A Disincorporation Story

by Alex Schmidt

The blacktop of Camino Real is dark and smooth under tire as the wide residential street snakes north from Limonite Avenue, Jurupa Valley’s main drag. Such pleasant driving conditions are new in this northwest corner of Riverside County. Jurupa Valley became California’s newest city less than three years ago and in that time, has spent over $3 million paving streets, some of which had not been paved in decades. But for all it has accomplished, Jurupa Valley may be on the cusp of disincorporating. It’s a move that would signal profound changes for the state going forward.

Riverside County, whose population has doubled since 1990, is home to California’s four newest cities: Menifee, Eastvale, Wildomar, and Jurupa Valley. Each had hoped local control would bring targeted, more responsive government, but all four face an uncertain future thanks to legislation passed that stripped new cities of a vital revenue source: motor vehicle license fees. Passed in 2011 just two days before Jurupa Valley’s cityhood became official, Senate Bill 89 transferred these fees—identified in 2006 to encourage new incorporations—from local authorities to the state. With that, 50 percent of Jurupa Valley’s planned operating budget was wiped out and the prospects for all new cities dimmed considerably.

Why incorporate?

Pull off Limonite onto one of the older residential streets of Jurupa Valley, and roosters cackle while horses graze in dusty yards. Practically every other home has a horse-themed gate or mailbox out front. One telltale marker of newly incorporated cities is that they straddle the fence between rural and urban, and homeowners in Jurupa Valley seem to be declaring their allegiance. Many folks moved here precisely for the rural flavor and didn’t want their unincorporated community to become an officially designated city. The prospect of Jurupa Valley going back to being unincorporated county pleases Jane Reichardt greatly, who was shopping in a strip mall Stater Brothers Supermarket on a sunny day. “We moved out here a long time ago, before any of this was even here. And we moved out here so things would be a little cheaper, a little more country,” she said. I have a horse, I have cats, I have two dogs. I don’t want to be in the city,” she added. “We do just fine without the rules and regulations.”

But others point out that change is here, city or no. The population of Jurupa Valley is now close to 100,000. While folks still ride horses around town, they now do so to get to McDonald’s. And while some areas use wells for water and have no sidewalks, in other parts of town, fancy new tract homes are sprouting like wildflowers —or weeds, depending on your perspective.

“I hate to tell you, three years later, it will never go back to the way it was,” said Kim Jarrell Johnson, chairman of the local nonprofit Save Jurupa Valley. “It was never going to be the way it was, even if we hadn’t become a city.” Johnson and others reason that, in fact, becoming a city is a key tool for self-determination. It can be the best way to determine the precise balance of rural and urban residents may want to preserve, rather than have those decisions made at a county seat dozens of miles away, and allow residents to bring government closer to them to better directly control their destiny.

It’s not just Jurupa Valley feeling the pinch. The grass on the wide sports field of Marna O’Brien Park in Wildomar is crackled and brown. It’s one of three parks in the city, officially five years old though actually much older.

“The community started in 1886,” said City Manager Gary Nordquist, as he looked out over the park through dark sunglasses. “And when it decided to become a city in 2008, it was to better the service levels, not decrease the service levels,” he added. “It’s terrible.”

Recreation and culture have suffered in Wildomar. The city had a vision for maintaining and expanding a vast natural trail system, along with a civic center in the middle of downtown. Those have been put on hold. City Hall hours have been reduced. Law enforcement budgets suffered most in the four Riverside cities—as it was the bulk of their budgets to begin with.

Despite the challenges, Jurupa Valley has been paving streets, cleaning sidewalks (where they exist), and removing graffiti in a timely fashion. City Manager Steve Harding says that if the city does have to disincorporate, “when we turn the keys back over to the county of Riverside, the statement is going to be, ‘We’re giving it back to you better than you gave it to us.’” At its best, this is what becoming a city can do for communities— involve more people in the business of solving problems at the day-to-day, local level.

Reshaping future California

Earlier this year, the state legislature passed on an opportunity to restore funding to new cities. Jurupa Valley’s mayor, Verne Lauritzen, has received calls from officials in two other California communities—Salida, near Modesto and Winchester, near Hemet— which may well be unable to incorporate because the expected motor vehicle fees are no longer available. Lauritzen called the inability to incorporate “taxation without representation.” The measure may get taken up in 2014, but that may be too late for already-struggling areas.

But the situation is injurious for a much broader reason: many of the rural areas looking to incorporate are disadvantaged already. Median income is often lower than in urbanized areas— in Jurupa Valley, for example, 23 of the area’s 24 schools are eligible for the federal SNAP food assistance program. The state is pointedly shooting itself in the foot when it sets back the most disadvantaged regions that also have the greatest ambition to improve their lot. California has set goals for smart growth and development over time, yet, as current legislation stands, fails to recognize that most of these positive changes happen within cities.

The California that develops without cities is a different place from the one that evolves with them. “I think it goes to the heart of economic competitiveness in a state,” said James Brooks, program director at the National League of Cities. “We are a nation of local economic regions. And as each of these local economic regions is strong, and healthy and prosperous and growing, and generating wealth and jobs, the rest of the region is doing well,” he said. “When you begin to inhibit the conditions whereby these areas can create their own economic prosperity by enacting their own local and municipal laws and ordinances that help drive this wealth creation, you are ultimately limiting the prospects of good, strong earning regional economies, and that ultimately affects U.S. global economic competitiveness.” In other words, cities make good business sense.

Beyond that, cities are special, unique places that have personalities and identities not only in the eyes of residents, but in the eyes of busy legislators. Kim Jarrell Johnson, of the Save Jurupa Valley Group, said she has received overwhelmingly more attention from her U.S. congressman as well as state senators in the period since Jurupa Valley became a city. As she put it, “A city is just easier to wrap your mind around than unincorporated area.”

Jurupa Valley tried for many decades to incorporate, and finally took the leap when the neighboring city of Eastvale— also recently incorporated— threatened to annex land that both communities perceived as valuable. Why did they find it valuable? Because it was prime territory for building a freeway adjacent “power center” – one of those enormous retail complexes anchored by a huge big box store like Target. Because California cities are so dependent on sales tax vis-à-vis property tax (see: Prop 13), new cities arguably cannot incorporate without one of these power centers. “I do find it rather ironic that California likes to promote itself for being environmentally friendly, but has created a tax structure that creates behaviors that are contrary to that,” said Mike Pagano, Dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago.

To see what a city formed around a power center looks like going forward, one need look no further than Phoenix, which has been dependent on sales tax for a long time. The incentive is to continue to build sales tax generating centers at the edge of the city, nearer the highway, to capture the consumption of people who live in surrounding areas, and development simply keeps sprawling outward. On the other hand, a property-tax-dependent city has no interest in moving the border of the city. It is interested in increasing the value of land and one way of doing that is having more dense areas, more amenities located in proximity to population.

Smart cities won’t truly thrive without addressing Prop 13, but SB 89 exacerbates the problem. The city of Jurupa Valley incorporated based on the presumption that the one 870,000 square foot power center within its borders would generate around $2 million in sales tax per year. Under current legislation, to make up for the loss of $6.7 million the city was counting on, Jurupa Valley would need two more of these properties to survive.

What’s next for Jurupa Valley

Forget for a moment the idea of touching Prop 13 and the bigger issues surrounding cities. The four newly incorporated cities in Riverside have banded together to try to simply try to gain revenue parity with cities incorporated before 2004, which are unaffected by SB 89. Three times they’ve brought bills to Sacramento, and three times, nothing has happened. Michael Coleman, of the League of California Cities, is befuddled by the lack of attention: “It’s been one of the difficulties in getting this through the legislature, it’s getting the legislators and the governor’s office to understand that this isn’t just some payment that some city lost that’s going to have some minor effect on their budget. No, this means every incorporation that happens in the future.”

And if the governor and state legislators find it difficult to understand, imagine the situation on the ground in Riverside. While city incorporation in Jurupa Valley won by a 9 percent margin, only 6 percent of the overall population voted in the election. Folks in town admit they want better services, like sidewalks and streetlights— they just don’t care where the services come from. Many others do not know that they now live in a city. Such an abstract change takes time to sink in. Even on Camino Real, the street with the newly paved surface, it was difficult to get a homeowner to put his or her weight fully behind cityhood. “Since it became Jurupa, it seems like it’s going for the better, but I’m not sure,” a homeowner named Jesus Piñon said.

“It’s very hard to get the word out,” Kim Jarrell Johnson said. “To me that’s one of the main reasons we need to be a city.” If Jurupa Valley hadn’t been fighting for life since its incorporation, Johnson believes that much more would have been done in the way of outreach and communication. Just because many people don’t know it happened, she said, doesn’t mean the issue does not matter or affect them.

After two-plus years of trying, the cities have hope that the message is finally starting to get through in Sacramento. A bill, SB 56, would fix the problem for good through property tax allocation. It is still in play and may have a chance of being passed in 2014. Jurupa Valley officials have an informal commitment from the governor’s staff that fixing this problem properly is a priority—though they’ve heard similar promises in the past.

In the meantime, the city of Jurupa Valley projects they will run out of money in 2015. On January 16 the City Council passed a resolution to begin the lengthy disincorporation process – it requires a vote and complicated agreements between county commissions. No one knows exactly how long it will take or what precisely the process will look like. There is a window of time during which the disincorporation can be halted. But, after a certain point, the city will be gone, perhaps for good.

Note

All photographs by Alex Schmidt.

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