Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Resolution Approving and Accepting Exchange of Property Tax Revenue Resulting from CSA-11’s Annexation of Pescadero Middle/High School
RECOMMENDATION:
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Adopt a resolution approving and accepting the negotiated exchange of property tax revenue in the amount of $0 resulting from County Service Area 11’s (CSA-11) annexation of Pescadero Middle/High School, located at 350-360 Butano Cutoff, Pescadero, CA 94060 (APN 087-053-010).
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BACKGROUND:
The subject territory for proposed annexation consists of the Pescadero Middle/High School site, located at 350-360 Butano Cutoff, Pescadero, California 94060 (APN 087-053-010) (the “Property”).
In 2017, the State Water Resources Control Board (Division of Drinking Water) cited Pescadero Middle/High School’s on-site well for exceeding maximum allowed nitrate and coliform contaminant levels. Past attempts to drill new wells have failed due to insufficient potable water quality and quantity on the Property. As a result, the school currently relies on bottled water for potable uses.
On November 1, 2022, the Board of Supervisors approved proposed amendments to the County’s Local Coastal Program (LCP) that will enable the construction of a replacement fire station for the Town of Pescadero, to be constructed adjacent to the Pescadero Middle/High School, and extension of County Service Area 11 (CSA-11) water lines to the Property in order to provide potable water to both the school and fire station. The California Coastal Commission certified those amendments to the County’s LCP on December 15, 2023.
The State Water Resources Control Board is funding CSA-11’s waterline extension to the Property. However, this action requires a sphere of influence amendment from the Local Agency Formation Commission (LAFCo) and annexation of the Property to CSA-11’s service area.
DISCUSSION:
Revenue and Taxation Code Section 99 requires that, prior to the scheduling of annexation proceedings at LAFCO, the governing bodies of all agencies whose service area or service responsibilities will be altered by such change must negotiate a reallocation of property tax revenue between the affected agencies and approve and accept such reallocation by resolution. Here, those agencies are the County and CSA-11.
Pescadero Middle/High School is a government-owned entity that is exempt from paying property taxes. In addition, CSA-11 is funded through service charges, rather than property tax revenue, eliminating the need for a property tax exchange to accommodate the annexation. Accordingly, a property tax revenue reallocation of $0 is appropriate in this case.
EQUITY IMPACT STATEMENT
There is no negative equity impact associated with the proposed property tax revenue reallocation, which is required by law for annexation of the Property to CSA-11 and extension of CSA’s waterlines to serve Pescadero Middle/High School. By providing Pescadero Middle/High School with a water connection, it will directly address the lack of potable water for students at Pescadero Middle/High School.
FISCAL IMPACT:
None