Measure A: the sales tax increase

WHAT:

A special election will be held Dec. 13 to determine if Laguna Beach will temporarily increase the local sales tax by a half cent to supplement the city’s general fund, depleted by repairs to infrastructure damaged in the June 1 landslide in Bluebird Canyon.

Measure A will be the only item on the ballot. No arguments against the increase will appear on the ballot because none were submitted.

The argument in favor of the increase reads, in part, “The City of Laguna Beach is required to replace over $15 million of streets, sewers and storm drains lost in the Bluebird Canyon slide. The City Council has carefully examined the city budget to find areas to cut. By drastically cutting projects and instituting a hiring freeze, $7 million has been found.”

Another $8 million is needed.

The argument goes on:

“If we do not pass this tax, we will not be able to fill vacant police, fire and lifeguard positions [nor the recently vacated Marine Protection Officer position], and we will delay critical projects.”

The Federal Emergency Management Agency declared this week that the city is eligible for about one-third of the estimated costs to repair the damage to public facilities, reversing an earlier decision.

“We still have to pass Measure A to cover out costs and to develop the Emergency Disaster Contingency Fund,” Mayor Elizabeth Pearson-Schneider said.

WHAT’S BEHIND IT:

After considering other means of raising money -- property tax increases, bonds, etc. -- the City Council held a special meeting Sept. 16 to gauge public support for the sales tax increase and decided to put it to a vote of the people.

If Measure A is passed, the tax increase would raise about $10 million, enough for the city to ride out the most recent disaster and set up a fund for future emergencies.

None of the money will be used for rebuilding homes damaged or destroyed in the landslide. However, owners of property perched on the edge of the slide area and at the toe of the slide on Bluebird Canyon Drive have pledged to contribute funds.

Due to state election rules, the council has not stipulated a precise use for the funds raised by the tax increase. Only a bare majority -- 50% plus one -- is needed to pass the increase because the funds are not restricted to a specific purpose. A two-thirds majority vote would have been needed to pass the increase if funds were specifically earmarked.

But the council can and did state its intention to use the first $6 million -- give or take -- to fund city programs or projects that would otherwise be reduced, delayed or eliminated altogether because of the funds funneled to the emergency and permanent repairs in Bluebird Canyon.

Among the projects: Corporate Yard relocation ($4.9 million), Canyon Acres/Atlantic Way storm drain ($1.9 million), Mountain Road to Nyes Place and Cleo Street to Nyes Place street resurfacing ($1.5 million), upper Bluebird Canyon street repairs ($1.02 million), South Coast Highway storm drains ($440,000), Main Beach boardwalk and stair replacement ($415,000), Diamond Street Beach stair replacement ($250,000), Cerritos Drive retaining wall ($200,000), Circle Way stairs and storm drain ($180,000), fire station door enlargement, so new equipment can get inside ($140,000), and Brooks Street stair replacement ($110,000).

A half-cent sales tax increase -- 25 cents per $50 spent -- should generate about $1.7 million a year -- which will be used only in Laguna Beach, not for county or state needs, according to City Manager Ken Frank’s financial analysis.

“The temporary sales tax increase would allow the city to continue with most municipal services and capital projects,” Frank said.

Otherwise, the $10 million needed must come out of the city’s general fund -- almost one-third of the annual $32 million budget.

The term of the proposed tax is six years. If the target amount is reached earlier, the tax can be canceled by the council, but it cannot be extended without another vote of the people.

WHAT NOW:

The Committee for Measure A/Citizens for Fiscal Responsibility filed its first financial statement, covering donations through Oct. 29. Committee Treasurer and city Disaster Recovery Coordinator Bob Burnham each contributed $500. Committee Assistant Treasurer/Secretary Anne Johnson donated $100.

For more information about the committee, call (949) 230-7799.

The Laguna Beach Taxpayers Association has pledged to support the tax increase.

WHAT’S SAID:

“A temporary tax is unprecedented, and we can support that,” Laguna Beach Taxpayers Association President Martha Lydick said. “The tax will be used to fund very important projects that would be delayed and to set up a disaster fund, which the past has proved we need.”

WHAT’S NEXT:

City Clerk Martha Anderson announced that applications for absentee ballots are available in her office at City Hall and through the city’s web site, www.lagunabeachcity.net. Absentee ballots must be received by the Registrar of Voters by Dec. 6. The city’s web site also has the ballot measure posted on it.

-- By Barbara Diamond