CITY PUTS GROWTH POLICY IN WORKS SUBDIVISIONS LIKELY TO PAY FOR ANNEXATION.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - The City Council has agreed to adopt an annexation policy that seeks to end the drain on city resources created when new subdivisions join Santa Clarita without adding any revenue.

The policy, which will be drafted over the next several months, is expected to require that communities bring in at least as much tax revenue as it will cost to expand city services to serve their neighborhoods, while allowing officials some flexibility.

``It's time that we have a written policy,'' said Councilman Cameron Smyth. ``We can't rely on other agencies to make our ends meet.''

The policy is expected allow city officials to consider planning, economic, political and other concerns when deciding whether to allow an existing neighborhood to leave Los Angeles County and join Santa Clarita.

``This is a quality-of-life issue for our residents,'' Ferry said. ``The annexations that we have approved have meant a lower quality of life for our residents.''

The policy is expected to be similar to those in Palmdale and Lancaster, which often battle over unincorporated areas and businesses, officials said.

The cost of providing basic city services in new neighborhoods has become a significant burden on the city's cash-strapped budget, officials said.

This year, the City Council was forced to cope with unfamiliar budget restraints imposed by the state's $23.6 million budget deficit, the recession, mounting legal bills and an increasing amount of debt.

The City Council has been looking for ways to increase revenues without having to raise taxes or fees and has primarily focused on increasing the amount of sales tax generated by businesses in Santa Clarita.

One percent of the state's 8.25 percent sales tax, which does not apply to groceries or medicine, goes to the city or county where the purchase was made.

The city's revenue from the sales tax makes up 41 percent of Santa Clarita's general fund, which the city uses to pay for most city services, including protection by the Los Angeles County Sheriff's Department and Los Angeles County Fire Department.

Property tax makes up a much smaller percentage of the city's budget and does not cover the cost of even basic city services, officials said.

Councilwoman Marsha McLean said she favored a policy that would require new communities to pay an impact fee to cover the gap created by an annexation of a residential community without any commercial development that generates sales tax.

The council was split on whether the city should encourage communities - such as Stevenson Ranch - to annex, or maintain its current passive approach, in which residents of the community considering joining Santa Clarita drive the debate.

Mayor Frank Ferry argued forcefully that an aggressive annexation policy was the only way for the city to cope with the growth that is projected over the next decade for the Santa Clarita Valley.

``This is one of the biggest decisions that we'll make, and it will have a lasting impact,'' Ferry said. ``This is a decision that will determine the future of Santa Clarita.''

Smyth disagreed, saying he was philosophically opposed to governments that seek to expand their jurisdictions.

Ferry said he was concerned that eventually the City Council would have to prohibit county residents from taking part in city recreation programs, and restrict the county sheriff's deputies who patrol the Santa Clarita Valley to the city limits.

``If we're serious about one valley/one city, annexation is the only option we have left,'' Ferry said, referring to the city's unsuccessful attempts to expand its influence throughout the Santa Clarita Valley. ``We're reaching the bending point, where something is going to bust.''