The city’s fear and fire campaign to underground utilities in Laguna Beach was not developed as a means of saving the residents from the next big disaster, but as a money grab to fund the city employee pension shortfall for years to come.
Last year CalPERS lowered its discount rate from 7.5% to 7%. The city will see a 30% – 40% increase in its required unfunded liability payment. These additional costs are expected to reach $2.8 million by 2021 and create a deficit budget position in the city’s general fund unless the revenue increases or expenditures are reduced.
In 2016, the City Council researched new strategies to address the impact of rising pension costs. They met with consultants to implement a community survey to value the importance of potential uses of funds by local ballot measures.
In other words, they paid a strategy specialist to devise the best method to convince the voters to tax themselves millions of dollars.
The survey concluded Laguna’s top high-priority uses of funds were local fire protection, preparing for natural disasters and removing utility poles, indicating the residents would approve a bond or tax increase if it addressed these measures.
From this information, Measure LL was placed on the November 2016 ballot which passed, providing approximately $2 million annually for fire, police protection, parking, utility undergrounding and other services. That $2 million annually was a nice start, but with all the new hires and pet projects, it wasn’t going to save the city’s unfunded pension liability which would eventually bankrupt Laguna.
The fire and safety undergrounding sales tax and GO bond was initiated. By their estimates, Laguna Canyon Road would require $90 million, all other evacuation routes $45 million, and neighborhoods not yet undergrounded $190 million, totaling $325 million.
This push by our city to underground is not because they are worried about our safety. It’s about 30 years of revenue into the general fund to use at their discretion.
Laguna Canyon Road has been and will continue to be undergrounded by Caltrans and SCE. It is not our obligation to fund a state highway route. If the city goes forward on the bond, insisting they need $90 million for LCR, when they don’t, the money goes into the general fund for 30 years to spend as they wish. That would go a long way to fund the pension shortfall.
Jill Cooper, Laguna Beach