A boom in fees for building permits and plan checks last year, the most in the past seven years contributed to an unexpected surge in the city’s spending power by $4.3 million, according to a midyear budget analysis.
The city’s triumvirate of key income sources – taxes on hotel stays, retail sales and property — put $2.8 million more into city coffers than estimated while unspent funds added another $1.5 million in savings to the cache.
The City Council had the happy task Tuesday of allocating those funds, along with another $750,000 courtesy of an upward revision in estimated property tax revenues, and a one-time $2.2 million infusion of hotel tax revenues received after the close of the fiscal year.
Thanks to the extra cash, they were able to repay the $1.45 million borrowed from city reserves to pay for cleaning up a former trash dump in Laguna Canyon that proved more expensive than estimated. They also took the precaution of appropriating $400,000 to pay down the city’s unfunded pension liability.
A number of repair and improvement projects across the city received funding, including renovations at Alta Laguna and Top of the World Parks, renovation of the high school tennis courts, improvement of Laguna Creek at the Animal Shelter, the Temple Hills storm drain, and upgrades to make public restrooms accessible to the disabled.
Council member Toni Iseman pushed for and received an extra $20,000 to expand ongoing sidewalk cleaning along Coast Highway further south to Pearl Street as well as $10,000 toward trash bins with recycling receptacles on the beaches. And Council member Rob Zur Schmiede made a successful plea for the Senior Housing Task Force’s request for $10,000 for their “virtual village,” creating a community of vendors to provide services to seniors living at home.
The Council looked at the $2.2 million hotel tax windfall separately. They agreed to put $2 million of it into the General Fund’s reserve fund, bringing its balance up to $12.5 million, creating a reserve of nearly 24 percent. They also endorsed Mayor Bob Whalen’s proposal that the remaining $200,000 go towards putting in three sidewalk segments on the inland side of Coast Highway parallel to Solana Way. “We’ve heard a lot about pedestrian safety and this is one of the stretches people have spoken to me about,” said Whalen.
The approved budget revisions also accounted for a 5 percent salary increase for City Manager John Pietig, following Council endorsement of his revised employment agreement. After an annual evaluation of Pietig in January, Whalen and Mayor Pro Tem Steve Dicterow proposed that he receive a 5 percent salary increase, in lieu of the 5 percent exceptional performance pay bestowed in June. They had also proposed extending the agreement to 2020, effectively giving him a five-year contract.
Justification for the increase included Pietig’s high performance rating, a desire to keep his salary reasonably competitive with other city managers in the county, and his foregoing of raises during the recession, Dicterow said. Council member Kelly Boyd said he favored the raise because Pietig had voluntarily refused annual pay jumps when municipal workers were foregoing theirs.
The rest of the Council agreed with the raise on his current pay of $216,342 annually. “We need to work hard to make every city employee feel that their salaries are competitive,” said Iseman, who heard about Laguna city employees departing for higher paying city jobs elsewhere.
The five-year contract met a different fate.
“I really have a problem with the term,” said Zur Schmiede, who said he consulted with human resource professionals about typical contracts for city managers. “I think the standard is two to three years, so I can’t support five years,” he said.
In the end, the Council agreed to a three-year term. They also agreed with Zur Schmiede’s proposal that going forward the annual review include a written evaluation, which would be added to the Council agenda so that the public can view it. “It’s good practice in transparency,” said Zur Schmiede.