Focus of Cityhood Elections Shifts to Open Council Seats : Incorporation: For El Toro and Laguna Hills voters, issues include rebates and campaign contributions.

As she stood before the Board of Supervisors last week, Ellen Martin knew that her efforts to protect the unincorporated community of Laguna Hills from a proposed development by the Mission Viejo Co. were hopeless.

And just as she expected, the board ruled against Laguna Hills residents and in favor of the developer.

Maybe if Laguna Hills were its own city, she said afterward, it would have had more political clout to take on the supervisors.

In the neighboring community of El Toro on the opposite side of Interstate 5, Jo Ann Burrows offers a smaller but equally important example of why the communities feel the need to declare their independence from county government.

“I have been in this community since 1970,” Burrows said, “and I remember when my street was swept on a regular basis. And I’ll bet you my street has not been swept three times in a year.”

In rapidly growing south Orange County, where the demand for attention and services has exceeded the county’s ability to keep up with needs, Laguna Hills and El Toro residents are expected to approve cityhood referendums in special elections Tuesday.

If approved, Laguna Hills will have a population of 23,000 and cover a five-square-mile area west of Interstate 5 and just north of Laguna Niguel; El Toro will have 58,000 citizens in a 15-square-mile area east of Interstate 5, just north of Mission Viejo.

The cityhood referendum in Laguna Hills--Measure H--is expected to win easily. Supporters are hoping for an 80% voter approval.

Most of the campaign debate has focused instead on the 10 candidates for the five council seats.

While longtime cityhood proponents--Melody Carruth, Joel Lautenschleger, Craig Scott and L. Allan Songstad--had hoped that their lengthy community involvement would carry them into office, the front-runners have found themselves responding to William Simmons’ suggestion that the projected $3.3-million budget surplus in the first year of cityhood be rebated to residents.

As they debate the legality of the rebate proposal, candidates have found themselves scurrying into two camps--the cityhood movement’s founders, along with Randal J. Bressette, who calls the rebate idea fraudulent; and those siding with Simmons, including Paul J. Mayjack and David R. Stabbe.

After first supporting the “spirit” of the rebate proposal, candidate Gregory N. Weiler has firmly planted himself in the middle, refusing to state support or opposition for the plan. Candidate David Leland says the proposal might be worth looking at in the distant future, but not right away.

In El Toro, the cityhood referendum--Measure E--is also expected to receive voter approval, although a small anti-incorporation effort has been organized.

Incorporation opponent William Millan has questioned the financial viability of the new city, based on county estimates that the first year’s budget surplus will total only $1.3 million. But proponents point to a consultant’s estimate predicting a $2-million surplus.

One issue being raised by slow-growth advocates involves campaign contributions from Foothill Ranch, a project by Hon Development Co. of Laguna Hills, and Baker Ranch Properties.

Baker contributed $1,000 each to candidates Jon Smith, Richard Dixon, Helen Wilson and Marcia Rudolph, $500 to Philip Dean, and $250 to the campaign committee for cityhood. Foothill gave $250 each to Wilson, Rudolph and the cityhood coalition.

The Foothill Ranch project is not in the proposed incorporation limits but is expected to be annexed if the city is created.

But cityhood supporters argue that the new council would have little influence over the projects since the county has already approved the development plans for both projects.

Burrows also argues that large special interest donations have not dominated the campaign, as evidenced by the 400 individual contributions to the cityhood campaign during the last year, but only six totaling more than $1,000 each.

If the communities decide to incorporate, the big loser will be the county.

County Supervisor Don R. Roth, a former Anaheim mayor, noted that state budget cuts, combined with the loss of tax revenue going to new cities, have hurt the county financially.

“Under normal conditions, I would have endorsed letting them go out and do their own thing,” he said. “But this is not normal times when we are on the brink of financial disaster for the county.”

Already facing a $13-million county budget deficit this year, a fiscal crisis that is expected to worsen as the county begins feeling the effects of state budget cuts, county officials opposed the creation of the new cities because they will further drain the county’s dwindling revenues.

Studies show that the incorporations, if approved, would cost the county a net revenue loss of $7.7 million in the first year in property and sales tax revenues and other fees that would go to the new cities. That total is in addition to the $10 million in yearly net revenue loss from recent incorporations in Dana Point, Laguna Niguel and Mission Viejo.

But residents are now demanding “local control” over their tax dollars.

For years, they argue, they have watched their taxes leave their neighborhoods to help pay for social services and other programs throughout the county, while their own needs for traffic lights, parks and athletic fields were not met.

Martin says a more critical service, police protection, is unpredictable because Sheriff’s Department patrol cars assigned to their neighborhoods are shared with other unincorporated areas.

Cityhood proponents say they also want “local control” over land-use decisions, and they are ready to trade in their one county supervisor for five locally elected city council members in each area.

“Without cityhood, we have to wait to see what happens,” said Burrows, vice chairwoman of Community Coalition for Incorporation. “With cityhood, we can make it happen.”

If they are incorporated, the new cities will provide their own road maintenance, street lighting, parks and recreation facilities, planning, building safety and code enforcement.

They will continue receiving from the county, through tailor-made contracts, other services such as sheriff’s patrols, fire and paramedic services and libraries.

Because of Laguna Hills’ healthy tax base, attributed to the giant Laguna Hills Mall and other businesses, incorporation backers are also arguing that if the community doesn’t become a city, it will cease to exist because it will be picked apart by surrounding cities trying annex the tax-rich neighborhoods.

And given the vows by county officials to fight future proposals for incorporation, Martin says this second try for cityhood may be Laguna Hills’ the last.

“We are not going to get another chance at this,” she said.