San Luis Obispo County Grand Jury • 2021-2022

Slo County’s State Water: a Taxpayer Burden and a General Fund Boon?

Published: June 20, 2022 12 pages
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Findings and Recommendations 6 findings

F1
The County established a County-wide special (standalone) property tax specifically to pay for its 1963 contractual obligation to the DWR for a 25,000 AFY allocation of water from the SWP.
Related Recommendations (1)
R1
The County, working with its Tax Collector, needs to obtain expert legal interpretation for the use of revenue derived from the sale of property tax-purchased State Water, past and future.
F2
Since 1993, nearly 40% of the SWP allocation has been assigned (i.e., sold) to subcontractors, leaving County property taxpayers responsible to pay for 15,173 AFY of State Water.
Related Recommendations (1)
R2
The County must ensure that only reasonable administrative charges attributable to the collection of taxes and payment of State Water Contract expenses be charged to the State Water Contract Tax Fund 0646. The County should clearly explain and justify the recent significant increases in “Administration and Accounting” charges to the State Water Contract Tax Fund 0646.
F3
The County sold $6.3 M worth of this property tax-funded allocation and has not credited the County’s State Water Contract Tax Fund 0646 with those proceeds. The County deposited these proceeds into its District Zone General Fund 0643 which is governed by the County Board of Supervisors.
Related Recommendations (1)
R3
The County should ensure that all funds derived from past and future sales and/or exchanges of the County SWP allotment be credited to the State Water Contract Tax Fund 0646 and reduce the financial tax burden placed on property owners.
F4
Based on the Board approved budgets, administrative charges to the State Water Contract Tax Fund 0646 have gone from $35,000 in 2003/2004 tax year, to $124,756 in the 2019/2020 tax year. Budgeted administrative charge for 2021/2022 is $187,000 - a five-fold increase over the 2003/2004 charge.
Related Recommendations (1)
R4
When the State Water Contract revenue exceeds the taxpayer burden, the County could use the balance to explore water resource projects with County-wide benefits.
F5
Property tax revenues collected to pay for State Water obligations continue to increase.
No recommendations for this finding
F6
The County’s Tax Collector’s Office acknowledged the County’s use of State Water Contract revenues is open to legal interpretation and deserves to be reconsidered prior to future tax rate determinations.
No recommendations for this finding

No Responses Found 1

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San Luis Obispo County County