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Settling with Incorporation Foes, County Agrees to Public Hearing

Proposed Town's Finances Under A Microscope
Carmel Pine Cone -- June 5, 2009


A LAWSUIT brought by opponents of Carmel Valley’s
incorporation claimed a revenue neutrality agreement
between Monterey County and incorporation supporters represents
“an illegal and wasteful expenditure of public funds.”
Now they’ll have the chance to make that same argument in
a public hearing in front of the Monterey County Board of

The hearing is part of the settlement of a Dec. 31 lawsuit
filed by local attorney Frank Lunding and his supporters. The
revenue neutrality agreement, reached in 2006 and updated
in 2008, allows the proposed Town of Carmel Valley to pay
off 10 years of lost county revenues in approximately 11
years. Lunding and other incorporation opponents say the
agreement must be revised.

“It’s a bad deal for the county and it’s a bad deal for the
taxpayers,” Lunding said. “The numbers they were relying on
were skewed in favor of creating a town. We’re pleased we’ll
have an opportunity to show the board of supervisors that the
numbers are wrong.”

Among Lunding’s complaints about the revenue neutrality
agreement is his claim that the document doesn’t adequately
address the high cost of maintaining Carmel Valley’s

At the hearing, opponents will have 30 minutes to make their
case for revising the agreement. The Carmel Valley
Forum — the nonprofit leading the drive to put the incorporation
issue on the ballot — and the Monterey County Local
Agency Formation Commission will each have 30 minutes to
present their arguments on the issue. Individual members of
the public will be allowed to comment as well.

The revenue neutrality agreement is based on an analysis
of the proposed town’s finances which opponents claim is

As part of the settlement agreement, the plaintiffs agreed
to not to file any further legal action based on the public
hearing, the county’s review of the fiscal analysis or its failure
to amend the revenue neutrality agreement.

While Lunding saw the settlement as a victory for opponents,
incorporation supporter Glenn Robinson viewed it differently.
“Lunding had essentially lost the lawsuit already, and the
agreement was simply a face-saving measure that also saved
the county some money by not having a trial,” Robinson
insisted. “Lunding had sued to get the revenue neutrality
agreement thrown out; instead, all he gets is a public meeting
in September to discuss incorporation.”

Robinson believes opponents are simply trying to stall a
vote on the incorporation issue.

“Everything is in line for a November election,” he added.
“Only a judge ordering the suspension of the election will
stop it now.”

A date has not yet been set for the hearing. According to
the settlement agreement, as long as the parties can agree on
a date by Sept. 1, the hearing will be scheduled no later than
Sept. 30.

A second lawsuit, filed Jan. 23 by Lunding and two nonprofit
groups, is set to go to trial Aug. 6 in Monterey County
Superior Court, according to Kate McKenna, LAFCO’s executive
officer. The plaintiffs are asking the court to require that
incorporation proponents fund an expensive environmental
impact report.

In other related news, the California State Lands
Commission decided June 1 to allow a piece of property
located within its jurisdiction to be included within the
boundaries of the proposed Town of Carmel Valley. The move
was significant because it represented the final hurdle that
needed to be cleared before LAFCO could formally request
that the incorporation issue be placed on the ballot. In
response to the decision, McKenna submitted the request to
the Board of Supervisors the following day. She said the
board could act on the request as early as June 23.

Last Updated: Jul 13, 09

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