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Laguna Beach staff recommends closing 50 CIP projects, returning about $16 million to fund balance
Summary
At a study session staff proposed closing 50 inactive capital improvement projects and returning roughly $16 million to the fund balance while identifying funding shortfalls for Cleo Street beach access, Fire Station 4 and EV charging; council directed staff to return March 11 with midyear budget amendment language.
City staff presented a review of the existing capital improvement program and recommended deprogramming 50 of 132 active projects and returning slightly more than $16,000,000 to fund balance, primarily from the capital improvement fund but also from parking authority, gas tax, street lighting and wastewater funds.
Staff said the recommendation follows a project‑by‑project review to mark projects that are complete, infeasible, funded elsewhere or lower priority. The presentation highlighted several funding adjustments staff recommends for council consideration: a federal grant of about $5,000,000 that staff says will offset most city funding for the Coast Highway sidewalk gap‑closure project; an estimated $1,000,000 shortfall to fully fund the Cleo Street beach access improvement project; and a roughly $2,500,000 shortfall for the planned Fire Station 4 replacement, for which planning and design review are underway.
Mark and Tom, the public‑works presenters, explained timing and risks for the federal sidewalk grant. They said the grant is programmed in federal fiscal 2026 and is administered through Caltrans and OCTA; construction would be contingent on Caltrans approvals and an E‑76 reimbursement agreement, with construction planned for 2027 if reimbursements are secured. Staff recommended leaving about $1,000,000 in the city project account to finish design while pursuing federal construction funds.
Staff also reviewed larger needs that remain unfunded: seismic upgrades for City Hall and Fire Stations 2 and 3 (estimated construction costs about $11.5 million), a Forest Promenade permanent conversion (concepts due after a consultant delivers an updated plan in roughly four weeks), and an EV charging deployment plan the staff estimated at about $3,300,000 pending a facilities master plan decision. On wastewater, staff said several large projects are underway but noted the city is completing a wastewater master plan to reprioritize future work.
Council members pressed staff on why the CIP backlog has grown. Staff identified three main causes: (1) project entitlements and design review requirements that trigger multiple hearings and potential Coastal Commission appeals, which can delay projects by many months; (2) limited in‑house project management capacity — staff said the public‑works group has three project managers and outsources a significant portion of design work; and (3) complex project scopes and regulatory constraints for projects that cross multiple jurisdictions or private property.
Public comment included a request from resident Michael Wilkes to add pedestrian‑safety work on Thalia Street and a willingness to organize neighbors around undergrounding utilities to create right‑of‑way space. Council members asked staff to return with a March 11 midyear budget adjustment action that memorializes council direction and to present a briefing on wastewater capital delivery timed with the wastewater master plan. Staff said a midyear budget amendment packet will be prepared for the March 11 meeting and that the drainage master‑plan RFP is expected to be issued in about a month with expected completion by the end of the year.
No formal council action was taken; staff will bring the proposed project closures and appropriation adjustments back as an action item at the March 11 midyear budget amendment meeting.
