Measure A could be retired

Monitors of Measure A say the temporary sales tax hike has done its job and should be retired in March.

The Measure A Oversight Committee will recommend at the Dec. 9 Laguna Beach City Council meeting the termination of the tax more than three years earlier than the term approved by the taxpayers in 2006.

The tax was imposed to help defray the city’s costs to repair infrastructure damaged in the Bluebird Canyon landslide and to create a substantial Disaster Contingency Fund.

“We feel the tax has met its goal,” said former Mayor Neil Fitzpatrick, committee chairman.

The recommended termination is dependent on a positive audit by the Federal Emergency Management Agency, which has born the brunt of the restoration expenses.

FEMA approved the final project expenses of an estimated $37.1 million at the end of October, but its contribution of almost $34 million won’t be certain until an audit is completed and approved.

“It looks good,” Fitzpatrick said.

“The audit is scheduled to start in December. That is very early — sometimes you have to wait two years.”

Assuming the audit is positive, the city will have a nest egg of about $5.3 million by the end of March, left after the almost $2-million reimbursement to the city for reconstruction expenses not covered by FEMA or the Governor’s Office of Emergency Services, according to Fitzpatrick.

“This will make the city whole,” Fitzpatrick said.

The most significant costs to the city are for planting and erosion control, which were deemed essential to protect the reconstructed slope, although not covered by FEMA.

Other expense for the city were the cost of the agreements with property owners for the temporary use of their parcels for construction staging or as buttresses at the bottom of the canyon; and for water, storm drain and sewer lines within the canyon bottom.

Although future costs not expected to be eligible for FEMA reimbursement are estimated at $984,000, the committee concluded that the city lucked out.

The $5.3 million disaster fund equals about 12% of the city’s General Fund expenses for the current fiscal year.

Looking on the bright side, the oversight committee posited that interest earnings on the $5.3 million will offset inflation and the fund should be maintained at an amount equal to at least 10% of the general fund.

If the money is tapped by another disaster, the committee recommends replenishment as soon as possible.

The committee also recommends that four council votes be required for any expenditures from the fund and the money should be use only for a formally declared “local emergency,” as defined by the city code.

Four council votes will be needed to approve a draft urgency ordinance proposed by the committee to rescind the tax at the Dec. 9 meeting in order to allow the state Board of Equalization deadlines the required time to curtail the tax by March 31.

The committee report to the city includes the draft ordinance, a list of federal and state contributions, a list of expenses not eligible for FEMA or OES assistance, a list of expenses currently being incurred or to be incurred in the future, an estimate of Measure A revenue, a comparison of revenue and expenses, and a copy of the resolution that created the city’s Disaster Contingency Fund.

Measure A was approved by the voters in a special election in December 2005 and took effect in July 2006.

An oversight committee was appointed and included Fitzpatrick, former Director of Public Works Terry Brandt, former Design Review Board member Greg Vail, Linda Brown, Ed Shaw, Ed Peterson and Frank Ricchiazzi.