Laguna Beach manager pitches ballot options to close budget gap; residents press parking, tourism impacts

City Manager Dave Kiff outlined the City of Laguna Beach’s proposed budget and a menu of potential voter measures on a town-hall webinar, saying the draft is projected to be balanced while carrying a ‘‘small maintenance’’ draw on reserves and stressing protections for public safety.

Kiff, who introduced Gavin Curran as assistant city manager, said the city maintains a roughly 20% general fund contingency reserve and a separate disaster contingency of about 7.3%. He told attendees he built the budget conservatively because of a coming peak in pension costs and a slow economy, and that he had reduced staff positions and operating expenses where possible.

Why it matters: Laguna relies heavily on property tax receipts and visitor-generated revenue; sudden hotel closures, higher CalPERS costs and volatile visitor patterns have tightened the city’s near-term fiscal outlook and increased interest in permanent, voter-approved revenue. Kiff said the council must act quickly to meet ballot deadlines if it decides to place measures on the November 2026 ballot.

Key proposals and estimates

• Transient-occupancy tax (TOT): Kiff discussed a potential 2-percentage-point increase to the hotel bed tax, which he estimated would generate about $3 million annually and would be paid primarily by guests and short-term renters. ‘‘It would stay in the general fund,’’ he said, adding that any ballot placement requires voter approval.

• Local sales tax: Kiff said the city’s portion of the state-and-local sales tax base is limited but that consultants estimate tourists contribute roughly 55% of local sales-tax receipts. A 1-percentage-point local sales tax was estimated to generate about $7.8 million a year for the general fund, subject to voter approval.

• Business license / gross-receipts fee: Kiff described a targeted gross-receipts-style business license fee (for example, applied to restaurants and bars) phased in over several years. He and staff discussed preliminary modeling in which a 3% application to selected categories could generate ‘‘several million’’ dollars; Gavin Curran noted the estimate depends on detailed scope and exemptions.

Legal and procedural constraints

Kiff explained the legal distinction between general and special taxes under California law: a general tax for general-fund purposes requires a simple majority (50% plus one) while a special tax targeted to specific uses typically requires a two-thirds approval. He also reminded residents the city cannot advocate for a local measure once council places it on the ballot; staff may provide information only.

Public reaction and trade-offs

During the Q&A, residents pressed Kiff on visitor-focused solutions that would shift more costs to nonresidents, including expanded paid parking in South Laguna and a trolley fee. Kiff said paid-parking appeals and neighborhood concerns remain unresolved: an appeal by the Lagunita Homeowners Association has paused implementation in South Laguna, and council review is pending. He acknowledged risks of a sales-tax increase for fragile local businesses: ‘‘I don’t want to hurt our businesses anymore,’’ he said, and urged careful outreach and analysis.

Next steps

Kiff said the council will consider the proposed budget and any direction on revenue measures ahead of a July council decision point; if council opts to place a measure on the November 2026 ballot, it must meet charter and state timelines and, depending on the tax type, the required voter threshold for approval. He invited attendees to two more community workshops before June 23 and promised the presentation and materials would be posted on the city website.

Ending: The town-hall closed after roughly 90 minutes of presentation and Q&A; Kiff encouraged written follow-up questions and said staff would post more detailed budget documents and a staff report for forthcoming council discussion.