BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 3| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 3 Author: Williams (D) Amended: 8/17/15 in Senate Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 5-2, 7/8/15 AYES: Hertzberg, Beall, Hernandez, Lara, Pavley NOES: Nguyen, Moorlach SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 51-26, 6/3/15 - See last page for vote SUBJECT: Isla Vista Community Services District SOURCE: Author DIGEST: This bill prescribes a formation process, boundaries, governing body, tax authority, and permissible services for the Isla Vista Community Services District (IVCSD). ANALYSIS: Existing law: 1) Controls, pursuant to the Cortese-Knox-Hertzberg Act, how local officials change the boundaries of cities and special districts, and designates a local agency formation commission in each county to oversee boundary changes. 2) Authorizes a county to create a municipal advisory committee to advise the board of supervisors and an area AB 3 Page 2 planning commission to carry out the county's land use planning and development in a designated area. 3) Authorizes, pursuant to the Community Services District Law, the establishment of Community Services Districts (CSDs) to provide over 30 types of public services and facilities, and provides special statutes for the delivery of additional services. 4) Provides for the election of CSD directors, and specifies requirements for open government, such as adoption of annual budgets, setting up designated reserves, following the Brown Act, holding regular meetings, and following standard auditing rules. 5) Requires voter approval of special taxes and property owners' approval of benefit assessments, as required by Propositions 13, 62, and 218. 6) Allows a city to impose a utility user tax (UUT) on the consumption of utility services, including, but not limited to, electricity, gas, water, sewer, telephone, sanitation and cable television. 7) Allows a county to levy a UUT on the consumption of electricity, gas, water, sewer, telephone, telegraph and cable television services in the unincorporated area. 8) Allows a city or county to determine 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. This bill: 1) Exempts the IVCSD from the formation process established in Community Services District Law (CSD Law) and provides that all other provisions of CSD Law apply to the IVCSD upon its establishment, except as provided in this bill. 2) Requires that the Cortese-Knox-Hertzberg Local Government Act of 2000 must govern any change of organization or reorganization of the IVCSD following the establishment of the IVCSD, except as provided in this bill. AB 3 Page 3 3) Requires the Santa Barbara County Board of Supervisors, on or before January 5, 2016, to file a resolution of application with the Santa Barbara County Local Agency Formation Commission (LAFCO), pursuant to a specified statute, to initiate a comprehensive review and recommendation of the formation of the district by the LAFCO. The application filed with LAFCO cannot be subject to any protest proceedings and the Board of Supervisors must pay any fees associated with the resolution of application. 4) Requires the LAFCO to complete the review no later than 120 days following receipt of the completed resolution of application and prohibits the LAFCO from having the power to disapprove the resolution of application. 5) Requires that, at the next countywide election after the completion of the LAFCO review, the LAFCO must order the formation of the IVCSD subject to a vote of registered voter residing within the IVCSD's boundaries. 6) Requires that the IVCSD's boundaries must be contiguous with the area known as County Service Area No. 31 within Santa Barbara County. 7) Requires the LAFCO to determine the appropriate rate of taxation for a UUT, applicable utilities to be taxed, and which services the district will be initially authorized to provide. 8) Specifies that the UUT rate must be no lower than 5% and no higher than 8% of the total cost of an individual's service charge for the utility being taxed and must only be applied to electricity, garbage disposal, gas, sewage, or water services. 9) Requires the IVCSD's board of directors to, within six months of the passage of a UUT, develop a low-income exemption to provide tax exemptions to those who would be disproportionately burdened by the UUT. 10) Requires that the IVCSD must be dissolved voters do not vote to impose a UUT within the IVCSD on or before January 1, 2023. AB 3 Page 4 11) Requires the LAFCO to direct the Santa Barbara County Board of Supervisors to direct county officials to conduct the necessary elections on behalf of the proposed district and place the items on the ballot including district approval, candidates for the IVCSD's board, and the UUT at the next countywide election, as provided in state law. 12) Requires that the initial UUT imposed by the IVCSD must only be used to fund the following services and powers of the district: a) Finance the operations of municipal advisory councils. b) Create a tenant mediation program. c) Finance the operations of area planning commissions. d) Exercise the powers of a parking district, in the same manner as a parking district formed pursuant to the Parking District Law of 1951 (Part 4 (commencing with Section 35100) of Division 18 of the Streets and Highways Code). e) Contract with the County of Santa Barbara 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 the County of Santa Barbara or the Regents of the University of California within the area of the IVCSD. 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 above the level of service already provided by either the County of Santa Barbara or County Service Area 31. The IVCSD shall not acquire, construct, improve, or maintain any work owned by another public agency unless that other public agency gives its written consent. AB 3 Page 5 h) Abate graffiti. 13) Exempts the IVCSD from provisions of CSD Law, which govern the establishment of a board of directors, and instead, requires the seven-member Board to be composed of: a) Four members elected at large from within the IVCSD for a term of four years, except that for the first election two members must be elected for a term of two years and two members must be elected for a term of four years; b) One member elected at large from within the IVCSD for a term of two years; c) One member appointed by the Board of Supervisors for a term of two years for the first appointment following the IVCSD's creation and for a term of four years thereafter; and, d) One member appointed by the Chancellor of the University of California, Santa Barbara (UCSB) for a term of four years. 14) Specifies that there is no limit on the number of terms any individual may serve on the IVCSD's board of directors either as an appointed or elected member. 15) Requires that that IVCSD must be formed if a majority of voters within the District's boundaries vote in favor of the District. 16) Grants the IVCSD all of the powers that are generally granted to CSDs pursuant to a specified statute, with the exception of two statutory provisions relating to park and recreation facilities and programs. 17) Allows the IVCSD, within its boundaries, to do any of the following: a) Create a tenant mediation program; b) Exercise the powers of a parking district pursuant AB 3 Page 6 to the Parking District Law of 1951; c) 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; d) Acquire, construct, improve, and maintain sidewalks, lighting, gutters, and trees beyond the level of service provided by either the County of Santa Barbara or County Service Area 31, except that the IVCSD may not acquire, construct, improve, or maintain any work owned by another public agency, unless that other public agency gives its written consent; e) Levy a UUT proposed by resolution of the IVCSD's governing board pursuant to approval by a 2/3 vote in accordance with Section 2 of Article XIII C of the California Constitution. 18) Prohibits a UUT imposed by the IVCSD from applying to any utility provided by a telecommunications service provider. 19) Directs that the IVCSD does not possess, and must not exercise, the power of eminent domain. Background The unincorporated community of 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. In response to concerns about public safety, inadequate AB 3 Page 7 infrastructure, insufficient land use planning, and a poorly-maintained housing stock, and other local challenges there have been a variety of efforts to establish different local governance structures in Isla Vista. 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. Proposals to incorporate Isla Vista as a city or annex it to adjacent cities have met substantial local opposition. 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." A report issued in November 2014 by the UC Santa Barbara Foundation Trustees' Advisory Committee on Isla Vista Strategies identified the goal of developing a form of self-governance for Isla Vista that will provide the necessary infrastructure and services, and promote the safety and well-being of its residents. To achieve this goal, the advisory committee recommended the creation of a community services district or municipal services district, with specified powers. In response to the challenges confronting the Isla Vista and the recent recommendations for improved self-governance structures, some community stakeholders want the Legislature to create a community services district with a formation process, governing board structure, and authorized powers that are uniquely tailored to Isla Vista's needs. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes AB 3 Page 8 SUPPORT: (Verified8/18/15) Associated Student Government of Santa Barbara City College Associated Students of the University of California, Santa Barbara Central Coast Alliance United for a Sustainable Economy City of Goleta City of Santa Barbara City of Santa Barbara Mayor Helene Schneider Isla Vista Relationship Committee Santa Barbara City Council Member Gregg Hart Santa Barbara City Council Member Cathy Murillo Santa Barbara City Council Member Harwood "Bendy" White Service Employees International Union, Local 721 Santa Barbara Community College District Santa Barbara County Board of Supervisors Santa Barbara County Supervisor Doreen Farr Santa Barbara County Supervisor Salud Carbajal UAW, Local 2865 UAW, Local 5810 68 individual supporters OPPOSITION: (Verified8/18/15) California Association of Local Agency Formation Commissions California Special Districts Association, Santa Barbara County Chapter California Taxpayers Association Goleta City Council Member Roger Aceves Goleta City Council Member Tony Vallejo Howard Jarvis Taxpayers Association Nevada County LAFCO San Mateo County LAFCO Santa Barbara County LAFCO Santa Barbara Rental Property Association Yolo County LAFCO 47 individual opponents ARGUMENTS IN SUPPORT: Supporters argue recent tragic events in Isla Vista, including multiple violent sexual assaults, AB 3 Page 9 riots, and a mass murder make it clear that the community faces unique challenges that require a new approach to governance. County government is not meeting the critical infrastructure and service needs of such a large and densely populated community. 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. 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. The current situation in Isla Vista 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. State legislative action is necessary because the Cities of Santa Barbara and Goleta are openly opposed to annexing Isla Vista and the County of Santa Barbara is not likely to create the necessary structure for self-governance for Isla Vista. This bill creates a self-governance mechanism through which local funding could be generated, to provide an increase in services directly to Isla Vista. By providing critical service to the community, this bill will help advance the cause of creating a safe and supportive environment for Isla Vista's residents. ARGUMENTS IN OPPOSITION: Opponents note the usual LAFCO process for creating a new special district provides substantial opportunities for public involvement and allows for a thorough vetting of proposed district's viability and the services it would provide. Requiring LAFCO to conduct a review of the IVCSD's proposed formation in only 120 days without allowing LAFCO to disapprove the proposal, or impose conditions on the formation may not allow sufficient public involvement in the District's formation process. Additionally, the IVCSD would be the first California special district, of any type, to have the authority to levy a UUT within its boundaries. State law currently empowers only counties and cities to impose UUTs, which are excise taxes imposed on the consumption of utility services, including electricity, gas, water, sewer, telephone, sanitation, and cable television. Although a city or county can impose a UUT as a special tax, generating revenues that must be AB 3 Page 10 used for a specific purpose, nearly all UUTs are imposed as general taxes, which allow revenues to be used for any purpose. This bill sets a precedent that may invite other special districts to ask for similar authority to levy a UUT. ASSEMBLY FLOOR: 51-26, 6/3/15 AYES: Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Beth Gaines, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron NO VOTE RECORDED: Achadjian, Gallagher, Wilk Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119 8/20/15 13:32:04 **** END ****