STAFF REPORT
Meeting Date:
February 24, 2026
BUSINESS
11 SUBJECT: CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES (AND
ISSUE-BY-ISSUE DIRECTION)
RECOMMENDATION: It is recommended that the City Council:
1. Confirm the City Council Strategic Priorities for Calendar Year 2026 and issue-by-issue direction, as discussed at the January 30, 2026, Strategic Planning Session and as addressed in this staff report;
2. Direct staff to align departmental work plans, performance measures, and budget development with the adopted priorities; and
3. Find that confirmation of the 2026 Strategic Priorities is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378, as it does not constitute a project.
SUMMARY OF THE MATTER
On January 30, 2026, the City Council held its annual Strategic Planning Session to review progress on 2025 priorities, evaluate the City’s fiscal outlook, and establish key focus areas for 2026. This item formalizes the direction provided at that session and returns for confirmation in accordance with the City’s annual agenda process.
Following discussion and Council direction, four overarching Strategic Priorities were identified for Calendar Year 2026:
1. Wildfire Mitigation and Prevention Plan Implementation
2. City Fiscal Sustainability
3. Stewardship Implementation
4. Advanced Planning and Long-Range Policy Initiatives
Confirmation of these priorities establishes policy direction for 2026 and guides departmental work plans, performance tracking, capital improvement planning and funding, and budget development. No specific appropriations are requested through this action at this time.
DISCUSSION
On January 30, 2026, the City Council conducted its annual Strategic Planning Session to review prior-year progress, assess the City’s fiscal outlook, and establish priorities for 2026. As discussed during the workshop, no formal action is taken at the session itself. Staff returns with this item to formally confirm the Strategic Priorities discussed at that meeting.
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
Based on Council discussion, four overarching priority themes were identified for Calendar Year 2026.
These are discussed below, with a matrix (Attachment 1) that describes these and other efforts in more detail.
1. Wildfire Plan Implementation
Wildfire mitigation and preparedness remain the City’s highest public safety priority. In September 2025, the City Council approved the updated Wildfire Mitigation & Fire Safety Report, identifying 75 action items across evacuation planning, fuel modification, public safety technology, community preparedness, and infrastructure.
During the Strategic Planning Session, Council reviewed 2025 progress and emphasized continued implementation of the adopted action items, with a focus on transitioning from plan development to sustained execution—particularly in situational awareness, interagency coordination, and alert system redundancy.
Council also discussed lessons learned from recent wildfire events in other jurisdictions, emphasizing the need for:
• Improved real-time operational coordination;
• A centralized and “ready to go” Emergency Operations Center (EOC); • Expanded outdoor warning system coverage to supplement cellular alerts; • Significant improvement in cellular phone coverage and reliability; and • Continued regional integration of response technologies. 2026 Focus
The 2026 priorities emphasize further progress on the previously adopted measures, including:
• Advancing EOC resiliency planning and facility hardening to enhance coordination and policy-level decision-making during emergencies;
• Expanding and improving outdoor warning system infrastructure; • Expanding our fuel modification zones (FMZs) and defensible space enforcement; • Implementing public safety technology upgrades, including regional resource coordination platforms,
• Improving cell coverage and reliability across the region; and • Integrating wildfire resiliency considerations into capital planning and facility modernization efforts.
2. City Fiscal Sustainability
The Council reviewed updated General Fund projections and long-term financial forecasts, identifying structural fiscal headwinds, including:
• Expenditure growth outpacing revenue growth;
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
• Rising insurance, personnel, and contracted service costs; • Significant capital facility needs noted in the Facilities Master Plan; • Flattening of sales tax revenues; and
• Near-term Transient Occupancy Tax (TOT) constraints due to temporary hotel closures.
While the City maintains a strong property tax base and healthy reserves, Council emphasized the importance of proactive financial planning to maintain structural balance and preserve long-term service levels.
The discussion also included a review of internal operational improvements made in 2025, including strengthened financial controls, improved procurement practices, enhanced forecasting tools, and completion of key organizational initiatives.
Facilities Master Plan Integration
A significant component of the fiscal discussion involved the phased Facilities Master Plan (FMP), which outlines long-term modernization of critical City facilities. Council reviewed the tranchebased implementation strategy and emphasized the importance of:
• Breaking up capital investments in phases;
• Prioritizing public safety and resiliency projects; and • Aligning facility modernization with available fiscal capacity and long-term financial modeling.
Tranche 1 is estimated at approximately $25 million, with subsequent phases estimated at approximately $20 million and additional long-term needs beyond those amounts. For illustrative purposes, at an assumed 4% interest rate over 30 years, each $1 million in new annual revenue could support approximately $17 million in bonded capital financing. These financing relationships underscore the importance of aligning phased implementation with sustainable revenue strategies.
Additional details on the tranche structure and other assumptions are provided in Attachment 2. 2026 Focus
Consistent with Council direction, the 2026 fiscal sustainability priority includes:
• Improving and using long-term financial projections;
• Evaluating potential revenue measures for 2026 ballot consideration to support operational and capital improvements to infrastructure;
• Considering asking the voters to approve a City Charter to improve fiscal flexibility and governance;
• Be more efficient overall, including measuring performance; and • Deciding how to phase the projects listed in the Facilities Master Plan.
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
Advancement of specific capital projects, funding strategies, or revenue measures may return to the City Council for separate consideration.
3. Stewardship
The Strategic Planning Session reviewed 2025 stewardship efforts, including an enhanced summer surge program, expanded staffing, improved coordination with Visit Laguna Beach, and strengthened visitor education messaging from both VLB and the City.
Council acknowledged measurable progress in reducing overtourism impacts and improving enforcement coordination. The 2026 priority shifts from pilot efforts and program development toward sustained implementation and refinement.
2026 Focus
• Continued coordination with community and tourism partners to promote responsible visitor behavior;
• Ongoing management of peak visitation impacts;
• Protection of coastal, open space, and cultural resources; and • Integration of stewardship principles into operational and capital planning decisions.
4. Advance Planning and Long-Range Policy Initiatives
During the Strategic Planning Session, Council discussed how major long-range planning efforts should be unified into a defined Advanced Planning effort. This priority reflects a shift from operational process improvements in 2025 (though those must continue) and toward comprehensive, forward-looking planning initiatives that shape the regulatory framework, environmental stewardship, fiscal sustainability, and the City’s capital investment strategy.
The Council identified the following initiatives as core components of this strategic theme:
• Comprehensive Zoning Code Update
• An update of our General Plan, especially:
o The Housing Element
o The Open Space & Conservation Element
o The Safety Element
• Amending our Local Coastal Program
• Completing the Design Review Efficiency Ordinance
• Improving our Historic Resource management
• Completing the Downtown Specific Plan (DSP), Phase II process (which considers where second and third-story housing could be added to the Downtown).
Collectively, these efforts are intended to ensure that land use policy, environmental protection, housing objectives, and facility modernization decisions are aligned and implemented in a coordinated manner.
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
These initiatives position the City for improved regulatory clarity, infrastructure modernization, environmental stewardship, and housing compliance, while ensuring that policy decisions remain integrated with fiscal planning and capital improvement strategies.
Implementation
Upon confirmation of the 2026 Strategic Priorities, staff will implement the following actions to ensure alignment across operations, budgeting, and performance management:
• Departmental work plans will be formally aligned with the adopted Strategic Priorities to ensure operational focus and resource coordination.
• Development of the Fiscal Year 2026–27 budget will reflect priority-based resource allocation and long-term financial planning assumptions.
• Capital Improvement Program (CIP) planning and Facilities Master Plan sequencing will incorporate adopted priority direction and fiscal capacity considerations. • New for this year, performance measures and milestone tracking will be integrated into Envisio to provide transparency and accountability.
• Periodic progress updates will be provided to the City Council throughout the year, including budget workshops and strategic reporting intervals.
Issue-by-Issue Check-In
Separate from considering the priorities, Council discussed and gave direction on:
1. Revenue Measure. There was a general consensus to proceed forward with a community discussion and Town Halls about a possible revenue measure for the November 2026 ballot. This could be a sales tax, a hotel bed tax, or a business license tax change.
2. Aliso Beach Parking Lot. There was a general consensus to redirect staff’s efforts following community input to a “no change” repaving of the ocean side of the lot (without decreasing space size or increasing the number of spaces) but a redesign and paving of the inland side to address ADA concerns, add spaces where possible, and improve egress and ingress.
3. Laguna Canyon Road. There was a general consensus to have staff bring back a detailed report on LCR’s possible relinquishment well before the June 30, 2026, deadline for letting Caltrans know if the City will pursue relinquishment at all at this time.
4. Emergency Operations Center. This was resolved on February 10, 2026, with a direction to pursue the CRC site as at least a temporary but fully-built-out EOC. Staff confirmed with the contractor that the contractor would hold their initial bid pricing, including for a generator.
5. Funding for Housing. Council discussed moving all Short-Term Lodging revenue towards the housing fund (about $900,000 per year) versus just a portion of those funds and versus the allocation of Property Taxes when Property Taxes come in higher than estimated. This will be discussed and further resolved in the context of the FY 2026-27 budget adoption process.
6. FMP. With the FMP nearing completion, Council was anxious to pick a pathway and start down it.
Attachment B is one proposed way of doing that.
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
7. Deciding what to do with the CRC. Council had a general consensus not to take any action on the CRC before partnering with a real estate expert advisor to study and recommend alternative uses, including but not limited to property sale, lease, or retention. Uses could be the current use, market rate and/or affordable housing, or a hotel (or some combination).
8. Drones for Beach Patrols. Council was interested in learning more about both Drones as a First Responder (“DFR”) and drones to monitor late night access to coves and beaches where such access is precluded or unsafe.
Additionally and of note, we realize that we have spoken to the Council in public about how to approach Mills Act applications for 2026 (as a reminder, the Mills Act is a provision of California law that allows owners of historic properties to enter into contract with local governments to pay lower property taxes and instead invest the reduction in improvements to the home). We now have a note on our website that explains that the City will not be accepting or processing new Mills Act applications this time of year as would have been typical in years past. The application process is paused until such time as the Council has had additional input as to these key issues, among others:
• What improvements could a property owner make that would be eligible for the Mills Act property tax reduction (i.e. the improvements should be meaningful to the property’s historicity and protection of historicity).
• Should there be a tighter duration of time during which improvements should be made? • What’s the best review process for ensuring the completion of the improvements? Council’s further discussion about any of these items is welcomed.
A handful of attachments are included that may be helpful to the public’s or Council’s edification. These include:
• Attachment 1, which is a work in progress, but includes an effort to summarize both the key initiative steps and a variety of other special efforts that are on the City’s plate, by department. • Attachment 2, which is a summary of General Plan elements and information; and • Attachment 3, which is a proposed approach for implementing the FMP, and • Attachment 4 & 5, link to the Strategic Planning Session Agenda and YouTube Video
FINANCIAL ANALYSIS
There is no direct fiscal impact associated with confirmation of the 2026 Strategic Priorities, and no appropriations are requested through this action.
However, implementation of the adopted priorities will guide development of the Fiscal Year 2026–27 budget, Capital Improvement Program sequencing, and long-term financial modeling. Future expenditures, capital projects, financing strategies, or revenue measures will be returned to the City Council for separate consideration and approval, in accordance with City purchasing policies and budget procedures.
CONFIRMATION OF 2026 CITY COUNCIL STRATEGIC PRIORITIES AND ISSUE-BY-ISSUE
DIRECTION
February 24, 2026
ALIGNMENT WITH CITY COUNCIL GOALS AND PRIORITIES
This item establishes the City Council’s Strategic Priorities for Calendar Year 2026 and therefore directly defines and advances the Council’s policy direction. Adopting these priorities provides a framework for resource allocation, performance measurement, and long-term planning.
ENVIRONMENTAL ANALYSIS
Confirmation of the 2026 Strategic Priorities is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378 because it does not constitute a “project.” The action involves approval of a strategic policy framework and does not authorize specific development, construction, or physical changes to the environment. Any future projects or capital improvements resulting from these priorities will be subject to separate environmental review, as required.
The exceptions to categorical exemptions identified in CEQA Guidelines Section 15300.2 do not apply because this action does not involve a physical project.
ATTACHMENTS
1. 2026 Key and Other Priorities DRAFT Matrix (Pgs. 8-22)
2. General Plan information (Pgs. 23-25)
3. Facilities Master Plan Proposed Pathway (Pgs. 26-27)
4. Link to the January 30, 2026, Strategic Planning Session Agenda https://lagunabeachcity.primegov.com/Portal/Meeting?meetingTemplateId=665
5. Link to the January 30, 2026, YouTube Video of the Session https://www.youtube.com/watch?v=QtGA0I6lTYg
Submitted By: Gavin Curran Approved: .David A Kiff
Gavin Curran, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Gavin Curran, Assistant City Manager Dave Kiff, City Manager Department Directors