Transit system running in the red

Transfers from the city's parking fund are used to subsidize the transit system, but over time that will hurt parking fund.

April 12, 2012|By Barbara Diamond
  • Take a ride: The Laguna Beach south route trolley roars past Forest Avenue after a day of moving locals and tourists around the city last summer.
Take a ride: The Laguna Beach south route trolley roars… (DON LEACH, Coastline…)

The Laguna Beach Transit System is hemorrhaging money.

Municipal buses and trolleys will cost the city an estimated $2.7 million for next fiscal year. Revenue this fiscal year from fares, charters and reimbursement is about $63,000, which means the transit system is running in the red in a chronic condition.

Annual transfusions from the Orange County Transportation Authority (OCTA) and the city's parking fund keep the system alive, but both sources have problems.

"The parking fund brings in $550,000 a year, and we are spending $900,000 in transfers to the transit system," said Councilwoman Elizabeth Pearson, a proponent of using parking funds to create more parking, as was the original intent. "If we keep spending at this rate, we will empty the parking fund."

However, the transit system currently can't function without the subsidies, City Manager John Pietig said.

Based on projections for the next 12 years, the parking fund could lose $150,000 annually unless new revenue sources are found, Pietig wrote in an email April 4.


Based on the 12-year projection, the parking fund will generate $1 million more than its costs, including the annual transfer that makes up the transit system's deficit, he wrote.

The transfer is projected to total $1.15 million over 12 years, which will reduce the parking fund by $1.8 million in the same time period, he wrote.

The current balance in the fund is about $5.2 million, Pietig wrote.

Laguna has the only full-time transit system in Orange County. The city operates the Little Blue Buses year-round and trolleys during the summer festival season and on Saturdays, partially to meet the needs of residents and visitors and partly to reduce automobile travel and its impacts within the community, according to city officials.

To encourage perimeter parking, summer shuttle buses are free and are subsidized by the city.

The city has a fleet of 12 trolleys and, until the recent acquisition of three new ones, had leased as many as nine for three months a year.

This year, the city leased six trolleys for 2012 and 2013, at a total cost of $201,600 — $16,800 per trolley, per summer — which the council approved 4 to 0.

"I will vote for this, but we really need to look at a long-term solution," Pearson said.

City officials said the annual cost of adding six trolleys to the city's fleet, each with an estimated life of 20 years, would total about the same as leasing them and would have other benefits.

Coastline Pilot Articles Coastline Pilot Articles