LAGUNA BEACH : City Manager Warns of Future Expenses

The city manager has released a proposed budget that describes the city’s financial condition as “reasonably good,” but warns that fiscal problems may be on the horizon.

Although the budget is balanced and the city has a 10% reserve, City Manager Kenneth C. Frank said in a memo to the City Council that Laguna Beach will eventually face staff shortages and it must begin funding a police and firefighter retirement program in two years, at a cost of $375,000 annually.

Frank told the council in his April 26 memo that city staff is dwindling in several departments, including fire administration, finance, personnel and municipal services.

“No other city in Orange County anywhere near our population or service level operates with the paucity of administrative staff as we do in Laguna Beach,” the memo says.

Frank said funding for the police and firefighter retirement account could be generated by property taxes if the economy remains sluggish. Otherwise, taxes may be raised, fees increased or other cutbacks may be necessary, he said. The city’s retirement account now has a reserve of about $400,000, he said.

Frank also recommended plans to increase revenue, including an increase in planning, zoning and building fees that would raise an additional $172,000 for the city during the next fiscal year. The fee for a building permit would increase 12% under the proposal, Frank said.

City Finance officer Richard Hasenohrl said Tuesday the proposed $31-million budget for the 1991-92 fiscal year is comparable to that of previous years.

“It’s pretty standard,” he said. “We’re just kind of staying status quo at this point.”

The City Council will consider the proposed budget at a May 14 workshop and public hearing. A second public hearing will be held in June, when the council is expected to adopt a budget.