BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Patricia Wiggins, Chair
BILL NO: AB 1232 HEARING: 7/1/09
AUTHOR: Huffman FISCAL: No
VERSION: 6/24/09 CONSULTANT: Detwiler
SPECIAL DISTRICTS IN MARIN COUNTY
Background
A 2004 Marin County Grand Jury report called, "So Many
Districts, So Few Users," looked at the 11 local
governments that provide sewer services in southern Marin
County. The Grand Jury recommended more interagency
cooperation and an in-depth study of consolidation options.
The Sewerage Agency of Southern Marin (SASM) runs one of
the five wastewater treatment plants in that part of Marin
County. Serving fewer than 30,000 residents, SASM is a
joint powers agency composed of six member agencies:
City of Mill Valley.
Almonte Sanitary District.
Alto Sanitary District.
Homestead Valley Sanitary District.
Richardson Bay Sanitary District.
Tamalpais Community Services District.
Each member agency has its own collection system to
transport sewage to SASM's wastewater treatment plant in
Mill Valley.
In April 2009, the San Francisco Bay Regional Water Quality
Control Board imposed a $1.6 million fine against SASM for
discharging untreated and partially treated wastewater into
Richardson Bay in January 2008.
In a May 2009 report called, "Southern Marin sewers: Cracks
in the system," the Marin County Grand Jury recommended
that SASM consolidate into one central agency and begin
planning for institutional consolidation.
To control cities and special districts' boundaries, the
Cortese-Knox-Hertzberg Act created a local agency formation
commission (LAFCO) in each county. Among a LAFCO's
statutory purposes is "encouraging orderly formation and
development of local agencies based on local conditions and
circumstances."
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To guide their boundary decisions, the LAFCOs must prepare
and regularly revise a sphere of influence for each city
and special district that sets out the city and district's
future service area and boundaries. Before preparing a
sphere of influence, the LAFCO must conduct a municipal
service review that examines the area's demographics,
capacity of public facilities and public services,
financial abilities, opportunities for sharing public
facilities, and governmental accountability. A LAFCO's
decision on a proposed boundary change must be consistent
with its adopted spheres of influence.
Marin County LAFCO's 2004 municipal service review and
sphere of influence update noted that a 1984 study
identified alternatives for consolidating SASM's member
agencies to reduce operating costs. That 2004 document
also looked at the advantages, incentives, disadvantages,
and obstacles involved in reorganizing SASM, including
functional consolidations, institutional consolidations,
and the creation of a regional sanitary district. The
LAFCO report sketched the possible consolidation of the
Almonte, Alto, Homestead Valley, and Richardson Bay
sanitary districts into a single sanitary district that
collects sewage. In turn, the consolidated sanitary
district, the City of Mill Valley, and the Tamalpais
Community Services District could reorganize as a sanitary
district responsible for collecting, treating, and
disposing sewage. The City would no longer be in the sewer
business.
Because SASM's member agencies are unlikely to propose
institutional changes, some observers want the Marin County
LAFCO to initiate a consolidation or reorganization.
However, they worry that the low threshold for protests
could trigger an election and block the changes.
Existing Law
A "consolidation" is a boundary change that combines two or
more special districts into a single district. A
"reorganization" collects two or more boundary changes into
a single proposal. For example, the dissolution of five
special districts and the formation of a new district to
replace them could be a single reorganization.
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The procedures for boundary changes require four, but
sometimes five, steps:
Initiation and filing a detailed application with
LAFCO.
LAFCO review and approval, after public notice and
hearing.
Another public hearing by LAFCO to measure
protests.
An election, if there were significant protests.
Completion of the formal documents.
For most special districts, there are three ways to propose
a consolidation or reorganization:
A petition signed by 5% of the registered voters in
each district.
A resolution adopted by any local agency that
contains territory in any of the districts.
A resolution adopted by the LAFCO.
Before a LAFCO can initiate a consolidation or
reorganization of special districts, the proposal must be
consistent with its own studies, including spheres of
influence or municipal service reviews. The LAFCO must
also determine that:
The public service costs will be the same or less
than the costs of alternative means of providing
services.
The proposal promotes public access and
accountability for community services needs and
financial resources.
If a LAFCO initiates the consolidation or reorganization
and then approves the proposal, the commission's resolution
must make the same two determinations.
After a LAFCO approves a boundary change, it must conduct
another noticed public hearing to measure protests by the
affected registered voters and landowners. The amount of
protests determines whether an election is needed. For
example, if the LAFCO approves a special district
consolidation or reorganization that was initiated by a
petition or by a local agency's resolution:
No election is needed if the protests are either
less than 25% of the voters or less than 25% of
landowners who own less than 25% of the land value.
An election is required if the protests are either
AB 1232 -- 6/24/09 -- Page 4
at least 25% of the voters or at least 25% of the
landowners who own at least 25% of the land value.
Proceedings stop if a majority of the voters
protest.
For a boundary change initiated by the LAFCO, an election
is required if the protests are either at least 10% of the
voters or at least 10% of the landowners who own at least
10% of the land value.
Proposed Law
Assembly Bill 1232 authorizes the Marin County Local Agency
Formation Commission (LAFCO) to initiate and approve a
reorganization or consolidation of the Sewerage Agency of
Southern Marin and its member agencies, without protest
hearings.
AB 1232 allows the Marin County LAFCO to impose terms and
conditions on this reorganization or consolidation that
would require the Sewerage Agency of Southern Marin and its
member agencies to pay for the commission's costs.
The bill's provisions become effective on January 1, 2011.
AB 1232 contains extensive legislative findings and
declarations in support of its provisions. The bill
contains a statement justifying its special provisions.
AB 1232 -- 6/24/09 -- Page 5
Comments
1. Connect the dots . Winter storms can overwhelm sewer
systems when the collection lines can't carry the combined
volume of wastewater and runoff. In addition to these
acute incidents, older sewage collection systems have
trouble coping with the chronic problems of inflow and
infiltration of groundwater into old, cracked pipes and
homeowners' lateral connections. Because southern Marin
County's sewer systems suffer from both acute and chronic
problems, the solutions require political leadership,
managerial skill, fiscal resources, and considerable time.
Protecting water quality requires sound public works.
Sound public works requires adequate funding. Adequate
funding requires an institutional structure and political
culture that's committed to success. Smaller, fragmented
institutions have a harder time than larger organizations
when it comes to finding resources and focusing attention
on solving problems. AB 1232 doesn't mandate the
consolidation of SASM's member agencies, but it removes
statutory and political obstacles that could block their
reorganization. Clean water depends on clear decisions.
2. Cracks and gaps . Big governments with more money don't
always make better decisions than small agencies that are
closer to their constituents. By pushing the consolidation
of SASM's member agencies, the Legislature may distract
local officials from their primary mission to improve water
quality. The Regional Water Quality Control Board's $1.6
million fine got the local officials' attention and work is
underway to reduce inflow and infiltration, limit sewage
spills, and cut inefficiencies. With local officials
already cooperating with each other, SASM doesn't need the
Legislature's interference. Legislators should be
concerned about results and not how local officials
organize themselves. Pay attention to the performance and
leave the details up to local conditions and circumstances.
3. Resetting the threshold . For their first three
decades, LAFCOs couldn't initiate proposals to change
special districts' boundaries. The 1993 bill that let
LAFCOs initiate district proposals balanced that new power
by reducing the protest threshold needed to trigger an
election from 25% to 10% (AB 1335, Gotch, 1993). It's
easier to force an election if LAFCO initiated the
proposal. If legislators worry that it's too easy for
AB 1232 -- 6/24/09 -- Page 6
Marin County's small sewer districts to rally their
constituents to protest a LAFCO-initiated reorganization,
then the Committee may wish to consider restoring the 25%
protest threshold instead of sidestepping protests.
4. A law or a lever ? The Marin County LAFCO can already
initiate the consolidation or reorganization of SASM and
its member agencies. The key change in AB 1232 is
sidestepping the protest hearings --- effectively avoiding
an election. The bill delays that provision until January
2011. In the meantime, the political pressure which may
result from AB 1232 could nudge SASM's member agencies into
a closer functional relationship or even change their
institutional structure. The Committee may wish to
consider whether AB 1232 could be an effective lever that
moves local decision makers without ever being used.
5. Progressive or Populist ? California's boundary change
statutes reflect the state's curious blend of Progressive
and Populist political impulses. The Progressive Era
touted representative government, expert advice, and
orderly government. The Populist cause championed direct
democracy, common sense, and responsive governments. While
the two goals aren't antithetical, reconciling them can be
hard. By creating LAFCOs composed of local elected
officials whose decisions must follow expert plans, the
Cortese-Knox-Hertzberg Act clearly reflects the Progressive
tradition. By requiring petitions, allowing protests, and
providing for voter review, the Act also acknowledges
Populist themes. More than a century ago, the United
States Supreme Court explained that there is no
constitutional right to vote on local boundaries. The
Cortese-Knox-Hertzberg Act's provisions for protest
hearings that may lead to elections are statutory
opportunities, not constitutional rights. What the
Legislature has created, it can waive.
6. Hearts and minds . One reason that Marin County's small
sewer districts persist is that they use property tax
revenues to subsidize their customers' sewer rates.
Because these districts levied their own property tax rates
before Proposition 13, four of SASM's special districts got
property tax revenues in 2006-07 to support their sewer
activities:
Almonte Sanitary District $91,417
Alto Sanitary District 42,679
AB 1232 -- 6/24/09 -- Page 7
Homestead Valley Sanitary District152,183
Richardson Bay Sanitary District 1,252,223
Total $1,538,502
Without these tax subsidies, local sewer bills would be
higher. To promote economic efficiency by relying on more
realistic prices and market-like mechanisms, legislators
could shift property tax revenues away from these
enterprise districts and send them to the county government
to support countywide public safety, social services, and
public health programs. Without the additional revenues,
southern Marin County's sewer districts would have to
explore new efficiencies and possible consolidations.
Proposition 1A (2004) permits this legislative
intervention, but it takes a 2/3-vote bill. To paraphrase
the late President Lyndon Baines Johnson: Get them by their
wallets and their hearts and minds will follow.
7. Special legislation . The California Constitution
prohibits special bills when a general law could apply.
Nevertheless, special legislation is permitted when
legislators explain why statewide statutes won't work in
particular circumstances. In addition to legislative
findings that recount Marin County's situation, AB 1232
also declares the need for special legislation.
AB 1232 -- 6/24/09 -- Page 8
Assembly Actions
Assembly Local Government Committee: 5-2
Assembly Floor: 48-27
Support and Opposition (6/25/09)
Support : Clean Water Action, San Francisco Baykeeper, Save
The Bay.
Opposition : Einar Asbo.