BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 244                      HEARING:  4/27/11
          AUTHOR:  Wolk                         FISCAL:  Yes
          VERSION:  4/25/11                     TAX LEVY:  No
          CONSULTANT:  Detwiler                 

                     PLANNING FOR DISADVANTAGED COMMUNITIES
          

               Requires counties, cities, and LAFCOs to plan for 
                           disadvantaged communities.


                                    Background  

          The U.S. Census Bureau identifies a "census designated 
          place" as the statistical counterpart of a city in that it 
          is a named place with a concentration of residents, 
          housing, and commercial activity, but located in a county's 
          unincorporated territory.  The 2000 Census identified 583 
          census designated places in California.  The Department of 
          Finance says that 159 of those CDPs had 2005-09 household 
          median incomes that were less than 80% of the statewide 
          household median income.  The 2010 Census identified 1,043 
          CDPs in California and when fresh income data become 
          available in late 2011, many of them will be considered 
          disadvantaged.

          Some of these disadvantaged unincorporated communities are 
          county islands (mostly surrounded by cities), some are 
          fringe communities (at or near the edge of cities), and 
          others are legacy communities (geographically isolated).

          Proposition 84 (2006) authorized $5.4 billion in state 
          bonds and specifically set aside $90 million for "planning 
          grants and planning incentives."  The Strategic Growth 
          Council manages these programs (SB 732, Steinberg, 2008).  
          The Council has awarded $26 million in planning grants.  
          Concerned about the inequities faced by disadvantaged 
          communities, the Council will prioritize 20% of each year's 
          planning grants for work that benefits economically 
          disadvantaged communities.

          Many disadvantaged unincorporated communities lack public 
          services and even public facilities like domestic water, 




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          sanitary sewers, paved streets, storm drains, and street 
          lights.  Some cities and special districts are reluctant to 
          annex these areas.  Advocates want legislators to require 
          local officials to include disadvantaged communities in 
          their long-range planning for land use and public 
          facilities.




                                   Proposed Law
           
          I.   County and city general plans  .  Every county and city 
          must adopt a general plan with seven mandatory elements: 
          land use, circulation, housing, conservation, open space, 
          noise, and safety.  Except for the housing elements, the 
          Planning and Zoning Law does not require counties and 
          cities to regularly revise their general plans.  Cities and 
          counties' major land use decisions --- subdivisions, 
          zoning, public works projects, use permits --- must be 
          consistent with their general plans.  Development decisions 
          must carry out and not obstruct a general plan's policies.

          Senate Bill 244 requires cities and counties to review and 
          update the elements of their general plans to include data 
          and analysis, goals, and implementation measures regarding 
          unincorporated island, fringe, or legacy communities.  This 
          requirement applies the next time that local officials 
          revise their general plans and each time they revise their 
          housing elements.

          SB 244 requires the updated general plans to include:
                 Identifications of island, fringe, and legacy 
               communities, and must include descriptions and 
               location maps of the communities.
                 For each community, analyses of seven specified 
               services, facilities and conditions. 
                 An analysis of the city or county's current 
               programs and activities to address those conditions or 
               deficiencies.
                 An identification of any constraints to addressing 
               those conditions or deficiencies.
                 An analysis that evaluates the annexation of island 
               or fringe communities.
                 A statement of the city or county's specific, 
               quantified goals for eliminating or reducing those 





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               conditions or deficiencies.
                 A set of flexible implementation measures to carry 
               out those goals, including an identification of 
               resources and a timeline of actions.

          The bill defines these terms:
                 "Disadvantaged unincorporated community" is a 
               fringe, island, or legacy community where the median 
               household income is 80% or less of the statewide 
               median household income. 
                 "Unincorporated fringe community" is the inhabited 
               territory within a city's sphere of influence.
                 "Unincorporated island community" is the inhabited 
               territory that is substantially surrounded by city 
               limits or cities and the Pacific Ocean.
                 "Unincorporated legacy community" is a 
               geographically isolated community that has existed for 
               at least 50 years. ݧ5]


          II.  Local agency formation commissions  .  The 
          Cortese-Knox-Hertzberg Act creates a local agency formation 
          commission (LAFCO) in each county to control the boundaries 
          of cities and most special districts.  The courts 
          repeatedly refer to the LAFCOs as the Legislature's 
          watchdog over boundary changes.  To plan for the future 
          boundaries and service areas of the cities and special 
          districts, a LAFCO must prepare informational reports 
          called municipal service reviews and then adopt a policy 
          document for each city and district called a sphere of 
          influence.  The LAFCOs' boundary decisions must be 
          consistent with the spheres of influence of the affected 
          cities or districts.

          State law lists the factors that a LAFCO must consider when 
          it reviews proposals.  One factor is the extent to which 
          the proposal will promote environmental justice; the fair 
          treatment of people of all races, cultures, and incomes 
          regarding the location of public facilities and provision 
          of public services (SB 162, Negrete McLeod, 2007).

           Municipal service reviews  .  In the late 1990s, the 
          Commission on Local Governance for the 21st Century 
          reviewed the LAFCOs' activities, including how they 
          prepared their spheres of influence.  The Legislature 
          adopted the recommendation that LAFCOs must periodically 





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          conduct "municipal service reviews" to inform their 
          decisions about spheres of influence.  Municipal service 
          reviews must analyze and make determinations about six 
          topics (AB 2838, Hertzberg, 2000; AB 1744, Assembly Local 
          Government Committee, 2007):
                 Growth and population projections.
                 Present and planned capacity of public facilities 
               and adequacy of public services, including 
               infrastructure needs or deficiencies.
                 Agencies' financial abilities to provide services.
                 Opportunities for sharing facilities.
                 Accountability for community service needs.
                 Other matters relating to effective or efficient 
               services.

          Senate Bill 244 adds the location and characteristics of 
          any inhabited communities to the required contents of 
          municipal service reviews.  SB 244 requires the LAFCOs to 
          assess various alternatives, including the consolidation of 
          governmental agencies, for improving infrastructure and 
          services within and adjacent to spheres of influence. ݧ4]

           Spheres of influence  .  Starting January 1, 2008, and then 
          every five years, a LAFCO must, as needed, review and 
          update the spheres of influence for each city and special 
          district in its county.  For each sphere, the LAFCO must 
          prepare written determinations regarding:
                 Present and planned land uses.
                 Present and probable need for public facilities and 
               services.
                 Present capacity of public facilities and adequacy 
               of public services.
                 Any relevant social and economic communities of 
               interest.

          On the next review and update of a sphere of influence 
          after July 1, 2012, Senate Bill 244 requires a LAFCO to 
          review and update the sphere of influence of each city or 
          special district that provides sewers, municipal and 
          industrial water, or structural fire protection facilities 
          or services to include the present and probable need for 
          facilities and services of disadvantaged inhabited 
          communities within or adjacent to the sphere of influence.  
          The LAFCO may assess the feasibility of government 
          reorganizations and recommend reorganizations. ݧ3]






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          "  Disadvantaged inhabited community  ."  Senate Bill 244 
          defines a disadvantaged inhabited community as inhabited 
          territory that is all or part of a "disadvantaged 
          community" as defined by a specific Water Code section that 
          refers to a community with an annual median household 
          income that is less than 80% of the statewide annual median 
          income. ݧ2]

          III.   Findings and declarations  .  Legislators sometimes 
          insert formal findings and declarations in their bills as 
          signals to the public, other officials, and the courts 
          about the Legislature's intent.  Senate Bill 244 contains 
          three legislative findings and declarations in support of 
          its requirements and a statement of legislative intent 
          regarding disadvantaged unincorporated communities. ݧ1]


                               State Revenue Impact
           
          No estimate.


                                     Comments  

          1.   Purpose of the bill  .  Disparities in public facilities 
          and services are nothing new; some communities are on the 
          wrong side of the tracks.  For decades, some neighborhoods 
          have enjoyed good schools, parks, libraries, street lights, 
          and police protection, while other areas have endured 
          rutted streets, low water pressure, inadequate sewers and 
          storm drains, and no curbs or sidewalks.  There are plenty 
          of reasons for these differences, including fiscal limits 
          and political realities.  A coalition of advocates has 
          compiled compelling information about these persistent 
          patterns.  They want legislators to change land use and 
          service planning requirements so that disadvantaged 
          unincorporated communities can remedy their past problems.  
          SB 224 tackles that challenge by inserting these concerns 
          into counties and cities' general plans and the LAFCOs' 
          municipal service reviews and spheres of influence.  For 
          nearly 75 years, state law has required counties and cities 
          to adopt comprehensive land use plans.  The Legislature 
          told the LAFCOs 40 years ago to adopt spheres of influence 
          to guide their thinking about cities and districts' future 
          service areas and boundaries.  A decade ago, legislators 
          told the LAFCOs to examine infrastructure deficiencies in 





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          their municipal service reviews.  Nevertheless, unfair 
          disparities still persist.  By putting the conditions faced 
          by disadvantaged communities squarely in front of the 
          counties, cities, and LAFCOs, the bill makes it harder for 
          local officials to ignore the questions of social equity.

          2.   Scarce resources  .  The classic definition of politics 
          is that it's the process by which a society allocates 
          scarce resources.  Without enough money to satisfy every 
          need, each community sorts out its priorities and spends 
          its revenues accordingly.  In a state that's geographically 
          large, economically varied, and demographically diverse, 
          it's no wonder that different communities make different 
          choices about where to provide public services and 
          facilities.  The local elected officials who set policy for 
          the 58 counties, 481 cities, and 3,300 special districts 
          struggle with the classic question of "who gets what."  
          When combined with the constitutional limits on raising new 
          local revenues, the state's archaic revenue and taxation 
          laws result in the fiscalization of land use.  Hemmed in by 
          these fiscal realities, local officials often chase land 
          uses that generate more revenue while shunning low revenue 
          neighborhoods that need expensive public works.  Before 
          legislators tell counties, cities, and the LAFCOs what to 
          do about disadvantaged communities, they need to straighten 
          out the state-local fiscal relationship.

          3.   Focused attention .  To help disadvantaged communities 
          get better public facilities and services, SB 244 changes 
          the contents of local general plans, municipal service 
          reviews, and spheres of influence.  The bill inserts 
          disadvantaged communities' concerns in three focused ways.  
          First, SB 244 requires county and city general plans to 
          include detailed analyses of disadvantaged communities' 
          needs for services and facilities.  Second, the bill 
          inserts a general reference to disadvantaged communities' 
          needs as part of the LAFCOs' broad municipal service 
          reviews.  Third, based on those municipal service reviews, 
          the bill targets the spheres of influence for cities and 
          districts that provide sewers, domestic and industrial 
          water, and structural fire protection --- the three 
          services that are essential to suburban and urban 
          development.  This focused attention adapts the structure 
          of the Planning and Zoning Law and the 
          Cortese-Knox-Hertzberg Act to the disadvantaged 
          communities' concerns.





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          4.   We've propositioned ourselves  .  Proposition 4 (1979) 
          amended the California Constitution to require the state 
          government to pay for the local costs of new state-mandated 
          local programs.  One legislative response was to disclaim 
          the state's responsibility because local officials had the 
          power to raise revenues by passing local taxes, 
          assessments, or fees.  For example, when the Legislature 
          required San Joaquin Valley counties and cities to amend 
          their general plans to include air quality concerns, the 
          bill didn't appropriate any state funds, but instead 
          contained the so-called "local fee disclaimer" (AB 170, 
          Reyes, 2003).  Proposition 26 (2010) amended the California 
          Constitution to define most local charges as "taxes," 
          unless they fit into one of seven specific exceptions.  
          That constitutional amendment calls into question the 
          practice of charging local fees to pay for the costs of new 
          state-mandated planning requirements.  SB 244 doesn't 
          appropriate state money to pay for its new mandated 
          planning, but recognizes that local agencies may file 
          claims to reimburse their costs.

          5.   Earlier bills  .  SB 244 is the latest in a series of 
          bills to insert the concerns of disadvantaged communities 
          into the land use planning statutes.  SB 1174 (Wolk, 2010) 
          concentrated on local general plans; the bill died on the 
          Assembly Appropriations Committee's suspense file.  AB 853 
          (Arambula, 2010) focused on the LAFCOs' municipal service 
          reviews, spheres of influence, and city annexation 
          procedures; Governor Schwarzenegger vetoed the bill as 
          "unnecessary."  SB 194 (Florez, 2010) looked at 
          disadvantaged communities' needs for public works funding; 
          Governor Schwarzenegger vetoed the bill as "unnecessary."

          6.   Technical amendments  .  The Committee should adopt the 
          following technical amendments to improve the bill without 
          changing its intent:
                 In §56430 (a) (2), conform the list of facilities 
               and services to §56425 (e)(2).
                 In §65302.10 (b), restore the phrase "and 
               thereafter upon"
                 In §65302.10 (b), "policies and objectives" should 
               be next to "goals"
                 In §65302.10 (b) (5), "flexible" should read 
               "feasible."






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                         Support and Opposition  (4/21/11)

           Support  :  California Rural Legal Assistance Foundation; 
          California Coalition for Rural Housing; California 
          Pan-Ethnic Health Network; Catholic Charities-Diocese of 
          Stockton; Clean Water Action California; Committee for a 
          Better Seville; Community Water Center; Environmental 
          Justice Coalition for Water; Food and Water Watch; Having 
          Our Say; Natural Resources Defense Council; Planning and 
          Conservation League; San Jerado Cooperative, Inc.; Sierra 
          Club-California; Southern California Watershed Alliance; 
          Urban Habitat; Urban Semillas; Unitarian Universalist 
          Legislative Ministry Network California; United for Change 
          in Tooleville; Winnemem Winte Tribe-Middle River People; 24 
          individuals.

           Opposition  :  American Planning Association-California 
          Chapter; California Association of Local Agency Formation 
          Commissions; California State Association of Counties; 
          League of California Cities; Regional Council of Rural 
          Counties; County of Los Angeles; San Diego LAFCO.