Laguna Beach reports $17-million budget surplus in update

Laguna Beach has reported a $17-million increase in the city’s operating budget.

As an independent audit of the city’s finances for fiscal year 2021-22 comes to a close, city officials provided an update to the City Council in late February. The general fund came in $7.4 million ahead of a 20% reserve requirement, according to a staff report.

The city outperformed budget estimates in its parking fund by $2.8 million, the capital improvement fund by $2.5 million, and the Measure LL fund by $1.6 million.

Those numbers were driven, in part, by $5 million in hotel bed tax revenue.

“When we put those estimates together — we’re talking February, March, April of 2021 — still a little pandemic era concerns,” Assistant City Manager and Chief Financial Officer Gavin Curran said. “We may have been a little more conservative just because of what we were seeing ... still face masks were required in a lot of places, we didn’t know where people were going to go, how they were going to react, and so I think that’s why you’re seeing some of those big savings numbers come in.”

The operating budget also benefited from an increase in property tax and sales tax. Laguna Beach collected 34% more in sales tax during fiscal year 2021-22 over the previous year, leading to a $1.8-million increase in the balance.

City departments also saved $1.4 million through a combination of cost control strategies and unfilled positions.

The general fund midyear savings were largely put to work, with $3 million of the savings going toward the purchase of the former St. Catherine of Siena school site at 30516 Coast Highway. The property is being repurposed as the Laguna Beach Community and Recreation Center.

Another $2.8 million was allocated for improvements along Laguna Canyon Road, $1.5 million was set aside for potential budgetary shortcomings due to hotel remodel projects in the fiscal year ahead, and $1.2 million for seismic evaluation of city buildings. City officials also asked for an allotment of $750,000 for a city facilities master plan and related improvements.

“We are not saying that the plan itself is going to cost $750,000,” City Manager Shohreh Dupuis said. “We don’t know how much the plan is going to cost based on the scope that the council would approve. … Any fund that we don’t use for the plan itself can be set aside for the actual improvements.”

The reallocation of the budget surplus included several boosts for public safety efforts, including the seismic assessment and funding for a hazard mitigation plan. The council also approved a $380,000 expenditure on 45 self-contained breathing apparatuses for the fire department.

“I just want to commend staff for including a lot of good public safety measures in here, particularly the Tier 3 seismic assessment, which I hope we can get done fairly quickly,” said Matt Lawson, chairman of the city’s emergency and disaster preparedness committee.

Support our coverage by becoming a digital subscriber.