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, SB 244 -- 4/25/11 -- Page 2 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 SB 244 -- 4/25/11 -- Page 3 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 SB 244 -- 4/25/11 -- Page 4 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] SB 244 -- 4/25/11 -- Page 5 " 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 SB 244 -- 4/25/11 -- Page 6 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. SB 244 -- 4/25/11 -- Page 7 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." SB 244 -- 4/25/11 -- Page 8 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.