LAFCO, a Government Body That Oversees the Formation of Cities, Is Making Enemies and Provoking Attacks on Its Power, Its Secrecy and Its Practice of Whittling Down Boundaries Proposed by Cityhood Advocates : Incorporation Inc.

Times Staff Writer

On a recent Friday afternoon, Carl Boyer III slid into a black vinyl booth at Tip's, a Santa Clarita Valley coffee shop, looking a bit glum.

"Tip's isn't going to be in the city," lamented the chairman of the Santa Clarita City Formation Committee. "We were really sorry to lose it."

Tip's is a landmark of the valley. For 62 years, it has dished up plain food that satisfies the locals and the highway patrolmen who cruise the nearby Golden State Freeway. And, in its bar, international-award-winning bartender Bobby Batugo concocts exotic cocktails--some of them with mounds of ice shavings on top, resembling chilly volcanoes.

The coffee shop was supposed to become part of the proposed city of Santa Clarita. So was Magic Mountain, the valley's best-known spot, as well as Castaic, whose residents clamored to be included. So were thousands of acres of land dotted with chaparral and oaks.

But those locations were all dropped when the Local Agency Formation Commission, which oversees community incorporations in Los Angeles County, this spring redrew the cityhood proponents' map. The proposed city was chopped in half, to 43 square miles, with LAFCO cautioning that, if it were larger, the city would end up with a $4-million deficit after its first year of operation.

Another Case

The story is similar in Calabasas, where another incorporation drive is under way. LAFCO rejected the residents' proposed boundaries and is whittling them down. Most of the community's virgin open space will not survive the cut. And LAFCO cites the same reason for the reduction in size: making it financially feasible.

Leaders in both the Santa Clarita Valley and the Calabasas area are optimistic that they will eventually get the go-ahead for cityhood. But the victory will be bittersweet. In both cases, the radical surgery LAFCO is performing is undermining one of cityhood supporters' key goals for incorporating: controlling their own destinies when it comes to development.

Much of the land excluded from the proposed cities by LAFCO will soon be buzzing with the construction of tens of thousands of homes. Had the areas remained within the city boundaries, the future city councils could have determined how much growth should be permitted. But now those decisions will remain with the Board of Supervisors, the majority of which is pro-development. The board retains jurisdiction over unincorporated areas.

And the two cities, without reaping any revenue from the unincorporated sections, will see their neighbors benefit from the cities' roads, schools, libraries and other facilities.

"We were grievously upset by the loss of these outlying areas," said Connie Worden, vice chairwoman of the Santa Clarita movement. "We considered them very carefully when we drew the 95-square-mile boundary."

Splitting Communities

The redrawing of boundaries also is shattering community ties, residents observed.

"I feel disappointed," said Hal Helsley, whose neighborhood is expected to be excluded from Calabasas. "It splits a feeling of community in half."

With cityhood activists questioning whether the radical cuts were really necessary, the two incorporation efforts have trained a spotlight on LAFCO, which normally operates in near obscurity, overseeing such arcane matters as sewer-district mergers and lighting-district annexations.

Some supporters of the proposed municipalities are charging that the commission is biased toward developers and the supervisors, who have little incentive to surrender large chunks of land to cities. The unincorporated areas generate tax revenue for the county and sometimes provide supervisors with campaign contributions from developers who are building homes in those areas.

Critics also maintain that LAFCO is dictatorial and so secretive that it is difficult to obtain public records on the incorporations. One Santa Clarita Valley newspaper resorted to filing a lawsuit to obtain county documents on the Santa Clarita incorporation.

Such accusations have dogged LAFCO for several years, but it is only recently that a lawmaker has called for an investigation of the obscure, 24-year-old commission.

State Sen. Ed Davis (R-Valencia) launched his own inquiry last month after receiving many complaints from residents in Calabasas and the Santa Clarita Valley. He also introduced legislation that would, in effect, hinder the commission's ability to dramatically shrink city boundaries proposed by residents.

"The LAFCO in Los Angeles County does not give the local people who are seeking incorporation a feeling that they are objective and scientific and disinterested," Davis said. "They give the impression they are the agent for Los Angeles County."

But Ruth Benell, LAFCO's executive director, says vehemently, "If that's an opinion, it's their opinion. It's not my opinion. The commission is independent."

Chances look good that LAFCO will permit Santa Clarita Valley voters to decide on cityhood in November. But a vote in Calabasas will probably be delayed until the summer of 1988 or beyond because of the boundary adjustments.

Formed by Legislature

LAFCO is a creature of the state Legislature, which in the 1950s and 1960s watched cities sprout like dandelions across the state. Municipal fever, the legislators worried, was resulting in helter-skelter boundaries that weren't good for its new citizens or businesses.

To oversee such incorporations and governmental annexations, lawmakers installed a local agency formation commission in Los Angeles County--where 84 cities have been formed--and 56 other counties. So far in Los Angeles County, the commission has approved fewer than a dozen new cities since 1963, when it was formed.

The Legislature gave the commissions broad authority to reject cityhood proposals for any reason and to redraw proposed municipal boundaries.

Each commission is made up of two county supervisors, two local city councilmen and one member of the public appointed by the supervisors. In Los Angeles, there are two other members--a resident of the San Fernando Valley and a Los Angeles city councilman.

To the best recollection of LAFCO members, no resident of unincorporated Los Angeles County--the area most likely to be affected in a cityhood decision--has ever served on the commission.

The commissions are neither county nor state entities. They are accountable to no one, although they are financed by their counties.

LAFCO's decision eventually must be approved by the Board of Supervisors. A citizen's only appeal is by lawsuit.

Discouraging Incorporation

The way LAFCO wields its power in Los Angeles makes it difficult to incorporate successfully, critics suggest.

"The way this particular LAFCO sets up rules of incorporation, almost no city in the County of Los Angeles could be incorporated today," said Madelyn Glickfeld, an urban planner and an alternate on the state Coastal Commission.

"It seems to me the only way an area like Malibu or Calabasas will succeed in incorporation is if the county supervisors want to incorporate, or if they raise a quarter of a million dollars and prepare to take it all the way to the Supreme Court," added Glickfeld, who was involved in a failed attempt to incorporate Malibu.

Board members and supervisors, however, scoff at accusations that the supervisors dictate their decisions.

County Supervisor Mike Antonovich, whose district encompasses the Santa Clarita Valley and Calabasas, suggests that he and his colleagues are merely convenient but innocent targets for those who are disappointed with incorporation results. Publicly, Antonovich has not taken a position on the two cityhood movements, but he says he favors placing the questions on the ballot.

"When you deal with an emotional issue, you have these types of controversies," Antonovich said. Incorporations, he said, "are just highly volatile."

Antonovich, who served on LAFCO several years, was replaced this year by Kenneth Hahn. Recently replacing the ailing Hahn was Ed Edelman, who now represents the supervisors along with Pete Schabarum.

Gloria Casvin, a vice president at the Valencia Co., a large developer in the Santa Clarita Valley, also disputes the theory that supervisors help thwart or scale back proposed cities.

"I don't feel there was any influence obtained or sought," Casvin said. Her company, however, successfully appealed to the commission to eliminate from the proposed city of Santa Clarita a 10,000-home project now under construction, claiming that completion would be delayed if the firm had to deal with a new city government.

The target of much of the criticism surrounding the commission is Benell, its longtime executive officer. She started her career at LAFCO as a commissioner in 1963, while she was a member of the City Council in Pico Rivera. She served as a commissioner six years and became a LAFCO administrator in 1970.

Benell has been active in the LAFCO statewide organization and often has been relied upon to represent the group at the Capitol. One LAFCO officer noted that, when the administrators meet at statewide conferences three times a year, Benell usually attracts a crowd wanting to talk shop with her.

"Without reservation, Ruth Benell is the best executive officer in the state, said Bob Whittemore, the Kern County commission's administrator, echoing the sentiments of several of Benell's peers.

But some of the state's incorporation experts say that Benell also has to be politically astute to have stayed in her appointed job so long. They suggest that her actions are colored by a desire to please the conservative Board of Supervisors.

But Benell responds: "I don't feel I'm under any pressure from the Board of Supervisors, the LAFCO commissioners or anybody else."

Cityhood organizers compliment Benell for her politeness and her willingness to chat with them and attend community meetings. But they complain that she won't divulge information pertinent to their causes.

How Process Differs

The Los Angeles commission's secretive policy on information-sharing is what separates it from most similar commissions in the state, interviews with several executive officers have revealed.

The process begins once citizens request cityhood after submitting to LAFCO the required number of petition signatures, an application, and a map of the proposed city limits. The next step requires researching whether a city could support itself financially.

In most other counties, the supporters, or the consultants they hire, provide the answers on financial feasibility. They contact various county departments to obtain information on such things as costs of roads and fire protection, sales-tax figures and other revenue. They write a feasibility report that concludes whether the city could operate in the black.

During the process, LAFCO staffs often act much like reference librarians, and check the report before it is presented to the commission for a cityhood vote. In Ventura County, those seeking cityhood get even more help. The county, for instance, donated $25,000 to pay for the expenses of the incorporation committee that successfully engineered the creation of Moorpark, the county's youngest city. Later, it lent the young city an interim city manager.

But, in Los Angeles County, Benell gathers the data and writes the reports. She and the commission have forbidden county departments from releasing statistics to proponents and opponents of any cityhood drive.

Benell justifies the procedure by saying the process requires an expert's attention. Novices only would make mistakes.

"Each county can develop its own method, and that's how we do it in this county," she said.

Kenneth Chappell, LAFCO's chairman, who is also mayor of West Covina, said the commission is actually doing everyone a favor. "They'd be floundering around for months or maybe longer trying to pull out that information," he said.

Both supporters and opponents of cityhood find the policy infuriating.

In Santa Clarita, for instance, residents were unable to obtain the financial report until shortly before the commission was scheduled to vote on cityhood. Citing a projected $4-million deficit, Benell's report recommended denying the 95-square mile city. Based on the report, LAFCO reduced the boundaries.

Cityhood leaders suspected that the deficit was inflated, but they did not have time to research the figures so they could challenge them, Worden said.

Access Denied

"We never had access to analyze it or refute it," Worden said of the report. "There were a number of inaccuracies; there were some obvious ones I believe we would have found prior to the hearing if we had had an opportunity to look at them."

The group maintained that it discovered in the report several omissions of projected revenue that could have shown that the larger city, as first proposed, would have been solvent, she said. One omission was about $3 million in federal revenue earmarked for street costs.

Benell later explained that the $3 million was left out of her report because she did not know whether the city would ask for the federal money or know how to seek it. She said cityhood proponents are usually overly optimistic about the revenues a new city will generate.

Even when Benell's reports are finally released, cityhood advocates in both cities say, they have encountered great difficulty getting background materials to double-check her figures.

Seeking such supporting evidence, reporters for the Newhall Signal this spring sought documents that Benell used to conclude that cityhood for Santa Clarita would be a financial flop.

The Signal sued after its editor, Scott Newhall, branded Benell as another "Attila the Hun," wielding a "magic adding machine." The paper eventually dropped the suit after LAFCO produced the records.

Benell refuses to discuss the Signal's lawsuit or its blistering attack.

Chappell justifies LAFCO's embargo by saying: "The reason why we want that information before it is released is because we know we're going to get phone calls about it. If I don't know what you're talking about, it won't make me look brilliant."

Complaints on Estimates

In recent years, certified public accountants and incorporation experts hired by cityhood proponents complain that Benell routinely underestimates revenue and sometimes overestimates costs.

When Marina del Rey tried unsuccessfully to incorporate last year, for instance, Benell said the city would have to pay $1.2 million for the marina's harbor patrol. But the community's consultant, Fred Christensen, who formerly was administrator of Sacramento County's LAFCO, argued that the cost should remain the county's because it owns the marina.

In Calabasas, Robert Hill, cityhood chairman, said he and others had spotted more than $1 million in discrepancies. They charged that at least $500,000 in revenues were not counted and that $600,000 in erroneous expenditures were. There was also an embarrassing geographical error. The report stated that the city would extend to the Kern County line instead of to the Ventura County line.

In Santa Clarita, David DeRoos, a CPA hired by the cityhood committee, maintained that the 95-square-mile city would have had a "very good chance" of surviving.

DeRoos said he also determined that LAFCO's past predictions were off base. He examined old financial records of Agoura Hills and Westlake Village to see whether LAFCO's first-year financial prediction for those two cities ever came true. They didn't.

Revenue outstripped LAFCO's projection by 70% in Westlake Village and 54% in Agoura Hills.

But, in interpreting the same figures, Benell said the healthy treasuries in Agoura Hills and Westlake Village prove the commission is doing a good job. "I think anytime people don't get what they want they find some reason to disagree," she said.

LAFCO commissioners said they look at Benell's conservative methodology as insurance against creating a financially unstable city.

"I hate to see anybody incorporate if they don't have all the prerequisites of a city up front," said Thomas E. Jackson, a commissioner, who is also a Huntington Park councilman. "It's tough enough running a city."

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