Free rides on Laguna Beach's trolley and Laguna Local on-demand shuttles are safe for now, after the City Council on Tuesday signed off on a five-year contract worth up to $19.1 million with a private operator. The deal keeps existing routes in place through fiscal year 2030-31, even as officials warn that rising insurance, fuel and pension costs are chewing through the Parking Fund that helps pay for transit. Several council members hinted that trimmed weekend service or a small fare on the microtransit system may still be needed to keep the budget from veering into the red.
What the New Contract Covers
According to the Los Angeles Times, the council approved a five-year agreement with Costa Mesa-based LAZ Parking to continue operating both the trolley and the Laguna Local on-demand service through fiscal year 2030-31. Staff told the paper the contract allocates about $12.3 million for trolley operations and $6.8 million for on-demand rides over the life of the agreement. City Manager Dave Kiff told the outlet that the programs are funded largely through parking revenue and grants, stressing that, "We don't use other general funds, like property taxes, to pay for Laguna Local."
Where the Money Comes From
The council agenda materials show the city has secured roughly $7.2 million in Measure M2 Project V cooperative agreements from the Orange County Transportation Authority to help support seasonal trolleys and Laguna Local through 2030-31. Those funds require a local match and are intended to subsidize off-season and canyon corridor services, according to the Laguna Beach City Council.
Service Cuts and New Fares on the Table
City staff are recommending relatively modest off-season service reductions, including the possible elimination of the canyon corridor on weekends, and have floated a $2 to $5 fare for Laguna Local riders as a way to rebuild the Parking Fund. The City Manager's budget bulletin warns that increasing PERS, insurance and fuel costs are squeezing reserves and suggests adjustments to meter and lot rates as one option to keep transit programs funded, according to the City of Laguna Beach.
How Laguna Got Here
Laguna Beach shifted to a contractor model in 2021. At the time, LAZ Parking announced it had been selected under a five-year agreement that could total about $10.6 million to provide drivers and dispatchers. Since then, route expansions and the launch of the Laguna Local microtransit service have pushed contract costs higher, and by December 2024 city staff reported that agreements had grown to roughly $16 million, a jump they say is putting real pressure on the transit budget.
What Happens Next
Council members approved the new LAZ contract but instructed staff to gather community feedback and return with recommended tweaks before the city adopts its final budget later this month. The city's calendar lists a final budget adoption hearing on June 23, 2026, and staff have said any proposed service reductions or fare changes will go through public meetings before anything actually takes effect.
