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Laguna Beach adopts balanced $101.9 million budget for fiscal 2026–27 with housing, fire safety and reserves boosted
Summary
Laguna Beach council adopted the FY 2026–27 budget June 23, approving $101.9 million in general‑fund revenues and a nearly $252,895 projected ending fund balance, boosting wildfire mitigation, insurance reserves and a $300,000 transfer to the housing fund to help secure a $2.5 million matching commitment.
Laguna Beach’s City Council adopted the fiscal year 2026–27 operating and capital budget on June 23, approving adjustments staff said keep the city balanced while strengthening reserves and funding key priorities.
The council-approved package sets general fund revenues at $101.9 million and general fund expenditures at about $101.8 million, leaving a projected ending general fund balance of roughly $252,895. Council members and staff said they pared prior spending proposals and moved money between funds so the city meets its 20% contingency reserve requirement.
City finance staff said the adopted budget transfers $3.6 million into the city’s insurance reserve and earmarks roughly $2 million for replacement of the 800-megahertz public safety radio system. The package also includes approximately $1.6 million to expand wildfire mitigation and fire safety work and reserves $1.9 million for prioritized projects the council’s ad‑hoc committee may bring forward.
On housing, the council approved a $300,000 discretionary transfer from the capital improvement fund to the city’s housing fund. Council members said that move is intended to help the city meet a $2.5 million local match needed to secure a related state grant and to build a more stable housing funding stream in coming years.
Council members and residents urged more transparent reporting of litigation and settlement spending. Staff said settlements are funded from the city’s internal service insurance fund and that the budget includes a plan to build that reserve; staff also said the city is adding a new ledger object code to track settlement payments going forward. Finance staff pledged quarterly updates on revenues and expenditures to give the council earlier opportunities to adjust course.
The budget reduces overall staffing by a net of seven positions while adding two targeted classifications to provide flexibility (for example, an assistant engineer and a transit and parking manager). It also retains funding to recruit a frozen assistant city manager position and moves a community-services officer into general-fund staffing to support a first-responder drone program.
Council members directed staff to return with a number of follow-up items: a timeline and procurement plan for an AI pilot to speed community-development plan checks, further design work for downtown streetscape and Main Beach boardwalk, a process to evaluate consultant spending for savings potential, and options for a reliable, ongoing housing revenue source rather than ad‑hoc transfers.
The council approved the budget unanimously. City staff said they will post the final adopted resolutions and revised exhibits on the Community Development and Finance pages of the city website and begin implementing the adopted changes on July 1, when the new fiscal year begins.
