation without comment, Councilwoman Leslie Daigle noted that rising costs could break the city.
“If these legal costs continue, we’re really going to blow out the budget,” Daigle said.
The litigation budget started at $590,000 this fiscal year but actual costs through the first three-quarters of the year total $885,000.
It was unclear in the report whether the $650,000 reserve withdrawal is to cover the deficit, or just the cost of litigation for the remainder of the year. I’ve put in a call to the city manager and the city attorney for clarification.