Ruling Lifts Roadblock to Forming Cities : Incorporation: State Supreme Court says residents in surrounding areas have no right to vote on a proposed municipality.

The state Supreme Court on Monday removed a major obstacle to the creation of new cities, ruling that residents in surrounding unincorporated county areas have no right to vote on a proposed municipality.

In a case watched closely by local governments, the high court unanimously overturned a state Court of Appeal ruling that struck down a 1985 state law because it limited the vote to residents within the proposed incorporation area.

The appellate panel had held that residents in other unincorporated county areas should vote, too, because they would suffer “significant effects” through the loss of county revenue from a newly incorporated city.

The high court found, however, that a lengthy pre-vote review process required under the 1985 statute adequately protected county interests and that the voting restriction was constitutional because it served a legitimate state purpose.

“If large, relatively disinterested majorities could veto incorporations decided through (the law’s) elaborate process, the result might well hinder orderly growth and development,” Justice Stanley Mosk wrote for the court.

The case raised a sharp conflict between the desire of residents of unincorporated areas for more local control and the wishes of county governments to retain revenues from tax-rich suburbs.

Sixty-seven cities joined lawyers for the unincorporated community of Citrus Heights in Sacramento County in warning that the appeals court ruling could stymie municipal incorporation and annexation around the state.

County attorneys countered that restricting the vote to incorporating areas unfairly deprived residents in the rest of the county of a voice on an issue that could significantly affect them.

Brenton A. Bleier, an attorney for the Sacramento County Board of Supervisors, called Monday’s ruling “bad news for county governments and bad news for people in unincorporated areas, who are not going to have a choice at all on these matters.” An appeal to the U.S. Supreme Court will be considered, Bleier said.

Robert W. Lucas of Orange, attorney for the 67 cities challenging the appeals court ruling, said the decision “reaffirms the right of local government for self rule.” The ruling, Lucas said, also eases the way for cities to annex new territory “without undue influence” from areas outside the two immediately affected communities.

An attorney for the Sacramento Local Agency Formation Commission, Nancy C. Miller, said the ruling removed a difficult hurdle for perhaps as many as 18 communities where incorporation proposals have been pending.

“As California gets more urbanized, there is a historical tendency to incorporate,” Miller said. “This provides more local control in the future.”

The case arose when the 69,000-resident community of Citrus Heights, north of Sacramento, sought to incorporate in 1986. The Board of Supervisors, joined by 40 local groups, brought suit challenging the 1985 law’s voting restrictions.

County officials calculated the net loss of tax revenue to the county would be some $2.5 million annually and said the 550,000 residents in unincorporated areas should be permitted to vote.