There will be challenges to face within the next few years for Laguna Hills, soon-to-be City Manager Donald J. White told residents and business and community leaders at the 2018 State of the City address.
Mayor Melody Carruth was slated to speak at the Jan. 11 event that drew more than 100 to the Community Center, but White said that she was ill.
“I do want to be pretty candid and as transparent as possible in talking about the challenges that face Laguna Hills,” White said. “Not only in 2018, but as I see it, it’s more of a two- to four-year time frame.”
White, currently assistant city manager, was appointed this week to fill longtime City Manager Bruce Channing’s seat when he retires next month. White has been with the city since its creation 26 years ago and was involved with developing the Laguna Hills Community Center and Laguna Hills Civic Center.
“We are facing some significant challenges,” White said, but added in the long term, in five years or so, the future is “very bright for Laguna Hills.” For example, he said, the city’s budget will receive a $3 million “shot in the arm” after paying off bonds from the Laguna Hills Community Center and Laguna Hills Civic Center.
In the short term, White said, the city will be dealing with the Five Lagunas project, the city’s law enforcement contract, the possible repeal of the state gas-tax, the potential of a future recession and leadership turnover in the city.
It’s been two-plus years since the Five Lagunas project – a $200-plus million rebranding and renovation of the Laguna Hills mall – was approved by City Council and many assumed it would be open for business this year.
White said recent delays in construction were a “strategic pause” by Merlone Geier, the Lake Forest-based company that bought the mall, in response to changing market trends. It will need to request some amendments to the conditions for approve of its plan, he said.
“I am so excited that we got improvements going in place now with the Five Lagunas,” county Supervisor Lisa Bartlett said. “This is really going to be a kick start to a lot of things happening that are really great here in Laguna Hills.”
The construction pause will put a financial strain on the city, but will significantly benefit the city’s revenue once Five Lagunas is completed, White said.
The city is also awaiting results of a study commissioned by 13 Orange County cities, including Laguna Hills, that analyzes the risings costs of contracts with the Orange County Sheriff’s Department for providing policing services.
A significant portion of Laguna Hills’ revenue goes toward its contract, White said. Police services once represented about one-third of the city’s budget, but over time has jumped to 40 to 41 percent, he said.
The law-enforcement cost and efficiency study is expected to finish by the end of the year.
“We’re really hopeful that will yield some long-term savings without compromising public safety or the safety of our officers,” White said.
Laguna Hills allocated $7.9 million for law-enforcement costs for fiscal year 2017-18 and $8.3 million for fiscal year 2018-19. In 2016, contract costs accounted for 40 percent of the city’s general fund at $7.6 million, and $6.9 million the year prior.
“We believe it’s in everyone’s interest – the city’s interest, the resident’s interest, business and also the sheriff’s interest to find a way to make the law-enforcement contract sustainable going forward,” White said.
A unique challenge in the years-to-come for Laguna Hills will be a significant turnover in leadership, with Channing retiring from the city manager post along with Mayor Carruth and Councilwoman Barbara Kogerman reaching their term limits this year.
