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Could an Appeal to the State Be Squaw Incorporation Proponents’ Last Hope?

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Incorporate Olympic Valley is taking its case to the state level that forming the Town of Olympic Valley makes financial sense. After receiving a green light from the Placer County Local Agency Formation Commission in August to go to the state, the California State Controller’s office will review what IOV claims are errors in the consultant’s revised fiscal report, which determined that incorporation is not financially feasible. A lot is riding on the State Controller’s findings for IOV, which has said it will not move forward with incorporation if it is not fiscally viable.

On Aug. 12, LAFCO voted 6 to 1 to allow IOV to request that the State Controller’s office review the draft comprehensive fiscal analysis, which was prepared by RSG — a firm hired by LAFCO and paid for by Incorporate Olympic Valley — on May 12. The draft CFA concluded that incorporation was not financially feasible. However, after IOV claimed that there were more than 24 errors in the report, on June 19 LAFCO ordered RSG to look into the possible inaccuracies. On July 24, RSG released the revised draft CFA. Although it included a number of changes, such as revised estimates of transit occupancy tax (TOT) and property tax revenues, and addressed two spreadsheet errors, it reached the same conclusion — that a Town of Olympic Valley is not fiscally feasible. 

In a letter sent to the State Controller — California’s chief fiscal officer — on Aug. 20, IOV identified 31 items it wants reviewed. These include adjusting the estimated cost of law enforcement to reflect the existing level of service in Olympic Valley, using comparable contract cities to project the number of employees required to provide town services, and using future residential development sales values and resulting assessed values from the expanded Village at Squaw Valley.

“We have a responsibility to IOV and to its constituency to do a really good peer review of the CFA to have an opportunity to give the city a chance,” said Bob Barnett, an advisor to IOV and a member of the IOV Foundation Board. “Because there are such a highly technical series of issues, it’s useful to have the controller analyze it. They have more expertise than LAFCO board members.”

IOV must pay for the State Controller review. Once the State Controller provides an estimate, IOV will have five days to submit payment. Kris Berry, LAFCO executive officer, said the last incorporation review by the State Controller cost around $30,000.

“Thirty-one points reviewed — that’s a lot,” she said. “They [IOV] are asking for a lot of information.”

The State Controller has a 45-day period to complete the review.

Placer County CEO David Boesch wrote a letter to LAFCO protesting the commission’s approval of the State Controller review. By law, incorporation proponents can request a review 30 days after the LAFCO executive officer’s final report has been issued. Since it is still too early in the process for Berry to issue her final report, LAFCO had to vote to allow IOV to make the request. 

“Because revenue neutrality negations have not yet begun, and environmental review has not yet commenced, the county believes it is premature and contrary to state law … for the review of the draft CFA to occur at this time,” Boesch’s Aug. 20 letter stated. “Circumventing this process sets a bad precedent for future incorporation proposals and creates a confusing process.”

Berry said the commission permitted IOV to make the request for State Controller review ahead of schedule “as a courtesy.”

Blue Sky Consulting Group founder Matthew Newman, who was hired by Squaw Valley Ski Holdings to advise on fiscal issues regarding incorporation, is skeptical that the State Controller will make any serious changes to the report that could result in a different finding.

“I am confident in the conclusion of RSG’s study and that it’s very unlikely that the State Controller will make substantive changes to arrive at a different conclusion,” he said.

LAFCO’s Berry had similar sentiments.

“I think the consultants did a good job and did a fair report,” she said.


At the Aug. 12 LAFCO meeting, the commissioners also approved delaying IOV’s payment for the environmental impact report. The $146,000 payment for the EIR was originally due by Aug. 13, but IOV wants the State Controller’s input on whether incorporation is viable before putting down that amount of money.

“It’s a reasonable decision because, honestly, there is not any information that is very useful in the EIR,” Barnett said. “What everybody is interested in is the fiscal feasibility.”

If, as Newman surmised, the State Controller does not make any major changes to the draft CFA, Barnett said IOV has one recourse left — legal appeals. But that would be yet another cost in what has become an expensive endeavor since the incorporation effort began in early 2013. IOV spent $85,000 on the CFA, and a total of $54,809 in 2014 and the first half of 2015, according to campaign documents. Factoring in the cost of the EIR and estimated cost of the State Controller review, IOV could spend more than $300,000 in its attempt to form the Town of Olympic Valley.

“At some point we have to evaluate whether there is sufficient benefit to the costs being incurred,” Barnett said. “We are trying to get to the point where we can rely on information and a reasonable decision can be made.”

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Reader comments so far...

Peter Schweitzer | Olympic Valley
David Boesch, CEO of Placer County is scared to death of the State Controller review of the Comprehensive Fiscal Analysis. Among the many fears he has the largest is the Auditors Ratio. This ratio limits (or increases) the property tax a town will receive. Placer states that it is 52%, even with huge allotments to Placer the number should be 25%. The State Controller will decide and he should be fearful. A standard will be set.

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December 13, 2018