Big rate increases proposed for four road maintenance special districts in Santa Cruz County

Four road maintenance special districts in Santa Cruz County are proposing rate increases to help fund their operations and future projects, including fixing medians that have fallen into disrepair.

If approved by a majority of property owners in the special districts, the rates — which cover about 1,600 parcels across the four districts — would triple for some property owners. A public hearing is set for April 13 at 9 a.m. to allow special district residents, who will vote on whether or not to approve the proposed hikes, to give their input.

The four special districts, also known as county service areas, include Aptos Seascape (CSA No. 3), Oak Flat (CSA No. 13A), Whitehouse Canyon (CSA No. 18), and Lomond Terrace (CSA No. 28). They dot the county, from urban coastal pockets near Seascape Park Beach in Aptos to rural neighborhoods along Whitehouse Creek Road near the county line.

CSAs are self-funded and formed by residents who want to pay for extra services not provided by their local government. In addition to CSAs related to sanitation, lighting and pest control, Santa Cruz County has dozens of CSAs that focus on increased maintenance of their local roads.

“Most people do it for their roads, because by forming a CSA for your road, your road becomes eligible for federal disaster assistance, because the road becomes a public roadway,” said Matt Machado, the county’s director of public works and deputy county administrative officer.

Residents in the CSAs fund the services through an annual fee that is tacked onto their property tax bills, called a benefit assessment. Fees can range from the low double-digits to hundreds of dollars annually. The proposed rate increases would be for the 2021-22 fiscal year, which runs July 1 through June 30.

The biggest of the four CSAs by far is Aptos Seascape, with more than 1,600 parcels. Of those, assessments would be levied on 1,498 parcels, according to the county.

A map shows the Aptos Seascape County Service Area.

(Santa Cruz County)

The assessments are based on flat fees, and parcels are classified into different categories. If approved, the annual rates for the Aptos Seascape CSA would increase as follows:

• For residential and vacant lots from $50 to $150
• For duplexes from $100 to $300
• For 3-unit condos from $150 to $450
• For fourplexes and retirement housing from $200 to $600
• For minor commercial, affordable housing, hotels and swim/tennis clubs from $400 to $1,200

Trink Praxel is a board member for the Aptos Seascape CSA. She and her fellow board members know that the proposed rate hikes are significant. But the hikes are needed, they say, to repair the damage done by more than a decade of deferred maintenance, especially since the special district hasn’t raised its rate since 1996.

The 15 medians the CSA is responsible for are in “pretty bad shape” and need some “significant renovation,” Praxel said. The Local Agency Formation Commission — which regulates the boundaries of cities and special districts, and is comprised of local elected officials and other appointees — determined in 2019 that the CSA is “significantly underfunded,” she said.

“We’re really at that point where we had cut back services so much that it was having an impact, and you could see that in the landscaping in the medians, and in other places,” Praxel said.

The rate hike is also needed, the CSA board argues, to pay for water costs that are increasing at a far greater clip than the Consumer Price Index — and to build a reserve for increasing costs and unforeseen expenses. Costs for the median renovations are expected to total $420,000, according to a plan put together by the CSA board.

At triple the current rate, the median project would still take four years, Praxel said. But that is far speedier than if the board had decided to only double the rate.

The idea is for people to see the results from the higher rate quicker, Praxel said. “(We felt) that it would be better to look at a shorter timeline,” she said.

The hope is that the increase, if passed, would also help restore services that have been cut, such as a street sweeping program. The CSA is also responsible for security and garbage pickup at a stretch of beach between Seascape Resort and Via Gaviota.

A map shows the Lomond Terrace County Service Area.

(Santa Cruz County)

The three much smaller CSAs are also looking at some significant proposed rate increases.

• At Oak Flat, 18 of the 21 total parcels would be charged assessments. There, the flat fee would rise from $600 to $1,500.
• At Whitenhouse Canyon, assessments will be levied on 40 of the 52 total parcels. The proposed increase of the flat fee would take rates there from $50 to $100.
• At Lomond Terrace, 79 of the 93 parcels would be charged assessments. There the flat fees would jump from $500 for improved parcels to $700, and increase from $200 for unimproved lots to $350.

Representatives for those CSAs did not respond to Lookout’s request for an interview, made via county staff.

The county, which mostly acts as a bank for the CSAs, mails out ballots to the property owners in the special districts. For a rate increase to pass — of the votes that are returned — more than 50% have to be in favor.

A map shows the Whitehouse Canyon CSA.

(Santa Cruz County)

Rate increases don’t happen regularly, Machado said, and often are tied to repair work after storms.

The Aptos Seascape CSA last had an election on proposed increases in 2002/03, which failed, according to the county. The Oak Flat CSA last passed increases, doubling rates from $300 to $600, with an election in 2011/12. The Whitehouse Canyon CSA last had an election in 2019/20, which failed to implement increases. And the Lomond Terrace CSA last had an election in 2018/19, approving rate increases on improved parcels — from $300 to $500 — but not on improved lots where rates stayed at $200.

“It’s rather rare,” Machado said. “Most of them are hinged upon like storm damage. So if a road gets damaged, then they have to pursue this, typically. And so that’s definitely not a regular basis.”