BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1232
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          CONCURRENCE IN SENATE AMENDMENTS
          AB 1232 (Huffman)
          As Amended  June 24, 2009
          Majority vote
           
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          |ASSEMBLY:  |48-27|(May 21, 2009)  |SENATE: |22-16|(August 27,    |
          |           |     |                |        |     |2009)          |
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           Original Committee Reference:   L. GOV.  

           SUMMARY  :  Allows the Marin County Local Agency Formation  
          Commission (Commission) to initiate and approve, after notice  
          and hearing, a reorganization or consolidation of the Sewerage  
          Agency of Southern Marin (SASM) and its member districts,  
          without protest hearings.

           The Senate amendments  :

          1)Narrow the scope of the bill to focus specifically on the  
            reorganization or consolidation of SASM and its member  
            districts.

          2)Allow the Commission, if it initiates and approves the  
            reorganization or consolidation, to impose terms and  
            conditions on the reorganization or consolidation that would  
            require SASM and its member agencies to be responsible for  
            payment of the Commission's costs incurred in association with  
            the reorganization or consolidation.

           EXISTING LAW  :

          1)Establishes the procedures for the organization and  
            reorganization of cities, counties, and special districts  
            under the Cortese-Knox-Hertzberg Local Reorganization Act of  
            2000 (Act).

          2)Allows a local area formation commission (LAFCO) to initiate  
            proposals for changes or organization, including  
            consolidation.

          3)Defines "change of organization" in the Act to include  
            consolidation of cities or special districts.









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          4)Defines "proceedings" to mean proceedings taken by the LAFCO  
            for a proposed change of organization or reorganization.

          5)Provides for noticing requirements for a protest hearing, and  
            specifies that during the hearing the LAFCO shall hear and  
            receive any oral or written protests, objections, or evidence  
            that is made, presented or filed.  

          6)Provides that a proposal for change of organization must be  
            abandoned if a majority protest is deemed to exist.

          7)Requires a LAFCO to revisit its municipal service reviews and  
            adopted spheres of influence every five years.

           

          AS PASSED BY THE ASSEMBLY  , this bill:

          1)Provided the Commission, after notice and hearing, with the  
            power to initiate and approve a reorganization or  
            consolidation of small wastewater agencies, without protest  
            hearings, if all of the following conditions exist:

             a)   The Commission, in its municipal services review (MSR)  
               of the wastewater agencies, completed within the last 10  
               years, makes findings or determinations related to  
               reorganization or consolidation, that if implemented, would  
               improve the financial and service level benefits, improve  
               government accountability, improve operational  
               efficiencies, and provide cost savings for the ratepayers;

             b)   The wastewater agencies have not implemented the  
               Commission's findings or determinations as provided in the  
               MSR; and,

             c)   The wastewater agencies affected have had three or more  
               illegal discharges in the last five years, based on  
               violations identified by the San Francisco Bay Regional  
               Water Quality Control Board (SFBRWQCB) that exceed 5,000  
               gallons of untreated or partially treated wastewater to  
               waters of the state.

          2)Defined "small wastewater agencies" to mean sanitation  
            districts and local governments that provide sewer and  
            wastewater collection or treatment services to 10,000 service  








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            connections or less.

          3)Stated that the provisions of this measure will become  
            effective on January 1, 2011.

          4)Made findings and declarations about the impact of illegal  
            sewage spills.

          5)Declared that this bill is a special statute because of the  
            unique circumstances applicable to the County of Marin.

           FISCAL EFFECT  :  None

           COMMENTS  :  Current law specifies various ways that special  
          districts and other agencies can be reorganized and modified,  
          including consolidation, dissolution, including dissolution with  
          annexation, a merger, or establishment of a subsidiary district.  
           This bill focuses on consolidation - the formal restructuring  
          transactions that would combine two or more agencies into a  
          single organization and would require a formal LAFCO review and  
          approval process - as the means to modify special districts.  A  
          consolidation can be initiated by a petition of registered  
          voters or landowners, by a resolution of the governing body of  
          an affected local agency, or by LAFCO itself.

          This bill originates from problems in eleven sewer services  
          agencies located in southern Marin County, including six  
          sanitary districts, three cities, one community services  
          district and one joint powers agency.  Three of the agencies  
          operate wastewater treatment plants - Sanitary District No. 5  
          (Tiburon), SASM, and the Sausalito-Marin City Sanitary District.  
           Ten of the eleven agencies operate sewerage collection systems  
          and pumping stations.  All of the special districts providing  
          sanitary sewer services are governed by independent boards,  
          except for SASM, whose members are appointed by each of its six  
          member agencies.
          The author notes that "the frequency and size of illegal sewage  
          spills of raw or partially treated sewage are increasing often  
          because of the improper sewer system maintenance.  By providing  
          limited new authority to a LAFCO, this bill would increase the  
          cost effectiveness and efficiency of small wastewater agencies  
          and reduce the impacts on water quality due to illegal sewage  
          spills.  The San Francisco Bay Regional Water Quality Control  
          Board reports that over 2,000 separate illegal sewage spills  
          occurred in the bay and coastline between 2004 and 2007.  Over  








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          500 of the spills exceeded 1,000 gallons.  One of the largest  
          spills was 2.5 million gallons in Marin County which illegally  
          discharged both untreated and partially treated sewage into the  
          San Francisco Bay."

          To reduce water quality problems and to increase system  
          efficiencies, in 2005 the Marin County LAFCO conducted an MSR  
          and recommended a consolidation plan for the eleven small  
          wastewater agencies in southern Marin County.  The report  
          concluded that the operation of numerous separate agencies with  
          duplicated staff, and over 40 elected officials, is not a cost  
          effective way to manage the single purpose service of wastewater  
          collection and treatment.  The MSR identified significant cost  
          savings for the ratepayers that would occur if agency functions  
          were consolidated.  

          This bill would allow the Marin County LAFCO to force the  
          consolidation or reorganization of SASM and its member  
          districts, without protest hearings.  Protest proceedings are  
          established in existing law to allow registered voters and  
          landowners to give oral or written protests against a change of  
          organization.  This bill removes the ability of the Marin LAFCO  
          to hold protest hearings for public input and for an affected  
          district to speak and deliberate in a public forum on the issue  
          of forced consolidation and whether it is the best option for  
          the community.  Protest proceedings are removed from the bill  
          because, according to the author, "there has been strong local  
          agency resistance to consolidation.  That resistance has made it  
          impossible under existing laws to implement the LAFCO  
          consolidation recommendation because existing law requires a  
          majority of voters in the affected districts to approve the  
          consolidation."

          While consolidation of SASM and its member districts may  
          increase administrative effectiveness and provide for better  
          management of those agencies, there are no guarantees that  
          consolidation is the answer to the question of how to prevent  
          illegal sewage discharges.  There may be other avenues to pursue  
          that would help sanitary districts update their aging  
          infrastructure including federal and state grants or funding, or  
          heavier enforcement if negligence is found on the part of the  
          sanitary districts.  The Legislature may wish to consider  
          whether the approach in the bill is the correct approach to  
          address illegal sewage discharges.









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          This bill, if signed into law, will take effect on January 1,  
          2011.  The assumption for SASM and its member districts is that  
          they have a few years before the bill's effective date to figure  
          out a plan to consolidate on their own terms, and then can  
          initiate consolidation before the bill takes effect.

           
          Analysis Prepared by :    Debbie Michel / L. GOV. / (916)  
          319-3958


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