How should Laguna Beach spend its extra $6 million? City Council meets Tuesday to discuss

Laguna Beach City Council members on Tuesday will consider how it wants to spend higher-than-expected revenues from the 2015-16 fiscal year, though they may not be able to ignore the growing unfunded pension liabilities.

A staff report released Thursday said the city has more than $6 million in extra revenues, including $4.7 million in the general fund, $1.1 million in the parking fund and $559,000 in the capital improvement fund.

Factors accounting for the general fund increase include $1.2 million in higher-than-estimated property taxes, $552,300 extra in investment earnings and $487,000 in increased sales tax revenue, the report said.

Revenue from parking meters and lots exceeded projections by a combined $659,000.

"Not all news is positive," the report cautioned. The city's unfunded pension liability for 2015-16 increased by $7 million over the previous fiscal year, bringing Laguna's total obligation to $49 million, according to the report.

In the last three years, Laguna has paid an additional $6.4 million toward the unfunded liability.

Complicating the picture is lower-than-expected investment returns for the California Public Employees' Retirement System.

Further budget details were not immediately available because City Hall offices were closed Friday.

The staff report suggests that the extra revenue cover a number of obligations, including $1.5 million to handle tort claims; $250,000 each in grants to the Laguna Art Museum and Laguna Playhouse; and $500,000 to the city attorney for work involving lawsuits filed against the city by American Civil Liberties Union and the BEACH Vacation Coalition, whose acronym stands for Backing Everyone's Access to Coastal Housing.

The ACLU sued Laguna in 2015, alleging discrimination in the treatment of disabled homeless people. The BEACH Vacation Coalition, a group of residents, sued the city in 2016, alleging that it violates land-use laws by prohibiting new short-term-rental permits in residential areas.

To read the full staff report, visit lagunabeachcity.net/cityhall/citygov/cityclerk/mam.htm.

Tuesday's council meeting begins at 6 p.m. at council chambers, 505 Forest Ave.

bryce.alderton@latimes.com

Twitter: @AldertonBryce

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