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City Limits Could Stretch as O.C. Resources Shrink

Government: Annexations look more attractive after bankruptcy. Proponents cite cost-effectiveness.


Several Orange County cities are beginning to take a serious look at annexing adjacent unincorporated neighborhoods, a move that government reformers have been urging since the county plunged into bankruptcy more than two years ago.

Most annexation efforts are in their early stages and could still be derailed by community opposition or other factors. But supporters insist that the moves mark clear progress toward "downsizing" county government by shifting responsibility for public services in these areas from the county to cities.

In just the last few months:

* Costa Mesa started the long process of taking over all unincorporated areas around the city, including a sizable chunk of Santa Ana Heights.

* Newport Beach launched a study to determine the economic feasibility of annexing the Newport Coast area.

* Tustin began discussing the possibility of absorbing North Tustin, an upscale community of 28,000 residents that includes Cowan Heights and Lemon Heights.

* Anaheim is studying the annexation of some county territories around Brookhurst Street as part of a neighborhood revitalization project.

* Garden Grove agreed to annex several unincorporated communities on its fringes.

Many county territories are actually "islands" surrounded by cities, but residents of these unincorporated areas rely on county government for public works and fire protection, and on the Sheriff's Department for security services.

Urban planners have long criticized the arrangement as inefficient, saying the nearby cities can provide such services at a lower cost than the more scattered county services, and the county should be left to focus on health care, social services and regional planning.

"This is the kind of thing local government should be doing," Costa Mesa City Manager Allan L. Roeder said. "We don't want our city street sweeper to drive down a road, pick up the sweeper when it enters county land, then start sweeping again when it gets back into the city."

Residents in established unincorporated communities like Midway City, Rossmoor and North Tustin have long opposed annexation, preferring life under county rule. But even some of the fiercest annexation foes admit that change might be inevitable.

"I think there is strong feeling in Santa Ana that the county should not be in the business of running townships," said Jerome Catlin, president of the Midway City Chamber of Commerce and Homeowners Assn. "I feel that five or 10 years from now, there might not be any islands left. Eventually, that day will come."

County officials are now preparing a plan that will examine the future of unincorporated areas as well as other ways that cities and the county can provide more efficient services.

About 180,000 people live in unincorporated areas, which stretch from the suburban ranch homes of Rossmoor near Los Alamitos to the barrios of El Modena, east of Orange.

A few planned communities in South County, including Rancho Santa Margarita and Aliso Viejo, might eventually become their own cities. But most unincorporated areas lack the tax base to support incorporation.

Before the bankruptcy, the Board of Supervisors saw little reason to give up control of the islands.

But the financial crisis has left the county with tight budgets and more than $800 million in bankruptcy debts. The county plans to pay off the debt in part by diverting redevelopment tax revenue originally earmarked to add gutters, sidewalks, street lighting and other improvements to county territories.

"I don't think it's really cost-effective to have dozens of county islands that we provide with fire and police protection and other services," Board Chairman William G. Steiner said.

In a sign of the shift, the Local Agency Formation Commission, which must approve all annexations, recently demanded that Garden Grove absorb hundreds of homes in unincorporated areas before backing the city's plan to take over a local sanitation district.

But future annexations won't be so easy.

The county and cities must agree on how to divide property tax revenue from the communities. In the past, cities complained that the county demanded too large a share of revenue, making annexations economically unfeasible.

Cities say they wouldn't receive much economic benefit from most of the islands because the neighborhoods are largely residential and don't produce precious sales tax revenue. Moreover, some islands lack sidewalks, gutters and other improvements found in cities.

Newport Beach, for example, concluded that tax revenue from an island south of John Wayne Airport would not pay for all the services the area would require. So the city decided to support annexation only if island residents agreed to pay an assessment to cover the difference.

Another problem is the long-standing resistance of many residents in larger unincorporated areas. A November community meeting on the North Tustin annexation proposal drew more than 200 people, many of whom opposed the idea.

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