`SILENT VETO' FEARS EASED; COUNTY COUNSEL SAYS VALLEY-CITY SPLIT IMMUNE TO TAX TRANSFER RULE.

Byline: Paul Hefner Daily News Sacramento Bureau

A legal provision that some feared could act as a ``silent veto'' over creating a separate city of the San Fernando Valley, in fact, would have no bearing on such a secession drive, a Los Angeles County attorney said.

While the state's tax code requires government entities exchanging territory to agree on a transfer of taxes, no such agreement would be needed - or even possible - in the Valley's case, Senior Assistant County Counsel Bill Pellman said Wednesday.

That's because the Valley - even with a detachment proposal pending - would not yet be a government or have formal legal representation, Pellman said.

``There's no negotiation because there's no one to represent the proposed new city,'' he said. ``There's no one to negotiate with.''

Pellman's analysis was welcome news to San Fernando Valley activists who have pushed for legislation stripping the Los Angeles City Council of its veto power over secession drives. Gov. Pete Wilson signed a bill Sunday that replaces the council veto with a public vote on any detachment.

With the formal veto erased from law, proponents had been concerned that city officials might refuse to negotiate a tax agreement within a 30-day deadline set forth in law as a means to thwart any Valley secession proposal.

``It's a complicated but straightforward process,'' said Richard Close, co-chairman of Valley Voters Organized Toward Empowerment. ``There has been talk about a silent veto, but it doesn't exist.''

Close said the group would hire attorneys to prepare their petition to detach the Valley from the city of Los Angeles and to help the group further navigate the complex secession process.

``We've got to make sure that what happened with term limits doesn't happen with Valley secession,'' he said. ``It has to be done the right way, or not at all.''

Close said he expects city officials to fight any proposal in the courts.

``The downtown business interests will try to kill this, through litigation and otherwise,'' he said.

Officials for the Los Angeles City Attorney's Office did not return calls for comment.

Pellman said that it would be up to the county's nine-member Local Agency Formation Commission to calculate the division of revenues between the new and remaining cities, based upon information from agencies that collect taxes.

The commission would also look at the current costs of providing services to the area and estimates for operating a new city in its place. The agency would have to believe a separate Valley city would be financially viable to allow a secession proposal to go to voters, Pellman said.

Completing the necessary analysis would be no small task, said LAFCO Executive Officer Larry Calemine.

``There has been no successful detachments in California since 1890,'' Calemine said. ``Clearly, existing government codes don't really contemplate something as large and complex as a detachment by the San Fernando Valley.''

The commission would have to determine ways to divvy up a wide range of assets and liabilities, from police cars to pension funds, and harbor and airport revenues.

``You're giving me heartburn,'' Calemine said of the scope of the task.

Also likely to complicate matters is a requirement that any change in territory be ``revenue neutral'' for the remaining city, he said.

``L.A. can't lose any money,'' he said.

Calemine said there have been no new incorporation proposals submitted to the commission since the neutrality requirement was added to state law five years ago. Before that, newly incorporated cities would typically be granted more favorable financial treatment.

``You used to provide a little benefit to get the new city up and running and on its feet,'' he said. ``You can't do that anymore.''