Should Los Osos be managed by the county?

September 4, 2014
Tom Salmon

Tom Salmon


The Los Osos Community Services District (LOCSD) has proven to be a failed experiment. Formed in 1998 under the guise of obtaining “local control” the LOCSD has been whittled down to a shell of its former self. With powers sold off and stripped away it leaves Los Osos residents asking “why don’t we just go back to the county?”

When the first fledgling board formed they chose latent powers as incorporated into their Mission Statement here: “The Los Osos Community Services District shall provide the best possible services to the community of Los Osos including water, wastewater, drainage, parks, recreation, street lighting, solid waste, fire emergency and rescue response. The Board of Directors and staff shall respond with excellence to meet the community’s needs and desires. The Board shall encourage community participation in its decision-making and shall facilitate the interaction between the community and other agencies and levels of government.”

The first departure from local control came when the district voluntarily contracted with Cal Fire; handing over the reins and management of the fire department to its qualified personnel. The district continues to benefit from the economies of scale Cal Fire can provide, yet robs the fire fund of over $100,000 a year each year for “administrative services” the district provides the department.

Additionally, a misstep when the ‘Move the Sewer’ board allowed their interim general manager to commingle fire funds with sewer funds. Taking responsibility and preventing that from ever happening again, the board took proactive steps to let the county make the district’s semi-annual payment to Cal Fire from general property tax collected. This check is cut prior to the CSD’s remaining tax allocation to use for “services the district provides.”

“Services the district provides” is in quotes, meant to sarcastically point out that the district “provides” very little in the way of “services” with the monies collected.

In 2007 the wastewater project was stripped away via special legislation, aka “AB2701,” leaving the district to “service” to two small community septic systems. These systems were never intended to treat sewage for over 40 years and continue to limp along in anticipation of the County’s completion of the out of town sewer project. Both these systems are operating at a financial deficit, propped up by inter-fund loans being made until the County’s project comes on line. Both funds contribute significant amounts to the district’s administration, leaving little funds to operate these systems.

The street light “service” in Cabrillo Estates is “provided” by the LOCSD, yet the tax collected doesn’t cover the expense of the “service” so lighting has been shut off. What lights are left on are so old they were built without switches or the adjoining neighbor has made an agreement directly with PG&E to pay to leave their light on.

Of the $95,000 in drainage tax we pay each year nearly $40,000 goes to fund administration. As it turns out the County hadn’t transferred all drainage facilities as expected and monies have been spent maintaining facilities that were not the LOCSD’s. Very little of what’s left goes to on the ground drainage improvements.

The district has never had revenue to fund Parks & Recreation. It has over $300,000 affectionately known as the “Pool Fund” safely housed at the SLO Community Foundation where it’s generating interest to do nothing. The funds were collected as part of a Special Tax for parks (not necessarily a pool) in 1997. The vote was overturned by the passage of Proposition 218 that required a 2/3 majority of voters to support the taxation. Rather than return the funds to each parcel, the funds have been held with no public discussion as to what to do with them .

The latest and most devastating blow to the district was the sale of the solid waste franchise to the county to cover bankruptcy debt. Without the $160,000 revenue it brought and its nearly $60,000 administrative contribution, the remaining LOCSD funds accounts will have to pick up the slack by contributing more to the overstaffed district.

What’s left? The water district only serves 2,755 customers; while Golden State Water, S&T Mutual and private wells (combined) serve the majority of the community its water. Additionally, the water company is being subsided by $180,000 in general property tax each year. This subsidy, combined with nearly $1.9 million in water sales, constitutes the bulk of the district’s income. Of this income, over $550,000 goes to administration and legal costs.

While I bristle at the thought of the county managing our services, it couldn’t be worse than the LOCSD and certainly would cost less.


The huge problem with correcting this obvious mistake in government is that the very people that decide whether or not a small CSD can dissolve and reap the benefits of scaled up (and most probably, more competent) government, are beholden to that people that would assume a shared cost in their inclusion. LAFCO, the governmental entity that decides this is made up of elected officials of the entire county. No elected official anywhere easily agrees to sharing the costs of bad decisions of other people with his electorate. Nor would anybody expect them to.

Stepping into a CSD is like stepping into a river, you can’t undo it and you can’t step in the same water twice.

It can be done well, in this case it wasn’t


Tom. Good article, but instead of “Formed in 1998 under the guise of obtaining “local control” I would have said under the guise of a $38 per month sewer as compared to a $100 per month sewer that was already approved and in the planning stage. According to their plan that was already rejected as unworkable by the regulating entities (Questa Study) they lied to the electorate and hoodwinked the then unincorperated area into forming a CSD. From then, their train ran headlong off the tracks.


As a longtime resident of Los Osos, I would welcome the county to take the reins back and govern Los Osos. It was downhill from the very moment the CSD was formed.

As the world turns

CSDs have become worthless. Wannabes get elected to CSDs and create a whole host of problems. They pay their employees outrageous amounts of money and hire consultants who make hundreds of thousands of dollars for worthless studies. Get rid of all CSDs.

mb business owner

The way Morro Bay is going, pretty soon they will be run by the county as well! But wait, perhaps that’s the scheme.


Nice summary and presentation, Mr. Salmon. You hit the big points and didn’t get bogged down, as I would have, amid bitterness over past monster stupidity and waste. You said your points better than I could have.


This question of continuing a CSD should be asked of every CSD in the County. I don’t see the benefit. What I do see is a lot of money spent on duplicate administration.


Some of the community service districts in this county are properly run and are of great benefit to the residents of the communities that they serve by giving local control on a variety of issues. In fact community service districts are a practical alternative to incorporation for communities that lack the tax base to support city level services. That being said there are examples of communities that are simply not suited to the Community Service District model often times because of the divisions that exist within them over hot button issues such as the building of infrastructure and the maintenance of public services. Los Osos would be better served by the County administering the functions of government and the maintenance of public services then to continue with the failed experiment.


Any government body never gives power or taxes back once they get them, or at least they try not too.


Great, choose between the frying pan and the fire?