***FOR THE RECORD: The May 14 editorial, “Good and bad news," should have stated that a higher bond rating affects future municipal interest rates.***
Surprise, surprise! Last year, Standard and Poor’s upgraded Laguna Beach’s municipal bonds to AAA, according to a report from city Treasurer Laura Parisi. This will help the city pay off debt it has incurred by lowering interest rates. But will it keep the city on a “green" path at a time when fiscal red light warnings are furiously blinking? That’s a good question.
Parisi’s good news came at the same time that City Manager Ken Frank announced a projected $1.2-million budgetary shortfall "” which will be easily covered by the city’s $6-million reserve fund and a $2.5-million Recession Smoothing Fund that Frank insisted upon creating when the economy began to tank.
The future isn’t looking very bright, however, with retirement obligations looming on the horizon like a tornado ready to rip the roof off of City Hall. One of those retirees, of course, will be Frank himself.
That sense of foresight is probably the most important quality that the council must seek in a city manager who is buffeted by enormous and conflicting immediate demands from the public and must also keep an eye on the larger picture as events unfold.
It’s an election year, and still unknown is whether the state will be able to dip its hand into the municipal coffers to balance its notoriously listing budget, which has been threatening to capsize for at least 10 years. A ballot measure that would stop that practice will be on the ballot and city voters would be well-advised to approve it.
After Frank steps down in November, a new city council will be seated, and local electioneering is already under way for incumbents who want to keep their seats, and possible challengers who are looking at joining the council.
It’s a tough time for the council, which must choose wisely in a successor to keep a steady hand on the helm of a ship of state approaching turbulent waters "” and possibly a waterfall.