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Laguna Beach

 Volume 12, Issue 55  |  July 10, 2020


Virus-plagued 2021 budget approved with minor changes

By BARBARA DIAMOND

Faced with revenue scenarios described as bad and worse due to the COVID-19 pandemic, the City Council on Tuesday accepted, with only minor changes, the budget recommended by City Manager John Pietig for fiscal year 2021.

The proposed budget was based on the better of the two scenarios, estimating revenue of $63.4 million for the General Fund – some $9.4 million less than the pre-pandemic projection, but better than almost $13 million in the worst case. The most significant loss in revenue was the anticipated $11 million reduction in the transient occupancy tax, the Business Improvement District assessment and sales tax, $7.1 million of it earmarked for the General Fund. Reduced consumer spending is also significantly lower, both reductions attributed to the impact of the virus on the travel and tourist industry, and locals observing the stay-at-home advisory. 

“I haven’t seen revenue losses like this in all my time with the city,” said Administrative Services Director Gavin Curran, who presented the review of the proposed budget to the council and the public. “We started working in April on the bad and worse scenarios. Our goal was to limit the impact on core services and reserves in the 2021 budget and the following fiscal year.”

The predicted revenue losses are worse than those the city suffered in the most recent recession, Curran said. 

On the brighter side, property taxes, which represent 56 percent of the General Fund, are not expected to be materially affected. Contributions to the California Public Employees Retirement System (CALPERS) are not expected to be affected by COVID-19 until fiscal year 2022-23, according to staff. 

The proposed budget does not recommend any employee layoffs or furloughs of employees other than the reductions in recreation and transit services already approved by council due to the virus. Full-time staffing will decrease by six positions, accomplished by consolidation of the department and the elimination of vacated positions. 

Council was also asked to approve an agreement with the Municipal Employees’ Association and Management personnel and Pietig that forgoes 2.5 percent salary increases scheduled to take effect July 1. Pietig expressed appreciation to the associations for the agreement, as well as to the staff that put together the proposed budget in two months, a task that normally takes nine months.

Slashes were made to the budgets in every city department. Proposed reductions in expenditures included cuts in salaries and benefits, contract services, overtime, maintenance, equipment replacement, frequency of downtown and beach cleanups, and kelp removal, and the deferment or cancellation of capital improvements among others. 

Proposed reductions covered an estimated $7 million of the $9.7 million anticipated loss in General Fund revenue. 

The reduction in the estimated Measure LL revenue led to a recommendation to eliminate the $1 million transfer to the Wildfire Mitigation and Fire Safety Fund in the 2021 fiscal year, which included funding for the Defensible Inspector position. Matt Lawson, chair of the Emergency and Disaster Preparedness Committee, and Sonny Myers, director of the Community Emergency Response Team (CERT), voiced opposition to both cuts. 

Pietig said the budget contains a contingency fund, in the event of wildfires, protests, and even, he joked, an invasion of locusts.

In addition to the cuts, the proposed budget dips into the 20 percent of the General Fund reserved by the council. The proposed $1.5 million reduction in the reserve fund preserves $17 million, well above the mandated 10 percent. 

Mayor Bob Whalen said the reserve fund is in good shape at 17 percent. 

The council also debated proposed expenditures carried over from an April meeting: $500,000 reserved for the South Laguna Community Garden Park, $200,000 for a Defensible Inspector position in the Fire Department that staff recommended cutting, $25,000 for the Urban Forest Management Plan, $730,000 for the renovation of the Digester, and $190,000 for the removal of sludge from the Digester. 

Feedback from the council to the staff as recommended by Whalen and seconded by Mayor Pro Tem Steve Dicterow, deferred the urban forest plan, and kept the funding for the Digester and for the garden, which was supported by phone calls from former Mayor Ann Christoph and businessman Ruben Flores. Whalen said the council had committed to funding the South Laguna Community Garden Park up to June 30, 2021, but nothing beyond that.

Councilwoman Sue Kempf said she wouldn’t have kept any of them even as a line item in the COVID-19 economy.

“We don’t know what will happen next,” said Kempf. 

Pietig said he will be monitoring the budget every month and will produce a mid-year budget review in December or January. 

Councilman Peter Blake said he would never vote money for the garden but supported funding the Digester, which is included in a study of a parking structure recently approved by the council. 

The council also asked staff to look into the janitorial costs for cleaning, sweeping, and trash collection in the downtown streets throughout summer and to look into the cost of a contract defensible inspector, rather than a full-time position.

The complete text of the proposed budget is available for review on the city’s website at www.lagunabeachcity.net. 

Changes requested by the council at Tuesday’s meeting will be incorporated into the proposed budget to be voted on at the June 30 council meeting. Recommendations for Community Assistance and Cultural Arts grants are scheduled to be presented and adopted at the meeting.

 

Shaena Stabler is the Owner, Publisher & Editor.

Dianne Russell is our Associate Editor & Writer.

Michael Sterling is our Webmaster & Designer.

Mary Hurlbut is our Chief Photographer.

Alexis Amaradio, Barbara Diamond, Dennis McTighe, Diane Armitage, Marrie Stone, Maggi Henrikson, Samantha Washer, and Suzie Harrison are our writers and/or columnists. Scott Brashier is our photographer.

Stacia Stabler is our Social Media Manager & Writer.

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