City Council approves $65-million budget

City still waiting on possible reductions from final state budget, county assessed value.

June 18, 2010|By Barbara Diamond,

The City Council adopted a $65 million budget for fiscal year 2010-11 in less than an hour on Tuesday, but the financial fandango is not over.

Adoption of the budget as recommended by City Manager Ken Frank was unanimous, with no major changes from the preliminary budget publicly reviewed at the May 4 council meeting, but with two caveats.

"First: We won't know where [our] budget stands until the state resolves its budget and we see if they can find a way to take any money away from us," Frank said. "And second: We get the assessed value from the county."


The assessed value is the amount property owners will pay in taxes — a percentage of which is revenue for the city — that provides 56% of the city's general fund to be spent at the discretion of the council.

Staffing cutbacks have delayed the valuation, but rolls for all cities are expected to be ready by mid-July, Frank said.

"So we adopt the budget tonight and we all sit around and wait and see if we get zero-percent increase or a cut or even a positive, but nobody expects that," Frank said.

Each a 1% change in property tax revenue shifts the general fund by $200,000, up or down.

"It is extremely likely that the City Council will need to revisit the budget early next fiscal year," Frank said.

As adopted, the city will begin the new fiscal year with an estimated General Fund balance of $6.7 million. General Fund revenues are projected to be $45 million in round numbers. Estimated expenditures are $46 million, with a projected balance of $5 million at the end of the 2010-11 fiscal year.

Frank presented a balanced budget for the next fiscal year, as required by city law, by dipping into the "Recession Smoothing Account" set up in December of 2008 for just this purpose.

No salary increases were approved for most city employees, including management. However, the Laguna Beach firefighters declined to forego their contractually agreed-upon 5% increase, effective July 1. The Municipal Employees Assn. and the Marine Safety Assn. did agree to pass on their cost-of-living raises, also scheduled to kick in on July 1.

A request by City Treasurer Laura Parisi to bump her job to full time was denied.

Total performance payments -- recognition of exceptional work -- will stay the same, but possibly be distributed differently, Frank said..

City Clerk Martha Anderson's performance pay was raised from 3% to 5% to equal Parisi's.

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