Panel Advises Against City of Laguna Hills

In a move that could slow south Orange County’s cityhood boom, a county report recommends that fewer cities be carved out of the region and that incorporation of Laguna Hills be denied when it comes up for a vote next week.

The report, prepared by the staff of the Local Agency Formation Commission and scheduled to be released at the board’s meeting Wednesday, warned that LAFCO runs the risk of further fragmenting Orange County by approving too many new cities.

The cities of Mission Viejo and Dana Point were formed during the past year and seven more south county cities are in the conceptual stages, including Laguna Hills. LAFCO will decide the Laguna Hills cityhood question Wednesday.

“Orange County already has 28 cities in what is considered a relatively small area,” LAFCO Executive Officer James J. Colangelo wrote in the staff report. “If LAFCO is to facilitate regional planning efforts, the commission must be cautious in creating new governmental agencies.”

The commission staff did not specify how many cities should be formed in south county, although Colangelo said there should be fewer, larger cities.

The five-member commission is not bound by the staff’s recommendations, but with few excep tions it has followed them. The commission screens cityhood requests for placement on the election ballot. The Board of Supervisors, which makes the final decision about putting the issue on the ballot, generally follows LAFCO’s advice.

Commission staff members recommended the denial of Laguna Hills incorporation because they said the proposed new city of 45,000 would receive an unfairly large share of available tax revenue, leaving other unincorporated south county areas with too little.

The staff concluded that although the proposed city includes about 36% of the people who live in the surrounding unincorporated area, it would acquire nearly 50% of the area’s sales tax and hotel bed tax revenue. A major source of the new city’s revenue would come from the lucrative Laguna Hills Mall.

About half the residents of the proposed city live in the Leisure World retirement community, many of whom are opposed to cityhood.

The staff also faulted the proposal out of concern that the new city would not be large enough to adequately address regional issues such as traffic, air pollution and airports. The county prefers to deal with larger municipalities that can pull their own weight when taking on these complex issues, Colangelo said in the report.

Decision Wednesday

LAFCO Chairwoman Evelyn R. Hart said Thursday that she and the rest of the commission would be “looking very seriously” at the staff report, but she added that she could not yet make a decision on Laguna Hills without hearing lengthy presentations Wednesday.

“I understand the (staff) concerns, and I have some of the same concerns,” Hart said. “Things are moving fairly fast in the south county and we need to understand what we are voting on.”

Thomas F. Riley, chairman of the Board of Supervisors, was not available for comment Thursday. The other four supervisors were in Washington attending the presidential inauguration.

Proponents of Laguna Hills cityhood were dismayed Thursday at the LAFCO staff recommendation. Some said they felt that Colangelo was waging a vendetta against Laguna Hills because residents were instrumental in defeating a proposal on last November’s ballot to incorporate a large portion of the Saddleback Valley. The LAFCO staff had recommended incorporation.

“I’m not surprised” at the recommendation, said Melody Carruth, co-chairwoman of the Citizens to Save Laguna Hills incorporation group. “I don’t think Mr. Colangelo wants a city of Laguna Hills.”

More Revenue

Carruth disagreed that the new city would take an unfair chunk of local tax revenue. The staff had concluded that a city of Laguna Hills would have $107 per capita in tax revenue compared to an area-wide average of $77.

But Carruth argued that the staff was comparing apples and oranges because Laguna Hills is a fully developed community while nearby El Toro and Laguna Niguel are only one-third built.

“You can’t compare those areas because they are not in the same stages of development,” Carruth said.

Carruth also downplayed the staff’s concern about regional issues.

“I cannot imagine any city council which would not want to cooperate in solving regional problems,” she said.

Laguna Hills cityhood proponents were unsure what they would do if the commission follows its staff’s recommendation. They would have the option, though, of re-submitting a revised proposal to the commission at a later time or challenging the denial in Orange County Superior Court.

The drive for Laguna Hills cityhood began early last year as a defensive measure against Saddleback Valley incorporation. Citizens to Save Laguna Hills filed their incorporation request with LAFCO on March 18.

Plan Put on Hold

In June, the commission placed the Saddleback Valley measure on the November ballot and put the Laguna Hills plan on hold pending the outcome of the election. After Saddleback Valley incorporation fell to resounding defeat, the commission agreed to hear the Laguna Hills cityhood plan.

In the report, Colangelo started off by praising the Laguna Hills proposal. With a projected first-year city surplus of $6 million, Colangelo said Laguna Hills would be financially healthy. And with a 3,000-name petition for cityhood submitted to the commission, Colangelo said the measure appears to enjoy widespread support.

LAFCO’s handling of the Laguna Hills proposal could have a bearing on other cityhood requests in south county. In February, the commission is scheduled to hear a request from Laguna Niguel, as well as a proposal by Mission Viejo to annex Aegean Hills. The commission also expects to eventually receive cityhood requests from El Toro-Lake Forest, as well as the planned communities of Rancho Santa Margarita, Aliso Viejo, Coto de Caza and Rancho Mission Viejo.

“In terms of regional planning, no cities would be better down there, but that’s not going to fly very well in Orange County,” Colangelo said. “Somehow we’ve got to balance the desire for local control against regional needs.”