I don't recall reading ANYWHERE about ANY sunset rules for analog AM and FM radio. The FM station owner may have misunderstood what with all the talk about sunset rules for analog TV in 2006 (which will probably be extended) and the IBOC (In Band On Channel) digital signals presently being tested on some FM stations. As far as I have read, there has not been any format selected for a stand alone digital radio signal. (That itself will probably take a few years.)
Analog radio IS safe for now, but the audio quality decline is already well on its way with all the low bit and lossy compression digital audio studio equipment in stations right now bringing down many analog radio stations to XM radio level. If only it was as simple as heavy use of compression!