CITYHOOD PLAN TAKES GIANT STEP.

Byline: Harrison Sheppard Staff Writer

San Fernando Valley secessionists scored a major, if tentative, victory Monday when a key committee overseeing the cityhood process recommended that the proposed Valley city get assets like police stations and libraries, as well as Van Nuys Airport, without compensation to Los Angeles.

The recommendation by a subcommittee of the Local Agency Formation Commission, which will make the final decision, goes against legal opinions from the Los Angeles city attorney and the commission's own legal counsel. Instead, it echoes a competing opinion that secessionists obtained from the state Legislative Counsel's Office.

City officials previously had refused to negotiate the transfer of Van Nuys Airport, saying the four city-owned airports - Los Angeles International, Van Nuys, Ontario and Palmdale - operate as an integrated system that should not be split up.

But the subcommittee chairman, County Supervisor Zev Yaroslavsky, said Van Nuys Airport is so important to Valley residents that it would be absurd not to transfer it to the proposed city.

``It's preposterous to have a reorganization of the San Fernando Valley and have one of the biggest industrial uses in the Valley exempt from the division,'' Yaroslavsky said.

``To take that issue off the table, as the city wants us to do, could be a disservice both to the people of the Valley and of the city who are going to vote on this in November.''

Secessionists cheered the decision, while city officials reiterated their strong disagreement.

``We're pleased,'' said Jeff Brain, president of Valley Voters Organized Toward Empowerment. ``We think this was the right thing to do. The city will have the proper protections they're asking for. The people of the Valley got their assets and got rate protections.''

The subcommittee made a lengthy series of other recommendations, including keeping the Department of Water and Power intact, under Los Angeles control, but requiring it to provide service to the Valley at equal rates.

Tim McOsker, chief of staff to Mayor James Hahn, said city officials strongly disagree with the committee's recommendation on dividing assets.

``We are certain that your county counsel is correct, and the transfer of assets without compensation cannot occur,'' McOsker told the subcommittee.

Attorneys in the state Legislative Counsel's Office said LAFCO has the power to transfer assets, including the airport, at no cost and without the consent of Los Angeles. That opinion contradicts those of City Attorney Rocky Delgadillo and County Counsel Lloyd W. Pellman, who serves as LAFCO's official legal adviser.

Los Angeles officials have taken the position that assets such as police and fire stations, libraries and parks could be transferred to a new Valley without compensation if the old city is assured of payments from the Valley for its share of debt and liabilities. While Valley negotiators have agreed to that in concept, the two sides have yet to agree on how to define a fair share of debt or when the transfer would occur.

The unanimous vote by the three subcommittee members is not a final decision but a recommendation to the full nine-member commission. But several people familiar with commission thinking said a majority appears to be leaning toward the state legislative counsel's view.

Yaroslavsky said he was not necessarily overruling the county counsel's opinion but hopes the two sides will work out agreements on their own to transfer assets, so LAFCO will not have to intervene.

In other actions, consultants for LAFCO revised the financial reports on potential Valley cityhood to lower the amount of ``alimony'' the Valley would have to pay Los Angeles by $4.5 million - to $61.3 million a year. The reduction is because LAFCO recently excluded the Cahuenga Pass neighborhood from the boundaries of the proposed city, and that amount is equal to how much more revenue that area generates than it collects in city services.

The subcommittee said alimony should continue for 20 years, decreasing annually until it is phased out.

At the same time, the county might look for alimony of $4.3 million a year from a new Valley city because it would have to charge a lower documentary transfer tax than Los Angeles city government levies on real estate transactions and shares with county government.

Under state law, a charter city such as Los Angeles can impose a higher documentary transfer tax than can a general-law city, which a new Valley city would be.

The LAFCO consultants also said both the new city and Los Angeles would have to reduce their services by $35 million a year because of that reduced tax in Valley territory.

They recommended that the reductions come through a hiring freeze, which would eventually result in 460 fewer employees out of an estimated 31,714 now employed by Los Angeles.