Consider a request from the Elkhorn Fire Protection District (FPD) to waive the Yolo LAFCo Deposit/Fee Schedule for its application to dissolve the FPD in response to the 2022 municipal services review (MSR) for fire protection agencies

Waive the processing costs associated with the Elkhorn FPD reorganization, consistent with the LAFCo Deposit/Fee Schedule.

Staff estimates that the fiscal impact of the fee waiver would be approximately $33,675, which can be absorbed by the LAFCo budget as detailed below.

Application charges for jurisdictional changes are established as an initial deposit, and then the cost of actual time is drawn from the deposit, with any shortfalls paid by the applicant prior to completion of proceedings. The adopted Yolo LAFCo Deposit/Fee Schedule indicates the Commission may reduce or waive the deposit/fees if: (1) a financial hardship is demonstrated; and/or if (2) the proposal is in response to a LAFCo condition or recommendation. 

Both of the conditions for a fee waiver are met. Elkhorn FPD does not currently generate sufficient revenue through its property tax allocation and assessment to pay the anticipated costs of city service contracts. Currently, the shortfall is anticipated to be roughly $130,000 annually, subject to additional analysis and contract negotiation. LAFCo charging the Elkhorn FPD for proposal processing will further reduce the funds available to address service transition. Additionally, Elkhorn FPD’s dissolution application is in response to a 2022 LAFCo MSR recommendation (LAFCo No. 21-05) which states:
Dissolving the Elkhorn FPD will be a very complicated process. Processing the application will include determining how the FPD should be dismantled, changing district boundaries, developing a plan for city service contracts, and shoring up any revenue shortfalls. Costs are anticipated to be roughly similar to those incurred by the City of West Sacramento with the RD 900 reorganization in 2019, which cost $38,910.

The anticipated LAFCo processing cost for the application is detailed below. However, please note that LAFCo staff time will not be a net cost incurred, as staff time is already included in our budget. But it would result in lost revenue that applicants normally pay for the share of LAFCo’s operating cost associated with the application, which is additional revenue which rolls over as a carryover fund balance that is used to offset agency LAFCo costs in the following fiscal year.
 

Executive Officer	$10,000*
Clerk/Analyst	$2,000*
LAFCo Counsel	$6,000
Outside Counsel	$2,000
Surveyor	$9,000
GIS	$525
Hearing Notices	$300
CEQA Filing Fee (NOE)	$50
BOE Filing Fee	$3,800
Total	$33,675

* Staff time is included in the LAFCo budget and is not a net cost that would be incurred. It is lost revenue to LAFCo, however.

These costs can be absorbed by our Services and Supplies budget already adopted for FY 2024/25, which LAFCo has consistently come in under budget at year end. For FY 2024, LAFCo expended only 56% of its Services and Supplies budget with $41,765 becoming a carry over fund balance. LAFCo also has an appropriation of $25,000 in our budget for contingencies. Separately, LAFCo budgeted more this year for succession planning under Salaries and Benefits assuming a new employee would start October 1, which is not happening as planned. Assuming we hire on January 1 instead of October 1, our expenditures would be reduced by $54,633. Therefore, these offsets are anticipated to be sufficient to absorb the Elkhorn FPD dissolution processing costs in our current budget.