BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2414 (Eduardo Garcia) - Desert Healthcare District
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|Version: June 28, 2016 |Policy Vote: GOV. & F. 4 - 1 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 1, 2016 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2414 would provide an exemption from specified
statutes that generally govern district annexations and require
Riverside County to apply to the local agency formation
commission (LAFCO) by January 5, 2017 to initiate proceedings to
expand the Desert Healthcare District (District). The bill
would also require the County to hold an election for approval
of the District expansion and any necessary funding sources, as
specified.
Fiscal
Impact:
Unknown reimbursable one-time costs, likely over $50,000, for
Riverside County to prepare an application for the expansion
of the District and to conduct the specified election (General
Fund). Actual reimbursable costs would be subject to a
determination by the Commission on State Mandates
(Commission), if the County files a successful reimbursement
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claim.
Unknown, likely minor reimbursable ongoing costs related to
the mandatory addition of two District board members, should
the election on the District expansion be approved by the
voters (General Fund). Actual reimbursable costs would be
subject to a determination by the Commission, if the District
files a successful reimbursement claim.
Background: Existing law, the Cortese-Knox-Hertzberg Act, controls how
local officials change the boundaries of cities and special
districts, and designates a LAFCO in each county to oversee
boundary changes. Most boundary changes begin when a city or
special district files a resolution of application with the
LAFCO, or when registered voters or landowners file petitions
with a LAFCO. In limited circumstances, a LAFCO can initiate
some special district boundary changes at its own discretion,
such as consolidations, dissolutions, mergers, subsidiary
districts, or reorganizations. Boundary changes, including
annexations, require four (sometimes five) steps:
First, there must be a completed application to LAFCO,
including a petition or resolution, an environmental review
document, and a property tax exchange agreement between the
county and the district.
Second, LAFCO must hold a noticed public hearing, take
testimony, and may approve the proposed annexation. LAFCO
may impose terms and conditions relating to revenues and
other considerations. If LAFCO disapproves, the proposed
annexation stops.
Third, LAFCO must hold another public hearing to measure
protests.
Fourth, if there was sufficient protest, an election
must occur. A successful annexation requires
majority-voter approval.
Finally, LAFCO's staff files formal documents to
complete the annexation.
The Desert Healthcare District was created in 1948 to provide
healthcare services to residents in the Coachella Valley within
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a 457 square mile area that includes Palm Springs, Desert Hot
Springs, Cathedral City, Thousand Palms, Rancho Mirage, Mountain
Center, San Gorgonio, and the area of Palm Desert west of Cook
Street. The District built and began operating Desert Hospital,
which is now known as Desert Regional Medical Center. Since
1986, the District's governing board has leased hospital
operations to medical facility providers. In 1997, the board
voted to lease the hospital to Tenet Health Systems for a
30-year period. The District continues to own the lease and
other assets, including the Las Palmas Medical Plaza, while
Tenet runs the operations of the 387-bed acute care hospital.
The District indicates that it has an operating budget of
roughly $9 million, and allocates more than $3 million each year
for grants and other programs that invests in non-profits and
public agencies whose activities and programs improve the health
and wellbeing of District residents. The District is funded by
property tax paid by its residents, revenue for working capital
for the hospital in the event the lease with Tenet is
terminated, and rental income from the medical plaza. The
District is governed by a five-member board elected at-large.
Proposed Law:
AB 2414 would establish a process for the expansion of the
District's boundaries that is exempt from some existing
requirements for boundary changes in current LAFCO law.
Specifically, this bill would:
Require the Riverside County Board of Supervisors to file a
resolution of application with the LAFCO by January 5, 2017
for the expansion of the District to include its current
service area and the communities of Indian Wells, La Quinta,
Indio, and Coachella, and the unincorporated areas of Bermuda
Dunes, Mecca, Thermal, Oasis, North Shore, and Vista Santa
Rosa.
Require the board of supervisors to pay any fees associated
with the LAFCO application.
Require the LAFCO proceeding to be deemed initiated on the
date the completed application is accepted, and require the
LAFCO to hold a noticed public hearing.
Prohibit the LAFCO from disapproving the application and
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prohibits the application from being subject to protest
proceedings.
Require the LAFCO to order the expansion of the District,
subject to a vote of the registered voters residing within the
territory to be annexed at an election following the
completion of their proceedings. The LAFCO must complete the
proceeding and direct the election within 150 days of
receiving the completed application.
Authorize the LAFCO to condition the annexation on the
District's imposition of sufficient revenues to provide
services to the expanded territory.
Require the LAFCO to direct the County to conduct the election
for the District's expansion and any necessary funding source
that requires voter approval on the ballot at the next
countywide election, as specified.
Specify that the District expansion is exempt from the
provisions of the Cortese-Knox-Hertzberg Act, except as
specified in the bill.
AB 2414 would also require the District's board of directors to
adopt a resolution to increase the size of the board from five
to seven members, as specified, within 30 days of voter approval
of the District expansion. The additional board members would
be initially appointed by the current board, and must be
registered voters and residents of the territory annexed
pursuant to this bill.
Staff
Comments: By placing new duties on Riverside County and
expanding the District's board of directors, this bill would
impose a reimbursable mandate. The County would likely be
eligible for reimbursement for costs related to the application
to LAFCO, and costs to conduct the necessary elections for
District expansion and funding at the next countywide election.
Staff estimates these one-time costs could exceed $50,000. In
addition, the District would likely be eligible for
reimbursement of ongoing costs associated with the mandatory
expansion of its board by two members, to the extent the
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District expansion is approved by the voters. Ongoing costs to
support the additional board members are likely to be relatively
minor. Actual state-reimbursable costs would be subject to a
determination by the Commission, if the County and District file
successful reimbursement claims.
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