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Laguna Beach council to consider eviction moratorium and budget adjustments

Laguna Beach traffic
With an expected drop in Laguna Beach’s summer tourism due to the coronavirus outbreak, the City Council will consider deferring occupancy tax payments for local hotels.
(File Photo)

Renters of residential and commercial properties in Laguna Beach who are worried about how to meet their monthly rent as a result of the economic downturn caused by the coronavirus outbreak may be able to breathe easier if the City Council adopts an urgency measure Tuesday night.

The ordinance would prohibit residential and commercial landlords from evicting any tenant who has experienced a loss of income or an increase in medical expenses due to the pandemic. Tenants would need to submit to their landlords written documentation of the virus’s financial impact within 30 days of the rent’s due date.

Renters would still be required to pay the unpaid rent within 120 days after the expiration of Gov. Gavin Newsom’s executive order prohibiting residential evictions, which is set to expire May 31 but could be extended.

The eviction moratorium will require approval of four of the five council members to pass and go into effect immediately.

At its meeting this past Tuesday, council members seemed to support the prospect of such an ordinance but were cautious about possibly hurting landlords who depend on rental income.

If the council does not approve the ordinance, it could opt to send landlords a letter urging them not to evict commercial tenants and to defer rent for anyone experiencing financial hardship due to the coronavirus.

Costa Mesa, Anaheim and Long Beach are among cities that have approved similar ordinances.

Projected budget impact

The Laguna Beach council also will review its current budget in light of a coronavirus-induced $12-million loss in revenue expected for the remainder of the fiscal year, which ends June 30.

The biggest chunk of that is a projected $3.5-million drop from the transient occupancy tax at the city’s hotels.

In a typical year, Laguna Beach attracts about 6 million tourists. But because of orders for people to stay at home, revenue from the hotel tax is expected to fall significantly this season, according to a city staff report.

The breakdown of projected losses:

  • $6 million to the general fund, including the $3.5-million drop in hotel taxes, $1.3 million in sales tax and $1.2 million in community development fees
  • $2.3 million to the capital improvement fund
  • $1.3 million to the business improvement district
  • $1.2 million to the Measure LL fund for various services and improvements
  • $1 million to the parking fund
  • $280,000 to the gas tax fund

City staff is asking the council to shift some budget items to preserve the city’s $13.2-million general fund reserve.

As part of its budget considerations, the council will discuss deferring transient occupancy tax payments for the first half of the calendar year. For hotels that typically contribute less than $150,000 in taxes annually, the extension would be to Nov. 1. For others, it would be to Sept. 1.

Tuesday’s council meeting begins at 5 p.m. No in-person public attendance is permitted as a measure to curb the spread of the coronavirus.

Council meetings are livestreamed on the city’s website at lagunabeachcity.net/cityhall/citygov/cityclerk/mam.htm and can be viewed on Cox cable Channel 852.

The public can email comments about agenda items to City Clerk Lisette Chel-Walker at lchel@lagunabeachcity.net. Comments are due by noon the day of the meeting.

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