The San Luis Obispo County Air Pollution Control District is facing considerable revenue shortfalls over the next five years and must consider raising fees to keep the agency solvent.
The air district’s board of directors is scheduled to meet Wednesday to discuss budget strategies through 2017.
The board will also hold hearings on updating the district’s fee schedule and its fiscal year 2012-13 budget, which takes effect July 1.
The meeting will be at 9 a.m. in the Board of Supervisors chambers in the County Government Center at 1055 Monterey St. in downtown San Luis Obispo.
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In a staff report summarizing the district’s financial woes, Larry Allen, county air pollution control officer, said the district’s annual budget deficit could grow to $655,000 in five years.
“It is clear that additional, stable sources of revenue are needed to avoid drastic cuts in operations, services and staff in coming years,” he said. “Significant measures must be taken now to ensure district revenue and expenses remain in balance over the long term.”
The district’s operating expenses have increased nearly 9 percent per year over the past decade, while revenue has grown at a much slower rate. The district also faces the closure of the Morro Bay power plant in 2013, which will mean the loss of $279,000 per year in fees.
Most of the district’s revenue comes from permits and fees. Allen’s report outlines a variety of increases the air district could adopt that would generate more revenue. Two of the more ambitious options would require either new state legislation or a property tax election.
One potential proposal would ask the state Legislature to increase motor vehicle registration fees by as much as $3 on the roughly 250,000 vehicles in the county. The fee is currently $4 per vehicle. A $2-per-vehicle increase would generate $500,000 per year for the district.
Another possible proposal would involve sponsoring a ballot measure to impose an added property tax of $5 to $10 on the 135,000 parcels in the county. If approved by voters, this tax would generate between $675,000 and $1.35 million per year.
The Air Pollution Control District has a staff of 24, and its current budget is $4.4 million. Most of its budget goes to pay salaries and benefits.