Month: February 2026

The Soft Launch of a Resident Tax Hike

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The Truth Behind the “Financial Emergency”
Coutesy of The Weiss Report

City Manager Dave Kiff’s recent column, “2026: A Big Year Begins,” appeared in Stu News and Friday’s Laguna Beach Independent. Readers should view this column as a “soft launch” of significant policy shifts coming to Laguna Beach.

The column is also a strategic communication piece designed to frame the narrative before the formal legislative process begins. The City Council is the legislative body responsible for making policy decisions. Why then isn’t the Mayor the one speaking to the public about new taxes and major issues for voters?

There is a reason for the City Manager to lead the charge instead of our elected officials:
· Pre-emptive Framing: Mr. Kiff is framing the tax not as “more spending”—which it is—but as a necessity to prevent the decay of “must-have” services like fire protection and fuel modification.

· Agenda Setting: The primary intent here is agenda-setting. By bundling a sales tax increase with popular or “emergency” needs—such as wildfire safety, seismic upgrades for fire stations, and “home rule”—the City Manager is attempting to create a “package deal” that is difficult for the public to oppose.

· Political Shielding. It’s An Election Year: By taking the lead on the proposal, the City Manager provides a layer of political cover for the City Council, especially those running for re-election. If the public reacts poorly, “city staff” takes the heat. If the proposal is well received, the Council can simply “respond to staff recommendations.”

Crossing the Financial Rubicon: At the recent City Council Strategic Planning meeting, we discovered that the city’s expenses have exceeded revenues for the last two years. The city is in financial hot water and claims it needs more revenue.

This is happening despite General Fund revenues climbing from $61.7 million in 2015-16 to $95.6 million in 2025-26. That represents a 55% increase in revenue over the last ten years, and yet we are still running deficits.

Why can’t the city live within its means? Why has city staff size increased by 35% over the last decade, (a major cause of increased spending) even though the population of Laguna has declined?

City Managers execute policies established by the elected officials of the City Council and runs the day-to-day operations of the city; City Managers do not initiate or sell policy ideas to the public. If you get the chance, please read Mr. Kiff’s column and feel free to email him as he invites.

Or, better yet, email the city council with your reaction to this tax proposal at: citycouncil@lagunabeachcity.net

Strategic Abandonment:

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The Engineered Collapse of Laguna Beach Healthcare
Courtesy of Laguna Unmasked

In January 2026, Providence Mission Hospital CEO Seth Teigen stood before the Laguna Beach City Council and delivered a grim prognosis: the local hospital’s emergency room and acute care services were “not part of the long-term plan”. The culprit, according to Providence? The state’s 2030 seismic safety deadline. Teigen framed the closure as a financial inevitability, citing a $350 million price tag to retrofit the 1959 facility.

But a forensic analysis of capital investments, service logs, and regulatory filings reveals a different reality. The facility is not closing because it failed; it is closing because it was starved.

The evidence suggests Providence did not stumble into an unsustainable facility—they engineered one. Through a decade of systematic service extraction and a refusal to invest institutional capital, the healthcare giant created the very “vacancy” it now uses to justify abandonment.

The Smoking Gun: A 57-to-1 Disparity

The most damning evidence of Providence’s intent lies in the investment ledger. Since 2016, the flow of capital into South Orange County reveals a stark strategic choice:

• Mission Viejo Campus: $762 Million

Includes a $712 million expansion (2022-2030), a new patient care tower, 100 private rooms, and state-of-the-art cardiac and neuroscience wings.

• Laguna Beach Campus: $12.5 Million

Includes an emergency department expansion (2019) funded entirely by community donations, not Providence’s capital budget.

The Ratio: 57 to 1.

For every dollar Providence spent maintaining Laguna Beach, they poured fifty-seven into Mission Viejo. When a health system invests three-quarters of a billion dollars in one site while pleading poverty regarding a satellite campus eight miles away, the message is unambiguous: the “financial constraint” is a myth. The neglect was a choice.

The Roadmap to Irrelevance

Providence argues that the Laguna Beach hospital runs with “huge vacancy”. This is technically true, but misleading. The vacancy is the result of a deliberate “hollowing out” strategy.

Since acquiring the facility, and accelerating after the 2016 merger, Providence has stripped the hospital of its vital organs. The most aggressive dismantling occurred over a mere nine-month period between late 2022 and spring 2023:

1. The Behavioral Health Purge (Sept 2022)

Providence eliminated the 38-bed Chemical Dependency Program—the hospital’s largest single unit. Unlike other services, this wasn’t moved; it was erased. Thirty-three staff members faced layoffs, and patients were redirected to facilities as far away as Torrance.

2. The “Spring Cleaning” (April–May 2023)

In a span of just 27 days, Providence relocated three core services to Mission Viejo, using corporate euphemisms like “centralization” and “optimization” to describe the cuts:

• April 27: Outpatient Physical Therapy transferred.

• May 10: Inpatient and Outpatient GI services transferred.

• May 24: Outpatient Laboratory closed.

By stripping the hospital of labs, specialists, and rehab clinics, Providence ensured that local physicians could no longer effectively admit patients to Laguna Beach. The resulting drop in patient census—the “vacancy”—was the mathematical inevitability of these decisions.

The Seismic Scapegoat

Providence points to California’s 2030 seismic compliance mandate as the primary driver for closure. However, the timeline of their decision-making contradicts this claim.

Every hospital administrator in California has known about the 2030 deadline for decades. Yet, in 2019, Providence accepted $12.5 million in donor funds to expand the Laguna Beach Emergency Department. Why expand a facility you know you cannot afford to retrofit?

Furthermore, the $712 million expansion of Mission Viejo was announced in September 2022—the exact same month they closed the Chemical Dependency unit in Laguna. This suggests the capital to fix Laguna Beach existed; it was simply allocated elsewhere. The seismic deadline is not a surprise event; it is a convenient regulatory shield for a consolidation strategy drafted years ago.

The Human Cost of “Efficiency”

CEO Teigen has promised “non-traditional healthcare models” to replace the hospital, likely referring to urgent care clinics. But urgent care cannot replace a trauma-ready Emergency Department.

The geography of Laguna Beach—a coastal enclave accessible primarily via the heavily congested Highway 133 or the Toll Road—makes the eight-mile trek to Mission Viejo dangerous in critical emergencies.

• Response Times: Fire officials warn that with only two dedicated ambulances in the city, transport times of 30+ minutes to Mission Viejo will leave Laguna Beach without local EMS coverage for hours at a time.

• Patient Safety: One resident recently reported a five-hour wait for a tendon repair, while another was left bleeding for an hour due to staffing shortages.

The Path to Survival: A Playbook for Resistance

While Providence has declared the hospital’s end, the community has identified four distinct avenues to challenge the closure and preserve critical care:

1. Regulatory Enforcement (The “2009 Agreement” Strategy)

When Mission Hospital acquired the facility in 2009, the sale required approval from the California Attorney General, conditioned on maintaining community benefits. The systematic dismantling of services—86 beds removed across four programs—may constitute a material violation of those commitments. A formal investigation by the Attorney General could force Providence to pause the closure or restore specific service levels as a condition of their nonprofit tax status.

2. The Standalone ER Battle

Providence claims California regulations make a standalone Emergency Department “infeasible” without inpatient beds. This is a policy choice, not a law of physics. Rural and remote communities often operate satellite EDs. The city can advocate for a regulatory waiver or specific legislative approval to maintain a licensed, 911-receiving ER with trauma stabilization capabilities, independent of the inpatient tower.

3. Legislative Triage

State representatives can be lobbied for immediate legislation requiring transparency before services are cut. New laws could mandate that healthcare systems disclose consolidation plans years in advance, or provide targeted seismic funding for “critical access” facilities like Laguna Beach that are geographically isolated by traffic and topography.

4. Forced Divestiture

If Providence is unwilling to invest the necessary capital, the final option is alternative ownership. The facility could be transferred to a public hospital district or a different healthcare system willing to undertake the seismic retrofits. While the $350 million cost remains a barrier, a new operator focused solely on Laguna Beach—rather than prioritizing a massive campus in Mission Viejo—might find a path to sustainability that Providence refuses to see.

Conclusion: A Manufactured Crisis

Providence Mission Hospital’s narrative is that they are reacting to market forces and regulatory burdens. The data tells a story of proactive dismantling.

They eliminated 86 beds across four major programs. They moved the profit centers (GI, Lab, Therapy) to Mission Viejo while leaving the cost centers (ER) to wither. They invested nothing from their own coffers while spending nearly a billion dollars down the road.

When the doors finally close, Providence will call it a tragedy of economics. The community should call it what it is: a successful execution of a long-term liquidation plan.

City Council Eyes a Takeover of Water District Site

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A Shocking Lack of Transparency

By George Weiss
I was shocked during last Friday’s six-hour Strategic Planning Meeting to discover an agenda item discussing the potential repurposing of the historic Laguna Beach County Water District (LBCWD) headquarters on Forest Avenue. Even more concerning, the City failed to inform Water District officials that this discussion would take place, nor did they provide notice when the topic was briefly raised at the January 27th City Council meeting. Does that bother anyone?

Historical Context & Governance For context, the LBCWD serves 80% of Laguna residents and became a city subsidiary roughly 20 years ago, with the City Council acting as its Board of Directors. The Water District is a pillar of our history, having celebrated its 100th Anniversary in 2025. It supplied water prior to the city’s 1927 incorporation—a crucial resource that allowed Laguna Beach to develop where Spanish explorers had previously avoided settling.

High Pay, Poor Culture – Courtesy of George Weiss

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Why a New Compensation Study Misses the Mark City Expenses are Outpacing Revenues

Courtesy of George Weiss’ Substack, a reader-supported publication. To receive new posts and support George’s work, consider becoming a free or paid subscriber.

On January 13th, the City Council held a study session with an HR consultant to review findings on staff compensation and job classifications. Although the City has not conducted such a study in twenty years, the findings were surprisingly positive. The consultant confirmed that Laguna Beach is well-positioned: midpoint salaries are at 100% of the market average, and maximums are at 104%.

As a result of increasing staff size from 2015-25 by 35% and increasing staff compensation the city budget is approaching a financial tipping point. For the second year in a row, expenses will outstrip funding, largely driven by increases in staff wages and compensation. Furthermore, our unfunded pension liabilities currently sit at over $88 million, and if current trends hold rise to $114 million by 2031 or higher if no remedial action is taken.

Given these financial realities, we must ask: Does a well-compensated workforce translate to superior service? In my humble opinion, it has not.

The Risk of “Market Adjustments”
History suggests that adopting compensation studies overwhelmingly results in significant, multi-million dollar increases to budgets. Realigning positions to market rates often necessitates an overall increase in personnel costs, even when the goal is simply “internal equity”. Since the City is already at 100% of the market average, we can only hope that further compensation hikes will not be the outcome when the recommendations return for a vote in late February or March. Attend if you can.

How Employees are Paid Now: (from the staff report)
It is important to understand that City employees already obtain higher pay and enhanced benefits through several robust processes:

● Collective Bargaining: Legally binding MOUs set specific terms for wages and benefits.

● Merit-Based & Promotional Increases: Employees typically receive annual step increases, with potential for faster advancement or a 5% raise upon promotion.

● Performance Pay: Management can award up to 5% of gross salary for exceptional performance.

● Add-ons & Stipends: Public safety roles earn extra for certifications, and employees receive stipends for cell phones ($80), internet ($50), and tuition reimbursement.

● Market Adjustments: Periodic studies ensure salaries remain competitive, such as the Council’s determination that Police officers be in the top quartile of Orange County.

The Debate at the Study Session:
During the session, at the request of Councilman Alex Rounaghi, the consultant suggested a “Hybrid Model”. Under this system, employees would advance via steps to the midpoint of their job pay scale, (market rate) based on time and competency, but any increases beyond the midpoint would be strictly performance-based.

While Rounaghi favored this model, Councilmember Sue Kempf pushed back. She warned that merit pay often devolves because “management just wants everybody to get something,” arguing instead that ambitious standards and culture drive performance more than complex pay schemes.

Councilmember Kempf is right. Research shows that without proper leadership and training, complex performance systems are risky and prone to failure. Currently, our HR Department and City management have not demonstrated the professional rigor required to manage such a system effectively.

The Unaddressed Problem is Leadership:
We have a clear example of how high pay fails to solve workplace issues. Irvine has the highest compensation plan for police officers in OC, with Laguna Beach second. Despite high compensation, LBPD has struggled to recruit from other Orange County cities for over 30 years. This recruitment challenge is not about money; it is due to a substandard workplace culture. Securing two horses for police service will not fix it.

We have not often enough attracted the “best and brightest” because the City’s work environment is substandard and suffers from poor leadership at City Council and Sr. Management at City Hall. As Councilmember Kempf argued persuasively, high standards and culture drive performance, not just compensation.

Conclusion:
“Cultural change precedes political and social change. You need a shift in thinking before you can have a shift in direction. You need a different spiritual climate, one grounded in humility, institutional wisdom and energy.” David Brooks, NY Times

If we focus on leadership and creating a healthy workplace culture, performance will improve, attrition will slow, and efficiency will rise. City Hall must become a better m place to work if it is to retain and attract talented employees that believe in public service. This must be the priority before we spend more money on consulting studies or risk adopting complex pay models, we are ill-equipped to manage.

The City’s financial situation is not healthy and action must be taken to forestall a financial crisis. New taxes were discussed at the City Council’s Strategic Planning session too. That won’t be accepted by voters considering that city’s general fund (local taxes) increased incrementally from by 36.5 million from 2015 to 2025. Every year the City Council finds ways to spend all the money and additional staffing accounts for a significant share. This is an election year and the members of the city council got us into financial difficulties need to be held accountable.