Nipomo’s Independence From San Luis Obispo County

This week’s Adobe Press ran a front page article on Nipomo’s possible incorporation. Randi Block did a very good job on researching the article and reporting on the issue. I don’t have too much more to add; but, did want to make just a couple of comments.

The lead paragrahs of the article talk about how incorporation might affect Nipomo’s rural nature (a very important and endearing quality of our community):

A renewed effort is under way to help Nipomo become a city and have greater control over the community’s planning issue.

While a number of residents have indicated support for a break from San Luis Obispo County governance, many agree that it will be difficult to achieve that freedom because Nipomo does not have a broad revenue base.

But to encourage the development of large commercial businesses and more sales tax revenue would work against the one thing most residents want — to keep Nipomo rural.

“That is a trap that everybody falls into when they get incorporated,” said Ed Eby, a director of the Nipomo Community Services District. “There’s a temptation to permit businesses just so you’ll get the sales tax. So you’ve got to have a careful balance whenever you accept any new businesses, because the fact is that this is going to take us away from being rural.”

While Ed is correct that more businesses will diminish Nipomo’s rural quality to a degree, the weakness in his (and others’) arguments on this score is that Nipomo is going to continue to grow and build out regardless of whether we incorporate into a city or not. There is always going to be a dense commercial core in the business district along Tefft Street–whether we incorporate or not. The smart thing to do is to plan for the upcoming growth and is coming to Nipomo. We can’t stop that growth; but, we can plan for it, and use it to our advantage by harnessing the tax revenues that new business brings to lay the foundation for our eventual incorporation.

The article then points out the very postive sales tax revenue increase from the last time figures were calculated in February 2005:

Michael Davis of the Sacramento-based Davis Co. completed a report last year that said it could take Nipomo a decade to incorporate, but residents are enthusiastic about new data that suggest it may take less time than originally predicted.

Davis estimated in the study that Nipomo would generate $758,000 in sales tax in 2005, but closing numbers revealed the community actually raised $921,000 — almost $200,000 more than predicted.

“Where we are now is a much better place than we’ve ever been,” said local lawyer Guy Murray, who has been a leader in the incorporation push.

Kevin Beauchamp, a member of Nipomo’s advisory body, said he was encouraged by the news and the progress of five large commercial projects in town, all of which have the potential to bring in big bucks.

“If we decide to pursue incorporation, now’s the time to do it,” Beauchamp said.

Again, the jump in sales tax revenue is only a positive thing. That is the basis and foundation upon which we can and should build our future city.

The article also noted Cambria’s own incorporation efforts in the past, which efforts are an important object lesson for our own community:

Breaking away from county government has been difficult lately for cities across the state. Under a 1992 law requiring “revenue neutrality,” all incorporation efforts must prove counties won’t fall short after the new city is formed.

If cities bring in more revenue than the services they require, they are forced to pay the county government the equivalent of alimony.

“You want to incorporate when you’re slightly in the red, but where there’s a trend for revenue,” Winn said.

Cambria has made several unsuccessful attempts to incorporate over recent years and finally put the effort on the backburner after determining the revenue neutrality payments to San Luis Obispo County would be too great, said Art Montandon, counsel for the Cambria Community Services District.

Montandon also said that when the district polled water customers, 90 percent of those who responded said they could not support incorporation. His advice for Nipomo residents, therefore, is to spend a lot of time explaining the benefits to the community.

“It should be organized across the board to be an educational effort,” he said.

Good advice from Mr. Montandon. The most critical factor in any future incorporation, aside from the revenue will be a broad based educational effort by incorporation proponents and community organizations. In my opinion most communities which have faced incorporation and failed have likely done so because the didn’t properly educate the community. This will be one of the biggest challenges we face here in Nipomo as well.

The other important point above is the revenue nuetrality issue. Right now, Nipomo is not a financial cash cow for the county like Cambria is. For Cambria to leave the county, would result in a financial windfall to Cambria and shortfall for the county. Right now, Nipomo is slightly in the red, as Mike Winn points out–which is the time to incorporate. Cambria’s biggest problem on their incorporation movement, is that they first considered the possiblity in the mid-1980’s but ultimately decided against incorporating then–when it would have been financial feasible. Now, it could cost Cambria millions in what I like to call “alimony” payments to the county to satisfy revenue neutrality laws. I will be doing a post shortly on where I think Nipomo’s incoporation movement needs to go, and point to Cambria’s examples for learning tools. Another furture post will deal with “revenue nuetrality” and exatly what that means.

The Incorporation Committee’s members said they want to reach out to the general public to determine whether there is broad support for moving forward with the break. The first step is to determine whether the NCSD board, currently Nipomo’s only governing body, is behind the effort.

Directors Winn and Eby both said they support the idea of incorporation if the finances pencil out.

“My position is and always has been that I’m for incorporation because it gives local land-use planning control,” Eby said, adding that he thought the whole board would support the idea.

A workshop on incorporation will likely be held in early January and sponsored by the committee.

Anyone who wishes to comment on the idea, can e-mail Murray at guy.murray@gmail.com.

The next steps toward Nipomo’s incorporation are very important. I believe the NCSD needs to become re-engaged in the incorporation dialogue. Cambria’s Community Services District likewise took a leading role in their movement (even though they eventually chose not to proceed). Workshops will also be important–as will increased public involvment and interest. We need more and more people, individual citizens and groups to become involved.

I am pleased to see both Ed Eby and Mike Winn, two current NCSD directors speak positively about incorporation. This is a good sign, and will help make the approach the NCSD more effective. You can feel free to email me at the addres above, or leave public comments on the blog about incorporation. What do you think about incorporation? Do you have any opinions? Do you have any concerns? Do you have any questions? Let’s begin this dialogue anew.

Nipomo Cityhood Debated

By Randi Block

A renewed effort is under way to help Nipomo become a city and have greater control over the community’s planning issue.

While a number of residents have indicated support for a break from San Luis Obispo County governance, many agree that it will be difficult to achieve that freedom because Nipomo does not have a broad revenue base.

But to encourage the development of large commercial businesses and more sales tax revenue would work against the one thing most residents want — to keep Nipomo rural.

“That is a trap that everybody falls into when they get incorporated,” said Ed Eby, a director of the Nipomo Community Services District. “There’s a temptation to permit businesses just so you’ll get the sales tax. So you’ve got to have a careful balance whenever you accept any new businesses, because the fact is that this is going to take us away from being rural.”

Members of the Nipomo Incorporation Committee recently met to discuss the likelihood that the community would be able to support itself and to determine how to gauge whether a majority of residents would support the idea.

Michael Davis of the Sacramento-based Davis Co. completed a report last year that said it could take Nipomo a decade to incorporate, but residents are enthusiastic about new data that suggest it may take less time than originally predicted.

Davis estimated in the study that Nipomo would generate $758,000 in sales tax in 2005, but closing numbers revealed the community actually raised $921,000 — almost $200,000 more than predicted.

“Where we are now is a much better place than we’ve ever been,” said local lawyer Guy Murray, who has been a leader in the incorporation push.

Kevin Beauchamp, a member of Nipomo’s advisory body, said he was encouraged by the news and the progress of five large commercial projects in town, all of which have the potential to bring in big bucks.

“If we decide to pursue incorporation, now’s the time to do it,” Beauchamp said.

However, Mike Winn, NCSD director, said that even if those projects are built in the next few years, they can’t open for business until there’s a supplemental water source in the town, which may be significantly more than five years away.

NCSD just found out the pipeline project to bring water in from Santa Maria is now estimated to cost more than $24 million, and the board is unsure how to pay for the construction.

One of the main obstacles standing in Nipomo’s way to incorporation is its lack of a tax base, which has concerned many residents who are worried that services may have to be scaled back.

“It can work, but it can’t work without more businesses than Nipomo has at the moment,” said Clyde Cruise, president of the Nipomo Chamber of Commerce.

Cruise said one of the quickest ways to garner more revenue is to build more hotels, which raise high taxes for the community.

Meanwhile, it’s important to stop allowing developers to construct residential projects on property zoned for businesses, especially on West Tefft Street, Nipomo’s prime commercial core, said resident Bob Blair.

Beyond needing to find enough money to prove Nipomo can function as its own entity, community members also are facing an estimated $3.5 million price tag just to form a city, according to Davis’ study. That prediction includes the cost of creating a city government and planning and building department and funding public safety.

That number could be reduced significantly, Cruise said, if Nipomo agreed to sign an agreement with the county to pay for some services while still allowing the incorporation effort to move forward.

“The reason for incorporation is to call your own shots,” Cruise said. “But I think we should not create our own fire and police (departments) and let the county do that.”

Breaking away from county government has been difficult lately for cities across the state. Under a 1992 law requiring “revenue neutrality,” all incorporation efforts must prove counties won’t fall short after the new city is formed.

If cities bring in more revenue than the services they require, they are forced to pay the county government the equivalent of alimony.

“You want to incorporate when you’re slightly in the red, but where there’s a trend for revenue,” Winn said.

Cambria has made several unsuccessful attempts to incorporate over recent years and finally put the effort on the backburner after determining the revenue neutrality payments to San Luis Obispo County would be too great, said Art Montandon, counsel for the Cambria Community Services District.

Montandon also said that when the district polled water customers, 90 percent of those who responded said they could not support incorporation. His advice for Nipomo residents, therefore, is to spend a lot of time explaining the benefits to the community.

“It should be organized across the board to be an educational effort,” he said.

The Incorporation Committee’s members said they want to reach out to the general public to determine whether there is broad support for moving forward with the break. The first step is to determine whether the NCSD board, currently Nipomo’s only governing body, is behind the effort.

Directors Winn and Eby both said they support the idea of incorporation if the finances pencil out.

“My position is and always has been that I’m for incorporation because it gives local land-use planning control,” Eby said, adding that he thought the whole board would support the idea.

A workshop on incorporation will likely be held in early January and sponsored by the committee.

Anyone who wishes to comment on the idea, can e-mail Murray at nipomolaw@aol.com.

November 24, 2006

 

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