(Oct. 10, 2008) -- LBReport.com, which was first to report that Mayor Bob Foster's original "infrastructure" property parcel tax could be spent on any virtually General Fund items (measure withdrawn/partially rewritten), and was first to report that the rewritten tax could be spent on virtually any infrastructure that a City Council majority may designate after the election (regardless of what voters are now shown on maps, lists and charts) is today the first LB media outlet to report the following:

Based on the email exchange provided verbatim below, we conclude that the City Council could use Measure I's tax proceeds -- restricted to infrastructure -- to backfill or reimburse City Hall's General Fund for sums now budgeted for infrastructure...thereby enabling the City Council to spend freed-up General Fund dollars on virtually any General Fund items it chooses...which may or may not include infrastructure.

On Oct. 8, LBReport.com emailed City Attorney Bob Shannon two narrowly drawn questions (verbatim below) to which he emailed replies on Oct. 9 (verbatim below) and we publish today (Oct. 10).

The two questions involve slightly different scenarios but have the same basic net effect for taxpayers.

In question 1, we asked if the Council could legally take sums it now budgets for infrastructure and reallocate those sums to General Fund purposes which may or may not include infrastructure. Under this backfill scenario, the Council could use the infrastructure tax (bond funded) proceeds to "backfill" sums and "free up" General Fund money for General Fund purposes that may or may not include infrastructure.

In question 2, we asked if the Council could spend currently budgeted sums for infrastructure...but legally reimburse the General Fund for its infrastructure spending with the tax (bond) proceeds. Under this reismbursement scenario, the "reimbrusement" could be allocated to the General Fund...where it could be used for purposes that may or may not include infrastructure.

[begin questions/answers with City Attorney Shannon]

Q 1: If Measure I is enacted, would the City Council have the legal authority to use the tax (or bond funded) proceeds from the measure's "Special Tax Fund" (under the measure dedicated soley for infrastructrue) to replace General Fund monies currently budgeted for infrastructure and spend such replaced General Fund monies on General Fund items that may or may not include infrastructure (a "backfill" scenario)?

City Att'y Shannon: If Measure I is enacted, all proceeds must be used for the infrastructure purposes enumerated. The City Council would retain its authority to allocate or reallocate other fund revenues including general fund revenues for the purposes it deems appropriate, which may or may not include infrastructure.

Q 2: If Measure I is enacted, and the City Council [under section 3.85.110A] chooses to reimburse the General Fund from Special Fund Measure I tax/bond proceeds for General Fund money used for infrastructure, would the Council have the legal authority to use money reimbursed from the Special Fund to the General Fund for General Fund items that may or may not include infrastructure (a "reibursement" scenario)?

City Att'y Shannon: As you know, Section 3.85.110 provides:

3.85.110 Special fund.

A. There is established a special fund entitled "Long Beach Infrastructure Reinvestment Special Tax Fund" (hereinafter the "special fund"). Money collected pursuant to this Chapter shall be deposited into said special fund and shall be used exclusively as provided in this Chapter for the purposes for which the special tax is imposed, and for no other purposes. Nothing in this Section shall prevent disbursements from this special fund to reimburse the general fund if, and only if, money has been advanced from the general fund to pay for the uses provided in this Chapter.

Thus, if the general fund advances money to pay for the infrastructure purposes enumerated in Measure I, the general fund may be reimbursed for that expense and the reimbursed moneys may be used for any general fund purpose.

[end City Attorney Shannon response]

LBReport.com posed an additional question to City Attorney Shannon on another Prop I related matter and he provided a response. We'll publish that exchange separately.