LAFCO warns Cambria CSD to align parks and fire responsibilities with sustainable funding

Rob Fitzroy, executive officer of the San Luis Obispo Local Agency Formation Commission, presented the municipal service review (MSR) and told the Cambria CSD board the review found water and wastewater services are operating adequately as enterprise funds but that parks, recreation and open‑space activities rely heavily on the district’s General Fund and pose a financial risk.

Fitzroy said the MSR noted the district has the ability to continue current fire protection service levels but should identify a stable funding source for fire into the future — especially as the SAFER grant expires. He said, “Without an increase in revenue streams, prioritize and operate within your fiscal limitations,” and urged the district to conduct fiscal projections and consider common practices such as budget policies, dedicated fees or, in extreme cases, divestiture of powers through a LAFCO proceeding.

Fitzroy described spheres of influence and LAFCO’s role in annexations, incorporations and divestiture proceedings, and said forming a new parks and recreation district is technically feasible but depends on community support and an associated revenue stream. He also emphasized the MSR used audited data (through fiscal year 2122 in the MSR presentation) and that these reviews are snapshots that should be revisited.

Board members used the presentation to ask how property tax allocations and tourism‑sourced revenues flow to the county and district, and whether an incorporation or special district for parks would be revenue‑neutral; Fitzroy replied that incorporation is possible but difficult and that revenue neutrality is a primary test.

The presentation framed the board's later discussion and the staff recommendation to prioritize core service funding in Resolution 152026.