Newport Beach is considering legal action against Orange County for allegedly hijacking developer and Newport Coast residents' fees that helped build a sheriff's substation and library in Aliso Viejo.
On Tuesday, the City Council is expected to authorize hiring attorneys to examine how two Newport Coast assessment districts that raised $183 million in bonds for streets, a fire station, lighting and other services were managed, said Dave Kiff, deputy city manager.
"The fundamental problem is that when the county first looked at this area, somebody said that it was OK to use these people's money
The decisions were made in the 1980s and 1990s by the assessment districts, which are administered by county supervisors and staffed by the county's Planning and Development Services Department, Kiff added.
The issue affects about 5,600 homes in Newport Coast, a community expected to eventually have 10,000 residents.
Newport Beach annexed the upscale coastal community in 2002.
Newport Coast residents raised the issue, saying they've had to pay huge annual assessments that have not been spent for local services, such as building a library in their community.
Aliso Viejo's 22,000-square-foot branch library opened in 1998, funded in part with Newport Coast assessments. The library is about nine miles from the oceanfront community.
The two assessment districts were created in the late 1980s and bought bonds with annual fees of up to $6,000 from homeowners. "Those fees were to help pay the bonds off over the next 20 years," Kiff said.
In addition, the Irvine Co. was charged a developer fee for each house that was built -- money that Newport Beach officials believe should have been used locally.
Instead, the county library system built the Aliso Viejo branch; assessment money was also used to build the sheriff's substation in Aliso Viejo.
County librarian John Adams did not immediately know whether the claim by Newport Coast residents was on target.
He said that when Newport Beach annexed Newport Coast, revenues for library services were transferred from the county to the city.
"So those residents are not paying for the operation of the Orange County library," Adams said. "And they're welcome at any of our branches."