BILL ANALYSIS                                                                                                                                                                                                    Ó



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          ASSEMBLY THIRD READING


          AB  
          3 (Williams)


          As Amended  May 5, 2015


          Majority vote


           ----------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Local           |6-1   |Gonzalez, Alejo,    |Linder              |
          |Government      |      |Chiu, Cooley,       |                    |
          |                |      |Gordon, Holden      |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Appropriations  |13-4  |Gomez, Bonta,       |Bigelow, Chang,     |
          |                |      |Calderon, Daly,     |Jones, Wagner       |
          |                |      |Eggman, Gallagher,  |                    |
          |                |      |Eduardo Garcia,     |                    |
          |                |      |Gordon, Holden,     |                    |
          |                |      |Quirk, Rendon,      |                    |
          |                |      |Weber, Wood         |                    |
          |                |      |                    |                    |
          |                |      |                    |                    |
           ----------------------------------------------------------------- 


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









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          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 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 California  
            Constitution Article XIII C, Section 2.  


          5)Provides that the District is dissolved, if the voters of the  
            District do not vote to impose a 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;  








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             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 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  








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               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  
               specified community facilities; 


             g)   Acquire, construct, improve, and maintain sidewalks,  
               lighting, gutters, and trees, as specified; 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 for those costs shall be made.  


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


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, one-time potentially reimbursable County costs, likely  








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          less than $150,000, to place the district formation question, and  
          the candidates for the initial board of directors, on the  
          countywide ballot.  


          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  
            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 SB 921 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  








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            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:


             a)   No government body is fully in charge.


             b)   Housing, zoning, safety, and parking ordinances are  
               inadequately enforced.  


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


             d)   Expensive, substandard housing is often overcrowded.


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


             f)   Current policing is often contentious and confrontational.  



             g)   A party culture has resulted in irresponsible and  
               destructive behavior. 


             h)   Criminal activity is a major issue and concern. 


             i)   Proposed solutions are rarely implemented.  










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            New 21st century issues affect Isla Vista as well:


             a)   An extremely low housing vacancy rate (less than 1%)  
               exists in expensive Santa Barbara County. 


             b)   Isla Vista's population has increased to 23,000, creating  
               an acute densification of the community. 


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


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


          2)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.  


          3)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  








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            subject to Local Agency Formation Commission (LAFCO)  
            jurisdiction and are subject to the proceedings contained in the  
            Cortese-Knox-Hertzberg Local Government Reorganization Act of  
            2000.  This bill is author-sponsored.  


            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 UCSB  
            Chancellor.  All of the board members, whether elected or  
            appointed, will serve a term of four years.  









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            Services.  CSD Law specifies up to 32 different services,  
            including water, fire 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.  


            Under current law, a city may impose a UUT on the consumption of  








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            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.  


          4)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.  


            "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,  
            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.  The  
            current conditions in Isla Vista have reached a breaking point.   
            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.  










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            "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."    


          5)Policy Considerations.  The Legislature 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)   Tax Burden.  UUT is a regressive tax; therefore, the  
               Legislature may wish to consider, if the reliance on the  








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               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  
               Legislature may wish to consider, if this bill and the  
               reliance on a UUT lets property owners off the hook.  


             c)   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 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  
               Legislature may wish to consider, if this is an appropriate  
               authority to grant to special districts.  


             d)   Board.  The Assembly Local Government Committee has heard  
               several bills for individual CSDs that are unable to maintain  
               a five-member governing board.  The Legislature 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 Legislature may wish to encourage the author to be more  








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               specific about the provisions in existing law that this bill  
               not withstands to ensure that the Board is accountable and  
               can function under the direction of its enabling Act.  


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


          6)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."  


          7)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  
            authorizing a UUT is not warranted.  




          Analysis Prepared by:                                               
                          Misa Lennox / L. GOV. / (916) 319-3958  FN:  
          0000530










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