Push Is On for Special District Consolidation : Government: Local Agency Formation Commission launches politically charged effort to merge maze of agencies. ‘Nothing is off limits,’ official says.

In the wake of a water district scandal, a county agency Thursday launched a politically charged effort to consolidate special districts in South County.

During a meeting that drew 28 wary officials from area cities and special districts, James Colangelo, executive director of the county’s Local Agency Formation Commission, said districts will be studied and judged by how well they provide water, sewer and park services to the taxpayers.

Colangelo said the study is “wide open” and timely, coming as the state cuts revenue to local government and after news reports of profligate spending and apparent conflicts of interest in the area’s most powerful special district, the Santa Margarita Water District in Mission Viejo.

“Nothing is off limits . . . nothing has been decided,” Colangelo told the officials. “If providing the best service means redrawing the boundaries of (some districts), LAFCO’s mission is to do that.”

The idea of changing the traditional structure of South County government--with some districts dating back to the 1920s--was greeted coolly by most of the officials, all of whom have a position of power that could be lost under consolidation.

Bonnie Streeter, recently elected to the board of the 33-year-old Capistrano Beach County Water District, said: “The special districts were started for the people. The people asked for the special districts.

“I don’t feel LAFCO should come in and tell the people what to do,” she said.

Fifty-seven LAFCOs statewide rule on local government annexations and incorporations, but can only recommend whether districts are consolidated. Ultimately, consolidations must be decided by district directors or a public vote.

Colangelo urged Streeter and all district officials to keep an open mind to change in local government.

“We are not going into this with the idea to do away with special districts,” he said. “The idea is, is this a way to save money? Will it improve planning? For this to work, the districts have to be interested in looking at the ways things are done.”

Initially, LAFCO’s study will focus on the myriad of districts in tiny Dana Point, a six-square-mile city often characterized as the most over-governed city in the county.

Although the city incorporated in 1989, a total of 52 elected officials from a variety of local agencies represent Dana Point, including seven water-related districts.

“That’s an awful lot of people for the citizens to keep track of,” Colangelo said. “I don’t know of anywhere else where there is a more diverse level of local government.”

But because the special district boundaries extend beyond city lines, the study will also touch on Dana Point’s neighboring cities, including Laguna Beach, Laguna Niguel, San Juan Capistrano and San Clemente.

Although Orange County grand juries have consistently urged consolidation efforts, the elected officials of the various districts have always resisted change and blocked the process, said Dana Point City Councilman William L. Ossenmacher. Officials are not apt to initiate moves that will cause them to lose their political powers, he said.

Colangelo agreed.

“One of the biggest hurdles is how to deal with the existing directors. None of them want to give up their seats,” Colangelo said, adding that in past consolidations, boards have expanded at first, eventually eliminating directors through attrition.

“There aren’t a lot of people volunteering to have their districts consolidated,” Colangelo said.

The state’s fiscal atmosphere, with Sacramento taking more revenue traditionally earmarked for local governments, makes consolidation more urgent, he said.

“The state is going to continue to come down and take local dollars,” Colangelo said. “We have to figure out how to keep providing the same services with less money.”

The study’s first phase will look at the Capistrano Bay Park and Recreation District, which oversees the parks and recreation programs within the city of Dana Point, and the small Capistrano Bay Community Services District, which serves a 200-home community along Beach Road in Capistrano Beach.

Then LAFCO will study the water- and sewer-related services in South County.

The commission will examine the overlapping boundaries of the various districts and prepare a cost analysis of how each district provides services. The study will consider whether cities should take over some services now provided by districts.

Colangelo said the LAFCO staff will meet individually with representatives of all the districts and make recommendations. The staff recommendations will be reviewed by district officials and then by LAFCO’s five-member commission made up of two county supervisors, two members of city councils in the county, and a member chosen from the public.

The study’s first phase is scheduled to be finished by October and the second phase by December.