LAGUNA NIGUEL : City Thinks of Ways to Protect Its Coffers

How can the city keep the revenue it collects for developing and maintaining its parks, green spaces, recreation programs and clean, well-lit streets away from money-starved state coffers?

City Manager Tim Casey says he’s searching for an answer to that question. And City Council members said last week that they want to wait before deciding or asking residents to vote on the issue.

“I think we need to move with caution on this,” said Councilman Thomas W. Wilson. “I would like to maintain the status quo until all the reports are in.”

City officials are pondering the question because they are concerned that revenue the city collects from a special property tax could be targeted by legislators who are desperately seeking funds for deficit-plagued state budgets.

Laguna Niguel operates a Community Services District, or CSD, that assesses its own property tax. Revenues from the tax are dedicated solely to fund parks, recreation programs, street lighting, street sweeping, and maintenance of slopes and street medians.

In fiscal 1993, the CSD escaped a move by the state to shift a portion of the property tax revenue collected by cities and special districts to schools. Although the shift resulted in a $100,000 reduction in Laguna Niguel’s general fund, it left the CSD’s revenue unscathed.

The apparent reason was that the CSD was one of only five special districts in the state governed by a city council and went unnoticed by state legislators as a potential revenue source.

This fiscal year, legislators found it. As a result, $1.1 million out of the CSD’s anticipated $5.4-million property tax revenues were taken by the state.

Now city officials are considering whether the city can best avoid future revenue grabs from the state by maintaining the CSD as it is or merging it into the general city budget. A merger would mean that parks, street lighting and sweeping, recreation programs and maintenance of medians and slopes would compete with other city needs for funds each year.

While saying they would consider the merger idea, council members stressed that they preferred to keep certain funds dedicated to those areas that beautify the city.

“The green issues of this community are really protected with that CSD,” said Councilwoman Patricia C. Bates. “I would hate to see that protection removed. I don’t want to see it subjected to competing interests” of the general city budget.

Casey said he may have a clearer idea of what to recommend in coming weeks, when details of Gov. Pete Wilson’s and state legislators’ budget proposals become known.

But even then, he admitted, he will feel ambivalent about the issue.

“I don’t think there is a clear answer as to the path we should pursue,” Casey said. “I’m bothered with the thought of tinkering with the CSD solely for the purpose of trying to guess the actions of legislators in the coming year.”

The council has the power to decide if it wants to merge the CSD with the city’s regular funding process. But council members said they would ask for direction from the city’s voters, who approved formation of the CSD in 1986, three years before Laguna Niguel was incorporated as a city.

“I would want to go to the people if a change is considered,” said Councilman James F. Krembas.