Staff Reports Available

George Weiss: Staff Reports on City Council proceedings are always readily available. To read the Staff Reports on any of the items below, go to: https://lagunabeachcity.granicus.com/GeneratedAgendaViewer.php?view_id=3&clip_id=2314

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ANNOUNCEMENTS

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New City Manager, David Kiff:
I welcomed Mr. Kiff at the Council meeting and had this to say about him:

 

“We have all experienced what it is like to have a highly trained and skilled city manager over the last six months with Sean Joyce. We now have a reputed master of coastal City Management with Dave Kiff.  I am so happy for our Laguna Beach community. I am looking forward to working with and learning from Dave Kiff.  Welcome!”

 

GW: We are truly fortunate to have Mr. Kiff sign a three-year contract as City Manager. He has a rare combination of skills, experience, education, integrity and commitment to public service. His skills include 9 years as a City Manager for Newport Beach. He holds a master’s in government from the University of Pennsylvania (one of the top programs in the US). In my research on Mr. Kiff, I could not find anyone who did not think highly of him. He lived in Laguna Beach for over twenty years. He knows and loves our town. Mr. Kiff starts his job on May 6, 2024, and I hope some of you will come to the May 14th Council meeting to welcome him back to his adopted home. 

 

 

Summary:
 

In this recap we cover the appointment of the new City Manager, Citizen’s Audit Review and Investment Advisory Committee Report on the Results of the Fiscal 2021-22 Audit, Outsourcing the City’s Investments, Establishing a Local Housing Trust Fund. 

 

GW: My Council Comments:
Recently Council voted 5-0 to initiate steps to build a City owned municipal pool. Soon after, the Mayor was quoted in a local newspaper saying that a second pool would never be built. Could the Mayor explain those comments in light of her and the Council’s decision to move forward on a city-owned pool?

 

Here is what Mayor Kempf said in Stu News shortly after the 5-0 vote was taken to move forward on a city owned pool “It is a good idea to include it in the facilities master plan, Kempf noted, because the city is so compact. Everyone is on top of each other, she commented, there are no wide-open spaces to put a pool or other facilities. “We will get opposition no matter where we try to put the pool in this town,” Kempf noted.

 

I erred in saying Mayor Kempf said we would never build a pool. However, if you read the above it is clear that she believes there is no place to put a pool. (Or maybe Pickleball either?) Isn’t that what the consultant is supposed to figure out for us? Sensible Laguna (www.sensiblelaguna.org) spent countless hours looking for sites and there are many city owned properties that can accommodate a pool, notably, the Laguna Beach Community Recreation Center, Lang Park, the Laguna Canyon Dog Park (2 acres), the parking area across from Aliso Beach, possibly El Morro. The Mayor should embrace and support unanimous Council decisions. 

 

On March 23, 2023, LBPD gave an annual crime statistics report for 2022. I have asked Chief Calvert to provide this report for 2023 but have not had success in securing a date for presenting the latest annual report to the City Council. I would like a firm commitment to a date since it has been over a year since the last report. Public Safety is job one for the City. 

 

Six months ago, Interim City Manager, Sean Joyce informed me that there would be large amounts of money needed for additional legal services to be provided by the City’s contracted legal firm, Best, Best and Kriegler. He informed me that a BBK attorney would be present at all future DRB and PC meetings and that additional legal services would be provided to Community Development. I agreed this needed to be done but also said that Council and the public need to know the root causes for taking this action and vote to appropriate the funds needed. At that time, I asked Mr. Joyce how is that that the Interim CM can make an executive decision to spend hundreds of thousands of dollars on additional legal services without a discussion and vote of City Council.  We are waiting for a report on why these additional monies needed to be allocated, 6 months after the Interim CM actually approved what will be hundreds of thousands and up to a million dollars in additional legal services for this year. 

 

I would also like to ask the City Attorney whether it was proper and legal to initiate a bill that allows the City to start discussions with Caltrans to take over responsibility for the Coast Highway. It would seem that this is a policy decision and requires a vote of the City Council, only Bob and Alex wanted this.  I look forward to hearing comments on these questions from the appropriate parties. 

 

GW: Unfortunately, except for the Mayor commenting on the pool, no city officials answered my questions. 

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NOTABLE ITEMS FROM PUBLIC COMMENTS

 

Former Councilwoman Toni Iseman questioned the impact of building 2-3 story additions on Downtown properties. She also noted that if we accept state and federal grants for affordable housing, we are precluded from giving Laguna residents priority for this housing. 

 

LBHS student Kaylan Walsh spoke about an event in support of  “Walking for Water” an organization that builds wells for rural communities in Africa. For more information on this event to be held on April 21st. go to:

https://wisdomspring.org/

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REGULAR CALENDAR

 

Item # 6: Appointment of City Manager: Passed 5-0

 

Background: For the last 6 months we have been searching for a permanent City Manager. The council approved his 3-year contract at the meeting. 

 

GW: As stated above Laguna is fortunate to have a person who possesses the skills, experience and character traits needed for this position. City Hall’s work culture was severely degraded by the prior City Manager, Shohreh Dupuis, who was unqualifiedly supported by the Mayor and Mayor Pro-Tem during her 3 years in the job. The Mayor and Mayor Pro-Tem carry a lot of the blame for her egregious actions and behavior during that time. The worst of all was her treatment of employees, residents and even public agency officials. I will tell her story again on the one-year anniversary of her departure. We had good leadership under Sean Joyce, and I expect Mr. Kiff will be the leader Laguna needs at this critical time. 

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Item # 9: Citizen’s Audit Review for 2021-22 and Outsourcing of City’s Investment Funds: Passed 5-0

 

Background: The Audit Committee provided comments on the 2021-2022 Audit but most of the presentation focused on outsourcing of public funds. See below for coverage of the Audit. 

 

Outsourcing: Historically investment decisions have been the sole responsibility of the elected Treasurer, Laura Parisi. However, Council previously directed the Audit and Investment Advisory Committee, and City Staff to create an RFP asking firms who specialize in this area to bid on this. The committee chose Meeder Investments who manages the assets of 347 public entities including the cities of Irvine and Anaheim. With a staff of over forty employees, and a total asset portfolio of over forty billion, this firm seemed highly qualified.  Also, the returns on investments managed by Meeder for the cities mentioned above over the last five years were 2.42% and 3.27% respectively. Meanwhile the City of Laguna Beach’s returns were 1.87%. Annual fees for Meeder’s services is $80,000. 

 

GW: I agonized over this decision as the Council would be taking away major responsibilities from an elected City Treasurer. I commented too that the decision should be delayed until the new CM is in place. What made me vote in favor was that the benchmark return rate for Laguna’s money is the 2-year US Treasury T-Bill which earns 2% annually. Our investments have not exceeded or matched the T-Bill benchmark over the last five years. I believe in outsourcing when we can increase our returns, improve services to residents or lower our costs. We should be looking at outsourcing for our Water Quality Dept. (more sewer spills over the years than all other Coastal cities combined, and millions in payouts for residential sewer back-ups with liability attributable to the Water Quality Dept.) Outsourcing Public Works Landscaping could save the city a lot of money and have other benefits as well. We do not have to be a full-service city when outsourcing is an efficient and cost-effective alternative. The key to managing outsourcing contracts is in the details of the contract deliverables and expert oversight. 

 

Public Comments:  Mike Marriner asked Council to delay this decision until the new CM was on board. CPA and resident, Vickie McIntosh commented that we needed to compare investments policies, so we have an apples-to-apples comparison. Laura Parisi said she had been doing this job for 24 years and works with six brokers who specialize in CA agencies. She said it would be cheaper to keep this in house and suggested delaying a decision until the new CM was in place. 

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The 2021-22 Audit of the City’s Budget:

 

Background: Council received the Committee’s report but the issues surrounding the City’s annual audits received a lot of attention from Council members and the public. It seems that the City has been filing these reports very late every year and that the auditor’s findings of “significant deficiencies are problematic”. 

 

GW: Bob Whalen commented that the audit was 11 months late, and CFO Gavin Curren said that the Finance. Dept. had high employee turnover so that is why this and perhaps prior audit reports were late. Unfortunately, as Vickie McIntosh and CPA Robin Hall pointed out, the annual audits have been late since 2016, and many had “significant deficiencies”. Mr. Curren said that the 2022-23 audit is not expected to be in its final form for 6-9 months from now. We need a thorough audit of our annual financial reports and the Finance Department itself. Based on what is being reported there are significant concerns about the timing and possible integrity of the City's financial reports.   

 

Public Comments: Robin Hall, a CPA and 40-year resident commented that no one on the Audit and Investment Advisory Committee has a CPA.

 

GW: The Mayor disputed that but in fact no Audit Committee member is a CPA) Ms. Hall said we need more internal controls and that an audit of the Finance Department is needed. Vickie McIntosh, who has worked as a CFO for a number of companies said that if she had provided such late audits with deficiencies to her private sector bosses, she would have been fired immediately. 

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Item # 12: Consideration to Establish a Local Housing Trust Fund, passed 5-0.

 

Background: Establishing a Local Housing Trust will enable the City to apply for Federal and State grants that fund affordable housing. The council allocated three million as a stake which allows us to apply for 50% matching grants. Currently we have approximately twenty-seven units of affordable housing at Alice Court, eighty-four units at Wesley Drive, and twenty-four at Hagan Place. Our target number to satisfy state mandates is to build 118 additional units in the next ten years. This trust will help us do that. 

 

GW: At a Council meeting in 2014 I asked why the City puts aside $250,000. a year for the purchase of open space while allocating nothing to fund affordable housing. It has taken ten years, but we are now closer to being able to purchase existing affordable housing units to preserve them, provide subsidies for low-income residents, and hopefully build some new affordable housing. 

 

My compliments to the Housing and Human Services Committee, Alex Rounaghi, Bob Whalen and City Staff for their work to create this fund. The next step is to create a permanent source of funding which is now only $74,000 a year coming from TOT taxes on Short Term Rentals. The goal should be to put aside at least $500,000 annually. 

 

GW:  I apologize to my readers for not writing recaps for the previous two council meetings. I have an excuse for the 2nd missing recap as I had a two weeklong viral infection, but for the first one I have no excuse. I will provide summaries for the missing recaps in the coming days.