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Mid-year budget report upbeat

Laguna Beach has a $3 million windfall, mostly due to increased property transfers, city manager tells council.

October 07, 2010|By Barbara Diamond, coastlinepilot@latimes.com

City Manager Ken Frank performed his last budget magic Tuesday — and it was quite a trick

Frank informed the council that the city has $3 million more in the kitty than was anticipated when the 2010-2011 fiscal year ended on June 30. The windfall is due to property taxes and penalties from prior years, a more robust real estate market, higher fees from parking meters and services and savings, Frank reported..

"This is the last time we get these budgets by Ken," Mayor Pro Tem Toni Iseman said. "Wouldn't it be fun to have a video history of all his budget reports? He always pulls a rabbit out of his hat."

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Frank, who is retiring in November after 31 years as city manager and chief architect of the city's budget, made four recommendations for the manna. Firstly, "pray for the legislature," so the state budget won't ding the city in what Frank has characterized in the past as rape and pillage.

The council approved his recommendations for modifications to the approved budget for fiscal year 2010-11 made possible by the extra funds.

Recommendations:

•Put $750,000 into the insurance fund to pay for higher incidence of liability claims in the past two years;

•Allocate $700,000 for the purchase of capital equipment, which was eliminated from the budget in June;

•Eliminate three vacant positions in the Streets Division of Public Works, which will virtually wipe out the street paving crew, saving the city about $150,000 this year; and

•Transfer $15,000 from the city Attorney's budget to pay for a couple of open space lots in Arch Beach Heights to avoid future litigation.

As recommended by Frank and approved unanimously by the council, about half of the $3 million was allocated and the other half squirreled away in the Genera Fund Reserve. After factoring in the unexpected revenue and approved modifications to the budget, the estimated general fund balance on June 30, 2011, would be $6,324,000, almost 14% of anticipated spending, Frank reported.

The council also approved Frank's recommended modifications to the capital improvement program, which comes out of a different pot of money, including the annual bed taxes from Montage Resort & Spa, for which Frank once said he thanked God.

"Montage is down to a measly $2.72 million," Frank said.

Down, but hardly chopped chicken liver.

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