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Laguna Beach to consider wastewater financing options and economic impacts of coronavirus

The Laguna Beach City Council will consider new financing options for a 10-year wastewater system capital improvement program, including increasing the sewer user charge by 5%, 10% or not at all.
(File Photo)

Following a 1.4-million-gallon sewage spill in Laguna Beach on Thanksgiving, the City Council authorized a one-year sewer user charge increase of 10% to pay for a wastewater system capital improvement program.

Now, the City Council will consider new financing options for the 10-year program in response to the stay-at-home order issued by Gov. Gavin Newsom in March, which city staff said has caused significant impacts to both the city and to ratepayers.

Up for council consideration Tuesday night is whether the city should increase the sewer user charge by 5%, the proposed 10% or not at all.

All options will provide funding until more information is known about an Administrative Civil Liability assessment as related to the Thanksgiving spill and options on how to improve the North Coast Interceptor over the next decade, city staff said. Staff expects to return with more information in March 2021.

Staff is also preparing for negotiations with the San Diego Regional Water Quality Control Board on the potential ACL assessment and how funds may be applied to improvements to the sewer system and environmental projects, city staff said.

“The impacts of the COVID-19 virus have yet to be fully realized,” city staff said. “The city is in a difficult position of needing to continue improvements to the wastewater system and bracing for the economic impacts of the pandemic.”

Proposed tourism marketing district

The City Council also plans to take action on the conversion of the business improvement district to a tourism marketing district, a process that would require more than 50% of the hotels supporting the establishment and submission of signatures for the district.

The council received public input at its March 31 meeting.

The business improvement district was adopted in April 2001 with the intent of using additional taxes on businesses to promote offseason cultural events and encourage hotel occupancy. Converting to a tourism marketing district would allow the district a five-year term instead of being renewed annually.

If approved, the term would begin July 1 and end June 30, 2025.

The proposed tourism marketing district would include all lodging businesses within city borders. An annual assessment of 2% of gross short-term room rental revenue would fund sales, marketing and communications and programs by the city Arts Commission, Laguna College of Art + Design, Laguna Playhouse and Laguna Art Museum.

The city will remain responsible for collecting the assessment on a quarterly basis and distribution of the funds. Visit Laguna Beach will be responsible for managing the tourism district’s programs and reporting annually to the City Council.

A staff report prepared for Tuesday’s meeting said if an insufficient number of business owners submit written protests the council may adopt the proposed assessment and, following the public hearing, establish the Laguna Beach Tourism Marketing District and adopt a resolution doing so.

To successfully protest the new district, the number of business owners protesting would have to add up to 50% of the assessed levies.

Residents are encouraged to send comments on agenda items to City Clerk Lisette Chel-Walker at at lchel@lagunabeachcity.net. All communications must be received by noon Tuesday.

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.

Residents can also call in at (669) 900-9128 to listen to the meeting and comment during designated periods. While calling, dial 91119733371# and press *9 to comment on an item. Time for remarks may be limited.

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