HOA voices concern over GCSD tax plan
There’s a showdown brewing between the Pine Mountain Lake Association, which represents owners of hundreds of homes and other properties in a gated community outside Groveland, and the Groveland Community Services District, which has a new tax plan focused on raising revenue from construction of new buildings to increase future staffing for the local fire department.
The association opposes the new tax plan and wants to see the GCSD board have it rescinded, while the district and its general manager, Pete Kampa, are going full speed ahead.
Joe Powell, general manager for the association, said Monday that he, its board of directors, and its members “had no idea that GCSD was going to levy a residential lot tax under the MelloRoos Act” until he was notified by Kampa via email on Sept. 17, after the GCSD board had already approved and adopted the tax.
“Why didn’t this happen prior to the GCSD board’s final approval?” Powell asked. “It appears that GCSD was working on the development of this tax plan for over a year. Why wait until after the adoption of the tax ordinance to get input from all affected stakeholders? It just didn’t make sense to us.”
It took more than a month and a half for the association’s staff to gather information about the new tax plan, Powell said.
Powell’s account of the
new tax plan and how it came to be differs from that of Kampa, who said on Friday the association is not experienced with the plan and is making assumptions that are going to confuse people.
After receiving the email about the plan, Powell said he asked to schedule a meeting with Kampa to gain clarity on what GCSD did. Powell said he suggested that Kampa and the GCSD board hold a town hall meeting to let members of the community know about their new tax plan, even though they had already adopted it.
“I told Mr. Kampa that it was my opinion that GCSD flew this MelloRoos Tax under the radar and once Groveland community members become aware of it, they would not be happy as they were not adequately informed so that they could provide input before the GCSD board approved and adopted the tax,” Powell said.
The town hall meeting took place Nov. 4 at Groveland Community Hall on Main Street in Groveland. More than 50 people filled all the chairs at the meeting. Many of them balked at the new tax plan’s complexity, questioned whether it’s a disincentive to new developments, and criticized what they described as a lack of transparency in how it has been presented to GCSD ratepayers.
The association’s board then met on Nov. 20 and assigned the association’s legal staff to review the legality of the tax. The board also gave direction to ask the GCSD board to revoke or amend the plan so that it does not affect single-family residential lot owners, before sending out a notice to association’s members on Nov. 23.
According to information PML administrators received and included in the Nov. 23 notice, there will be a $2,700 fee charged to annex into the new community facilities district and an annual tax of $1,600 that goes up each year in perpetuity on each property where a new home is built.
Taxes from the new community facilities district are slated to fund the Groveland Fire Department and parks and recreation at GCSD, the Nov. 23 notice states.
“While the association supports the Fire Department and the service they provide to our community, we are in opposition to funding it through a Mello-roos tax on single-family residential lots,” the Nov. 23 notice states. “We would rather see a tax measure that is approved by a vote of the ratepayers in the district, not one that creates a Mello-roos district that will require disclosure every time a property is sold in PML.
“Even if you already own a home in PML and do not get annexed into the new GCSD MelloRoos tax district, you can be impacted. If every PML member who owns an undeveloped lot decides to dump their property on the association, we could lose more than $1.3 million per year in assessments. If this occurs all remaining PML members will have to foot the bill to cover the cost of these lost assessments.”
Powell said Monday the information that the association received about the tax plan came directly from the official GCSD website, which included board meeting minutes, board resolutions, ordinances, a frequentlyasked-questions sheet, and a fiscal impact analysis prepared by a consultant for the district.
“We also received information directly from Pete Kampa and from attending the Nov. 4 town hall meeting,” Powell said. “Lastly, we read the entire text of the MelloRoos Act, specifically Section 53328.1 of the California Government Code. This is the section that GCSD quoted as part of their documentation that purportedly allows them to levy this tax without getting approval by twothirds of the voters in our community.”
The $1.3 million calculation of potential annual losses to the association reflects the loss of $220 per month assessment from 511 undeveloped lots, which works out to $1,349,040 annually, Powell said.
“If our association loses over $1.3 million dollars annually, the other members of the association will have to foot the bill for this lost assessment income,” Powell said. “This is an obvious negative impact to our community members. At the Nov. 4 town hall meeting, a real estate agent and a real estate broker stated emphatically that they would no longer pay the annual assessment on their unimproved lots if the GCSD Mello-roos Tax remains in place as they would not be able to sell these lots. They looked at me and told me to get ready because they were going to dump the lots on the association.”
Powell said GCSD should have notified all of its ratepayers in Groveland and Pine Mountain Lake to let them know that, if the tax went into effect, it could cost them an additional $1,600 per year if they decide to build a home on their property.
Kampa heard about the association’s Nov. 23 notice Friday and responded to questions about it Friday and Monday.
“The main thing is the association is not experienced in this type of funding mechanism,” Kampa said in a phone interview Friday. “They’re making some assumptions that are going to confuse people. The assumption that it’s going to have an impact on all residential lots, it’s not that way. The way that (Nov. 23 notice) is written, it expresses the confusion they have about it. We, GCSD, had over a dozen meetings. I’m a little bit surprised by the association putting it out there that it could affect all lots, when that’s not the case, and that some people will walk away from their lots.
“Making an assumption that all lots within Pine Mountain Lake are going to be affected, and all these people are going to walk away from their lots and leave Pine Mountain Lake Association with assessments obligations, it’s their assumption. I don’t know of any factual basis. They’re completely confused about the whole thing.”
The new GCSD tax plan is intended to fund expansion of fire services in the future to make sure response times don’t suffer as new developments occur, Kampa said, adding that there was never any intent to fly the new tax plan under the radar.
Kampa said the district purposely placed fire department funding concerns and community facilities district formation on the GCSD board agenda every month from October 2020 until the community facilities district was finally formed in July.
All meeting agendas are posted, and all meeting materials are made available on the GCSD website four days in advance of the meeting. Agendas are emailed to those who request them, and social media posts about meetings and agenda items are published in advance on Facebook and Nextdoor, Kampa said.
Kampa also said the district also asked the association to publish informational GCSD posts and agendas on its official Facebook page for months to increase awareness of GCSD business.
“We were denied the ability to have GCSD information posted on a regular basis and, rather, were told that PML staff would review GCSD posts and determine what is ‘appropriate’ to post on the official PML Facebook page,” he said. “Information about the CFD and fire department funding issues were for some reason not published on the official PML Facebook page.”
The need for the new tax plan at GCSD stems from a “very real financial problem with the Groveland Fire Department as it exists today,” Kampa said. Without additional funding, new development in the district will exacerbate the financial problem and result in more emergency calls and longer response times.
“We have to solve this for the health and safety of the community, and it is not appropriate to charge existing home and business owners the cost to expand fire and park services in the future,” Kampa said. “That cost is for new development to pay.”
The new tax plan is complicated, Kampa conceded. It took 24 times on the GCSD board agenda over the past three years for the district to take action. Every meeting was open to the public and advertised on the website and social media both before and after.
“Unfortunately, the PML board was presented in only one single meeting a proposal containing unfounded assumptions, incorrect information and misstatement of facts, which led them to oppose the GCSD Community Facilities District, a funding mechanism adopted specifically to maintain the services they say they support, by offsetting the financial impacts of new development,” Kampa said.
The next GCSD special board meeting is scheduled at 10 a.m. Tuesday at the GCSD offices, 18966 Ferretti Road. The next GCSD regular board meeting is scheduled at 10 a.m. Dec. 14 at the same address, but the tax plan is not on the agenda.
The tax plan will next be on the board’s agenda at its meeting on Dec. 14, Kampa said. For more information, visit www.gcsd. org/board-meetings-meeting-documents.