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The Inland Empire’s newest city might not be a city for long

Jurupa Valley, which became a city less than three years ago, might be forced to return to being a county-run community, although its battle is far from over

For Jurupa Valley, incorporation might end before it really got started.

Two days before it officially became a city, on June 28, 2011, the community of 100,000 residents in Riverside County had the rug pulled out from under it when the state legislature voted to take revenue from vehicle license fees away from cities.

From that point on, that money would be used to help pay for the Brown Administration’s prison repopulation plan, in which counties would be reimbursed for taking over some state prisoners.

That was bad news for a lot of cities, but for Jurupa Valley it was a disaster. New cities receive extra revenue from vehicle license fees to help them get through the difficult early days of incorporation.

The legislature’s move will cost Jurupa Valley about $7.2 million a year for five years, or 47 percent of the city’s total operating expenses, Mayor Verne Lauritzen said.

Broken down another way, the loss of vehicle tax revenue will cost Jurupa Valley an extra $50 a year for each of its residents.

“I don’t know how you can cut someone’s budget by 47 percent and expect them to function,” said Lauritzen, who commented on the city’s financial plight during his state of the city address last Thursday. “We’re about $20 million in the hole, and we have to pay $13 million for our contract with the sheriff’s department.

Despite keeping its expenses to a minimum, Jurupa Valley could be out of money by 2015, Lauritzen said.

“We’ve cut everything back as much as we can,” he said. “Our staff is as small as it can be and still operate.”

Jurupa Valley’s plight is so serious that the city is considering disincorporating through the Local Agency Formation Commission, better known as LAFCO, the agency that oversaw its incorporation drive three years ago

If that happens, Jurupa Valley would be the first city to go through California’s formal disincorporation process since Cabazon, also in Riverside County, did so in 1971, said George Spiliotis, executive officer with Riverside LAFCO.

The chances of disincorporation became even greater in September, when the state legislature declined to return the revenue from the vehicle license fees to the cities. That move prompted City Manager Steve Harding to put together a video detailing the city’s financial plight and asking the legislature to reconsider its decision, to no avail.

Given Jurupa Valley’s dire financial situation, a return to being an unincorporated community isn’t out of the question, said George Spiliotis, executive officer with the Riverside Local Agency Formation Commission.

“Unless there’s a miracle, it looks like the city will have to get that process started,” Spiliotis said. “It takes a long time and they could stop it if things were to improve, but it looks like it might happen.”

Not necessarily, said Lauritzen.

Jurupa Valley has changed its battle plan and is no longer trying to get the state legislature to restore the revenue from the vehicle license fees. Instead, the city is trying to get lawmakers in Sacramento to give Jurupa Valley and all other new cities the same rate of property tax revenue that established cities receive.

Under the current plan, younger cities don’t receive as much property tax revenue as older cities. Ironically, the state legislature in 2006 voted to give new cities more revenue from vehicle license fees to make up for the money they weren’t receiving from property tax revenue.

“We aren’t looking for handouts, but we are saying ‘give everyone the same amount, level the playing field,’ Lauritzen said. “We think that will have more appeal because leveling the playing field is always good public policy.”

Because Jurupa Valley could be out of money in less that two years, and because the LAFCO disincorporation process can take at least 18 months, the city might have to start the process as early as December.

First, the city would file an application with Riverside LAFCO and detail the level of services Jurupa Valley would receive if was no longer a city. LAFCO would then reject or approve the application; if it said yes, city residents would vote on whether to disincorporate, just as they voted to become a city in March 2011.

If a majority of residents voted to remain a city, then Jurupa Valley would have to remain incorporated and provide whatever services it could on a shoestring budget.

“We would have to get a parcel tax or something like that passed in order to pay for services, and that would have to go before the voters, and a lot of people would vote against that,” Lauritzen said. “It could really be a problem.”

Riverside County would also have a problem if Jurupa Valley were to disincorporate. The county no longer includes that community in its budget, and yet it would have to go back to providing a full range of services for it, said John Field, chief of staff for Supervisor John Tavaglione.

Tavaglione represents the second district, where Jurupa Valley is located.

“The worst part of Jurupa Valley no longer being a city, if that happens, would be all of the people who worked so hard to make incorporation happen,” Field said. “It would be a shame to see all of that work go away, especially so soon.”

Riverside County supported Jurupa Valley’s incorporation just as it backed Eastvale, Menifee and Wildomar when those communities opted to become cities, Field said.

“Counties are not set up to provide municipal services, especially in a bad economy,” Field said. “It’s not our job. We should not be doing land-planning or building and safety codes. We should be doing sheriff and fire department and flood control.”

Disincorporating would be “devastating” for a lot of Jurupa Valley residents, who got incorporation on the ballot three times dating back to the mid-1980s before it finally passed, Lauritzen said.

“I don’t want to disparage the county, because they’ve treated us pretty well and Supervisor John Tavaglione is a good man, but we have a history of having bad projects being dumped on us,” he said. “We also have generated a lot of tax revenue that never came back to us. No one wants to go back to that.”

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