Preliminary budget OKd with changes

The City Council took steps this week to help people around town on foot, without increasing expenditures proposed in the 2011-12 draft budget.

Revisions made Tuesday to the $66-million preliminary budget will be incorporated into a final version scheduled to be approved at the June 21 meeting.

Changes will include the council's directive to eliminate a $100,000 sign denoting availability at the Glenneyre Parking Structure and to find grants to construct the $300,000 Sun Valley Drive Debris Basin, made necessary by the December deluge and reallocate the funding.

"We just found $400,000," Mayor Toni Iseman said.

The council banked $100,000 in the parking fund and earmarked $300,000 for line item Sidewalks, Complete Streets and Pathways without identifying specific projects, swayed by the Temple Hills Pathways Committee presentation and Complete Streets supporters

"What tremendous foresight Joe Thurston had when he established the original city tract maps with 5-foot public walkways as integral parts of his layout in 1921," said Caroline Wright, a Temple Hills resident.

"Since that time, the pathways have been used by children as routes to walk to and from school and by others to get up and down the hill."

The paths are publicly owned lots, long identified as egress for hillside residents in an emergency. All but one of seven has fallen into disrepair and some of them are nearly impassable, reported committee member Lou Novak.

For a start, Novak recommended improving the Coast View Drive paths that serve residents on three streets.

Environmental Committee member Chris Prelitz said the city should fund sharrows, painted symbols on streets to indicate bicycle traffic without separate lanes, and for dedicated lanes.

"Eco-tourists want to go places they can ride bikes and walk," Prelitz said.

Tourism continues to be a major factor in the city's budget, second only to property tax as a revenue source.

Property taxes account for more than 56% of the city's spendable income, estimated at $25.4 million in the 2011-12 draft budget. Bed taxes are expected to bring in $4.4 million, 9.8% of the total revenue in the next fiscal year. Sales taxes are projected at $3.10 million.

Property taxes have consistently beaten, even if not by much, county projections, said Gavin Curran, city director of finance and information technology.

Despite the uncertainties of the economy, City Manager John Pietig said revenue projections for Laguna are looking up.

"I think they are modest, but we are not sure if this growth is sustainable, if whatever signs of recovery exist today will persist throughout the year," Pietig said. "But we are cautiously optimistic."

Nonetheless, the city must cope with an operating deficit of $718,000. It can be covered without dipping into the city's mandatory 10% reserve of the revenue smoothing account set up in 2008.

"So we are in better shape financially than most of the communities around us, but we still have challenges ahead of us, including increasing pension costs, health costs and who knows what's going to happen with gasoline and other utility costs?"

Councilwoman Elizabeth Pearson said the challenges include determining if the Sun Valley projects can be funded by the Federal Emergency Management Agency or the city's own disaster fund.

Other capital improvements are funded under the rolling 10-year plan, with projects prioritized and costs estimated.

"John [Pietig] and I go into a dark room and get out a crystal ball and come up with 10-year revenue projections and then my staff comes up with projects within the revenue," said Steve May, director of Public Works.

Projects for 2011-12 are projected to cost $6.4 million, about $2.8 million funded by Montage Resort& Spa bed taxes.

Pietig said steps taken in previous years have helped the city weather the recent economic doldrums.

Staff has been reduced by attrition or consolidation, saving $920,000, without layoffs. Interest on retirement benefits was paid off by an internal loan, saving $150,000 in interest. Exceptional performance pay was reduced by $170,000 and the city employees, part-time lifeguards and police officers relinquished scheduled salary increases.

The budget is available at http://www.lagunabeachcity.net, at City Hall, 505 Forest Ave., or at the Laguna Beach Library, 363 Glenneyre St.

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