BILL ANALYSIS Ó AB 2455 Page 1 Date of Hearing: April 23, 2014 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT K.H. "Katcho" Achadjian, Chair AB 2455 (Williams) - As Amended: April 10, 2014 SUBJECT : The Santa Rita Hills Community Services District. SUMMARY : Allows, until January 1, 2035, the Santa Rita Hills Community Services District (District) board of directors to consist of three members, instead of five. Specifically, this bill : 1)Allows the District board of directors to consist of three members, instead of five as required by current law, until January 1, 2035. 2)Requires the board, prior to reducing the board of directors, to adopt by a majority vote a resolution proposing to reduce the number of directors to three members. 3)Requires the District to hold a public hearing regarding the proposal to reduce the number of directors. 4)Requires notice of the public hearing to be given by placing a display advertisement at least one-eighth page in a newspaper of general circulation for three weeks, pursuant to existing law, and by United State first-class mail to each landowner voter in the district, as specified. Requires the envelope or cover of the mailing to include the name of the local agency and the return address of the sender and the mailed notice to be in at least 10-point type. 5)Requires the public hearing to be held at least 45 days after mailing the notice pursuant to 4), above. 6)Requires the board to receive and consider at the hearing any written or oral comments regarding the proposed reduction in the number of directors. 7)Requires the board, after receiving and considering the comments, by a majority vote, on the record, to do one of the following: a) Disapprove the proposal; or, AB 2455 Page 2 b) Adopt a resolution that orders the reduction in the number of members of the board to three members. 8)Prohibits a reduction in the number of directors from affecting the term of office of any director. Requires a director currently holding office as of the effective date of the reduction in the number of member of the board to continue to be the director until the office becomes vacant by means of term expiration or otherwise. 9)Makes conforming changes within the Community Services District (CSD) Law. 10)Finds and declares that a special statute is necessary because of the unique circumstances applicable only to the District. EXISTING LAW : 1)Establishes the CSD Law. 2)Requires a CSD board of directors to consist of five members and establishes four-year terms. 3)Authorizes the board of directors to be elected at large, by division, or from divisions, if a majority of the voters voting on the question are in favor at a general district or special election. 4)Requires a CSD candidate for the board of directors to be a voter of the district. Requires a CSD candidate for the board of directors that is elected by division to be a voter from that division. 5)Requires all members of the board of directors to exercise their independent judgment on behalf of the interest of the entire district, including the residents, property owners, and the public as a whole. FISCAL EFFECT : None COMMENTS : 1)Author's statement . According to the author, "This bill addresses a district specific problem. The District is facing AB 2455 Page 3 a declining pool of candidates to serve on their board of directors. As such, this bill allows them to temporarily reduce their board membership from five to three members. "The District is a 'roads' district formed in 2009 by a vote of property owners. It was created to serve a small community of Santa Rita Hills which consists of 39 parcels in Santa Barbara County. The power and responsibilities granted to the District include the act to acquire, construct, improve and maintain streets, roads, bridges and sidewalks. Any road improvements or infrastructure constructed by the District must be related to the authorized services and any significant costs for construction will be financed by benefit assessments approved by landowners within the District. "Because much of the district is comprised of parcels of land, there are only between 10 - 12 actual voters residing in the district, some of which are in the process of moving outside the district. Additionally, Santa Barbara County currently has a restriction that prohibits new residences from being built in the district until upgrades in road access is provided, thereby limiting the potential for new registered voters within the district. "At present day, the board currently has one vacancy and consists of only four members. The vacancy was created by a member who moved out of the area. Additionally, one of the four remaining board members continues to travel for military support out of the county; therefore the board has a bare quorum of three with which to conduct business. Additional vacancies are expected in the near future leaving the board in a situation where they may lose quorum to conduct business. As required by law, the board gave notice to the county about their board vacancy last year. To date, the county has been unable to find a replacement for the resignation." 2)Purpose of this bill . There are over 300 CSDs in California that provide up to 32 different services, including water, garbage collection, wastewater management, security, fire protection, public recreation, street lighting, and mosquito abatement services. Current law requires a CSD board of directors to consist of five directors elected by resident voters for four-year terms. This bill allows the District's board of directors to consist AB 2455 Page 4 of three members, until January 1, 2035. Under this bill the board would have to comply with a number of hearing and notification requirements in order to pass a resolution with a majority vote to reduce their board membership from five to three. This bill would not impact the term of any board member currently in office. This bill is sponsored by the District. 3)Local government governance structure and previous legislation . In some cases, state law requires voter approval before a local government can change their governance structure. For example, cities must get majority-voter approval to change the number of council members. Additionally, current law requires a majority-voter approval in fire protection districts to increase or decrease the size of their boards. The Legislature has authorized special districts to increase or decrease the size of boards of directors by both amending the principal act, like for water conservation districts (SB 235 Negrete McLeod), and by making specific exceptions for individual special districts. For example, SB 210 (Local Government), Chapter 176, Statutes of 2001, authorized the Sawyers Bar County Water District (Siskiyou County) to decrease the size of their board from five to three members. Sawyers Bar only had 14 registered voters at the time SB 210 was making its way through the process. SB 210 authorized their board of directors to reduce its membership if a majority of the district's voters signed a petition requesting that reduction. Alternatively, instead of requiring direct action from the voters, SB 235 (Negrete McLeod) Chapter 122, Statues of 2011, authorized water conservation districts with a board consisting of seven directors to reduce the number of directors to five by a resolution adopted by two-thirds of the board. The hearing and notification requirements in SB 235 are substantially similar to this bill. However, this bill does not include the opportunity for referendum. SB 263 (Strickland), Chapter 11, Statutes of 2009, includes the District as a CSD authorized to limit access to roads it owns to the landowner and residents of that district. According to the December 6, 2007, executive officer's report for the Santa Barbara Local Agency Formation Commission (LAFCO), the District serves a private community that is zoned AB 2455 Page 5 as agricultural land. The subdivision includes 35 parcels that primarily support grazing land and farming. There are only three to four single family homes in the entire subdivision, and many parcels are vacant. There is no easy way to access the individual parcels within the subdivision, with some landowners saying they have been unable to use their parcel because of a lack of road access. 4)Rewrite of CSD law . SB 135 (Kehoe), Chapter 249, Statutes of 2005, required all CSDs to have a five-member board of directors, as part of the rewrite of the CSD Law. The Senate Local Government Committee produced a detailed report (Community, Needs, Community Services: A Legislative History of SB 135 (Kehoe) and the "Community Services District Law," March 2006) following the passage of SB 135 detailing the 19-member working group that reviewed the statute and recommended revisions. The report states, "The 1995 Law allowed CSDs to have board of directors with either three or five members. The Working Group was aware some CSDs have three member boards (Mountain Meadows CSD, Kern County). The Working Group's consensus was that all CSDs should have five member boards of directors." 5)Policy considerations . The committee may wish to consider the following issues: a) Voter determination . Should the reduction in size of the board be determined by the voters? b) Other options . Given the current governance challenges faced by the District, the Committee may wish to consider if the district should be consolidated or dissolved instead of just reducing board membership. Current LAFCO 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. c) Temporary solution or systemic problem . The Committee may wish to consider if this bill is attempting to provide a temporary solution for a longstanding systemic issue that may be better addressed by the Santa Barbara LAFCO. d) Purpose of the district . The Committee may wish to AB 2455 Page 6 consider whether the purpose of the District can be fulfilled in light of the broader challenges to road access and infrastructure the District is facing. 6)Arguments in support . Supporters argue that this bill allows the district to reduce the size of their board until the current requirements can be more easily met in the future - once the roads are improved and property owners are allowed to build their residences. 7)Arguments in opposition . None on file. REGISTERED SUPPORT / OPPOSITION : Support Santa Rita Hills Community Services District [SPONSOR] County of Santa Barbara Opposition None on file. Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916) 319-3958