Nipomo CSD is at odds with SLO County over property taxes

San Luis Obispo County and the Nipomo Community Services District (NCSD) are in a stalemate over potential tax revenue from the Dana Reserve development. 

After the Board of Supervisors gave the green light for developer Nick Tompkins to move forward with building the 288-acre housing development, the Dana Reserve returned to the board on June 18, seeking approval for an annexation into the NCSD’s service area for water and wastewater services. 

But before that can happen, the county and the NCSD need to discuss and agree on an exchange of property tax revenue. 

click to enlarge Nipomo CSD is at odds with SLO County over property taxes
File photo by Jayson Mellom
CIRCLING BACK: The San Luis Obispo County Board of Supervisors agreed to give county staff and the Nipomo Community Services District more time to discuss an exchange of tax revenue for the annexation of the Dana Reserve into the community services district service area.

On April 23, 2019, the Board of Supervisors adopted a policy stating that funding for independent special districts should not result in a net fiscal loss to the county.

However, county administrative staffer and negotiator Rebecca Campbell said that county staff determined that the Dana Reserve project build-out would generate a net general fund deficit of roughly $612,000 if it was annexed into the NCSD. This point makes negotiations difficult because the county already allocates some property tax income to the NCSD, specifically 27 percent of its Post Educational Revenue Augmentation Fund.

“Because it is unknown what the actual household size will be, staff wanted to ensure the county would not take a loss related to the development,” she said. 

Campbell said the county told the NCSD that the only way to move forward would be a zero exchange for the annexation—as in none of the Dana Reserve’s potential future property tax would go to the NCSD. But the NCSD is refusing after the county Assessor’s Office provided data that said that the Dana Reserve would generate an extra 3.7 percent in property taxes. 

In March of 2023, the NCSD changed its annexation policy. It states that the amount of property tax revenue exchanged in future years should remain consistent with historic property tax revenue sharing agreements with regard to the percentage allocated to the district. This policy change, the NCSD claims, means that the extra 3.7 percent belongs to it. 

Nipomo resident Carla Hanley urged supervisors not to let taxpayer money go to the NCSD and the Dana Reserve. 

“NCSD has a history of making promises and mismanaging money and water. Right now, the aquifer, according to last week’s NCSD meeting, is back to 1970 levels. We are literally swimming in water right now, and I don’t understand why my tax dollars, why I have to pay for a developer to get water,” she said during public comment. “He’s trying to build this thing on taxpayers’ money, and this is not right. Just please, please do not spend county money on putting in a private developer’s water supply.” 

After both the NCSD and county staff requested more time to negotiate the tax revenue exchange, the supervisors voted unanimously to circle back this discussion at the next board meeting on July 9. 

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