LAGUNA HILLS : Appeal Planned on Annexation Ruling

The city will appeal a recent ruling allowing county officials to block the city’s attempt at annexing unincorporated North Laguna Hills.

At its meeting Tuesday, the City Council directed City Atty. Lois E. Jeffrey to seek reversal of the Orange County Superior Court decision.

“We believe the ruling is contrary to the law as it pertains to annexations,” Jeffrey told the council.

Two weeks ago, Judge Eileen C. Moore determined that county officials acted legally when they refused an offer that would have moved the city closer to its annexation goal.

Since gaining cityhood in 1991, Laguna Hills has sought to expand its boundaries to the north, where furniture stores and other businesses provide a steady flow of sales-tax revenue.

Laguna Hills officials offered to let the county continue collecting property taxes from the area so the annexation would not completely deplete another revenue source from the county’s budget. But the county declined, saying it also wanted a share of the area’s sales taxes.

The city went to court, claiming that annexation laws required it only to negotiate property-tax revenue with the county. And since it had offered to turn over 100% of the property tax, the city argued, nothing was left to negotiate and the county was legally required to approve an agreement.

The judge ruled that while the city was correct in not having to negotiate anything beyond property taxes, the county still could block the annexation for other reasons. The judge also agreed with county attorneys’ arguments that the city had not followed proper procedures in negotiating with the county.

Under state law, unless the county and city come to an agreement, the city cannot plead its case before the Local Agency Formation Commission.

The city wants to annex the 722-acre area, whose 4,600 residents voted more than four years ago to be part of the new city of Laguna Hills. Because of objections from the county, LAFCO did not allow North Laguna Hills to be included when Laguna Hills incorporated in 1991.

The area annually generates about $600,000 in property taxes and $2.3 million in sales and other taxes for the county while requiring about $540,000 in costs for law enforcement, planning, animal control and other services, according to the county auditor.

The area’s sales-tax revenue is particularly lucrative because it includes numerous stores concentrated along a street commonly called “furniture row.” The proposed annexation area is bounded by Interstate 5, Ridge Route Drive, Santa Maria Avenue, Moulton Parkway and the city of Irvine.