City officials approve budget

Barbara Diamond

Despite the effects of the state’s ongoing financial crisis, Laguna

Beach officials were able to approve a budget Tuesday for the next

fiscal year that cuts no public services or city personnel.

The City Council voted 4 to 0, Councilwoman Toni Iseman was

absent, to approve the $49-million budget with only minor tweaks to

the recommendations by City Manager Ken Frank.

“This is a year to pare costs rather than add programs,” said

Frank, who rarely admits publicly to an optimistic view of city

revenue.

Fiscally conservative Mayor Cheryl Kinsman, a certified public

accountant, told Frank to bump up his property-tax revenue estimate

from 8 to 8.25% to balance a budget that added one new staff position

and payment of past dues to the El Toro Re-use Planning Agency to his

recommendations.

“You always underestimate the property tax [revenue],” she told

Frank.

Frank’s tax revenue prediction of an 8% increase was the highest

he has ever made in more than 20 years. He is required to submit a

balanced budget to the council, which has the right -- some say the

duty -- to tamper with it.

This year, Frank had to take into account an anticipated $675,000

loss to the state. Last month, the cities and counties of California

cut a deal with the governor to pony up a percentage of the local

revenue for the next two years to help the state out of its financial

morass. In return, the legislature was supposed to put a state

constitutional amendment on the ballot that would protect local

revenue at the end of the end of the second year.

Frank opined that the light at the end of the governor’s two-year

tunnel might be sputtering.

“Now, it looks like the legislature may not agree to the

amendment,” Frank said.

Frank said he and Kinsman planned to be in Sacramento for a rally

Thursday on the capitol steps to demonstrate support for the

amendment.

“But, at the moment, we have to deal with this year,” Frank said

Tuesday. “I asked every department to recommend 1% cuts from their

preliminary budget requests. They are trying to hold staff positions

and cut elsewhere. They are afraid if they lose staff they will never

get it back.”

The only staff increase was the position of the tidewater

enforcement officer, which had a dedicated lobby. It took some number

crunching, but funding was found that did not dip into the Open Space

Fund as Councilwoman Elizabeth Pearson had suggested.

Frank opposed using the fund because it might jeopardize possible

acquisitions, which the Laguna Greenbelt Inc. maintained is the

fund’s primary purpose.

“We support the tidewater officer, but find the money elsewhere,”

said Jane Egly, on behalf of the environmental group. “The fund is

not for protection of open space, but the acquisition of open space.”

That has been a council policy in the past, but may be in for a

change.

Pearson will seek support for tapping the Open Space Fund to

protect the city’s beaches and coastal waters.

Police, fire and public works departments, with the highest

budgets, took the biggest hits from the 1% cuts.

The police department shaved $70,000 from its budget by deleting

one unfilled position, but a state grant program, if not reduced,

could preserve the level of staffing. The department will cut $30,000

from its budget for supplies, training, repairs and contractual

services. The fire chief’s request to go on 70% of full-time helped

cut costs in his department. A battalion chief vacancy will remain

unfilled until August to further ease the budget.

Public Works Department training funds will be cut 50%. Funds for

supplies and contractual services also will be cut and an upgrade of

the City Council Chambers’ air conditioning system will be delayed.

Senior Planner Kathy Lottes, who has accepted a job in another

community, will not be replaced in kind. A clerk typist will be added

to Community Development Department, which was asked to cut $40,000

from its budget.

The Cultural Arts Department was asked to save $13,000. Funding

for Music in the Park concerts, which have always been billed as a

locals’ event -- newspapers are asked not to publicize them outside

of the city -- was transferred from the city’s general fund to the

Business Improvement District revenue. City hotels fund the BID

specifically for tourist-generating activities or groups.

Adjustments to the capital improvement projects 10-year plan were

left for future consideration.

The bold-faced graphs could be broken out into a sidebar.

The council did not tamper with the Community Assistance Grants

recommended by council members Pearson and Wayne Baglin.

“We used some specific criteria in determining who and what should

be funded,” Pearson said.

The criteria included being based in Laguna, with a membership

primarily of city residents and funds used primarily to benefit

Lagunans. The grants often reflect the interests of the

sub-committee.

South County Senior Services Inc. was awarded $10,000, although it

is based in Laguna Woods, has no membership and has provided lunches,

Meals on Wheels and transportation to Laguna’s seniors for only few

months. The organization also provides services to Laguna Woods,

Laguna Hills, Laguna Niguel, Lake Forest, Mission Viejo, Dana Point,

San Juan Capistrano, San Clemente and Corona del Mar.

Laguna Seniors Inc. received a $12,000 grant and Sally’s Fund,

which provides transportation for seniors received $10,000. For what is believed to be the first time, a booster club was awarded a grant.

Other booster groups are likely to take notice.

Ocean Laguna Foundation received a $4,200 grant, the full amount

requested. Rescuing Unwanted Furry Friends also got its total

request, but it was only $500.

Laguna Beach Friends of the Library got $2,500 more than the

$5,000 it applied for, but the HIV-AIDS Commission $20,000 request

was cut to $8,000, half of what it received last year.

California Choreographers Dance, the Festival of Arts and the

Laguna Playhouse, which all get substantial hotel-funded Business

Improvement District grants, received assistance grants. The festival

and the playhouse each were awarded $1,000. The dance group got

$7,000 from the city plus the BID grant, which is paid through the

city.

The highest grant, $24,000 went to the Crosscultural Council,

which oversees the day labor site on Laguna Canyon Road, as well as

other programs. Requests totaled $434,140, about $8,000 more than

applied for in the 2003-04 grants. Grants exceeded the $169,500

2003-04 total by $5,500.

The city budget includes a legally required reserve of 10% of the

general fund, which the council can spend at its discretion with a

majority vote. Reserve spending requires four votes.

A self-imposed $500,000 contingency fund provides a cushion, which

Frank recommended using to get the city past the next two years of

state-deprived funds, to be restored as the financial picture

improves.

“The council set this aside for crises or natural disasters,”

Frank said. “I think this qualifies.”

Laguna’s municipal code mandates approval of a balanced budget by

July 1, when the new fiscal year begins. The council made it with two

weeks to spare.