BILL ANALYSIS Ó SENATE COMMITTEE ON TRANSPORTATION AND HOUSING Senator Jim Beall, Chair 2015 - 2016 Regular Bill No: AB 738 Hearing Date: 7/14/2015 ----------------------------------------------------------------- |Author: |Beth Gaines | |----------+------------------------------------------------------| |Version: |5/11/2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |No | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Eric Thronson | |: | | ----------------------------------------------------------------- SUBJECT: Sacramento Regional Transit District DIGEST: This bill recasts membership in the Sacramento Regional Transit District and redefines the boundaries of the District. ANALYSIS: Existing law: 1) Establishes the Sacramento Regional Transit (Sacramento RT) District to operate a single unified public transportation system in the Sacramento region in order to meet the present and future public transportation, and mass and rapid transit, needs of the region. 2) Defines member entities of the Sacramento RT District as cities or counties that are annexed to the district. 3) Enables any city or county to annex and become part of the Sacramento RT District following a written request by that city or county and upon approval by the Sacramento Area Council of Governments. 4) Defines the boundaries of the Sacramento RT District as: a) All of the areas of any eligible cities in which a city council has declared the need for the district to operate; and b) Any of the area of a county described in statute AB 738 (Beth Gaines) Page 2 of ? within which a board of supervisors has declared the need for the district to operate. 1) Enables Sacramento RT to operate and exercise its powers within any city or county. 2) Restricts Sacramento RT from levying an ad valorem property tax within the boundaries of any city or county unless that city council or county board of supervisors declares that there is a need for Sacramento RT to levy a tax within its boundaries. This bill: 1) Defines member entities of Sacramento RT as any city or county within the district boundaries. 2) Determines the boundaries of Sacramento RT to include: a) The cities of Sacramento and Rancho Cordova b) The unincorporated territory of Sacramento County within the urban service area, as determined by the Board of Supervisors c) An eligible city or county that has annexed to the district 1) Requires that any territory annexed into a city currently included in Sacramento RT also be included in the district. 2) Requires any new city incorporated on or after January 1, 2016, which has any territory within Sacramento RT boundaries, to be annexed wholly into the district. 3) Declares that any territory included within the district boundaries of Sacramento RT is subject to taxation in accordance with the assessable valuation of the property and that revenue can be used for general purposes and for payment of any district indebtedness. 4) Restricts Sacramento RT from levying an ad valorem property tax on any territory that is not within the district boundaries. 5) Requires the legislative body of any city or county that wishes to be annexed into Sacramento RT to agree in writing AB 738 (Beth Gaines) Page 3 of ? upon terms and conditions of annexation with the district's board of directors. 6) Eliminates the Sacramento Area Council of Governments' approval of annexation of any new territory to the district. 7) Requires any territory wishing to detach from the district to obtain a supermajority vote of 80%of the district's board of directors, and a majority of its governing body, in order to no longer be part of the district. 8) Holds any territory that detaches from the district responsible for taxation for the payment of any bonded indebtedness existing at the time of detachment. COMMENTS: 1) Purpose. According to the author, this bill is attempting to resolve a few problems created by existing law. First, some jurisdictions in Sacramento County, specifically the cities of Folsom, Citrus Heights, and Elk Grove, contract for service with Sacramento RT but are reluctant to annex into the district for fear of losing some existing degree of control over the operations of service within their boundaries. This bill allows entities to negotiate their relationships to Sacramento RT before annexing into the district and therefore allay some concerns. Second, Sacramento RT has invested in some currently unincorporated areas of Sacramento County, and to protect those investments this bill specifies that those areas remain part of the district notwithstanding any new city incorporations in the future. Finally, this bill creates a mechanism for a member city to leave the district if it wishes, which is currently not possible under existing law. 2) Sacramento RT Background. The Legislature authorized the creation of the Sacramento RT District in 1971 to operate a comprehensive public transportation system for the Sacramento region. Sacramento RT serves an area encompassing 418 square miles and 1.4 million people; it operates 67 bus routes and 38.6 miles of light rail service. Sacramento RT is governed by an 11-member board of directors comprised of eight directors that are appointed by the member entities, including Sacramento County and the cities of Sacramento and Rancho AB 738 (Beth Gaines) Page 4 of ? Cordova. Additionally, three directors are appointed by non-annexed jurisdictions, which are "participating entities," including the cities of Citrus Heights, Elk Grove, and Folsom. Board members vote based on a weighted vote system established by AB 2137 (Niello, Chapter 227, Statutes of 2008), which is based upon the type of membership and the financial contribution made by each entity to the district. 3) Concerns. The City of Elk Grove has an "oppose unless amended" position on this bill, and raises several areas of concern. First, it believes this bill creates challenges for the city's planned future annexations and the service area for Elk Grove's own transit service. Second, Elk Grove strongly objects to this bill granting Sacramento RT the ability to levy and keep an ad valorem property tax in the unincorporated area of Sacramento County. If Elk Grove ever annexes more land that had an ad valorem property tax associated with it, the City expects to take over that property tax. Elk Grove states that it has no intention of annexing into Sacramento RT. Any future land Elk Grove annexes will become part of the city's own transit service. Elk Grove's oppose letter suggests that this bill threatens Elk Grove's ability to grow, and at the same time, expand its own transit service. For example, this bill will include in Sacramento RT's boundary a portion of Sacramento County south of Elk Grove that is entirely disconnected from the rest of Sacramento RT by the City of Elk Grove's boundary. It seems reasonable for Elk Grove to want this portion of Sacramento County to be excluded from Sacramento RT's district, given that Sacramento RT does not provide service to this area and would have to travel through Elk Grove to do so. Further, it doesn't appear that Sacramento RT intends to limit Elk Grove's ability to grow and provide its own service. In light of this, the committee and author may wish to amend the bill to resolve Elk Grove's growth issues as well as exclude the detached portion of Sacramento County from Sacramento RT's district boundary. Related Legislation: AB 906 (Cooper) - specifies that the City of Elk Grove's obligation to pay its proportionate share for transit service AB 738 (Beth Gaines) Page 5 of ? provided by Sacramento RT is fully satisfied by the district's receipt of revenues from a countywide sales tax measure dedicated to transit service. This bill is also being heard in this committee today. Assembly Votes: Floor: 75-0 LGov: 9-0 FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No POSITIONS: (Communicated to the committee before noon on Wednesday, July 8, 2015.) SUPPORT: Sacramento Regional Transit District OPPOSITION: City of Elk Grove -- END --