Property taxes to the rescue

City officials replace almost all of $8.2 million spent for slide response and repairs. Laguna’s financial cup may not runneth over, but at least it’s half full.

The passage of a temporary sales tax, the favorable evaluation by a Federal Emergency Management Agency representative and higher-than-expected revenue allowed the city council to approve on Tuesday the restoration of city funds that were borrowed for emergency repairs to the June 1 landslide site.

“We are sure better off than we were a month ago,” said City Manager Ken Frank, who presented the midyear budget report.

Frank said the supplemental property tax revenue from midyear purchases was by far the highest in the city’s history. FEMA and the Governor’s Office of Emergency Services is expected to reimburse the city for $8 million of the $8.2 million that the emergency repairs to Bluebird Canyon are expected to cost, as well as 6.4 million of the estimated $7.4 million for permanent restoration.

If FEMA accepts the city’s application, financial assistance will total $14.4 million, only about $1.2 million less than current estimates for the total cost of repairs.

To celebrate the good news, the council voted to allocate funds to make city documents available online and to purchase a new fire engine.

A $500,000 loan from the Open Space Fund was among the money restored.

The city recently agreed to purchase scattered lots on paper streets in Arch Beach Heights, tapping the fund, which can only be used to buy open space or loaned to the city. However, Frank was not wholly optimistic.

His report included a warning that bids for capital improvement projects continue to come in appreciably higher than budgeted.

“We need to expect every project will be over budget,” Frank said.

Bids already have been rejected for the Canyon Acres storm drain project, which was bid at a level more than $2 million higher than the city allocated for the project. The bid on the relocation of the city corporation yard to the Act V parcel in Laguna Canyon also came in $2 million higher than budgeted.

Reallocation of money in the contingency reserve, the Cox Cable franchise renewal payment and higher-than-estimated property taxes and a higher-than-anticipated balance in the general fund on June 30, 2005, will be diverted to cover the shortfall in the corporation yard project and part of the Canyon Acres storm drain shortfall.

Options for the storm drain financing will be presented to the council in February. The options include the sale of the lots on which the Girl Scout House stands, if the scout leaders would be amenable to a relocation on another parcel owned by the city.

“The city has two major problems,” resident Gene Felder said. He cited escalating employee benefits, for which he offered no solution, and project cost overruns, for which he had two suggestions: pursue outsourcing and have the Measure A Oversight Committee oversee all projects.

“Money is rolling in, but it’s rolling out as fast as it’s rolling in,” Felder said.

Preparation of the 2006-07 city budget is underway. A budget hearing is scheduled for May 16. A draft of the proposed budget will be available to the public and the council at the end of April.

The new fiscal year begins July 1.