The City Council gave a passing grade Tuesday to the proposed budget for the next two fiscal years.

Tweaks discussed by the council were passed on to City Manager John Pietig for incorporation into the final version of the 2013-14/2014-15 budget, scheduled to be approved at the June 18 meeting. The two-year budget is a first for Laguna.

"Why a two-year budget? We are just getting more details earlier," Councilman Steven Dicterow said. "We are not setting it in stone."

Updates and an opportunity to modify the budget will also be presented to the council at public meetings in January and June of 2014, before the start of the next fiscal year.

The proposed operating and capital improvement budget for 2013-14 is estimated at $68.5 million, and at $67.5 million for 2014-15.

Service levels and financial reserves will be maintained, Pietig said. However, labor negotiations are underway and the budget will need to be adjusted to reflect any agreements.

The annual Community Assistance grants are budgeted but will not be specified until the June 18 meeting. Mayor Kelly Boyd and Mayor Pro Tem Elizabeth Pearson volunteered to compile a recommended list of recipients.

"Laguna has emerged from the recession in a more streamlined fashion," Pietig said. "We need to be cautious, but there is a little bit of money for one-time expenditures."

Tuesday's review of the draft budget included consideration of the wish list, to be funded by unspent funds from the 2012-13 fiscal year.

"They are not [funded] in the budget either because there is no funding or because of competing requests," Pietig said.

Resident Chris Prelitz complained that neither the budget nor the wish list included funding for Complete Streets projects. "There is $5 million for the Village Entrance and we were told other projects wouldn't suffer," Prelitz said.

Woods Cove resident Larry Ulvestad told the council that the people he talks to resent city money being spent on the Village Entrance or for undergrounding utilities on Laguna Canyon Road rather than undergrounding in neighborhoods.

Danielle Ward asked to have a community swimming pool added to the wish list because of the problems residents have in getting pool time.

"We are having more and more problems with the school district," Ward said. "City programs begin late and kids are not getting to bed until 10 or 11 p.m."

Add-ins listed by Pietig include a one-time $400,000 allocation toward the city's $3.7 million financial commitment to upgrade the countywide emergency communication system, of which $1.6 million has already been set aside.

Pietig recommended approval of emergency communication system funding but cautioned about funding ongoing projects.

The other big-ticket item was a request for an estimated annual $300,000 to $400,000 allocation to fund staffing, office space, legal fees and processing if a proposed view preservation ordinance is passed. The amount is based on the ongoing costs incurred by Rancho Palos Verdes, which has provided guidance to the committee working on Laguna's ordinance. Start-up costs are not included.

Other possible additions to the list of unfunded expenditures are $60,000 for a firm to seek grants; bumping up downtown police presence, perhaps to include a canine officer; $10,000 for more street cleaning; and $3,000 for a strategic planning session.

Councilwoman Toni Iseman asked to have downtown traffic control personnel year-round, rather than just on weekends in the summer or when an influx of tourists is anticipated.

Mayor Pro Tem Elizabeth Pearson requested a gradual reduction in the transfer of roughly $700,000 a year from the parking fund to balance the general fund expenditures, which crimps the creation of more parking spaces.

Consensus appeared to be to fund what can be funded on the wish list without eliminating other projects and upsetting the balanced budget.

"What happens if we add in ongoing costs? I am not sure we stay at a positive number," Councilman Robert Whalen said.

By law, the budget must be balanced and include a 10% reserve over expected expenditures.

The draft of the budget and the agenda for the budget workshop with the wish list are available on line at http://www.lagunabeachcity.net.

coastlinepilot@latimes.com

Twitter: @coastlinepilot