BILL ANALYSIS Ó SB 244 Page 1 SENATE THIRD READING SB 244 (Wolk) As Amended September 8, 2011 Majority vote SENATE VOTE :25-14 LOCAL GOVERNMENT 6-3 HOUSING 7-0 ----------------------------------------------------------------- |Ayes:|Skinner, Bradford, |Ayes:|Torres, Atkins, Bradford, | | |Campos, Davis, Gordon, | |Cedillo, Hueso, Jeffries, | | |Hueso | |Miller | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Smyth, Knight, Norby | | | | | | | | ----------------------------------------------------------------- APPROPRIATIONS 12-5 LOCAL GOVERNMENT 6-3 ----------------------------------------------------------------- |Ayes:|Fuentes, Blumenfield, |Ayes:|Alejo, Bradford, Campos, | | |Bradford, Charles | |Davis, Gordon, Hueso | | |Calderon, Campos, Davis, | | | | |Gatto, Hall, Hill, Lara, | | | | |Mitchell, Solorio | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Harkey, Donnelly, |Nays:|Smyth, Knight, Norby | | |Nielsen, Norby, Wagner | | | ----------------------------------------------------------------- SUMMARY : Requires cities, counties, and local agency formation commissions (LAFCOs) to plan for disadvantaged communities. Specifically, this bill : 1)Defines, for purposes of LAFCO law, the term "disadvantaged unincorporated community" to mean inhabited territory with 12 or more registered voters, or as determined by LAFCO policy, that constitutes all or a portion of a "disadvantaged community," which is defined in the Water Code to be "a community with an annual median household income that is less than 80% of the statewide annual median household income." 2)Prohibits, in specified circumstances, a LAFCO from approving SB 244 Page 2 an annexation to a city of any territory greater than 10 acres, or as determined by LAFCO policy, 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 executive officer. 3)Specifies that an application to annex a contiguous disadvantaged community is not required if either of the following apply: a) A prior application for annexation of the same disadvantaged community has been made in the preceding five years; or, b) The LAFCO finds, based upon written evidence, that a majority of the residents within the affected territory are opposed to annexation. 4)Requires the LAFCO, in determining the sphere of influence of each local agency, to additionally consider, for a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence, beginning with the next sphere of influence update on or after July 1, 2012. 5)Allows the LAFCO, in determining a sphere of influence, 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. 6)Requires the LAFCO, in the written statement of its determinations for a municipal service review to additionally consider the following: a) The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence; and, b) Present and planned capacity of public facilities and SB 244 Page 3 adequacy of public services, and deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the agency's proposed sphere of influence. 7)Allows the LAFCO, in conducting a municipal service review, to assess various alternatives for improving efficiency and affordability of infrastructure and service delivery within and contiguous to the sphere of influence, including, but not limited to, the consolidation of governmental agencies. 8)Requires, on or before the due date for the next adoption of its housing element, each city or county to review and update the land use element of its general plan to include all of the following: a) In the case of a city, an identification of each unincorporated island or fringe community, within the city's sphere of influence; b) In the case of a county, an identification of each legacy community within the boundaries of the county, but not including any area within the sphere of influence of any city; c) Requires that the identification include a description of the community and a map designating its location; d) For each identified community, an analysis of water, wastewater, stormwater drainage, and structural fire protection needs or deficiencies; and, e) An analysis, based on then existing available data, of benefit assessment districts or other financing alternatives that could make the extension of services to identified communities financially feasible. 9)Requires, on or before the due date for each subsequent revision of its housing element, each city or county to review, and if necessary amend, its general plan to update the analysis, as specified. 10)Defines, for purposes of general plan law, the following terms: SB 244 Page 4 a) "Community" to mean an inhabited area within a city or county that is comprised of no less than 10 dwellings adjacent or in close proximity to one another; b) "Disadvantaged unincorporated community" to mean a fringe, island, or legacy community in which the median household income is 80% or less than the statewide median household income; c) "Unincorporated fringe community" to mean any inhabited and unincorporated territory that is within a city's sphere of influence; and, d) "Unincorporated island community" to mean any inhabited and unincorporated territory that is surrounded or substantially surrounded by one or more cities or by one or more cities and a county boundary of the Pacific Ocean. 11)Allows, subject to all applicable constitutional restrictions, a county, a city, or a special district that provides, or intends to provide, wastewater treatment facilities or services, to borrow money and incur indebtedness pursuant to provisions in the Water Code related to the State Water Pollution Control Revolving Fund. 12)Provides that no reimbursement is required by the bill's provisions because a local agency or school district has 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. 13)Makes legislative findings and declarations. 14)Contains chaptering out provisions in order to avoid conflicts with AB 54 (Solorio). 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. 2)Provides that a LAFCO shall determine the sphere of influence SB 244 Page 5 of each local governmental agency within the county and enact policies designed to promote the logical and orderly development of areas within the sphere, and provides that a LAFCO shall, as necessary, review and update each sphere of influence every five years. 3)Provides for the process of determining the sphere of influence, and specifies the different factors that a LAFCO shall consider and prepare in a written statement of its determinations. 4)Provides, in order to prepare and to update spheres of influence, that a LAFCO shall conduct a municipal service review (MSR) of the municipal services provided in the county or other appropriate area as designated by the LAFCO, and requires that a written statement of its determinations include all of the following: a) Growth and population projections for the affected area; b) Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies; c) Financial ability of agencies to provide services; d) Status of, and opportunities for, shared facilities; e) Accountability for community service needs, including governmental structure and operational efficiencies; and, f) Any other matter related to effective or efficient service delivery, as required by commission policy. 5)Defines "disadvantaged community," as that term is used in the Water Code as added by Proposition 50, to mean a community with an annual median household income that is less than 80% of the statewide annual median household income. 6)Requires every city and county to adopt a general plan with seven mandatory elements including land use, circulation, housing, conservation, open space, noise, and safety. FISCAL EFFECT : According to the Assembly Appropriations Committee, this bill has a negligible state fiscal impact. SB 244 Page 6 There would be significant local planning costs, but these are not a state mandated local program and would not be reimbursable. COMMENTS : 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. Some cities and special districts are reluctant to annex these areas. The intent of this bill is to require local officials to include disadvantaged communities in their long-range planning for land use and public facilities. The sponsor of the bill, the California Rural Legal Assistance Foundation, argues that "these 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." This bill takes a two-pronged approach to new requirements for local officials to consider disadvantaged communities. First, the bill requires LAFCOs to consider these types of communities in both their sphere of influence updates and municipal service reviews (MSRs), starting after July 1, 2012. Second, the bill requires cities and counties to review and update the land use element within the general plan with specified data and analyses of community needs, upon a city or county's next revision of its housing element. This bill establishes a process for the identification of service deficiencies in disadvantaged communities through the LAFCO planning process, therefore adding new duties to LAFCOs in the preparation of MSRs and when reviewing and updating a city or a special district's sphere of influence. Provisions in the bill require a LAFCO, when preparing an MSR, to include a written statement determining the location and characteristics, including infrastructure needs and deficiencies in disadvantaged unincorporated communities. Additionally, any update to a sphere of influence occurring on or after July 1, 2012, must include the needs for public facilities and services in disadvantaged unincorporated communities. It should be noted, however, that some areas considered "disadvantaged communities" actually prefer the more rural SB 244 Page 7 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. The Legislature may wish to consider whether this bill contemplates those communities and the will of the residents. This bill contains language that prohibits a LAFCO, in specified circumstances, from approving an annexation to a city of any territory greater than 10 acres where there exists a disadvantaged inhabited community that is contiguous to the area of proposed annexation, unless the annexation application includes a separate application to annex the disadvantaged unincorporated inhabited territory to the subject city. The Legislature may wish to consider whether this language ties the LAFCO's hands and has the unintended consequence of limiting annexations from occurring in the future. This bill requires each city or county to update the land use element of its general plan to address the presence of these types of communities, and for each identified community, the city or county is required to do an analysis of water, wastewater, stormwater drainage, and structural fire protection needs or deficiencies. The League of California Cities (League), in opposition, believes that 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 new 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. Additionally as part of this year's budget package, SB 89 (Budget and Fiscal Review Committee), Chapter 35, Statutes of 2011, stripped approximately $186 million from Vehicle License Fee (VLF) funding for local governments, part of which had been used to assist cities with the costs of annexing a new territory or incorporating a new city. The League argues that one of the main goals of this bill is to annex disadvantaged communities, SB 244 Page 8 thus there is a clear disconnect between SB 89 (Budget and Fiscal Review Committee), and the stated goals of this bill. The County of Los Angeles opposes this bill because the County believes it to be 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. This bill is the latest in a series of bills to insert the concerns of disadvantaged communities into land use planning statutes. SB 1174 (Wolk) of 2010 concentrated on local general plans; the bill died on the Assembly Appropriations Committee's suspense file. AB 853 (Arambula) of 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) of 2010 looked at disadvantaged communities' needs for public works funding; Governor Schwarzenegger vetoed the bill as "unnecessary." The most recent amendments to the bill add in provisions that provide explicit statutory authority for cities, counties, and special districts to borrow money and incur indebtedness pursuant to statutes in the Water Code relating to the Clean Water State Revolving Fund Loan Program, for wastewater treatment facilities or services. This would enable disadvantaged communities, like those in the bill, to gain financial assistance for planning costs. The author notes that often these are the same communities that are unable to obtain funding necessary to conduct planning for wastewater infrastructure projects. Support arguments: Supporters 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 planning documents. Opposition arguments: Opposition groups argue that while the intent of the bill is laudable, there is no identified funding source for the new duties mandated in the bill's provisions for cities, counties and LAFCOs. This comes at a time when local agencies are already strained with existing fiscal pressures. SB 244 Page 9 Analysis Prepared by : Debbie Michel / L. GOV. / (916) 319-3958 FN: 0002858