Laguna Beach council adopts 2025–26 budget, approves labor MOU and several policy items; arts funding clarified

The Laguna Beach City Council adopted the fiscal year 2025–26 budget on June 24, approving staff‑recommended adjustments carried from the budget workshop and adopting related administrative and personnel actions.

The council’s package included: adoption of the city’s master fee schedule (with minor corrections), formal approval of a 15‑month memorandum of understanding (MOU) with the Municipal Employees Association (effective July 1, 2025–Sept. 30, 2026) that provides a 3.5% salary increase on July 1, 2025 and 1.5% on July 1, 2026, and authority for the city manager to execute competitively bid vehicle/fleet purchases that are already budgeted.

Council members also approved the city manager’s one‑time exceptional performance payment related to a previous closed‑session review, finalized community assistance grant awards and cultural arts allocations, and made several technical corrections to the proposed 2025–26 budget. The council set an administrative direction that one item be adjusted: $60,000 of city discretionary Tourism Marketing District funds will be reallocated to cultural arts grants to align the arts commission recommendation with the council’s prior direction on total funding.

Key budget mechanics discussed at the meeting included: staff’s proposed changes to general‑fund assumptions, an updated sales‑tax projection, fee revenue increases from community development (reflecting recent fee adjustments), and corrections to certain internal transfers in parking and transit funds. The council also appropriated seized asset funds for police equipment purchases in the current year and confirmed that budgeted appropriations remain below the city’s appropriations limit for FY 2025–26.

The council approved labor and salary steps incorporated into the budget and adopted salary schedules that reflect the MOU increases for represented employees and a parallel 3.5% increase for management positions. The council directed that the cost‑of‑living increases take effect July 1 and asked staff to return quickly with a classification/compensation comparison for the city clerk role and to continue work on the treasurer hours review ordered in the treasury discussion earlier in the meeting.

Votes at a glance - Budget adoption (FY 2025–26) — adopted as revised; motion carried (unanimous). - Municipal Employees Association MOU (07/01/2025–09/30/2026) — approved; cost built into current budget. - Master Fee Schedule (fees effective 60 days after adoption; real property report fee reduced to $40) — approved as corrected. - City Manager employment agreement amendment (one‑time exceptional payment and deferred compensation) — adopted. - Community assistance and cultural arts grants — approved with $60,000 reallocation from TMD discretionary to cultural arts. - Appropriations for asset‑forfeiture police equipment (FY 2024–25) — approved.

Councilmembers said they wanted more work on longer‑range revenue strategies. An ad hoc committee appointed by the council will study potential non‑voter and voter‑approved revenue options — ranging from parking rate changes to a voter measure (sales tax, transient occupancy tax or business license tax) — and will conduct a community survey on priorities later this year.

The council asked staff to return with follow‑up items including: a revised cultural arts payout schedule that reflects the council’s funding target, classification comparisons for the city clerk, and the treasurer‑hours third‑party review that was authorized earlier in the meeting.