Mission Viejo Cityhood Boosted by Study Showing a Revenue Surplus

The move to incorporate Mission Viejo as the county’s 27th city Monday got its biggest boost so far with the release of a consultant’s study that found the community could not only pay for itself but operate with hefty surpluses.

The study shows that Mission Viejo, as a city, would only use 56% of the income that it would generate, said William Craycraft, chairman of a committee studying incorporation.

Craycraft presented the report Monday night to a meeting of the Mission Viejo Incorporation Feasibility Study Committee, which for the past year has been investigating the pros and cons of creating the City of Mission Viejo.

“What this report says to me is that incorporation is absolutely of necessity for the taxpayers of Mission Viejo,” Craycraft said.

He said he will recommend that the committee now present a formal incorporation proposal to the Local Agency Formation Commission (LAFCO), the county panel that screens requests for annexations and bids for cityhood.

Question on Ballot

If LAFCO approves the proposal, the matter would then go to the Orange County Board of Supervisors. State law provides that the supervisors hold a hearing, and that if the proposal is not opposed by more than 50% of the registered voters in the community, they must present the cityhood question on the ballot.

“The earliest it could be on the ballot for Mission Viejo voters is November of this year,” Craycraft said. “I’m not saying that’s when it will happen, but that’s the earliest it could be on the ballot.”

The Mission Viejo Incorporation Feasibility Study Committee last summer hired Christensen & Wallace Inc. of Oceanside to study the financial aspects of possible cityhood. The study was to weigh sources of income, such as sales tax revenue against expenditures in the form of the cost of city government and city services.

Craycraft said he received the consultant’s report Monday, and the document strongly recommends that Mission Viejo move into cityhood.

Quoting from the report, Craycraft read: “ . . . The incorporation of Mission Viejo would be imminently feasible.”

Craycraft said the consultant who wrote the report, Fred Christensen, added that although the firm has studied numerous communities for possible incorporation, none heretofore showed such high financial feasibility.

The consultant study found that general fund (tax) income for Mission Viejo would be $10.3 million a year, while general fund expenditures would be $4.9 million. General fund income includes tax money earmarked by state law for incorporated cities; a major item is 1 cent of the state’s 6-cent sales tax.

“That 1 cent now goes to the county instead of Mission Viejo,” Craycraft noted.

The city would face a potential deficit in expenditures for roads, the study found. It said that Mission Viejo, as a city, would get $1.3 million in state road money, but that it would need to spend $1.6 million in road expenses each year.

In the category of special fund revenues, Craycraft said, the consultant found that Mission Viejo would take in $963,000 in a year but only spend $583,000.

The Mission Viejo Co., which founded the planned community 20 years ago, has said it is neutral on the issue of incorporation.

And even though county government would lose a lucrative tax source if Mission Viejo became an independent city, Craycraft said Monday night, “county government has been very supportive of our move. . . . The Board of Supervisors has sympathized with south Orange County’s move into maturity, and we’ve received strong support from the supervisors.”