BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 3


                                                                    Page  1





          Date of Hearing:  May 13, 2015


                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT


                              Brian Maienschein, Chair


          AB 3  
          (Williams) - As Amended May 5, 2015


          SUBJECT:  Isla Vista Community Services District.


          SUMMARY:  Establishes the formation process, boundaries,  
          services, and governing body for the Isla Vista Community  
          Services District (District). Specifically, this bill:  


          1)Requires the Santa Barbara County Board of Supervisors (Board  
            of Supervisors) to place the question of whether the District  
            shall be established on the next countywide election ballot.   
            Requires, if a majority of voters within the District  
            boundaries established by this bill vote in favor of the  
            District, that the District be formed in accordance with this  
            bill.  


          2)Exempts the District from the formation process established in  
            Community Services District Law (CSD Law) and provides that  
            all other provisions of CSD Law apply to the District upon its  
            establishment, except as provided in this bill.  


          3)Requires the Board of Supervisors to also place the candidates  
            for the five elected positions for the District's initial  
            board of directors (Board) on the ballot at the next  








                                                                       AB 3


                                                                    Page  2





            countywide election.  


          4)Requires the Board, if the District is formed pursuant to 1),  
            above, to place a utility user tax (UUT) on the ballot,  
            pursuant to a two-thirds voter approval, in accordance with  
            Section 2 of Article XIII C of the California Constitution.  


          5)Provides that the District is dissolved, if the voters of the  
            District do not vote to impose a Utility User's Tax (UUT)  
            within the District on or before January 1, 2027.  


          6)Exempts the District from provisions of CSD Law, which govern  
            the establishment of a board of directors, and instead,  
            requires the Board to be composed as follows:


             a)   Five members elected at large from with the District for  
               a term of four years;  


             b)   One member appointed by the Board of Supervisors for a  
               term of four years; and,


             c)   One member appointed by the Chancellor of the University  
               of California, Santa Barbara (UCSB) for a term of four  
               years.  


          7)Requires the boundaries of the District to be contiguous with  
            the area known as the County Service Area No. 31 (CSA 31)  
            within Santa Barbara County (County) and requires the  
            District's boundaries to additionally include UCSB.  


          8)Provides that the services specified in CSD Law do not apply  








                                                                       AB 3


                                                                    Page  3





            to the District.  Authorizes the District, within its  
            boundaries, to do any of the following:


             a)   Finance the operations of a municipal advisory council  
               (MAC) formed pursuant to existing law which authorizes any  
               county to establish and provide funds for a MAC for any  
               unincorporated area in the county to advise the board of  
               supervisors;


             b)   Create a tenant mediation program;


             c)   Finance the operations of an area planning commission  
               (APC) formed pursuant to existing law which authorizes a  
               city or county to create an APC and specifies the functions  
               of APCs;


             d)   Exercise the powers of a parking district pursuant to  
               the Parking District Law of 1951;


             e)   Contract with the County or the Regents of the  
               University of California, or both, for additional police  
               protection services above the level of police protection  
               services already provided by either within the area of the  
               District;


             f)   Acquire, construct, improve, maintain, and operate  
               community facilities, including, but not limited to,  
               community centers, libraries, theaters, museums, cultural  
               facilities, and child care facilities; 


             g)   Acquire, construct, improve, and maintain sidewalks,  
               lighting, gutters, and trees.  Prohibits the District from  








                                                                       AB 3


                                                                    Page  4





               acquiring, constructing, improving, or maintaining any work  
               owned by another public agency, unless that other public  
               agency gives its written consent; and,


             h)   Abate graffiti.  


          9)Prohibits the District from having the power to organize,  
            promote, conduct, or advertise programs of community  
            recreation in the same manner as the Isla Vista Parks and  
            Recreation District.  


          10)Provides that, if the Commission on State Mandates determines  
            that this bill contains costs mandated by the state,  
            reimbursement to local agencies and school districts for those  
            costs shall be made pursuant to current law governing state  
            mandated local costs.  


          11)Makes findings and declarations that a special law is  
            necessary and that a general law cannot be made applicable  
            within the meaning provided in existing law because of the  
            unique community needs in the Isla Vista area that would be  
            served by the Isla Vista Community Services District.  


          FISCAL EFFECT:  This bill is keyed fiscal and contains a  
          state-mandated local program.  


          COMMENTS:  


          1)Isla Vista History.  There is extensive history surrounding  
            Isla Vista's community efforts to form a more representative  
            government, which is currently in the unincorporated area of  
            the County.  A municipal advisory council was formed and later  








                                                                       AB 3


                                                                    Page  5





            dissolved due to lack of funding.  SB 921 (Lagomarsino),  
            Chapter 1420, Statutes of 1972, allowed Isla Vista to form a  
            CSD, however, the authority granted by the bill was never  
            used.  There have been three separate cityhood efforts in  
            1972, 1975, and 1983, and an effort to include Isla Vista in  
            the City of Goleta's incorporation; however, the petitioners  
            explicitly excluded Isla Vista from their proposed boundaries.  
             In 2001, the Santa Barbara Local Agency Formation Commission  
            commissioned a study to examine the local government options  
            for the unincorporated area consisting of Isla Vista and UCSB  
            while they examined the proposal to incorporate Goleta.  The  
            report states that, "The Isla Vista community encompasses a  
            population of over 20,000 residents.  It is adjacent to UC  
            Santa Barbara campus and its student population.  Including  
            University property, the area totals about 1,500 acres.  Isla  
            Vista faces various challenges in local governance.  For  
            example, as a university town, Isla Vista must accommodate the  
            service needs associated with its transient student population  
            and a predominantly renter-oriented community.  Isla Vista's  
            situation is complicated by its unincorporated status, which  
            limits local participation in managing public services and  
            providing needed public improvements."  


            In November of 2014 the UC Santa Barbara Foundation Trustees'  
            Advisory Committee on Isla Vista Strategies released a report  
            detailing problems and specific recommendations.  The report  
            notes that "Isla Vista has been studied exhaustively for 45  
            years with at least nine formal reports by government  
            agencies, grand juries, and the University of California.  All  
            reports reached the same conclusions, decade after decade:"  
            The report contains the following conclusions:


                 No government body is fully in charge.
                 Housing, zoning, safety, and parking ordinances are  
               inadequately enforced.  










                                                                       AB 3


                                                                    Page  6





                 An unhealthy balance exists among resident college  
               students, families, and other adults.


                 Expensive, substandard housing is often overcrowded.


                 An insufficient number of businesses are present to make  
               a real community. 


                 Current policing is often contentious and  
               confrontational. 


                 A party culture has resulted in irresponsible and  
               destructive behavior. 


                 Criminal activity is a major issue and concern. 


                 Proposed solutions are rarely implemented.  





            New 21st century issues affect Isla Vista as well:





                 An extremely low housing vacancy rate (<1%) exists in  
               expensive Santa Barbara County. 
                 Isla Vista's population has increased to 23,000,  
               creating an acute densification of the community. 









                                                                       AB 3


                                                                    Page  7






                 A large influx of Santa Barbara City College students  
               now reside in Isla Vista. 


                 Widespread use of social media attracts thousands of  
               non-residents.





          1)Local Governments Providing Services in Isla Vista.  As an  
            unincorporated community, Isla Vista receives regional and  
            local services from Santa Barbara County and from two County  
            Service Areas (CSAs), which are special districts governed by  
            the Board of Supervisors.  CSA 32 provides Sheriff patrol in  
            the unincorporated areas of the County and is funded by  
            non-property tax revenues.  CSA 31 services more than 250  
            streetlights and is funded by benefit assessments and  
            approximately $15,000 of property tax.  


            Additionally, several special districts provide services to  
            Isla Vista, including the Isla Vista Recreation and Park  
            District, County Fire Protection District, Goleta West  
            Sanitary District, Goleta Water District, Santa Barbara  
            Metropolitan Transit District, and the Santa Barbara Vector  
            Control District.  


          2)Bill Summary.  The Community Services District Law is a  
            principal act that governs the 312 CSDs in California.  The  
            Legislature originally passed the CSD Law in 1951, and  
            re-enacted it in 1955 and 2005.  As a special district, CSDs  
            are subject to LAFCO jurisdiction and are subject to the  
            proceedings contained in the Cortese-Knox-Hertzberg Local  
            Government Reorganization Act of 2000.  









                                                                       AB 3


                                                                    Page  8






            Formation and Boundaries.  This bill exempts the district from  
            the formation process defined under current law for CSDs,  
            which would have required Santa Barbara LAFCO to approve the  
            District's formation.  Instead, this bill requires the Santa  
            Barbara County Board of Supervisors to place the question of  
            formation on the next countywide election ballot.  A majority  
            of voters in the District, who are registered voters within  
            the District's boundaries established by this bill, must  
            support District formation.  Additionally, this bill requires  
            the Board of Supervisors to place the initial board member  
            candidates on the same countywide election ballot.  This bill  
            establishes the boundaries of the District to be the same area  
            as 


            CSA 31 and also includes UCSB.  
            Board of Directors.  Current law requires that CSDs are  
            governed by five-member Board 


            of Directors that are elected by resident voters to four-year  
            terms.  Directors can be elected at large or by divisions.  
            This bill exempts the District from the provisions in CSD Law  
            which govern the initial formation of a board of directors,  
            the reorganization of a board of directors, and other  
            provisions which establish requirements for when a board must  
            meet, what constitutes a quorum, and other transparency and  
            accountability requirements.  
            This bill specifies a seven-member board of directors for the  
            District, which include five members elected at large by  
            registered voters in the District, one member appointed by the  
            Board of Supervisors, and one member appointed by the UC Santa  
            Barbara Chancellor.  All of the board members, whether elected  
            or appointed, will serve a term of four years.  


            Services.  CSD Law specifies up to 32 different services,  
            including water, sewage, flood, hydroelectric power, fire  








                                                                       AB 3


                                                                    Page  9





            protection, public recreation, street lights, police  
            protection, library, street, and transportation services that  
            can be provided by a CSD.  Following formation, a CSD Board of  
            Directors must receive approval from LAFCO to exercise any  
            latent power.  The Cortese-Knox-Hertzberg Act establishes the  
            process to activate a latent power, including passing a  
            resolution by the Board, holding a public hearing, and  
            submitting a petition to LAFCO which includes a plan for  
            services and the estimated cost of the new service.  A  
            district's plan for services must demonstrate that a district  
            will have sufficient revenue to carry out new services.  LAFCO  
            cannot authorize the exercise of a latent power, if they  
            determine that another local agency provides substantially  
            similar services.  


            This bill provides that the services specified in CSD Law do  
            not apply to the District, and instead, establishes a number  
            of powers for the District, including a tenant mediation  
            program, parking district services, and the ability to finance  
            a MAC and APC.  


            Financing.  Current law authorizes a CSD to receive a portion  
            of property tax revenue, establish rates for services and  
            facilities, and levy special taxes, benefit assessments,  
            property-related fees, and standby charges.  In addition to  
            these revenue generating powers, this bill also authorizes the  
            District to levy a UUT, at a rate specified by the District's  
            Board, with two-thirds voter approval.  This bill requires the  
            District's Board to place a UUT measure on the ballot and  
            makes the District contingent on its passage.  If the UUT  
            measure is not passed by the voters on or before January 1,  
            2027, then the District is dissolved.  













                                                                       AB 3


                                                                    Page  10





            Under current law, a city may impose a UUT on the consumption  
            of utility services, including, but not limited to,  
            electricity, gas, water, sewer, telephone, sanitation and  
            cable television.  Additionally, a county may levy a UUT on  
            the consumption of electricity, gas, water, sewer, telephone,  
            telegraph and cable television services in the unincorporated  
            area.  The city or county determines the rate of the tax and  
            the use of its proceeds.  UUTs are collected by the utility as  
            part of its regular billing, and then remitted to the city or  
            county.  


            In California, 153 cities and four counties impose a UUT on  
            electricity.  
            State Mandate.  This bill is keyed a state mandate, which  
            means the state could be required to reimburse local agencies  
            and school districts for implementing the bill's provisions,  
            if the Commission on State Mandates determines that the bill  
            contains costs mandated by the state.  





            This bill is author-sponsored.  


          3)Author's Statement.  According to the author, "Following  
            several, tragic events earlier this year, UCSB formed an  
            advisory committee to analyze the conditions and dynamics of  
            [Isla Vista] and develop mid- and long-term recommendations to  
            establish a viable, safe, supportive environment.  Among their  
            recommendations is that the State of California create a  
            Community Services District/Municipal Improvement District in  
            Isla Vista with potential powers of infrastructure, utilities,  
            garbage, police services, parks, recreation, cultural  
            facilities, fire, security, and roads.  










                                                                       AB 3


                                                                    Page  11





            "The current conditions in Isla Vista have reached a breaking  
            point.  County government is not equipped to meet the critical  
            infrastructure and service needs of such a large and densely  
            populated population.  With UCSB set to admit 5,000 more  
            students over the next 20 years to meet the state's growing  
            need for an educated workforce, a growing population is likely  
            to lead to further deterioration in conditions over time  
            without a direct, local self-governance structure in place to  
            provide the services that will meet [Isla Vista's] unique  
            needs.  


            "Since [Isla Vista] is represented by only one Supervisor on a  
            five-member board, it must always compete with the rest of the  
            county for even the most basic of services.  Self-governance  
            would create a mechanism through which local funding could be  
            generated from [Isla Vista] to provide an increase in services  
            directly to [Isla Vista].  Complicating the issue locally, the  
            Cities of Santa Barbara and Goleta are openly opposed to  
            annexing Isla Vista.  Further, it isn't likely the County of  
            Santa Barbara will create the necessary structure for  
            self-governance for Isla Vista.  Further, it is highly  
            unlikely that the County alone will be able to adequately fund  
            local services, even if it set up a MAC or some other  
            structure.  


            "At stake is a significant state investment.  UCSB represents  
            an investment of billions of dollars on the part of  
            California.  The current situation in IV diminishes the value  
            of the State's investment in UCSB and the State has a vested  
            interest in policies that will improve the educational  
            opportunities of that institution.  The time is right for  
            state action.  


            "Over the last year, the Isla Vista community in Santa Barbara  
            County has been faced with many challenges due to high-profile  
            tragic events, including multiple violent sexual assaults, 








                                                                       AB 3


                                                                    Page  12







            riots, and a mass murder that emphasized the unique needs of  
            [Isla Vista].  There is a clear need for services that create  
            a safe supportive environment for Isla Vista's residents.  As  
            such, this bill establishes a community services district for  
            the purposes of providing critical services to community of  
            Isla Vista."  
          4)Policy Considerations.  The Committee may wish to consider the  
            following:


             a)   Circumventing LAFCO.  The Legislature has delegated the  
               power to control local boundaries to the 58 LAFCOs;  
               directing the LAFCOs to discourage urban sprawl, preserve  
               open space and agricultural lands, provide efficient  
               government services, and encourage orderly government while  
               considering local conditions and circumstances.  


               The California Association of Local Agency Formation  
               Commissions states, "The Act provides that LAFCOs have  
               jurisdiction over a CSD and that the organization or  
               reorganization of such a district be subject to LAFCO  
               proceedings.  This process allows for the comprehensive  
               review of the viability of the proposed district and  
               services to be provided.  Bypassing this critical process  
               jeopardizes the CSD in that there is not thorough analysis  
               of the long-term sustainability of the financial,  
               governance, and service capacities of the CSD.  We strongly  
               believe that LAFCO process should not be circumvented and  
               request the bill be amended to ensure the formation process  
               complies with the Act."  


             b)   Precedent Setting.  This bill conditions the existence  
               of the District on the passage of a UUT by two-thirds of  
               the voters in the District.  In a letter of concern, CSAC  
               argues, "Isla Vista CSD would be the first and only special  








                                                                       AB 3


                                                                    Page  13





               district with this type of tax authority.  Additional  
               consideration must be given to this unprecedented expansion  
               of general tax levying powers and its implications for all  
               special districts' tax authority and responsibilities."   
               The Committee may wish to consider, if this is an  
               appropriate authority to grant to special districts.  


             c)   Tax Burden.  UUT is a regressive tax; therefore, the  
               Committee may wish to consider, 


             if the reliance on the passage of a UUT to prevent the  
               District from being dissolved is appropriate.  Since a UUT  
               is imposed on the consumption of utility services and  
               collected on utility bills, residents in the District,  
               comprised mainly of student renters, will produce the  
               revenue for the District.  Voters in the District may be  
               more likely to support a parcel tax, which is collected via  
               the property tax bill, instead of a UUT.  The Committee may  
               wish to consider, if this bill and the reliance on a UUT  
               lets property owners off the hook.  
             d)   Board.  This Committee has heard several bills for  
               individual CSDs that are unable to maintain a five-member  
               governing board.  The Committee may wish to consider, given  
               the large population of students, if there will be enough  
               registered voters to sustain a five-member Board elected to  
               four-year terms.  Additionally, since the initial Board  
               does not have staggered terms, there will be no continuity  
               from the first Board to the next Board. 


               This bill exempts the Board from many provisions of CSD Law  
               that establish general requirements like when a CSD  
               governing board must meet and elect officers, holding  
               meetings pursuant to the Ralph M. Brown Act, what  
               constitutes a quorum, referendum and recall provisions, and  
               board compensation.  The Committee may wish to encourage  
               the author to be more specific about the provisions in  








                                                                       AB 3


                                                                    Page  14





               existing law that this bill notwithstands to ensure that  
                                                                                          the Board is accountable and can function under the  
               direction of its enabling Act.  





               In the board membership defined by this bill, the UCSB  
               Chancellor would appoint a director.  CSAC argues, "This  
               breaks new ground for special district governance and could  
               break down the line of accountability to the community  
               served by the proposed district".  


             e)   Powers.  The Committee may wish to ask the author to  
               further define some of the services granted to the  
               District.  For example, the Committee may wish to ask the  
               author what tenant mediation services are intended for the  
               District to provide.    


          5)Arguments in Support.  Santa Barbara County Supervisors argue  
            that "County government is not designed nor does it have tools  
            readily available to finance and manage large, densely  
            populated urban areas.  Santa Barbara County is already  
            spending millions of dollars each year into IV that is not  
            recovered by the property tax garnered from the area.  This  
            bill allows for the creation of a CSD that will meet the  
            unique needs of Isla Vista, including additional services  
            above and beyond what the county can provide."  


          6)Arguments in Opposition.  Opposition argues that the District  
            should be required to go through the LAFCO process where a  
            financial feasibility study can be done.  Additionally, the  
            California Taxpayers Association and the Howard Jarvis  
            Taxpayers Association argue that establishing a completely new  
            and precedent setting way for CSD's to increase revenue by  








                                                                       AB 3


                                                                    Page  15





            authorizing a UUT is not warranted.  


          











































                                                                       AB 3


                                                                    Page  16




















































                                                                       AB 3


                                                                    Page  17











          REGISTERED SUPPORT / OPPOSITION:




          Support


          Associated Student Government of Santa Barbara City College, 


            Isla Vista Relationship Committee 


          Associated Students of the University of California, Santa  
          Barbara


          Central Coast Alliance United for a Sustainable Economy (CAUSE)


          Council Member Gregg Hart, City of Santa Barbara


          Council Member Cathy Murillo, City of Santa Barbara


          Council Member Harwood "Bendy" White, City of Santa Barbara


          Mayor Helene Schneider, City of Santa Barbara










                                                                       AB 3


                                                                    Page  18





          Service Employees International Union, Local 721


          Supervisor Doreen Farr, Third District, Santa Barbara County


          Supervisor Salud Carbajal, First District, Santa Barbara County


          UAW, Local 2865


          UAW, Local 5810


          Individual letters (68)





          Concerns





          California Special Districts Association


          California State Association of Counties


          Santa Barbara Rental Property Association




          Opposition








                                                                       AB 3


                                                                    Page  19







          California Association of Local Agency Formation Commission  
          (unless amended)


          California Special Districts Association, Santa Barbara County  
          Chapter


          California Taxpayers Association


          Howard Jarvis Taxpayers Association


          Santa Barbara Local Agency Formation Commission (unless amended)


          Long-Term Residents of Isla Vista's Neighbors' Group (47)


          Individual letters (2)







          Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958
















                                                                       AB 3


                                                                    Page  20