BILL ANALYSIS Ó SB 244 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 244 (Wolk) - As Amended: August 15, 2011 Policy Committee: Housing and Community Development Vote: 7-0 Local Government 6-3 Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY This bill requires cities, counties and local agency formation commissions (LAFCOs) to analyze infrastructure deficiencies in unincorporated disadvantaged communities. Specifically, this bill: 1)Prohibits a LAFCO from approving an annexation to a city of territory, as specified, where there exists a disadvantaged unincorporated community that is contiguous to the area of proposed annexation, unless an application to annex the disadvantaged unincorporated community to the subject city has been filed with the LAFCO. 2)Requires, upon the next update of a sphere of influence that occurs on or after July 1, 2012, the inclusion of the need for public facilities and services of any disadvantaged inhabited communities within or contiguous to the existing or proposed sphere of influence of the city or special district. 3)Allows the LAFCO to assess the feasibility of governmental reorganization of particular agencies and recommend reorganization of those agencies when reorganization is found to be feasible and if reorganization will further the goals of orderly development and efficient and affordable service delivery. 4)Requires, before the next revision of its housing element, a city or county to review and update the land use element of its general plan to include a description of each unincorporated island, fringe community, or legacy community SB 244 Page 2 and an analysis, based on available data, of water, wastewater, stormwater drainage and structural fire protection needs. 5)Provides that no reimbursement is required because local agencies have the authority to levy service charges, fees or assessments sufficient to pay for the program or level of service mandated by the bill's provisions. FISCAL EFFECT This bill has a negligible state fiscal impact. There would be significant local planning costs, but these are not a state mandated local program and would not be reimbursable. COMMENTS 1)Purpose . According to the author, many disadvantaged unincorporated communities lack public services and even public facilities like domestic water, sanitary sewers, paved streets, storm drains, and street lights, and some cities and special districts are reluctant to annex these areas. The author states the bill will require local officials to include disadvantaged unincorporated communities in their long-range planning for land use and public facilities. The author notes that SB 244 takes a two-pronged approach to bringing more attention to disadvantaged unincorporated communities in the planning process. First, the bill requires LAFCOs to consider these types of communities in both their sphere of influence updates, starting after July 1, 2012. Second, the bill requires cities and counties to include information about disadvantaged unincorporated communities in their general plans. 2)Background. The Department of Finance says that 159 census designated places (CDPs) had 2005-09 household median incomes less than 80% of the statewide household median income. CDPs are named places with a concentration of residents, housing, and commercial activity, but located in a county's unincorporated territory. Some of these disadvantaged unincorporated communities are county islands (mostly surrounded by cities), some are fringe communities (at or near SB 244 Page 3 the edge of cities), and others are legacy communities (geographically isolated). The bill may describe these communities as disadvantaged, but some residents actually prefer the more rural nature of their community's environment. Not all disadvantaged communities wish to be part of a city or desire to receive additional services beyond what they already have. 3)LAFCO. The Cortese-Knox-Hertzberg Act creates a LAFCO in each county to control the boundaries of cities and most special districts. The courts repeatedly refer to LAFCOs as the Legislature's watchdog over boundary changes. A LAFCO must determine a sphere of influence for every local government agency within its county and must review and update the spheres as necessary every five years. In addition, any person or local agency may apply to LAFCO to update a sphere of influence at any time. A LAFCO's boundary decisions must be consistent with the spheres of influence of affected cities and special districts. Bringing territory into a sphere is generally considered to be a precursor to annexation. In determining a new or amended sphere of influence, the LAFCO must hold a public hearing and must prepare a statement of its determinations with respect to the present and planned land uses in the area; the present and probable needs for public facilities in the area; the present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide; and the existence of any social or economic communities of interest in the area, if relevant. 4)Local planning . 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. Because the general plan is a long-range planning document, in preparing these documents cities typically plan for their entire sphere of influence rather than just their current physical boundaries. SB 244 Page 4 5)Previous legislation . SB 1174 (Wolk, 2010) concentrated on local general plans; the bill was held on this committee's Suspense File. AB 853 (Arambula), 2010, focused on LAFCO 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)Support . The sponsor of the bill, the California Rural Legal Assistance Foundation, argues that disadvantaged unincorporated communities "are systematically underserved in the overall allocation of public resources and are frequently left out of local planning processes?this neglect and deprivation prevents these neighborhoods from realizing their potential as livable and economically viable communities." Supporters further argue that few local government land use plans focus on the existence of disadvantaged unincorporated communities, much less how to solve their many challenges. This bill will result in greater awareness of these communities and their needs in local government plans. 7)Opposition . The League of California Cities believes local agencies do not have the legal authority to impose fees to recover the costs of the new duties mandated in the bill. The bill's provisions right now include a fee disclaimer that says that "no reimbursement is required by this act?.because a local agency has the authority to levy service charges, fees or assessments sufficient to pay for the program or level of service mandated by this act." The League is concerned that cities, under the rules dictated by Proposition 26, cannot charge current residents of the city for the costs associated with the considerable analysis required by the bill's provisions since the residents of the city are not being provided a service. The County of Los Angeles opposes this bill because it is both costly and burdensome. They argue they already have a long term plan for all unincorporated areas and that the bill does not adequately address the fiscal strains the bill would place on already distressed counties, cities, communities and taxpayers. SB 244 Page 5 Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081