City Council approves $63M budget for 2006-07

The city will spend an estimated $63 million to stay in business in 2006-07.

Big ticket items include $4.5 million in supplemental funding for the $15 million community/senior center, an additional $1 million to pay for capital improvement projects already in the works, $800,000 to match a state grant to preserve Heisler Park and $500,000 to cover pay increases offered to city municipal, fire and police department employees.

City law requires a balanced budget to be approved by June 30, including a 10% reserve fund, produced each year by City Manager Ken Frank. The City Council unanimously approved the budget after some horsetrading.

The council swapped a $1 million contingency fund (recommended by Frank) for the community/senior center project for 340 of the 1,340 square feet that had been lopped off, along with other plan changes, to cut construction costs. The council also extracted a promise from Frank that some of the project’s “grace” would be restored if he could find the money.

“We are [cutting costs] to the point of losing the building’s essence and charm,” Councilwoman Toni Iseman said.

Lifeguard pleas rejected

The most time spent on any item in the budget was the conversion of one part-time lifeguard position to full time. Lifeguards and supporters spent about three-quarters of an hour trying to convince the council to upgrade five part-time guards to full-time employees.

The council spent about one hour hashing over the testimony before approving the one conversion, as recommended by Frank for the next fiscal year, but pushed for the promotion “sooner, rather than later,” and directed staff to consider the virtue of a beach curfew in lieu of nighttime on-call guard duty.

The annual budget includes salary resolutions for city personnel. An agreement was reached prior to the budget hearing with the Police Employees Assn. that raised the cost-of-living increase from 3% to 4½%. Negotiations are still under way with the municipal employees and firefighters associations.

“We have tendered a very expensive offer to the firefighters,” Frank said “They have shown that they are the least-paid firefighters in Orange County. I didn’t believe it, but it’s true.”

City Clerk Martha Anderson and City Treasurer Laura Parisi, both elected officials although the council determines their salaries, were awarded 5% exceptional performance bonuses in addition to the cost-of-living raises.

No new hires were proposed.

About 70% of the city’s $40 million discretionary general fund will be spent on employee salaries and benefits, 20% of that just for benefits, Frank said.

Discretionary spending comes out of the city’s general fund, estimated for 2006-07 at $41 million, pumped up by better-than-expected property taxes and bed taxes that will be considerably higher when the city’s debt for Treasure Island Park is paid off this fall, and the Montage Resort and Spa bed tax will become available for other purposes, such as capital improvement projects.

Proposed capital improvement spending in the next fiscal year includes supplemental funding for eight of 16 capital improvement projects.

Projects include replacing play equipment at Moulton Meadows and Alta Laguna Parks, which were intended to be done three or four years hence. The public petitioned for earlier replacement and the staff agreed it was a high enough priority to move up the timetable. The $400,000 storm drain replacement between Starlit and Bluebird also was expedited.

“We couldn’t wait for five years, when it was scheduled,” Frank said.

The city will again use about $700,000 from the parking fund to fill gaps in the general fund.

“It is simply not possible to balance the general fund without that augmentation,” Frank said.

Community Assistance Grants, funded by the city’s share of the Festival of Arts ticket sales and recommended by council subcommittee members Jane Egly and Cheryl Kinsman, were approved with just two changes.

The council added $2,500 to the $4,000 recommended for Gallimaufry Performing Arts and more than doubled the Laguna Beach Live!’s recommended $3,000.

“Jane and I went through the applications and read them all,” Kinsman said. “There were requests for $492,000. We had $213,000, which we divvied up.”

The budget will be reviewed in December. If revenue is higher or spending lower, the council will consider funding for other projects.