LAGUNA NIGUEL : City Sues County for Tax Revenue

The city has filed a lawsuit against the county seeking up to $2.5 million in property tax revenue dating back to 1990.

The city filed the lawsuit in Orange County Superior Court in Santa Ana just before the three-year statute of limitations was to expire on Dec. 1, City Atty. Terry Dixon said.

The county contends that it only owes the city about $1.75 million in revenue dating back to the 1991-92 fiscal year. But the city says that it is owed an additional $750,000 to account for fiscal year 1990-91, the city’s first after incorporation.

Until that issue is resolved, no money will change hands.

“We are looking to preserve the city’s rights (to that money) by filing the lawsuit,” City Manager Tim Casey said.

Casey said that when Laguna Niguel incorporated in December, 1989, the county continued to provide such services as law enforcement, planning and zoning, maintenance and inspections as the fledgling city government was getting on its feet.

It was agreed that the city would reimburse the county $400,000 for the services, Casey said.

“We (county and city officials) do not dispute that money is owed,” Casey said. “The only dispute is whether or not they owe us” $750,000 for 1990-91.

The city has been receiving tax revenue from the county since incorporation, but city officials said the payments do not reflect the city’s growth during that time.

This year the California Supreme Court upheld a lawsuit in which the city of Highland sued San Bernardino County on similar grounds.