Cityhood proponents criticize study

By: KELLY BRUSCH - Staff Writer | Saturday, April 9, 2005 10:55 PM PDT ∞

MENIFEE ---- Menifee cityhood supporters say a study of the community's financial stability contains discrepancies that discredit the author's conclusion that a municipal government here could not afford to do business.

The consultant defended his work, saying the report is a complete, accurate picture of the valley's current and future financial situation.

The draft study, released this month and compiled by consultant Economic & Planning Systems, showed the proposed city of Menifee Valley would have serious budget shortfalls for the first decade after incorporating.

The study's author wrote that either significant continued growth or the passage of a special tax could help the new government pay for services, such as providing police and fire protection for the area.

Menifee cityhood proponents are challenging the study, saying suspected errors call the entire study's accuracy into question.

"I don't think anybody's verifying anything," said Marc Miller, president of the Menifee Valley Incorporation Committee. "Everything in this report ... is skewed."

The study is framed to evaluate whether the new city could afford services up to 10 years after incorporation. Miller said the study should determine only whether the valley could afford the level of services it now receives from Riverside County.

Richard Berkson, lead author of the study, said it was important to project finances far into the future, taking growth into consideration.

"We can't freeze costs where they are today, because that's not where they'll be when they become a city," he said. "We have to at least maintain similar levels of service, and if a population is growing, more staffing is needed to ensure a minimum level of public protection."

The document, called a comprehensive fiscal analysis, is the primary document the Local Agency Formation Commission will use in considering whether to approve or deny the proponents' cityhood application.

The agency is charged by the state with considering incorporation proposals in the county. It also decides whether those proposals would be eligible to be put on a ballot for voters to decide.

The community has until April 8 to send comments about the study to the commission.

Community concerns

A group of cityhood supporters met after the study came out earlier this month to hammer out what they believe are discrepancies and errors, Miller said. A list disputes estimated costs to provide service and a variety of other concerns.

Miller said projections for police and fire protection are too high, and the study does not list fees that could be used to build fire stations and other capital improvement projects.

Miller said a map of the proposed city has incorrect boundaries. The map cityhood proponents used in their petition shows the boundaries extending farther north, up to Ethanac Road. He said the study also underplays the community's tax base.

The estimated cost for police service provided by the Riverside County Sheriff's Department was $1.2 million for the 2003-04 fiscal year, according to the report.

The study estimates the cost to provide that same level of service to the area would be $5.3 million by the 2007-08 fiscal year, a 342 percent increase.

Berkson said calls for service to the police department would increase as the population increases, and as the area becomes more urbanized with commercial development. He said the Sheriff's Department estimated costs to provide a minimum level of service.

The Sheriff's Department estimated the costs to contract with Menifee based on the number of calls it anticipates it will receive from the area for each of the next 10 years. The cost estimate accounts for more officers, who would have to be added over the years to service the growing area.

The fire department estimates, which Menifee residents also dispute, are similarly based on population increases and the need for increased staffing, Berkson said.

Menifee resident Don Gravett, who is retired from the California Department of Forestry and Fire protection, disagreed with the study's conclusions.

"If these are the standards that are going to be applied, no cities will ever be formed," he said. "We're a growing community. As sales taxes and growth increases, we'll provide more services, but we can only be expected to provide services at the current levels."

LAFCO executive director George Spiliotis said the study is required to look at levels of service today, however, the costs aren't frozen.

"Just because the level of service is static, that doesn't mean the resources and cost remain static," he said. "You have to, over time, ... add people and equipment to maintain that same level of service."

Sales tax

The study estimates that 1 million square feet of new retail development will be constructed through 2016, or about 80,000 square feet per year.

However, residents say 300,000 to 500,000 square feet per year is a more accurate estimate based on the amount of land in Menifee Valley that is designated for commercial development. The more commercial development, the more sales tax the businesses are providing, Miller said.

Miller said one business that sells recreational vehicles provides about $1 million per year in sales taxes.

Berkson said it is impossible to know whether projects in the county would be approved, and it is also difficult to estimate how long it would take for commercial projects to begin generating taxes, which is why he used the figure of 80,000 square feet per year, which is an average estimate.

"Developers will want to lock in their entitlements, but whether or not they can actually build, sell or lease a tremendous amount of space is another issue," he said.

Another point of contention is that the study does not take into account the amount of fees the new city would collect from developers to lessen the impacts of their projects.

The fees would be used for everything from building roads to libraries. Cityhood proponents said a study of the area's financial feasibility should include an analysis of those fees and what projects they would pay for, regardless of whether they go into the city's general fund, earmarked for day-to-day operations, or into another pot.

Gravett said it is disappointing for the community to have spent $68,000 on what he believes is a flawed study.

"Why not just come out and say 'We don't want you to become a city' instead of wasting everyone's time?" he asked.

Contact staff writer Kelly Brusch at (951) 676-4315, Ext. 2626, kbrusch@californian.com.

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