Incorporating Olympic Valley again found unfeasible; state may review
If you go
What: Placer Local Agency Formation Commission meeting
Where: County Administrative Building (Board of Supervisors’ Chambers), 175 Fulweiler Ave., Auburn
When: 4 p.m., Wednesday, Aug. 12
Topic: Town of Olympic Valley incorporation
More online: Visit placer.ca.gov/departments/lafco to view the revised CFA.
OLYMPIC VALLEY, Calif. — After fielding critical feedback on its analysis of the economic viability of the proposed town of Olympic Valley, the firm that prepared the report is standing behind its original conclusion.
Released July 24, the revised draft Comprehensive Fiscal Analysis prepared by Rosenow Spevacek Group Inc. again reports the proposed town “does not appear to be feasible at this time.”
“RSG considered all input and performed due diligence as needed, but did not necessarily make the changes as suggested,” the company wrote in a cover letter to the CFA, which was signed by the firm’s principal, Jim Simon, and associate Jane Carlson.
After the first report was released in May, the group spearheading the incorporation effort, Incorporate Olympic Valley, suggested RSG reduce the percentage allocated to a town reserve fund, lower the number of estimated full-time town employees, and decrease the estimated contract cost for certain services, among others.
At the time, Fred Ilfeld, chair of Incorporate OV Foundation, a financial arm of IOV, called the preliminary CFA a “deeply flawed report.”
Meanwhile, Matthew Newman, co-founder of Blue Sky Consulting Group, a consultant for Squaw Valley Ski Holdings — which is challenging incorporation — in June described the first report as using “reasonable assumptions and sound methodology.”
Blue Sky also suggested some adjustments, such as including a scenario where future development in the town would occur at a slower pace than projected in the preliminary draft CFA, and lowering projected Transient Occupancy Tax collection, according to RSG.
In all, of the nearly 20 overarching comment categories identified by RSG, adjustments were only made in a few of them.
This week, Newman said he thinks RSG made the right call in not adjusting certain projections, such as reserve funding, employee count and law enforcement budget, as suggested by IOV.
“All three things would have reduced resources to run the town,” he said. “Doing so would have made the service level lower than what is currently experienced by the community.”
Ilfeld, meanwhile, offered a different view.
“They have made numerous miscalculations and have made erroneous assumptions, the large bulk of which work against the feasibility of incorporation,” Ilfeld said. “… IOV has responded in great detail to RSG’s mistakes and erroneous assumptions to correct them, but to little avail. Regrettably, RSG has used our comments not to modify their analysis, but rather to reinforce and justify it.”
In an Aug. 2 letter to the Placer Local Agency Formation Commission, IOV is requesting the California State Controller’s Office review the latest draft CFA report.
According to LAFCO’s Wednesday, Aug. 12, meeting agenda, the commission will consider the request, along with potentially delaying such a review until after an Environmental Impact Report is completed and a hearing set.
Should LAFCO approve IOV’s request, the grassroots group will have to identify in writing what it wants the Controller’s Office to specifically review, said Kristina Berry, Placer County LAFCO executive officer.
Based on that, the Controller’s Office will provide a cost estimate for the work. Payment from IOV would have to be received before a review could begin, a process that could take up to 45 days, she said.
“It would put a hold on activity on the proposal in the meantime,” Berry said.
Alimony-like discussions — referred to as “revenue neutrality negotiations” — with Placer County have not begun, nor has preparation of an environmental impact report.
At its July 8 meeting, LAFCO directed IOV to pay Amec Foster Wheeler’s $147,000 contract in full by Aug. 12, so work on the EIR can start.
“IOV has the ability to fund both the EIR and the Controller’s review,” Ilfeld wrote in the Aug. 2 letter. “However, it is not willing to commit $147,000 to the preparation of the EIR on an incorporation proposal hobbled by an adverse CFA conclusion.”
In a follow-up interview, Ilfeld said IOV is hopeful that LAFCO will allow the state Controller’s Office to review the draft CFA.
“(This) way, we have a better idea of the town’s fiscal feasibility before investing a huge sum of money up front for the EIR,” he said. “IOV is focussing on this action and has not made any plans should the commission refuse our request to appeal the CFA for review before paying for the EIR.”
Contingent upon approval, should the state Controller’s Office come to the same conclusion as RSG — that the town does not appear financially feasible — IOV will determine then what to do.
“Meanwhile, our policy is not to advocate for incorporation of a town that we believe is fiscally not viable,” he said.
The incorporation process for Olympic Valley officially began in December 2013, when IOV submitted its application to LAFCO.