By Jennifer Grimes

Triplicate staff writer

Already bogged down by difficult revenue-sharing talks between Del Norte County and Crescent City, now a disagreement over the timeline to approve a new pact is complicating the so-called Roosevelt Annexation.

At stake is a $500,000 state grant necessary to upgrade the system. Without that money, residents would see water bills skyrocket.

But to get the grant, the city must annex the Roosevelt area from the county. To do that, the city and county have to agree on sharing the tax revenue.

Amy Beauchane, LAFCO's executive director, said the two sides have a year to complete the whole process once the application is submitted.

Crescent City officials submitted the application in April.

Clyde Eller, a Del Norte County Supervisor and a decision maker on the Local Agency Formation Commission Board in charge of approving or rejecting annexation applications, argued with Beauchane at Monday's board meeting that the clock is ticking much faster.

Eller said as far as he knows, the county assessor has 30 days to gather tax assessment information on the area and deliver it to the county auditor. The auditor then has 45 days to gather other information and then there is a 90-day window to firm up an agreement, he said.

Beauchane questioned Eller's source of information.

andquot;My obligation as executive director of several county LAFCOs is to know LAFCO timelines and last I knew, the deadline is one year from the time the application was submitted,andquot; she said.

Eller insisted his information is correct and said the current time pressures are the fault of the city.

andquot;This is why I suggested we have the (tax-sharing) agreement in place before the city submitted the application,andquot; Eller said

andquot;I suggested that to the city as well,andquot; Beauchane said.

But City Manager Dave Wells said waiting to apply is not a luxury the city has if it wants to get the water grant.

andquot;We are obviously under deadline pressures to utilize the state grant monies. Our contract with the state said the project should be substantially completed by Dec. 31,andquot; Wells said.

Replacing the 60-year-old pipes and pumps which are not hooked up to a state required filter system and are not part of the city water system is imperative, says the State Department of Health.

The private owner of the system, Needa Morgan, said she can't afford to do that.

andquot;The system does definitely need to be upgraded, but it would cost about $500,000 and I could never get a loan for that much. Even if I could, the users would have to pay a lot more than they are now,andquot; Morgan said.

Half-inch instead of one-inch pipes, shallow wells that are 25- instead of 50-feet deep and the absence of filtering are factors causing the state to demand changes.

Ten businesses and 68 dwelling units use the Roosevelt Water System. City Councilmember C. Ray Smith said that's why it's important to get it done.

andquot;It's an unfortunate situation, because we have political differences. These people are on an unfit water system and we need to push this along,andquot; Smith said, who is also a LAFCO board member.

The city and present owner of the system Morgan had to sign a contract with the state to improve the system or the state would take it over, fix it themselves and charge Morgan and the water users.

andquot;The cost would be so high, the people living there would have to move because they wouldn't be able to afford it,andquot; said Leah Brooks of the State Department of Health.

andquot;The state engineer made it very clear that if this annexation does not go forward and the grant money is not used, the state would take it over,andquot; Wells added.

During the discussion at Monday's LAFCO meeting, board member Donald Micheletti asked the city and county politicians why it's so hard to agree on sharing the tax revenue from the small area.

andquot;It's not an easy discussion because both entities are going to lose money,andquot; said Eller.

County supervisor Jack Reese said andquot;Both the city and the county are in the position to lose money and it's up to each to decide how much we're willing to lose.andquot;

To that, Smith suggested both sides split revenues down the middle. But Eller worried the county wouldn't get enough.

andquot;If the county is going to lose sales tax revenue from Coast Auto, how is the county going to be reimbursed for that?andquot; Eller said.

Once annexation occurs, the two governments cannot share sales tax revenue unless it is voted on by the residents to do so. Without putting it on the ballot, if the city takes jurisdiction over that area, the city will get all the sales tax revenue.

Even if the city does get all the sales tax, the cost of installing and running the new water system will cost the city more than it gets in revenue, city officials say.