By Lou Ponsi, Special to the Independent
Following the economic downturn caused by the COVID-19 pandemic, Laguna Beach’s financial situation is expected to improve in the 2021-22 Fiscal Year.
As he presented the 2021-22 proposed budget to the City Council on Tuesday, City Manager John Pietig said the budget shows a “path forward” to “full recovery,” while advising the council and the community to maintain an attitude of “cautious optimism.”
Revenues continue to improve, the budget is balanced and reserves are intact, said Gavin Curran, director of administrative services.
“We’re not quite where we were pre-pandemic but we are well on our way,” Curran said. “We are still below our estimates from a couple of years ago but we are much improving.”
The budget is expected to be presented to the City Council for final approval on June 15.
Revenues for 2021-22 are forecast to be $108.1 million, with $107.9 million in estimated expenditures.
Estimated revenue for the General Fund, which is the city’s main operating fund, is $72.6 million with $72.4 million in estimated expenditures. Nearly 53 percent of General Fund expenditures pay for police, fire and marine safety operations.
The city also expects to receive $4.3 million over the next two years from the American Relief Act. These federal dollars will be used to replenish the loss in revenue caused by the pandemic.
Property tax revenue, the city’s largest source of revenue is expected to increase by three percent to $43.2 million.
Transient occupancy tax, the city’s second-largest revenue source, is expected to increase by five percent to $7.3 million.
Sales tax revenue, which was severely impacted by the pandemic, is forecast to go up by 15-percent to $5.6 million.
The proposed budget also includes funding for new services and initiatives to benefit the public.
Among those are implementation of the $2 million Neighborhood Environmental Protection Plan, which provides more police protection, additional lifeguard coverage, stepped-up parking enforcement and trash pickup.
Funding for the Promenade on Forest Avenue, a pedestrian-only outdoor dining and retail enclave in downtown, is also part of the budget.
The budget also provides for adding jobs in the Administrative Services and Community Development Department and for restoring raises exceptional performance pay.
The Information Technology Services division includes $500,000 set aside for software replacement and network infrastructure, and $211,000 for computer replacement.
Several capital improvement projects are also scheduled to get underway in 2021-22.
Those include $1.7 million for the Bluebird Canyon Drive Road Widening, $1.2 million for the Moss street Beach Access Improvements, $950,000 for renovations at Main Beach Park and $950,000 for the design phase for the replacement of Fire Station 4 in South Laguna.
The city has an unfunded liability of $73.7 million, which represents the total amount of benefits owed to all current employees and retirees compared the value of the financial assets the pension plan manages.
The City Council will consider issuing pension obligation bonds to replace the unfunded liability at much lower rate than the seven percent charged by the California Public Employee Retirement System. Issuing bonds could save the city up to $40 million over 20 years according to the proposed budget.
The budget also includes $1.5 million in discretionary funding available for a “wish list,” of projects that are not listed in the budget.
Those include $600,000 for improvements to the Council Chambers and $600,000 for a new city ambulance contract.
“I think the staff has done a really good job,” Councilmember Peter Blake said of the budget. “I can’t find any real issues with any of it.”
