The premise of UBI is that it creates a more productive society. If there is no possibility to be self-sustained, why implement it? However, if there is the possibility, then funding is possible because you can sell future surpluses for external current currencies and get the city going.
As far as I know, there have been ancient UBI societies, like Persia and Egypt where everybody received free grain.
Don't forget that luxury is the tool of kings to show their power. On one hand, kings live in luxury, but they still keep working. On the other hand, not working stops being a status symbol and a luxury if common people do it by default in a UBI society.
UBI is like heat pumps: you don't use the energy of the wall socket to create heat or cold, but you use it to move energy from one area to another. That way, you create a net surplus. With UBI, people stop worrying. All that mental energy is used to create value. The insight needed for a UBI city is the ability to tax it.