Letter: A Look at Risk

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It is clear that the Laguna Beach City Council considers above ground utilities the most significant risk facing our city. This is extraordinary given not only the number of other risks the city faces but also the voters’ expressed disagreement with this position. The Council’s position borders on obsession.

Despite clear voter rejection of undergrounding utilities, the city recently voted to commit funding in the amount of $168 million to wildfire mitigation; the overwhelming amount of which was allocated to undergrounding utilities. It’s almost as if we are living in a “Father Knows Best” world.

But does he? The city does not live in a vacuum and it doesn’t have unlimited resources. With respect to just natural disasters, Laguna is at risk not only from wildfires, but also from earthquakes, floods, mudslides, and if North San Diego is any indication, collapsing bluffs.

And there are other risks. What about the impact of current business practices and/or a financial crisis on the city’s increasingly underfunded pension obligation? How about the city’s aging sewer system? What about the risks associated with managing the city’s various capital projects? Or heaven forbid, the risk of a financial mishap resulting from the significant deficiency in internal controls reported by the city’s auditors the last two years?

Yet the city has gone all in on one aspect of one natural risk. “It’s not a matter of if but when,” the city says. Not mentioning that it could also be said about things like earthquakes and underfunded pensions. Where will all the money come from? Money to fund not only the Council’s obsession, but also any other unwanted surprises the city may face?

Funding generally can come from budget reductions, additional taxes, or saddling current and future residents with debt. Practically, the city never discusses reductions in its budget, so it likely would be looking to residents to pony up funds in the form of increased taxes or debt to fund any future problems. Is it really financially prudent to commit so much of the city’s budget to a single risk expecting that residents will fund other future shortfalls not currently provided for either through increased taxes or debt?

The Council has its cheerleaders. But has it convinced the voters? Time will tell.

Jud Robert, Larry Gorum & Dick Swintek, Laguna Beach

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