Council and public weigh in on proposed budget and wish list


City Manager John Pietig’s proposed two-year budget, to begin July 1, was vetted by the council and the public at a workshop on Tuesday afternoon at City Hall. City coffers are plump enough to accommodate funding the majority of the items on the council and staff  “wish list” in addition to capital and department improvements.

“The economic outlook for the City of Laguna Beach continues to remain positive with moderate revenue growth expected for the next two years,” Pietig wrote in a letter to council members. “The total proposed General Fund expenditures (discretionary spending) are $69.3 million in fiscal year 2019-20 and $72.2 for fiscal year 2020-21.” 

Specifically, the council voted 5-0 for an increase in Community Development fees for large projects, a pilot program for a dog park at Moulton Meadows, proposals to upgrade safety at the Alternate Sleeping Location (to come back to the council in six months for review), supplemental funding for a greenhouse gas emissions inventor and a request from the Chamber of Commerce for funding to expand the holiday lighting to include the highway between Legion and Aster Streets. 

The council split 3-2 on implementation of a Cultural Arts proposal to connect better with the global art world, increased hours for the Arts Program Coordinator and adding a second part-time position, Councilwoman Toni Iseman and Mayor Pro Tem Steve Dicterow opposed.

If approved as expected by the council at the June 18 meeting, the budget will fund improved services in the Community Development Department, address homeless issues, and enhance the city technologic capabilities and advance safety services, according to Pietig. 

Notable additions to the budget include adding three new positions to the Community Development Department; funding for the advancement of the Fire Department Strategic Plan; programing Measure LL funds to support additional police and lifeguard patrols at Main Beach and Heisler Park; expansion of a fuel modification program to protect structures and evacuation routes and payments toward the city’s unfunded pension liability.

The city will pay the California Public Employees Retirement System $1,510,000 in the next fiscal year, a $700,000 increase over the present year, and $1,970,000 the following year, a $1,200,000 increase. The increases are projected to continue to escalate to an estimated $3,100,000 by the 2024-25 budget. The city will also pony up an extra $2 million in the next two fiscal years toward the unfunded liability.

Also on the downside: Laguna’s transit system is running off the rails. The costs are increasing. Ridership is decreasing. Subsidies are draining the parking fund.

Pietig, who has been warning that the transit system was in dire straits, said that even a major marketing effort last year failed to improve ridership. “The two-year budget keeps the status quo,” said Public Works Director Shohreh Dupis. “We will come back later this year [to council] to address some of the issues.”

Microtransit is an option under consideration. The service resembles the old Dial-A-Ride model, with an Uber-like delivery, but is more expensive for the riders. 

“We are going to need to see if microtransit can be implemented in Laguna Beach,” said Dupuis. 

Pietig also said the expanded Sally’s Fund is a consideration.

Overall, the  proposed two-year General Fund budget is balanced with sources of revenue comprised of taxes, service fees, grants, interest earnings and fund transfers, which exceed expenditures by $561,00 in the 2019-20 fiscal year and by $512, 000 in 2020-21. The City’s General Fund reserve remains intact at 20 percent of the annual operating costs. The Disaster Fund, originally a one percent sales tax approved by the voters in the wake of the Bluebird Canyon landslide in 2005 and sunsetted, continues to earn interest and provides another 10 percent reserve. 

Property taxes are the city’s highest revenue source. Bed taxes are the second highest. 

The police department gets the biggest slice of the pie chart – 27.4 percent. Emergency/Disaster Preparedness Committee Chair Matt Lawson wants even more.

 “We ask the council to minimize discretionary spending on everything not directly related to public safety to preserve as much funding as possible for the essential recommendations coming in July from the Mayor’s Fire Safety Subcommittee and the Police Departments’ Strategic Plan update.”

The council did add $45,000 to the proposed expenditures to fulfill the request by Councilman Peter Blake for a beach patrol officer to be stationed at the Alternative Sleeping Location and $10,000 to buy a metal detector for the site.   

However, Sonny Myers, Community Emergency Response Team instructor and communication chief, said any discussion about expenditures should include a plan to address the city’s aging public safety infrastructure. 

“Although charming and beloved, our City Hall, Operations Center, our Police Department and all of our Fire Stations are old and must be brought up to date,” said Myers. “Old and charming are quaint, but not safe.”    

The Fire Department gets the second highest funding, with 20.2 percent of the General Fund. Public Works comes in third at 18 percent, which includes funding capital improvement projects such as the long-wanted sidewalks and street improvements, and the more contentious maintenance of city trees. 

Water quality gets the least funding at one percent of the general fund.

As always cautious, Pietig advised the council that they should be mindful of potential economic changes, the growing demand for city services and the ominous increase in pension costs. 

Pietig anticipates that the budget which he will present at the June meeting will be approved and go into effect July 1, as city law requires.