Laguna’s Economy Rebounds as Tax Revenue Climbs

Mayor Walks on the Sunny Side

Mayor Toni Iseman

Sales, property and hotel bed taxes are increasing for the first time in several years, even though they remain substantially lower than a decade ago, City Manager John Pietig informed a group of 100 business and civic leaders attending the mayor’s state of the city address last Friday.

Laguna’s $65 million budget is faring better than either the state or federal government, Pietig noted, which he said was achieved without laying off or furloughing employees despite projected deficits for the last three consecutive years. With a $720,000 deficit expected in the upcoming fiscal year beginning July 1, Pietig said delays in refilling vacant City Hall positions and agreements by municipal employees to forego pay raises are helping balance a budget shored up by two untouched reserve funds that now total $4.6 million and $4 million.

Pietig said 10 city positions have been phased out and equipment replacement is being postponed until better economic times.  He said the city is offering more service with fewer employees due to friendlier public relations policies.

Looking three years ahead, Pietig warned that the city will face greater health-care expenses, increased pension payments as well as an additional estimated $72,000 for higher gasoline prices.

He anticipates a Federal Emergency Management Agency reimbursement at the 94 percent maximum allowed for $1.75 million in damages to public facilities resulting from December’s record flood.

One of the biggest drains on the city budget is the free summer trolley service, Pietig explained, especially with higher prices at the pump.  The city recently purchased four custom-built trolleys, costing $240,000 each, that will replace leased trolleys this summer in the city’s fleet of 15.

Saying that Laguna has lived up to the colloquialism as the “Pageant of Disasters,” mainly due to topography and weather, Mayor Toni Iseman presented a feel-good litany of accomplishments in her address at the Montage resort.

Sidestepping the past year’s more controversial issues, such as the temporary homeless shelter, marine life protection laws, street bans on downhill skateboarders and restitution for displaced flood victims, Iseman left the details on the budget deficit, fire and crime prevention and flood-drainage projects to city department experts.

Expressing empathy for struggling business owners and residents, she described the closure of her father’s ready-to-wear shop in the Midwest during a recession and drought.  “We stand up here and say the local economy looks optimistic,” she said, “but if somebody’s sitting in this room and you’re right on the edge, you don’t want to hear someone say it’s not bad because, if it’s bad for you, it’s bad.  The biggest thing we can do is to tell people we know who live here to shop here.  Don’t leave home to buy.”

She recounted what the city has accomplished over the last several years with a series of crowd-pleasing “How ‘bout” rhetorical questions.

“How ‘bout the no-left turns southbound on Coast Highway at about five or six places?” she asked to instantaneous applause. “I started that 11 years ago and it just got done.”  Iseman delineated other “small changes.”

“Some of the things we’ve done, some small changes were a big deal, like the stop sign on Park Avenue at the Third Street hill,” she said.  “Parking meters that take credit cards, how ‘bout that?  Nobody resents paying for parking,” Iseman said. “They resent the quarters.”

She also mentioned the reverse 911 service that alerts residents about potentially unsafe conditions. “We promise that we will call you in the middle of the night,” she said. If the service had been in operation in 2009, informing residents to not use toilets, showers or sinks during the Bluebird pump station spill, Iseman surmised it would have prevented 80 percent of a 600,000-gallon spill.

The mayor congratulated several business owners that revitalized historic buildings, such as Madison Square and Garden Cafe, the Old Pottery Place and Hotel La Casa del Camino.  She also praised Mozambique Steakhouse, which has created controversy among its neighbors for adding a live-music venue.  “It is a gift to us that we have a place for late-night dining, great food and great music,” she averred.

Living close to the beach, though, means living close to Coast Highway businesses and their parking problems.  She said the city solved the problem by creating a “quiet zone” rather than a no-parking zone. “It’s just quiet.  We don’t want to run into a problem with the [California] Coastal Commission by limiting parking,” she said.

Public Works Director Steve May said residents should expect delays on Laguna Canyon Road beginning in September when the California Department of Transportation will divert traffic while two more inches of asphalt are laid.

The run-off angle of Laguna Canyon Road, a fast-flowing flood corridor during intense rainstorms, will once again be raised during a construction project expected to take two months, he said. “I hate to depress everyone,” he said jokingly, anticipating more traffic delays on one of the town’s few throughways.

May said Caltrans will grind down the highway two inches in noted flood-prone spots before adding two more inches of tarmac, a concern since raising the canyon road’s height increases the velocity of storm water. Permeable paving was on the list of considerations drawn up by a recently established city flood taskforce, which will recommend measures to prevent damage from future storms.

May, known for his relaxed sense of humor, added his own financial forecast, reading tell-tale signals of an improving local economy. “We have discovered that preceding any economic upturn is an increase in trash collection.”

Iseman thanked the local free press, which, she said is religiously read, for keeping civic officials “on their toes.”


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