Unincorporated Areas Contemplate City Life : Annexation: County’s budget problems, which some fear will bring cuts in services and new taxes, have residents reassessing decisions to stay outside city limits.

On a map, Orange County’s dozen or so unincorporated communities resemble the missing pieces of a jigsaw puzzle--jagged, meandering chunks of suburbia that, for reasons ranging from fierce community loyalty to a love of horses, have remained outside any city’s limits.

For years, many residents fought to preserve this separateness, which they believe fosters a small-town atmosphere. To them, it is also a source of pride and comfort.

But times are changing. That fiery independent streak that sustains these enclaves is cooling as some residents take a second look at life in the city. It’s a reassessment caused in part by the county’s budget problems, which some fear will bring cuts in services and new taxes.

In Sunset Beach, a small group of residents and business people dissatisfied with the quality of county services and local representation are thinking the unthinkable: becoming part of nearby Huntington Beach, a city old-timers have long eschewed.

Other unincorporated islands in the foothills east of Orange--where some homes still use septic tanks--are block by block being slowly annexed by the city, which offers sewer and other municipal services.

And amid the green rolling hills and winding tree-lined streets of North Tustin, some residents are all but resigned to one day living within Tustin’s city boundaries.

As more of these areas flirt with annexation, county government stands to lose. The county receives less property tax money when unincorporated areas disappear and is already reeling from the recent formations of five South County cities.

“The handwriting is on the wall,” said Bob Bennyhoff, a resident of the unincorporated Orange Park Acres neighborhood and a proponent of annexation. “If you look here and at other areas, it’s just a matter of time before they are annexed.”

Some county planners said that scenario might be premature. But they acknowledge that prolonged state and county budget problems--especially if they bring a loss of services or higher taxes to unincorporated areas--could make annexation a more desirable option.

What remains of the once-abundant unincorporated patches span the county, from the stylish suburban streets of Rossmoor to the modest tract homes of Midway City and the hillside villas and narrow canyons of Lemon Heights.

About 157,000 of the county’s 2.4 million residents live in these areas, which also include Cowan Heights, Aliso Viejo and Rancho Santa Margarita, among other smaller areas.

Residents receive police, fire and street service from the county, which also handles planning and zoning issues. Local concerns are usually dealt with by county supervisors and a patchwork of local community associations, special districts and sanitation boards.

It’s a situation that works just fine, say many residents who see their communities as islands floating above what some regard as a dark sea of municipal neglect and overtaxation.

Others, however, are taking an increasingly dim view of unincorporated status, especially in the wake of county budget cuts.

“The advantages of living (under county rule) seem to be eroding as the county’s budget situation erodes,” said 22-year North Tustin resident Phyllis Spivey. “I’ve always enjoyed living in the county, (but) . . . I’d certainly be willing to consider (annexation). Being able to vote for a local representative and having a say in government would definitely be a plus.”

So far, residents have only felt a moderate pinch from the county’s budget woes. But continuing financial problems could bring more severe service cuts in coming years, officials said.

While fire and police protection remain untouched, several flood-control, street works and capital projects scheduled for unincorporated areas as well as county parks and facilities were postponed, said Rob Richardson, executive assistant to Supervisor Roger R. Stanton. As a result, residents will have to wait longer for some street-works services.

Cuts were also made in funding to special community service districts, which exist in a some unincorporated areas to pay for such things as tree maintenance and park services that the county doesn’t provide, he said.

In Spivey’s North Tustin neighborhood, the main impact of these cuts means less landscaping of public land. She fears the county will eventually seek tax hikes to pay for other services as well.

Tustin is slowly eating away at her unincorporated area with a steady series of annexations that helped prompt a bitter and unsuccessful North Tustin cityhood bid last year, which was aimed at giving the community’s 25,000 residents more local control.

Even leading critics of Tustin’s annexation policy acknowledge county rule has “not benefited the area” and that North Tustin’s days as an unincorporated area might well be numbered.

“A county supervisor looks at the entire county, not just a small part,” said Marvin Rawitch, leader of the cityhood movement. “It’s almost unrealistic to expect (the county) to represent us in the same way as a city council would.”

A similar warming toward annexation exists in the pricey horse country of Orange Park Acres, where 16 more homes were annexed by Orange last week.

The historic distrust and friction between Orange council members and Orange Park Acres residents is legendary. Nevertheless, concerns over county services cuts, along with an influx of younger residents and a desire to replace septic tanks with a modern sewer system, has helped ease suspicions in recent years, Bennyhoff said.

Many residents are now less fearful that annexation will bring the kind of urban mentality that would threaten the rural ambience of the 1,200-acre area enclave with its horse trails, livestock and 4-H clubs.

“We have residents who have lived in the county for 50 years and plan to die there too,” he admitted. “But month by month, there’s less county land around here.”

Perhaps nowhere in the county is the urge to merge with a neighboring city more contested than in Sunset Beach, a sand-swept sliver of a town of small shops, beach bungalows and larger homes bisected by Pacific Coast Highway.

A handful of local business people and residents, who support annexation by Huntington Beach, contend that county rule is inadequate and ill-administered--tarnishing more than brightening the area.

Their biggest gripes surround the quality of Sheriff’s Department service and code enforcement. They said the county has been ineffective in controlling petty crime and what they see as the proliferation of unauthorized apartment units that “lower our standards.”

“The sheriff’s (deputies) do the best job they can,” said Nancy Howell, a Sunset Beach realtor who lives in nearby Huntington Harbour. “But it’s just not logistically reasonable for them to go to this tiny area with Huntington Beach right next to it. It makes sense for Huntington Beach (police) to shoot right up the block to us.”

Howell is also critical of the Sunset Beach Community Assn., a seven-member group selected by local business owners, homeowners and renters, which serves as a forum to address local concerns.

“This isn’t working,” she said. “In Huntington Beach, you’d have elected officials who would truly represent the people of the community and not just a small group.”

Many locals, however, take a different view.

Most admit Sunset Beach isn’t perfect, but they contend that county policing and code-enforcement has been more than adequate. They also defend the community association, which they said serves as a strong local voice and takes the same concern in addressing residents’ concerns as any other elected body.

Their greatest fear about annexation is the loss of community power if Sunset Beach’s 1,000 residents join Huntington Beach, with its population of 185,000.

“Sunset Beach is a small town. It has a tradition and personality that is so nice. It’s important to try to preserve it,” said John Biedenharn. “To retain this personality, we need to remain unincorporated. . . . We’re very pleased with the county’s representation.”

That view is echoed across Orange County by many die-hard annexation foes.

“Why should we change? What do they offer us that we don’t already have?” said Arthur Horne, 76, the feisty unofficial mayor of Midway City, an unincorporated area of 7,000 people that has fought off several annexation attempts by Westminster. “We don’t need them.”

That may be true, but some urban planners contend that many long-held fears about annexation are often inaccurate and outdated.

The most common misconception is that annexation means higher property taxes, they said. This was sometimes true before the passage of Proposition 13. But since 1978, the tax advantage has disappeared, and residents of unincorporated areas generally pay the same percentage of tax as their city-dwelling neighbors, said Jim Colangelo, executive officer of the Local Agency Formation Commission.

Moreover, Colangelo said that the presence of numerous, small islands of county turf actually impedes smooth urban planning by presenting a different set of services, building rules and land uses from their adjoining cities.

It remains uncertain whether North Tustin, Orange Park Acres and other unincorporated areas will hold off their municipal neighbors.

Such a mixed feeling toward annexation in some communities was underscored last week when a measure calling for the annexation by Orange of 48 homes just east of the city ended in a 15-15 tie.

But it is clear that the disappearing county islands constitute a drain on the county’s coffers.

The county receives about 15% of unincorporated residents’ property taxes--a far larger percentage than it does for annexed or incorporated areas, whose contributions to county coffers vary according to when the new city was formed.

The recent incorporations of Mission Viejo, Laguna Hills, Lake Forest, Dana Point and Laguna Niguel deprive the county of about $15 million a year in property tax revenue, according to Ronald Rubino, the county budget director.

And LAFCO officials said continued county budget woes could bring more annexations.

“If the county’s financial picture worsens to the point that it couldn’t provide services without charging for services, that could give residents an incentive to annex,” Colangelo said. “But I don’t see that happening in the near future unless something dramatic happens.”

Beyond City Limits Scattered throughout Orange County are small neighborhoods that are not part of a city. A Rossmoor look at four such communities: Population: 9,893 Median household income: $64,803 North Tustin Population: 24,358 Median household income: $74,347 Aliso Viejo Population: 7,612 Median household income: $50,766 Rancho Santa Margarita Population: 11,390 Median household income: $50,968 Source: 1990 Census