San Luis Obispo County, California Fire Fees May Go Back to Towns

San Luis Obispo County will likely turn over at least $380,000 in fees that were intended to pay for new fire facilities in Oceano, Los Osos and Santa Margarita -- money that apparently should have been going to those communities' respective fire departments.

Instead, the fees went into a countywide pool used to fund fire facilities in other unincorporated communities.

The fees -- essentially a tax on new development -- were collected from builders over the past dozen or so years. The revenue was intended to pay for facilities needed to support growth.

Several officials, including county Administrator David Edge, hadn't been aware that fees from the three communities were going into the countywide pool until the issue was raised in recent weeks.

Since then, county officials have gone back and calculated how much was paid in each community.

Edge said the Board of Supervisors will be asked to approve disbursement of the fees to the three agencies. The request should go to the board in about a month.

Edge said he didn't have the total amount to be paid out but put it at less than $500,000.

In Oceano, where the community services district provides fire protection, an official said he's been told the agency has $181,000 coming from the county.

"It's a one-time deal," said Mitch Cooney, general manager of the services district. "We're going to be using it wisely."

In Los Osos, the community services district has been informed it has $199,000 coming, according to Bruce Buel, the general manager.

Santa Margarita fire officials could not be reached for comment.

The three agencies will be limited to spending the money on approved projects, such as fire stations and major equipment purchases. State law -- which gives agencies the power to collect the fees -- specifies how the money may be spent.

In Oceano, Cooney said the funds could go toward expanding the fire station or may be set aside for future purchase of a second engine. The department currently has one primary engine and one older, back-up engine.

Oceano is looking at the possibility of passing its own fire fee ordinance, which would take the money out of the hands of the county and put the community in charge of administering the fee program.

Los Osos and Santa Margarita also have that option.

The three communities also could opt to have the county continue collecting the fees then return them regularly to the respective agencies. The county does that now for Cayucos, Cambria, San Miguel and Avila Beach.

The fees are charged to builders when they construct new homes, offices or commercial structures. The county currently charges $800 per new home and $592 per 1,000 square feet of commercial space but is looking at revamping its fee structure.

Fees also are collected for libraries, parks, government offices and similar facilities.

The fees were put in place in 1991, and what occurred then regarding the fire charges isn't entirely clear.

From what officials have pieced together, Edge said, it looks as though a staff report presented to the Board of Supervisors indicated that Los Osos, Oceano and Santa Margarita were not to be included in the countywide fire fee ordinance.

It's uncertain whether those communities intended to pass their own, separate ordinances or weren't interested in participating in the countywide pool for other reasons.

However, the language in the final ordinance adopted by the board did not exclude the three communities, Edge said. When projects were built in those places, developers were charged the full amount, including the fire levy.

"It was legal," Edge said, "but it wasn't the intent, based on the report, to collect the fee in those three areas."

This is the second time in recent months that the county has been challenged over its handling of facility fees.

In Nipomo, community leaders say they haven't been receiving their fair share of fees collected for the development of new parks, and they're questioning the legality of the county's practice of "pooling" funds for countywide use.

The county is in the process of re-examining its entire facility fee program. Staff is scheduled to bring a report to the Board of Supervisors this spring.