The city has taken practically every measure possible to save money: It owns no property and has no police force or fire department. The city government is run by a skeleton staff of contractors. Money is in such short supply, the mayor lamented, workers can't even offer a cup of coffee to visitors who come by the makeshift City Hall.

Still, it might not be enough to save Jurupa Valley. City leaders in California's newest city, established in 2011, fear it could also be the first to disincorporate in decades.

"We're fighting something that's not the same old business," Mayor Verne Lauritzen said at a recent City Council meeting, on the showroom floor of the old western-wear shop leased by the city. "We're fighting something that's above and beyond."

Jurupa Valley, a city of about 94,000 just west of Riverside, has struggled since its inception, crippled financially as the state's youngest cities lost a critical source of revenue from the state.

The city has pared its yearly budget to about $17 million, having lost what would have been nearly $7 million. It has made cuts in its contract with the Riverside County Sheriff's Department as well as other services. Lauritzen said Jurupa Valley also had to repay more than $1 million it owed to the county for its help in launching the city.

After multiple failed attempts in Sacramento to replace the money, city officials say the situation has grown dire. Officials project that the city will be able to sustain itself for only two years at most — enough time for the city to dissolve itself.

"It solidifies the reality we only have so much time and so much money," said Laura Roughton, the city's first mayor and now a councilwoman. "It's challenging, but we haven't known any different. We've operated under this for so long.... We're certainly not going to give up. There's just too much at stake."

Policy experts say the consequences of disincorporation spread beyond Jurupa Valley. Dan Carrigg, legislative director of the League of California Cities, said the issue has "fundamental impacts on the state," discouraging other communities from incorporating — or even cities looking to annex unincorporated areas — because it wouldn't be financially viable.

State Sen. Richard Roth (D-Riverside), who has sponsored legislation to correct the issue, said it would be impractical for new cities to incorporate because "the money is simply not there to support the effort."

"Help is simply not available at this point," he said, calling finding a resolution his top priority.

The source of the problem is a change in the way state funds were distributed to newer cities, which are given back less in property taxes than more established cities. In the past, to even things out, newer cities were given a share of vehicle registration fees. But in 2011 — two days before Jurupa Valley incorporated — those funds were reallocated to bolster funding for law enforcement.

"This should not have happened to these people," Carrigg said.

If it weren't for that legislation, he added, "Jurupa Valley would be continuing to grow and thrive, rather than spending the last two years trying to survive."

Lauritzen said Jurupa Valley was on track to being a stable community, with the rigorous evaluation process undergone by potential cities projecting it to be financially viable until, essentially, the rug was pulled out from under it.

"That's the disappointment: playing by the rules, only to get slugged in the gut," Lauritzen said. "We don't want an extra handout; we only want to be equal with every other city."

The legislation affected three other cities established since 2004, all in Riverside County: Wildomar, Menifee and Eastvale.

For these communities, cityhood meant the promise of better services for residents — only to end up having to skimp, said Carol Jacobs, Eastvale's city manager. That city lost about $3 million from its $13-million annual budget, Jacobs said. Because of that, she added, the city is run with less than half the staff it needs and has cut back its public safety budget.

"The level of service we can provide the community is not what it should be," Jacobs said.

But her city's predicament pales next to the one facing Jurupa Valley, just on the other side of the 15 Freeway — the newest and the largest of the affected cities. "They just never even had a chance to get off the ground," Jacobs said.

Jurupa Valley's borders were formed by freeways and the Santa Ana River, stitching together nine communities that vary from tidy and suburban to rural with muddy roads trod by horses. For close to 30 years, various efforts at incorporation had failed, with some residents fearing that their treasured Old West lifestyle would be threatened by being inside city limits.

"It's freedom, to some extent," said Chuck Morris, 76, a retiree who bought half an acre of land and moved with his wife from Rowland Heights in Los Angeles County. "It's like heaven."

Voters approved the most recent effort because advocates said residents wanted local governance and sought to keep locally generated tax revenue in the area.

Even as disincorporation looms — the process could begin as soon as this month — officials maintain some hope. Just as it took a few failed attempts before Jurupa Valley became a city, some believe it might require a few failed tries before Sacramento saves it.

"We can last for one more shot with the state," Lauritzen said. "I think Jurupa Valley can be a city. It can govern itself, make its own decisions and determine its own destiny."

rick.rojas@latimes.com