Pacifica has financial problems, but could increase efficiency by merging its water district and city government.
That proposal comes courtesy of Project Resource Specialists, a consulting firm hired by the San Mateo Local Agency Formation Commission.
But any savings to ratepayers would be minimal, said a water district representative, and LAFCO’s executive officer believes Pacifica officials might want to avoid taking on additional responsibilities before they address those financial problems.
Contained in LAFCO’s recently released North County Cities & Special Districts Municipal Service Review and Sphere of Influence Study, the consultant’s recommendations also include removing certain unincorporated permanent open space areas from Pacifica’s sphere of influence and transferring responsibility for maintenance of those lands to San Mateo County.
The lands in question are located at the far south and southeast ends of Pacifica, and any suggestion that the town relinquish control over them could be met with resistance from residents who have historically opposed new development.
But it is “highly unlikely” that those lands would ever be developed, said City Manager Lorie Tinfow, who has not advocated the change, but explained that because those lands don’t require many municipal services, removing them from the city’s sphere of influence could make sense.
Budget issues in Pacifica were highlighted in the report. When the draft Municipal Service Review was made public May 21, the city’s fiscal year 2013-14 audit had not been completed. This and other factors caused the consultant to conclude that the town’s financial condition was “not clear.”
The consultant added that Pacifica’s reserve funds were below the levels normally seen as necessary for responding to emergencies or economic downturns, with some funds showing negative balances.
Tinfow said the audit, which was presented to the City Council earlier this week, had been delayed by staff vacancies and turnover.
Martha Poyatos, LAFCO’s executive officer, acknowledged that city staff had shouldered additional responsibilities, and said a delay in completing the audit might be understandable under the circumstances.
Partly due to loans between city funds that were not repaid, the cash shortages existed prior to Tinfow’s appointment in 2013, and she said the City Council has made it a priority to fund the emergency reserve and repay the loans.
Councilman Mike O’Neill agreed with this goal, saying, “Pacifica is working toward getting our financial house in order.”
The North Coast County Water District provides Pacifica’s drinking water, and its boundaries are essentially the same as the city’s borders. Joshua Cosgrove, district vice president, said he was pleased that the Municipal Service Review had generally positive things to say about his agency’s finances, but that he disagrees with the recommendation that the district merge with Pacifica’s city government.
Cosgrove, who is also a LAFCO commissioner, explained that the merger recommendation is driven by a guideline that, wherever possible, LAFCO should favor single, multipurpose agencies over solutions requiring more than one agency.
Although absorbing the district into the city government could enable Pacifica to reduce costs by dissolving the district’s board of directors and laying off some managers, Cosgrove said any savings for ratepayers would be barely noticeable.
Cosgrove added that he did not think the political will for such a change existed in the community.
“No resident has ever come to any of our meetings and said the water system should be run by the City Council,” Cosgrove noted.
Poyatos said that while the merger recommendation is consistent with LAFCO’s mission of streamlining local government, she recognized that Pacifica’s current budget issues could support an argument against combining the two entities.
“The city’s financial condition maybe should improve before such a merger occurs,” Poyatos said.
LAFCO’s commissioners will vote on whether to endorse the review’s recommendations during their next regular meeting, scheduled for July 15.