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FPUD community benefit latent powers upheld by protest hearing results

Joe Naiman

Village News Reporter

The protest hearing on expanding Fallbrook Public Utility District latent powers to provide for public community facilities did not produce sufficient signatures to trigger an election.

The protest hearing held by San Diego County's Local Agency Formation Commission was on June 14, and on Aug. 1 the LAFCO board voted 8-0 to accept the results of the protest hearing. The latent powers expansion will become effective once all other conditions have been satisfied.

An 8-0 LAFCO board vote April 4 expanded FPUD’s latent powers to include parks and recreation, street lighting, and roads and streets service functions. FPUD previously had water, recycled water, and wastewater latent powers.

The July 2019 FPUD board meeting included a 5-0 vote to authorize the preparation of the application to LAFCO. FPUD's May 2018 meeting included a presentation by the Fallbrook Chamber of Commerce and other community groups proposing the possibility that FPUD might take responsibility for community maintenance.

The groups identified approximately 15 maintenance projects, including trash and graffiti removal, which would be undertaken. FPUD created an ad hoc committee and, in October 2018, FPUD's board voted 4-0 with Milt Davies absent to direct staff to initiate an application and to work with LAFCO to determine what would be required for an application.

In 1976, LAFCO created County Service No. 81, which obtains its funding from a share of property tax revenue. The governing body of a county service area is the San Diego County Board of Supervisors, although a CSA No. 81 advisory board is comprised of local residents appointed by the Board of Supervisors. The conditions of the latent powers expansion include that the County of San Diego and CSA No. 81 remain the primary principal agencies, which will give those agencies the final say in the event of a conflict between FPUD and the county or the parks service area.

The activities from the parks and recreation latent powers would cost approximately $560,000 annually. FPUD receives a portion of property tax payments from district landowners, and the community groups requested that some of that property tax revenue be used for the community activities.

A new tax would require a public vote. Raising water rates would only require a majority board vote although a cost of service study which shows the relationship between the rates and the agency's cost to provide water would be required to raise rates without a public vote.

In November 1996, the state's voters passed Proposition 218, which requires a public vote on benefit assessments. Proposition 218 exempts water and sewer rate increases if a cost of service study shows a relationship between the rates and the agency's cost to provide water or sewer service.

FPUD is currently in the process of financial planning for a Proposition 218 hearing to be held later this calendar year.

FPUD and LAFCO worked to have the latent powers expansion funded by the property tax transfer rather than an assessment. If water rates are raised to cover the cost of property tax revenue being used for community benefit projects rather than infrastructure, the estimated increase is $5 per meter per month. The conditions of the latent powers expansion also include that FPUD will attempt a Proposition 218 hearing to free up the $560,000 of property tax revenue for the community beautification.

Volunteers would limit FPUD’s expenses of the community beautification activities. The type and scope of projects with FPUD involvement will be determined by the local organizations. The application to LAFCO included support from Fallbrook Center for the Arts, Inc., the Fallbrook Beautification Alliance, the Fallbrook Land Conservancy, the Fallbrook Sports Association, the Fallbrook Village Association, Save Our Forests, and The Wildlands Conservancy.

On March 7, LAFCO approved a municipal service review and sphere of influence update for FPUD, which was utilized in the following month’s decision to grant the latent powers.

The protest process requires an election if at least 25% of registered voters or landowners comprising at least 25% of the district’s land or at least 25% of the land’s assessed value (not including improvements) sign petitions which include an address verifiable by the Registrar of Voters. If at least 50% of registered voters sign a protest petition, the process is terminated without an election.

FPUD’s land encompasses 28,193 acres and 10,669 legal parcels, and when LAFCO approved the latent powers expansion April 4, the district had 20,807 registered voters. The total assessed value of land within the FPUD boundaries is approximately $4.078 billion.

As of the June 14 protest hearing date, 39 parcel owners with a cumulative land value of $7.3 million filed valid protests. An additional 10 landowner protest petitions were received, but nine of those were voided due to the lack of an assessor’s parcel number on the petition and one was voided because the ownership didn’t match the name on the petition. The valid signatures equate to 0.18% of the total land value.

The 48 registered voter protests included 15 signatures which were declared invalid by the Registrar of Voters, so only 33 valid signatures were submitted. That equates to 0.16% of FPUD’s registered voters.

The remaining actions needed to record and implement the latent powers expansion are ministerial.


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