Laguna Beach’s Unexpected Revenues Help Relieve Budget Pressures

Laguna Beach’s Unexpected Revenues Help Relieve Budget Pressures
A view of The Coast Inn from Main Beach in Laguna Beach, Calif., on Oct. 15, 2020. John Fredricks/The Epoch Times
Jack Bradley
Updated:

Laguna Beach is reporting better-than-anticipated revenues in its latest budget update, although it warns that its finances will continue to suffer throughout the next fiscal year.

During its Feb. 23 financial briefing, the city reported that “major revenues are doing better than forecasted.”

While the city’s finances are weathering the ongoing COVID-19 pandemic, revenues are likely to remain below their pre-pandemic levels through the next fiscal year—even if the pandemic subsides.

The general fund reserves will likely be needed to balance the budget under any scenario.

“This recovery will take time, but the city council can be cautiously optimistic about revenues stabilizing,” the report states.

The report attributes its latest financial picture to higher-than-expected sales tax, transient occupancy tax, and community development fees. It added up to $7.3 million in unanticipated revenue that the city wants to return to the general budget.

The city adopted a budget last June with two different scenarios: bad and worse.

This was done to reflect the economic impact of the CCP virus pandemic.

The bad revenue scenario appropriated $17.9 million in citywide budget cuts, with $9.4 million cut from the general fund, and $1.5 million of general fund reserves.

During the city’s first budget update last September, the pandemic was lifting, schools were reopening and businesses were getting back to work.

Though the city was still trending toward the bad revenue scenario, much of the budget cuts were refunded; $1.5 million was returned to the general fund reserve, and about $900,000 was returned to the general and parking fund balances.