Placer LAFCO Agrees To Send CFA Out For Review By The State Controller

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It’s been quite a battle over the incorporation of Olympic Valley. It seems as if every week there is some new twist to the plot. Most recently, we reported that Squaw Valley had contributed nearly $700,000 to defeat the move to incorporate the town of Olympic Valley. Those funds were contributed to the “Save Olympic Valley” campaign to create a campaign of fear amongst local voters.

Over the last few months, there’s been a lot of banter back and forth between the factions about the validity of the draft Certified Fiscal Analysis for the proposed town. Earlier this year, financial analyst RSG released a draft CFA that seemed to show that the town may not be financially viable. Officials from Incorporate Olympic Valley (IOV) cried foul, noting a number of parts of the review that seemed inaccurate or potentially biased. While some of the numbers were adjusted, IOV has suggested that there are still errors in the report. Here are their top four remaining concerns:

  • Revising the proposed 10% contingency expense to be included as part of an annual reserve.
  • Calculating the general fund reserve as a percentage of the town’s operating expenses rather as a percentage of the total general fund revenues.
  • Revising the estimated property tax revenue calculations to include indirect costs and be based on realistic Olympic valley real estate values.
  • Adjusting the estimated cost of law enforcement to reflect the actual existing level of service in Olympic Valley.

Last week, the Placer County Local Agency Formation Commission (LAFCO) decided to send the draft of the CFA to the Sate of California Controller’s Office for review. While the incorporation of new cities in California is a rare event, the review of a certified fiscal analysis for a LAFCO action is even more rare. It’s interesting to note that the vote by the LAFCO commission was 6-1 in favor of sending the document for review. Previous decisions by the commission regarding the incorporation movement seem like they have more commonly gone in the opposite direction. It certainly seems prudent to let the State Controller make the final call on the validity of the document.

We are very pleased that the commissioners agreed 6 – 1 with our concerns, recognizing the need for the draft CFA to be reviewed and corrected.   We are confident that the State Controller will confirm and resolve errors made by RSG.  Once corrected, we firmly believe the CFA will show the proposed town of Olympic Valley to be financially viable. – Fred Ilfeld, Chairperson IOV Foundation

The LAFCO board also voted to delay the beginning of the preparation of an environmental impact report until after the  review of the CFA is final. Previously, IOV had been notified that they would need to pay for the cost of the environmental review before the CFA determined if the town was financially viable. The estimated cost of the review is expected to be near $200,000. While that seems to be a drop in the bucket, compared to Squaw Valley’s $700,000 expenditure, it is certainly not chump change for Incorporate Olympic Valley.

While we are not municipal finance experts, we can’t help but wonder how the town of Olympic Valley can’t be viable.  The proposed town has very little service area yet has enormous tax revenues. By implying the town is not viable means that Placer County actually supports the Olympic Valley area, though we have heard that “Squaw Valley” is Placer County’s cash cow. Which is it?
​The Save Olympic Valley campaign, funded entirely by Squaw Valley, has now spent over $700,000 adamantly claiming that the town is not viable, and we expect those numbers to jump when the new campaign reports are filed next week. We’re glad that an ​independent review by the State Controller’s Office will determine the town’s viability, not a smear campaign.
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