City-to-Be Getting a Free Launch : Malibu: They have a council, a city manager, free insurance and a location for offices. Now all that’s needed is cityhood--and tax money to pay for it all.

Cities running in the red could learn a few tricks from Malibu’s City Council-elect.

Now in its fourth month of unofficial operation, the council still has no money to spend, but it is nonetheless managing to line up future staffers and office space.

On Tuesday night, a veteran city manager agreed over a handshake to come to work for Malibu and also agreed to defer his salary until the long-delayed incorporation takes place. The new manager will be Bruce C. Spragg, a city administrator for 29 years in South Gate, Santa Ana and several Eastern cities.

The council also signed a five-year lease to set up city offices as soon as possible in prime Civic Center office space. Landlord Thomas Wong agreed not to charge rent until the city incorporates. Malibu resident Larry Taubman, meanwhile, volunteered to pay the city’s liability insurance on its new quarters.

Until it moves in, the council will continue to meet in the auditorium of Hughes Research Laboratories--rent-free, of course.

But penny-pinching has its limits. Spragg said his first task will be to figure out how to obtain some operating money for the city-to-be.

Residents of the oceanside community voted in June to make Malibu a city and elected a five-member City Council. But the County Board of Supervisors, determined to start work on a long-planned sewer system that most Malibu residents oppose as too large, has won a court ruling to put off the date of incorporation until next March.

A bill passed by the Legislature last month to expedite incorporation is now before Gov. George Deukmejian, but even if he signs it, cityhood--and the accompanying flow of tax dollars into the city treasury--would still probably be weeks or even months away.

Since June, the five future council members have been subsidizing city operations out of their own pockets, paying their own phone, travel and secretarial expenses. Once incorporation occurs, they will receive salaries of $300 a month.

“I figure I’ve spent about $1,000 a month since June,” Councilman-elect Mike Caggiano said. Others estimated that they were spending about $350 a month on city business. Four of the five are also paying off campaign debts ranging from $3,000 to $24,000.

In the meantime, the city-in-waiting may get help from the Malibu Alliance for Constructive Solutions, a new grass-roots group that plans to launch a fund-raising drive this week.

“The alliance will collect the money, and the council will decide how it wants to use it,” said spokeswoman Joy Ellis. She said residents have already pledged about $4,000.

The Alliance has set no dollar target for its campaign, but Councilman-elect Larry Wan said the city probably needs about $20,000 to get it through the next nine months.