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Annexation delayed by tax questions

Officials concerned that incorporating territory will impact county budget

Posted: April 14, 2009 1:33 a.m.
Updated: April 14, 2009 4:55 a.m.

The possibility of annexing part of Castaic into Santa Clarita may be further delayed as county officials take stock of the money they stand to lose should the unincorporated areas join the city.

A fiscal analysis is being performed to determine the potential impact on the county's general fund if three neighborhoods and the Valencia Commerce Center are annexed into Santa Clarita.

Currently in unincorporated Los Angeles County, the areas in question "generate significant property taxes, sales tax and other revenues," according to a March 10 letter from county CEO William Fujioka to the Local Agency Formation Commission, which rules on all municipal boundary changes.

The 1,400-acre area in the southeast portion of Castaic includes the Hasley Hills, North Bluffs and Live Oak communities - with about 5,000 residents - and 6 million square feet of commercial space in the Valencia Commerce Center.

"It's very unusual. It's never happened before," Castaic resident Brian Roney said of the county's fiscal analysis.

Roney has led the charge over the last several years in gathering enough signatures from Castaic residents to move forward with applying for annexation.

"We badly want to become a part of the city," he said. "The other 28 annexations (since Santa Clarita's 1987 incorporation) have slid through without a blip on the county's radar."

The difference this time is that the potential annexation includes such a large commercial component, said Dorothea Park, a manager in Fujioka's office.

Once the county completes its fiscal analysis and assesses potential impacts, she said the next step will be meeting with Santa Clarita officials.

"We have an obligation to look at how any annexation will impact us," said Paul Novak, planning and land use deputy for county Supervisor Michael D. Antonovich. "I would think (county residents) want us to be asking the tough questions."

While the majority of annexations in the valley have been largely residential, there have been commercial areas involved, said Sharon Sorensen, a senior planner for the city of Santa Clarita.

Those areas included the Rye Canyon Business Park and the property that is home to the Best Buy shopping center at the corner of Bouquet Canyon and Newhall Ranch roads. The center was under construction at the time of annexation, she said.

In addition to sales-tax revenue, the county stands to lose revenue from a 4.5-percent utility-user tax - which, in part, supports the Castaic Library - should the annexation be approved, according to a report attached to Fujioka's letter. The city does not charge such a tax.

This is not the first holdup in Castaic residents' pursuit of annexation.

In 2007, members of a citizens' group called Castaic Annexation Support Team presented the city with a list of signatures of support from 72 percent of the residents and business owners in those communities.

Last July, city officials pulled back their annexation request from LAFCO after encountering a state provision that prevents the county from processing the city's Sphere of Influence amendment application along with the annexation application. Those two applications must be processed separately. As a result, the city had to wait until the beginning of 2009 to re-file its application.

"We've lost a lot of valuable time," Roney said Monday. "(These delays) just shouldn't be happening."


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