MISSION VIEJO

City leaders cautiously agreed this week to take another step toward annexing Las Flores and Ladera, but said they will need more information before making a final decision. At issue is whether it will cost the city more to provide services to the unincorporated, mostly residential communities than they will produce in tax revenue.

A preliminary report compiled last fall by Alfred Gobar Associates shows that annexing Ladera could cost the city from $13,358 to $704,393 each year, based on a number of assumptions. Las Flores could cost from $319,291 to $436,251. But City Manager Dan Joseph said the report was a very conservative first look. He said he believes further study will establish that both communities could yield a positive cash flow.