The city of Laguna Beach has no plans to appeal a federal audit that has disallowed part of a claim for clearing and rebuilding expenses after a 2005 landslide.

The city in August found out about the Federal Emergency Management Agency audit that means Laguna Beach must reimburse the feds for $1.0 million of $33.9 million received for the project.

“We have worked with FEMA before, bless them for all they do,” said Laguna Beach City Manager Ken Frank in a recent interview. “We would be in a huge world of hurt without their help. But there is a tendency for FEMA people to approve expenses and then later people at headquarters or the audit staff to disapprove them.”

Frank stressed that the city is satisfied with the results of the audit and has no plans to appeal. “But obviously we’d rather not have such an audit finding,” he added.

In the June 2005 landslide, 12 homes tumbled into Blueberry Canyon. Masses of debris blocked a drainage creek, and the city was worried about additional rain causing further slides. Time was of the essence in removing debris and regrading the site, Frank said.

The city felt it could not wait for action from local property owners, many of whom were uninsured or under-insured, Frank said.

One finding of the Office of the Inspector General of the Department of Homeland Security cited the allotment of hours for an ad-hoc employee the city hired soon after the landslide. The auditor felt more of the employee’s time should have been allocated to administration and less to actual project expenses, said Frank.

Other points in the audit concerned installation of a sewer line, demolition and debris removal.

There’s a trend in the insurance industry to offer municipalities “pre-event” hazard mitigation contracts. In some instances, the contracts can be structured so the municipality pays no money up front and reimburses a contractor after FEMA payments have been secured. Services covered and an emergency management plan can be laid out in the document.

Similar contracts have been sold to private property owners for years. Sample consultation agreements for municipalities are available on the FEMA web site (

There are large national contractors that advertise their ability to respond quickly to disasters, including the hiring and training of local subcontractors.

Many counties, cities and even states have “pre-event” contracts with this type of disaster response and recovery contractors. That means the contractor is on standby, ready to mobilize if, for instance, there’s a wildfire or landslide or earthquake, and the municipality activates the pre-existing contract.

This can expedite response and recovery as many contractors have experience with FEMA regulations, helping the municipality to navigate the feds’ reimbursement requirements and reduce the chance that FEMA will de-obligate funds when the project is audited.

Lance Howland can be reached at