“We are expecting to beat the assessor’s estimate,” city Finance Director Gavin Curran said in his report to the council Tuesday at the annual budget workshop.
City officials won’t know until late June or early July if Laguna will be one of the Orange County cities that the assessor expects will see a decline in taxes, but the 2010-11 budget prepared by City Manager Ken Frank is based on no changes. The city has a record of exceeding the assessor’s estimates, including last year when the property tax receipts increased by 3.8% when the assessor estimated a countywide percent increase of minus-one to plus-one.
“I suspect we are the envy of other Orange County cities [due to] our famous city manager and his way of making a dollar stretch,” Mayor Pro Tem Toni Iseman said.
Every 1% increase or decrease in the property tax is worth about $200,000, a significant sum in the current economic climate when city revenue from sales and hotel bed taxes took a nose dive.
Escalating costs of about $1.2 million to run the city — increases in employee health insurance and pension benefits and operating the homeless shelter, for examples — exacerbate the problem.
“I told department heads not to ask of dime more than they got this [2009-2010] fiscal year,” said Frank, who is required by law to submit a balanced budget to the City Council by May 1 of each year.
Balancing Laguna’s budget this year was relatively painless compared to the state, counties and other cities, Frank reported to the council.
“There are no layoffs, only minor reductions in service and no mandatory furloughs,” Frank said.
Expenditures have been held to 2009-10 levels, by some judicious juggling.
Frank ordered departments to absorb unavoidable costs by savings elsewhere in their budgets.