Below is a presentation on local governance options published for the RMV Stakeholder Working Group by Orange County LAFCO:
The presentation lays out the different governance options available to the Rancho Mission Viejo Study Area (which includes Ladera Ranch and the Ranch Plan area). Among those potential governance options are:
County Service Area
A County Service Area is a specific geographic area targeted for additional government services. CSAs are used as a precursor to cityhood as a tool to identify the costs and revenues associated with portions of unincorporated Orange County. CSAs remain governed by the County Board of Supervisors and are funded by local revenues, including a portion of the property tax base rate coupled with additional fees or assessments. The Cities of Aliso Viejo, Lake Forest, Mission Viejo and Laguna Hills all began as County Service Areas.
Community Services District
A Community Services District is also a specific geographic area targeted for additional government services, but it is governed by a locally elected board for locally administered services, although for CSDs within unincorporated Orange County, certain authorities will remain with the County Board of Supervisors. Like CSAs, Community Services Districts are funded by local revenues derived from property tax base rates and additional fees or assessments. Existing CSDs include Capistrano Bay (within the City of Dana Point) and Rossmoor (within unincorporated Orange County).
Annexation
Obviously annexation involves an existing city taking over responsibility for governance of an unincorporated area. In the case of the Rancho Mission Viejo Study Area, the most likely candidates to annex all or a portion of the area include San Juan Capistrano, Mission Viejo and San Clemente (insofar of Planning Area 8). Annexed territories are funded by local revenues such as property taxes, but also City taxes and fees such as sales, utility and occupancy taxes. The annexed territory becomes the financial responsibility of the annexing city.
Incorporation
Incorporation is the formation of a new municipal entity to represent and provide services to the area. The new city government replaces the County. A new city must fund itself from local revenue sources, including a portion of property tax revenues, additional fees and assessments, sales taxes and other city taxes and fees including utility and occupancy taxes. The State of California has taken vehicle license fee revenue away from cities, depriving municipalities of an important source of local revenue and adversely impacting the financial viability of newly incorporated cities.
LAFCO plays an important role in all of these options, from approving the formation of County Services Areas and Community Services Districts, to authorizing annexations and incorporations. Indeed, for cities like Mission Viejo, the path to cityhood passed through many of these steps: first as a County Service Area, then as a Community Services District governed by a municipal advisory council, then to cityhood in March 1988. LAFCO notes also that the presence and role of homeowners associations complicates local governance because HOAs act as quasi-government organizations both before and after cityhood.
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