Big houses equal big money for city

Despite the intense opposition of many neighborhoods to “King Kong” homes, there is an upside to “mansionization.”

With skyrocketing residential property values comes a commensurate increase in property taxes, the lifeblood of the city’s finances.

That transfusion -- the highest in the city’s history -- has already restored more than $8 million to city coffers, allowing the City Council to open the purse strings and buy a new fire engine, restore money taken from the Open Space Fund, and put back on the front burner a languishing effort to place city documents online.

When FEMA comes through with funding to repay the city’s expenditures on landslide emergency response and infrastructure repairs, the city’s budget will look even better.

It’s welcome news after eight months of financial worry.

Still, city officials must remain cautious and not go on a spending spree. The final bill for Bluebird Canyon repairs is not yet in, and, as the City Manager has warned, many of the projects that have been put on hold due to financial uncertainty will cost more -- perhaps much more -- when they begin to move forward.

And revenues must be set aside -- sooner than later -- to create a disaster fund so the city will not find itself in such a financial jam in the event of a future catastrophe.

With Measure A funds -- the half-cent sales tax increase -- due to start accumulating July 1, the last half of 2006 should be looking very good for many of the city’s pet projects, such as the Village Entrance.

We also expect that homes will continue to get bigger -- despite the efforts of many to clamp down on building -- and that property values will continue their upward climb.

As they say, to every cloud there is a silver -- or in this case, a gold -- lining.

QUESTION OF THE WEEK

Is the City Council moving too quickly to spend money from the windfall in property tax revenues? Write us at P.O. Box 248, Laguna Beach, CA, 92652, e-mail us at coastlinepilot@latimes.com or fax us at 494-8979. Please give your name and tell us your home address and phone number for verification purposes only.