BILL ANALYSIS Ó
AB 402
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Brian Maienschein, Chair
AB 402
(Dodd) - As Amended May 5, 2015
SUBJECT: Local agency services: contracts.
SUMMARY: Expands existing law to allow local agency formation
commissions (LAFCOs) to authorize a city or district to extend
services outside of boundaries for additional purposes beyond
responding to a threat to public health or safety.
Specifically, this bill:
1)Allows LAFCOs to authorize a city or district to provide new
or extended services outside its jurisdictional boundaries and
outside its sphere of influence, if consistent with adopted
policy, to support existing or planned uses involving public
or private properties, subject to approval at a noticed public
hearing where LAFCO makes all of the following determinations:
a) The extension of service or services deficiency was
identified and evaluated in a review of municipal services
(MSR) prepared, pursuant to existing law;
b) The extension of service will not result in adverse
impacts on open space or agricultural lands, or have growth
inducing impacts; and,
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c) A later change of organization involving the subject
territory and its affected agency is not feasible under
existing law or desirable based on the adopted policies of
LAFCO.
2)Provides that existing law, which allows LAFCO to authorize a
city or district to provide new or extended services outside
it jurisdictional boundary and outside its sphere of influence
to respond to an existing or impending threat of public health
and safety, must be consistent with adopted policy.
3)Makes other technical and conforming changes.
EXISTING LAW:
1)Establishes the Cortese-Knox-Hertzberg Act (Act), which
defines the procedures for the organization and reorganization
of cities, counties, and special districts.
2)Authorizes a city or district to provide new or extended
services by contract or agreement outside its jurisdictional
boundaries, if it requests and receives written approval from
the LAFCO in the affected county.
3)Allows a LAFCO to authorize a city or district to provide new
or extended services outside its boundaries, but within its
sphere of influence in anticipation of a later change of
organization.
4)Allows a LAFCO to authorize a city or district to provide new
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or extended services outside its boundaries and outside its
sphere of influence to respond to an existing or impending
threat to the public health or safety of the residents of the
affected territory, if both of the following requirements are
met:
a) The entity applying for the contract has provided LAFCO
with documentation of a threat to the health and safety of
the public or the affected residents; and,
b) The LAFCO has notified any alternate service providers,
including any water corporation or sewer system corporation
that has filed a map and statement of service capabilities
with the LAFCO.
5)Establishes requirements and a timeframe for an executive
officer upon receipt of a request for approval by a city or
district of a contract to extend services outside boundaries.
Requires, upon receipt of a complete request, the request to
be placed on the agenda or a LAFCO meeting, unless the LAFCO
has delegated the approval of requests to the executive
commissioner.
6)Requires the LAFCO or executive officer to approve,
disapprove, or approve with conditions the contract for
extended services. Allows an applicant, if a contract is
disapproved or approved with conditions, to request
reconsideration and cite the reasons why.
7)Provides exemptions to the requirement in existing law for the
following contracts or agreements:
a) Contracts or agreements solely involving two or more
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public agencies where the public service is an alternative
or substitute for public services already being provided by
an existing public services provided, and there the level
of service will be consistent with the level of service by
the existing provider;
b) Contracts for the transfer of nonpotable or nontreated
water;
c) Contracts or agreements solely involving the provision
of surplus water to agricultural lands and facilities, as
specified;
d) Extended service that a city or district was providing
on or before January 1, 2001; and,
e) Local publicly owned electric utility, as defined,
providing electric services that do not involve the
acquisition, construction or installation of electric
distribution facilities by the local publicly owned
electric utility, outside of the utility's jurisdictional
boundaries.
FISCAL EFFECT: None
COMMENTS:
1)Current Law. The Cortese-Knox-Hertzberg Local Government
Reorganization Act (Act) delegates the Legislature's power to
control the boundaries of cities and special districts to
local agency formation commissions (LAFCOs). The Legislature
created LAFCOs to discourage urban sprawl, preserve open space
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and prime agricultural lands, encourage the orderly formation
and development of local agencies, and to ensure the efficient
provision
of government services.
The Act requires that cities and districts must get a LAFCO's
written approval before they can serve territory outside their
boundaries pursuant to AB 1335 (Gotch), Chapter 1307, Statutes
of 1993. This requirement was established because of a
concern that some cities and
districts might be circumventing LAFCO review by signing
contracts to provide services outside their boundaries without
annexing the territory. AB 1335, however, recognized the need
to accommodate unexpected local conditions and several
exemptions were established. LAFCO approval is not required
for contracts or agreements solely involving two or more
public agencies where the public service to be provided is an
alternative to, or substitute for, public services already
being provided by an existing public service provider and
where the level of service to be provided is consistent with
the level of service contemplated by the exiting service
provider. In 1999, the Legislature expanded these provisions
to allow services outside spheres of influence to correct
public health and safety problems, pointing to failing septic
tanks and water wells to exemplify the necessity for the
change.
2)Bill Summary. This bill further expands the provisions of law
which allow service extensions outside sphere of influences
and jurisdictional boundaries, beyond health and safety
issues. Under this bill, LAFCOs may authorize, if consistent
with their adopted policies, a city or district to extend
services to support existing or planned uses involving public
or private properties, if the approval is done at a noticed
public hearing where LAFCO makes specified determinations.
The determinations must include: 1) The extension of service
or service deficiency was identified and evaluated in an MSR;
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2) The extension of service will not result in adverse impacts
on open space or agricultural lands, or have growth inducing
impacts; and, 3) A later change of organization involving the
subject territory and its affected agency is not feasible, or
desirable based on the adopted policies of the LAFCO.
This bill is author-sponsored.
3)Author's Statement. According to the author, "There are
instances when existing or approved developments lie outside a
sphere of influence of a municipal service provider, and that
are in need of those municipal services. For example, the
ABAG Regional Housing Needs Allocation (RHNA) process may
require the location of affordable housing outside the City of
Napa's sphere of influence. Unfortunately, current law will
not permit municipal services to be extended outside the
service provider's sphere of influence unless a city or
district receives written approval from the LAFCO in the
affected county pursuant to a very limited set of special
circumstances.
"An additional example would be Whetstone winery in Napa. This
existing development lies adjacent to a city water line and is
outside of the city's sphere of influence in an unincorporated
area surrounded by agricultural lands. When the property owner
submitted the application for water service to be extended to
this property to allow for a fire hydrant to be serviced, the
extension was denied because this was not a residential
property and the health and safety exemption in [current law]
could not be applied. The only means to extend water to this
property would be to annex it into the city's sphere of
influence. With a city water line running adjacent to the
property, allowing Whetstone an exemption to access this city
water rather than annexing the property into the city's sphere
of influence would be a greater protection to the surrounding
agricultural lands than extending the sphere of influence into
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the unincorporated area."
4)Policy Considerations. Proposed changes to the laws governing
outside service extensions have been debated among LAFCOs for
many years and have largely divided practitioners. On one
hand, some LAFCOs can provide examples where outside service
extensions seem to
be the only option because of local geography, politics, and
other circumstances, so more flexibility is appealing. On the
other hand, some LAFCOs feel that an expansion to this
provision of law is fundamentally against the core purpose and
mission of LAFCOs and could impact agricultural lands or have
growth inducing effects.
a) Identified Solution Doesn't Match Identified Problem.
In support of the bill, Napa County argues that extending
services outside spheres of influence may prevent
unnecessary annexation of territory that might lead to
unintentional sprawl. The examples raised in Napa County
are unique in the sense that wineries on commercially zoned
parcels have service needs for commercial purposes and are
largely surrounded by agricultural land. In these
instances annexation of territory has implications not only
on the efficiency of services, potential growth and
development, but also has financial impacts, due to sales
taxes or transient occupancy taxes that may be collected in
these territories. The Committee may wish to consider,
given these factors, if it is appropriate to use the issues
identified in Napa County to craft statewide policy that
may have very different impacts in other counties.
Additionally, the Committee may wish to consider asking the
author to narrow the scope of the bill to more specifically
address some of the examples raised.
b) Growth Inducing? In opposition to this bill, the
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California Farm Bureau Federation argues that this bill
will have a severely negative impact on farmland
conservation efforts by encouraging leap-frog commercial
and residential development.
c) Terminology. The Committee may wish to ask the author
to strike out the term "existing or planned use" to be
consistent with the author's intent to address service
extensions to existing developments.
The Committee may wish to consider whether it would be
possible for LAFCO to approve an extension of services for
a planned use that would not inherently have growth
inducing impacts. The Committee may wish to consider if
this bill may lead to costly litigation for LAFCOs if this
bill requires substantive changes in LAFCO policies which
will influence growth patterns and affect land use, thus
leading to potential impacts to the environment that may be
subject to CEQA.
d) Impact on Voters. The Committee may wish to consider if
this bill will result in more cities and districts
extending services outside their boundaries instead of
annexing territory into their boundaries. If more services
are extended outside of boundaries, instead of annexing
territory into a district, then voters within that
territory cannot vote in the elections that directly impact
the service they are receiving.
5)Related Legislation. This bill is substantially similar to SB
1498 (Emmerson) of 2012, which was never heard in the Senate
Governance and Finance Committee.
6)Arguments in Support. Napa County argues that this bill seeks
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to provide LAFCOs with more flexibility to approve service
extensions outside of a sphere of influence without requiring
annexation of territories that might lead to unintended
sprawl.
7)Arguments in Opposition. The California Farm Bureau
Federation argues, "Unfortunately, extending urban services
outside of cities' spheres of influence would have a severe
negative impact on farmland conservation efforts by
encouraging leap-frog commercial and residential development."
REGISTERED SUPPORT / OPPOSITION:
Support
Napa County Board of Supervisors
San Bernardino Local Agency Formation Commission (if amended)
Opposition
California Farm Bureau Federation (unless amended)
Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958
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