Like their individual residents, cities have a kind of hierarchy of needs. And once the more basic ones are met — functionality, safety, comfort — it's time to take aim at loftier ideals.

That, Mayor Keith Curry said Friday night during his State of the City address, is where Newport Beach finds itself heading into 2013.

He spoke to a crowd of past and present city officials, friends and family assembled at the Newport Beach Marriott for the 32nd annual Speak Up Newport Mayor's Dinner.

"In my new job as a college instructor, I spend a lot of time thinking about what concepts to impart to students on how to approach the creation of public value and to impact the quality of life in our cities," Curry said. "This year, I would like to focus on some initiatives that will make the relationship between our residents and our city both more interesting and more meaningful."

To that end, Curry — who also serves as director of the Concordia University Center for Public Policy — said he plans to ask the council to allot a small percentage of the city's development fees to invest in public art. The announcement drew applause.

He added that private contributions will fund a variety of cultural improvements throughout Newport, like at the Balboa Theater and Explore Ocean.

In his speech, Curry called for a proactive review of the city's municipal code — similar to last year's review of the city's charter resulting in a spate of changes approved with Measure EE — to eliminate outdated rules and inefficiencies.

But first, Curry cited author Peter Kageyama in laying out Newport's solid fulfillment of expectations that fall closer to the base of that hierarchy.

He told the audience that the city is "financially strong, economically vibrant."

He detailed the city's efforts to cut costs by increasing public employee pension contributions and reducing its workforce by 10% since 2008. Curry credited the city's department heads and City Manager Dave Kiff with keeping negotiations with employees cooperative and civil.

Still, he said, "more needs to be done, but we're making good progress."

Curry underlined that the council has made a "very conscious decision that we will not use our reserves to balance the budget."

"As a result," he said, "our reserves grew each year throughout the recession to the highest level in the city's 107-year history, in excess of $100 million."

Another astute move on the part of the city, Curry said, was taking advantage of lower construction costs through the recession. That, he said, has borne fruit in the form of the new civic center, which will be open to the public in May.

Curry took the opportunity to address detractors of that project directly, saying that those who had suggested the city should have instead constructed a tilt-up city hall "on the cheap," will be "hard to find come summer."

He added that other infrastructure projects, including Newport Harbor improvements, are moving along.

"For the first time since President Franklin Roosevelt funded the initial dredging of our harbor," he said, "we have completed the dredge of the upper bay." Dredging of Lower Newport Bay was completed Friday, he said.

Harbor infrastructure improvements, which the council has said will be funded with money raised by 2012's hotly contested harbor fee increases, are just some of the challenges continuing to face the city, Curry said.

He said that in order to preserve the city's fiscal health, more cuts to the city budget may be made – including the possible outsourcing of trash services and the city jail.

But he was optimistic about the community's "golden future."

He announced the city will launch a Newport Beach mobile app, so that residents will be able to better connect with the city.

"We want to make accessing the city easy and fun for all of our residents," he said.

Curry stressed civic engagement and encouraged residents to avoid succumbing to the "temptation to be part of the cynical and disengaged." Those people, he said, fail to recognize Newport's high baseline of comfort and "conviviality."

They fail to appreciate, he said, "that we live in America's greatest city."

jill.cowan@latimes.com

Twitter: @jillcowan