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Independent Firm Finds Squaw Incorporation Not Feasible

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The Road to the Town of Olympic Valley

• Final comprehensive fiscal analysis

• Revenue neutrality negotiations between IOV and Placer County

• Environmental Impact Report

• Public hearings

• LAFCO vote

• Olympic Valley residents vote

A third-party financial consultant has found that Incorporate Olympic Valley’s bid to make Olympic Valley a town is not financially feasible. IOV disputes the findings, claiming the report’s conclusions are based on flawed analysis.

In its comprehensive fiscal analysis draft report released May 21, Santa Ana-based RSG — which was hired by the Placer County Local Agency Formation Commission but paid for by IOV — determined the Town of Olympic Valley would not have sufficient revenue to outweigh expenditures. Two scenarios by RSG predict the new town could run either a deficit of $1.8 million or $3.5 million in the eight years after incorporating. Both scenarios also find that the town “would not have sufficient funding for projected road maintenance costs.”

IOV, however, strongly disagrees with the report.

“This is not a valid document,” said Fred Ilfeld, chairman of the IOV Foundation. “It has a host of inaccuracies — 17 pages worth … It’s just plain wrong. We need correct numbers.”

One of the flaws IOV points to is the comparison cities used by RSG to project the Town of Olympic Valley’s budget. These cities include Colfax, Placerville, Nevada City, Auburn, Angels Camp, and Truckee. But IOV says that except for Colfax, all of these cities are full-service cities, meaning that the fire department, police department, sewer, and water is run by the town, whereas the Town of Olympic Valley will be a contract city, contracting out its fire and utilities to the Squaw Valley Public Service District, and police to the Placer County Sheriff. (While the Town of Truckee does not have its own fire or utilities departments, it does have its own police, planning, engineering, solid waste, and transit. Thus IOV does not feel it’s a comparable town to Olympic Valley.)

“To compare us to a full-service city is incorrect,” Ilfeld said. “You have to get cities with like service levels. Full-service cities have a lot more employees. It overstates the expenses if you compare us to full-service cities.”

IOV also claims that the report inflates attorney and insurance costs. RSG found that the new town will need approximately $100,000 in the first year for insurance and attorney fees each. But IOV says that since Loomis, with a population of 6,600, pays $60,000 a year for its city attorney, and Colfax, with a population of 2,000, pays $40,000, a more realistic cost for Olympic Valley’s attorney would be $50,000.

“We don’t have a fire department or police or unions,” Ilfeld said. “That’s what takes up a lot of legal issues. These are expenses we don’t have.”

Similarly, the report estimates the new town will need $100,000 a year for insurance, but according to Ilfeld, Colfax’s insurance costs $30,000 a year, so a more accurate amount for Olympic Valley would be $50,000 because “we don’t have the risks of fire and police.”

However, LAFCO Executive Officer Kris Berry believes that the RSG study is solid.

“I think we had an excellent consultant that looked at it extremely in depth and did an extremely good job,” she said.

Squaw Valley Ski Holdings CEO Andy Wirth agrees. SVSH is the organizer and major funder of Save Olympic Valley, a group of residents and businesses who oppose incorporation.

“The draft comprehensive fiscal analysis used very sound, thoughtful analysis from a very respected firm,” Wirth said. “It affirmed a lot of the internal analysis we had done. RSG showed that it’s even less financially feasible than we thought it was.”

IOV planned to present its objections to LAFCO at its June 10 meeting in Tahoe City, which was after Moonshine Ink went to press, and to request that LAFCO appoint a non-elected LAFCO commissioner, E. Howard Rudd, to mediate between IOV and RSG to correct the report’s supposed flaws. If that fails, IOV’s next option is to bring its case to the State Controller.

And what if an amended report still shows that a town of Olympic Valley is not financially viable?

“The last thing we want is a town that is going to be in debt,” Ilfeld said.

The Olympic Valley Comprehensive Fiscal Analysis Draft Report is available at placer.ca.gov/departments/lafco.

 
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October 12, 2017