TO: Honorable Mayor and Members of the City Council
FROM: Jarad Hildenbrand, City Manager
1. SUBJECT
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County of Orange Unincorporated Island Annexation Study and Policy Direction
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2. SUMMARY
During the February 5, 2026 Strategic Planning Session, the City Council expressed interest in evaluating whether the remaining unincorporated County islands within the City's Sphere of Influence should be annexed into the City of Orange. Annexation has the potential to create a more unified community, improve service consistency, and eliminate jurisdictional boundaries that currently divide neighborhoods surrounded by the City. At the same time, annexation would transfer ongoing service responsibilities, infrastructure obligations, and Regional Housing Needs Assessment (RHNA) allocations to the City. This report provides an overview of the annexation process, summarizes the potential fiscal and policy considerations, and seeks City Council direction regarding whether staff should pursue annexation of some or all of the remaining County islands.
3. RECOMMENDED ACTION
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1. Receive and file the presentation regarding the potential annexation of the remaining County islands within the City of Orange's Sphere of Influence.
2. Provide policy direction regarding whether staff should pursue annexation of all, some, or none of the remaining County islands, and identify any additional analysis desired before initiating formal proceedings.
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4. FISCAL IMPACT
There is no immediate fiscal impact associated with this report. Should the City Council direct staff to initiate annexation proceedings, additional staff time and consultant resources may be required to prepare fiscal analyses, service plans, environmental documentation, and annexation applications. Preliminary estimates indicate that annexation of one or more County islands could result in ongoing net costs to the City unless additional revenue-sharing agreements are negotiated with the Count...
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