MISSION VIEJO : City to Ask Judge to Rule on Aegean Hills

Frustrated by failure to hammer out a deal with the county over the proposed annexation of Aegean Hills, the City Council on Tuesday night decided to take the dispute to court.

A writ of mandate asking a judge to rule on how to divide about $800,000 in property tax revenue from the 7,000-resident community will be filed this week, council members said.

“We’ve reached a stalemate,” Councilman Robert D. Breton said Wednesday. “There’s nothing to negotiate anymore. We’ve given them the whole tamale.”

Aegean Hills is bordered by Interstate 5 on the west and Mission Viejo to the east. Its north-south borders are Los Alisos Boulevard and La Paz Road respectively.

The city and the county have been negotiating for several months over splitting revenue from the community, and the city’s final offer was rejected in late May. City negotiators agreed to hand over 100% of general property taxes--about $439,000 annually--while asking to keep about $270,000 charged residents for street lighting and park maintenance.

The city would also receive $553,000 annually from state cigarette and vehicle registration taxes, as well as about $216,000 a year from vehicle court fines and boat registration, according to the county.

State law only allows the county to take a portion of general property tax revenue, according to city officials. But the county says it needs at least $866,000 to pay for benefits provided to Aegean Hills residents, such as courts, jail and social services.

“What they offered isn’t enough to pay for the services we have to provide,” said Ernie Schneider, county administrative officer.

Mission Viejo is the first city to encounter a new, tougher policy on annexations set by the financially strapped county. After losing millions of dollars in annual income from a spate of incorporations during the past five years, county officials have vowed to take a hard look at any future incorporations or annexations.

Breton said he was reluctant to take the dispute to court, but a recent move by the county to dissolve the street lighting district and keep the tax funds pushed the council to act immediately.

“They’ve had years to disband the (street lighting) district,” he said. “Isn’t it a coincidence that they get around to doing it now?”

County officials said the dissolution of the district is part of an overall effort to streamline county operations that began before the annexation dispute arose.

The legal problems between the two government agencies may only be starting. There is also a stalemate over how property taxes will be divided in the city’s redevelopment plans, which also passed Tuesday night.

Schneider said the county is investigating its legal options and will report to the Board of Supervisors in a few weeks. City officials say they have been threatened with court action by the county.

But Breton said the city will make an offer this week that “I feel will be accepted by the county. I don’t think they will wind up suing us over redevelopment.”