County May Have to Deal With Another Defection : Incorporation: Some Rancho Santa Margarita residents have set their sights on cityhood for the planned committee.

These are heady days for the residents of Rancho Santa Margarita.

Last week, the hillside community got its 15 minutes of fame when a network news magazine compared Rancho Santa Margarita to the fabled land Shangri-La.

And on Thursday, the residents of paradise could decide to try becoming a city.

No official vote will be taken, but if sentiment at the town hall-style meeting leans toward incorporation, members of the fledgling cityhood committee say they will move ahead with required financial studies. Organizers expect a large turnout from a community they describe as deeply interested in cityhood.

“There’s a real sense of community here,” said Gary Carlisle, chairman of the Rancho Santa Margarita Civic Assn. and a member of the cityhood committee. “People take a lot of interest in Rancho Santa Margarita.”

The road to incorporation could take as long as three years and be lined with formidable obstacles. The strongest opposition would likely come from a financially strapped county, which has seen five South County cities leave the fold since 1987. Combined, the defections cost the county about $16 million per year in lost tax revenue, county officials say.

Most were reluctant to speculate on the potential financial impact of Rancho Santa Margarita becoming a city. But there would be pain. “We haven’t had an incorporation yet that hasn’t hurt us,” said Murry Cable, assistant county administrator.

While rhetorical fireworks have ignited other incorporation drives, cityhood organizers in Rancho Santa Margarita said they don’t have a problem with the way the county has served their planned community of about 15,000.

“We’re not mad at anyone, we don’t feel particularly confrontational,” Carlisle said. “We’re just enthusiastic about our own community. Everything has been mapped out for us to take care of ourselves. Cityhood is a natural.”

Over at the Santa Margarita Co., officials are acting like the Switzerland of developers--they’re officially neutral on the incorporation idea.

“It’s not up to us to decide (about incorporation), it’s up to the citizens of Rancho Santa Margarita to decide,” said Diane Gaynor, a company spokeswoman. “We feel they need to understand the hazards of incorporation and they need to research the process well.”

Nestled at the base of the scenic Saddleback Mountains, Rancho Santa Margarita is a planned community created as the antithesis to the fast-paced, car-oriented Southern California lifestyle.

The goal set by the development’s architect, the Santa Margarita Co., has been to mold a place where work, play and shopping are all done within the boundaries of a single community.

Work has already started on Town Center, described as the heart of the community. Land has been set aside for retail centers, parks and a civic complex. Construction is expected to be complete in two to four years, when cityhood backers hope to bring incorporation before the voters.

“We’re all set up to be a city, that’s been the idea all along,” said Jack Wynns, a civic association board member. “This is a place of peace, beauty and security. It reminds me of a New England village, where people know each other. That’s what makes Rancho Santa Margarita different.”

Cityhood supporters see incorporation as the only safe way to preserve the character of the community.

“Control over our destiny is what cityhood is about,” Wynns said. “It’s what we can do to preserve the good things we have over here.”

Before Rancho Santa Margarita can claim cityhood, residents must prove they can stand on their own financial feet, said Jim Colangelo, head of the Local Agency Formation Commission, a regional planning group that controls the incorporation process.

The 5-year-old community would also have to decide on its boundaries, a potentially sticky equation. At one time, Rancho Santa Margarita was on the fringes of Orange County. But in recent years, several housing developments such as Dove Canyon and Robinson Ranch have cropped up outside the planned community boundaries.

Carlisle isn’t sure what will be done about the satellite communities; it’s an issue that is too far off in the future, he said.

Financing the city through sales tax revenue won’t be a roadblock once the Town Center is finished, Wynns said.

“We were planned to be a mix of business and community,” he said. “We will have built-in revenue that will enable us to take care of ourselves.”

To help in preparing for the complicated incorporation process, the committee has invited several veterans of past cityhood drives to speak at Thursday’s meeting.

Appearing on a panel will be Councilman Robert A. Curtis of Mission Viejo, Councilwoman Patricia C. Bates of Laguna Niguel, Councilman Richard T. Dixon of Lake Forest, Jerry Patterson, city attorney for Dana Point and Lake Forest, and Colangelo.

“We’ll listen closely to what they have to say,” Carlisle said. “That’ll give us a head start. We’ll need it because this will be a long process and we’re just at the crawling stage.”