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The map of a potential city of La Jolla largely aligns with the 92037 ZIP code, stretching north-south from Del Mar to Pacific Beach and east-west from Interstate 5 to the ocean, excluding UC San Diego. (Association for the City of La Jolla)
The map of a potential city of La Jolla largely aligns with the 92037 ZIP code, stretching north-south from Del Mar to Pacific Beach and east-west from Interstate 5 to the ocean, excluding UC San Diego. (Association for the City of La Jolla)
UPDATED:

A 122-page feasibility study conducted for the Association for the City of La Jolla’s application to have La Jolla become its own city and detach from San Diego projects an $8 million budget surplus in the proposed city’s first year and provides cost and revenue estimates, as well as options for city management and obtaining or providing services in public safety, development, code enforcement, water, trash and more.

The report was prepared by Richard Berkson of urban economics company Berkson Associates for a study that began in September 2022.

An initial draft of the report in fall 2023 looked “promising,” the Association for the City of La Jolla said at the time, without providing specifics.

Association President Trace Wilson did not comment about the finished study and referred the La Jolla Light to the San Diego Local Agency Formation Commission for a copy.

ACLJ submitted its cityhood application to LAFCO on Jan. 29 after raising about $132,000 to cover the $66,000 application deposit and related LAFCO legal fees. LAFCO provides guidance to communities seeking to incorporate.

Soon after the application was submitted, Wilson said ACLJ would “need to step back and take some deep breaths and ramp up the volunteerism and get organized so we can scale the effort to where we need.”

“We need to raise $500,000 by the end of the year to cover LAFCO expenses and the costs of having them our preliminary fiscal analysis and then the consulting so we know who to educate and why,” Wilson said.

The application marked the association’s second major accomplishment in two months. A petition drive seeking signatures of a required 25%, or 6,536, of La Jolla’s 26,144 ed voters in of the cityhood initiative ended Dec. 1, and the association submitted nearly 8,000 signatures to LAFCO and the San Diego County registrar of voters office in mid-December for review and validation.

If it is determined the group did collect the required number of valid signatures and LAFCO eventually approves the application, the initiative would go to a public vote in which a majority of voters both in La Jolla and the rest of San Diego would need to it.

ACLJ had hoped to have the proposal on the ballot in 2026 but is now aiming for 2028.

Story gallery: “Leaving San Diego?” A series about potential La Jolla cityhood

Here are several key elements of the feasibility study:

Management

If the city of La Jolla comes to be, a five-member city council would be elected by the residents of La Jolla — which the study says has a population of 38,227 — to direct municipal services, facilities and city staff and determine priorities. Based on comparable cities, the report expects the formation of a La Jolla City Council would cost $600,000.

La Jolla also would have a city manager at a cost of $900,000 based on city managers in comparable cities.

State law provides for a transition period for the new city’s initial fiscal year in which “the prior jurisdiction, in this case the city of San Diego, continues to provide public services,” the report states. “This transition period allows time for the new city to hire staff and lease office space, organize departments and enter into contracts for ongoing services. The transition period enables the new city to build operating reserves by accumulating tax revenues during the year while the city of San Diego continues to provide services. These reserves may be required to fund start-up and transition costs.”

The La Jolla City Council would meet on the city’s first day of operation to adopt various ordinances and resolutions.

Budget

The total first-year city budget for La Jolla is projected at about $74.8 million.

That includes estimated annual costs of $8.6 million for “management and istrative services replacing those provided by the city of San Diego, including the city council, city manager, istrative services and finance, audit services, city attorney and city clerk,” the study states. “The estimate is based on existing San Diego services and other reference cities.”

“Being a much smaller city compared to San Diego, the La Jolla budget does not include many departments shown in the city of San Diego budget,” according to the report. “Rather, services of San Diego departments such as performance and analytics will be the responsibility of the city manager’s office or the finance department.”

San Diego police close part of La Jolla Boulevard in June 2022 for a collision investigation. Local advocates plan to contract with the San Diego Police Department for services, at least initially, if La Jolla becomes a city. (James Rudolph)
San Diego police close part of La Jolla Boulevard in June 2022 for a collision investigation. Local advocates plan to contract with the San Diego Police Department for services, at least initially, if La Jolla becomes a city. (James Rudolph)

The budget forecast lists “major service costs” such as police, firefighters and lifeguards and how they would be shepherded from the city of San Diego to a city of La Jolla. Those services will assume “ongoing contract services and costs consistent with current city of San Diego costs for La Jolla in order to maintain current levels of service with the least disruption and cost,” the report says.

The estimated annual contract cost for San Diego fire and rescue services is $16 million. For lifeguard services the estimate is $12.2 million.

In addition to police, fire and lifeguards, services that would be covered by San Diego during the first year include development, economic development, library, parks and recreation, planning, animal control, public utilities, roads and stormwater.

However, the report says, “other service options may offer opportunities to reduce costs in the long run and improve the effectiveness of service delivery.”

Such decisions would be made by the future La Jolla City Council, LAFCO and the city of San Diego.

In December, San Diego Mayor Todd Gloria said on a Voice of San Diego podcast that he “wouldn’t recommend” that the city continue providing services to La Jolla in the long term.

“If there’s a separation … the city of San Diego will not be providing policing services, landfill services, sewage services. … We will not be contracting them,” Gloria said.

“Their belief is that they can treat it like a buffet — ‘I like this municipal issue and that municipal issue, but the rest we’ll just leave,’” he added. “No, no, you have to run a full-scale city with all that comes with it. Yeah, autonomy, independence, self-determination, but that means you’re going to have to have your own police force, your own taxation system.”

If San Diego declined to continue contracting out the planned services to La Jolla, the new city could turn to San Diego County for some of them, such as police, which neighboring cities Del Mar, Encinitas and Solana Beach do now with the Sheriff’s Office.

ACLJ wrote to the Light in a letter to the editor last month submitted by Wilson that there are various other area agencies the city could use for trash collection, water supply and filtration and wastewater treatment.

La Jolla also could start providing more of its own services. If it does, the costs in future years are expected to be comparable to the first year, according to the feasibility study.

Revenue

“If requested, the new city will be required to repay the city of San Diego over time for transition,” according to the report. “Because of the timing of the incorporation, the city of San Diego may receive revenues during the transition that, in the future, will accrue directly to the city of La Jolla. Revenues retained by the city of San Diego should be credited against the transition-year service costs.”

Major city of La Jolla revenue sources outlined in the report include property taxes, sales taxes and transient occupancy taxes on hotel rooms, as well as other taxes and fees.

The report estimates first-year property tax revenue for La Jolla at $43 million, along with $4 million in sales taxes and $24 million in hotel occupancy taxes.

Based on the proposed budget and total expected revenue, the report estimates a positive net amount of more than $8 million during the first year. ♦

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