Laguna Beach council weighs options to close multi‑year budget gap; charter city and ballot measures discussed

Laguna Beach councilmembers on Jan. 28 confronted a multi‑year fiscal projection showing expenditures outpacing revenues and the city’s discretionary fund shrinking substantially.

Finance Director Michelle Bennigan told the council the general fund grew roughly $34 million (55%) in revenues since FY2015‑16 but expenditures rose about $37 million (59%) in that same period; the city’s discretionary balance fell from about $6.9 million in 2015‑16 to an estimated $2.0 million this fiscal year. Staff’s forecast assumes roughly 5% property‑tax growth in 2026‑27 and modest sales‑tax and hotel‑tax growth thereafter but shows reserve draws unless the city tightens costs or finds new revenues.

Council members and staff discussed short‑ and long‑term responses: continued operational efficiencies, an audit of fee subsidies in community development, potential fee updates, and possible voter measures (sales‑tax increase, TOT changes or business license adjustments). Council also asked staff to explore a narrowly scoped city charter that would preserve municipal control over select local matters (parking enforcement, procurement, some contracting rules) while deferring most statewide matters to state law. City attorney staff outlined that a simple charter can reserve limited municipal powers but cautioned that adopting or amending a charter requires voter approval and that some statewide rules (prevailing wage, housing law) constrain local options.

Council asked for a short, comparative fiscal memo on: (1) likely efficiency savings from proposed process and procurement changes, (2) the legal mechanics and near‑term costs of drafting a small charter focused on procurement/parking, and (3) an outreach plan (town halls, focused surveys) if the revenue ad hoc proceeds. No binding direction to place a tax measure on a ballot was taken.