Orange Rejects Proposal to Put Off Annexations

Despite concerns that the county may not uphold an agreement guaranteeing the city a share of tax revenue from annexed property, the City Council Tuesday rejected a proposal to postpone all residential annexations.

The council, which had considered halting annexations of small parcels of unincorporated county land, instead voted 4-1 to scrutinize the potential for tax revenue from properties before processing annexations of eight islands of residential unincorporated county territory and agreed to lobby county officials through the Orange County League of Cities.

At issue is the 1980 Master Property Tax Agreement, which determines how property taxes collected from unincorporated areas will be divided between county and city governments. Under the agreement, the city and county usually split tax revenue on unincorporated properties that are annexed.

In January, however, county administrators recommended that the county terminate its agreement with the city of Anaheim and renegotiate for a greater share of the property taxes collected from Gypsum Canyon.

County administrative officials have said they want to re-evaluate the tax agreements with other cities, and Orange officials are worried that a new agreement could cost the city about $5.7 million in annual revenue should the proposed annexation of East Orange, a 7,100-acre Irvine Co. development, go through.

The city staff recommended that residential annexations be postponed as a way to pressure the county to reaffirm the 1980 tax agreement. Annexation is considered beneficial to the county because it eliminates the burden of providing police, fire and other services to those areas.

Orange Councilwoman Joanne Coontz said postponing annexations would be “a little bit too subtle” to pressure the county and that it would punish East Orange residents who need city services. She recommended that Orange work with the League of Cities to negotiate with county officials.

Mayor Gene Beyer, who cast the lone dissenting vote, argued that postponing future annexations would have “sent a strong message to the county.”