BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2414|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2414
Author: Eduardo Garcia (D)
Amended: 8/19/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 4-1, 6/22/16
AYES: Hertzberg, Beall, Hernandez, Pavley
NOES: Nguyen
NO VOTE RECORDED: Lara, Moorlach
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 50-25, 5/12/16 - See last page for vote
SUBJECT: Desert Healthcare District
SOURCE: Author
DIGEST: This bill establishes an annexation process to expand
the Desert Health Care Districts boundaries that is exempt from
some statutes that generally govern district annexations.
Senate Floor Amendments of 8/19/16 (1) require the Desert Health
Care District, if it expands its boundaries pursuant to the
bill's provision, to change from an at-large to a by-district
method of electing the District's governing board members; and
(2) specify that the Desert Health Care District, not the County
of Riverside, is responsible for submitting a resolution of
application with Riverside County Local Agency Formation
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Commission to initiate proceedings to expand the District.
ANALYSIS: Existing law, pursuant to the
Cortese-Knox-Hertzberg Local Government Reorganization Act
(Act), generally controls how local officials change the
boundaries of cities and special districts, putting local agency
formation commissions (LAFCOs) in charge of the proceedings.
This bill:
1) Establishes an annexation process for the Desert Health Care
District (District) to include the East Coachella Valley
region, and provides a new governance structure for the
District's Board of Directors, if the District is expanded
pursuant to the process established by this bill.
2) Requires the District, on or before January 5, 2017, to file
a resolution of application with Riverside LAFCO, to initiate
proceedings by Riverside LAFCO for the expansion of the
District to include the East Coachella Valley region. The
District must pay any fees associated with the resolution of
application.
3) Requires the Riverside LAFCO proceeding to be deemed
initiated on the date the resolution of application is
accepted for filing. Riverside LAFCO must hold a hearing and
provide specified notice.
4) Requires the expanded District to include all communities
currently served by the District as of the date the
resolution of application is filed 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.
5) Requires Riverside LAFCO to complete the proceeding and
direct the election no later than 150 days following receipt
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of the completed resolution of application.
6) Prohibits the resolution of application, filed by the Board
of Supervisors, from being subject to any protest proceedings
and prohibits Riverside LAFCO from disapproving the
resolution of application.
7) Requires Riverside LAFCO to order the expansion of the
District subject to a vote of the registered voters residing
within the territory to be annexed to the District at an
election following the completion of their proceedings.
Riverside LAFCO may condition the annexation on the
District's imposition of sufficient revenues to provide
services within the territory to be annexed, including, but
not limited to, the concurrent approval of special taxes or
benefit assessments that will generate those sufficient
revenues.
8) Requires Riverside LAFCO to direct the Board of Supervisors
to direct county officials to conduct the election, as
specified, for the District's expansion and any necessary
funding source that requires voter approval on the ballot at
the next countywide election. The District must pay the
county for the actual costs of conducting the election.
9) Requires the District to be expanded in accordance with this
bill, if the following occur:
a) A majority of the voters within the territory proposed
to be annexed to the District vote in favor of the
expansion; and,
b) A number of voters required under applicable law to
approve any necessary funding source that requires voter
approval vote in favor of that funding source.
10)Requires the District's Board, 30 days after the expansion
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of the District, to adopt a resolution to increase the number
of Board members from five to seven without the petition or
approval of the voters residing within the District. The
Board's resolution must be effective on the date of, and
subject to any conditions specified in the resolution.
11)Requires the Board to appoint two additional Board members
that are registered voters and residents of the territory
annexed pursuant to this bill.
12)Requires the District, after its expansion, to elect the
seven members of its board of directors by district, rather
than at large, beginning with the first district election
after January 1, 2020.
13)Establishes a method by which the District's board of
directors must establish the new voting districts.
14)Specifies the manner in which the new Board members' term
must be staggered and requires a vacancy to be filled
pursuant to a specified statute.
15)Provides that the increase to the membership of the Board,
the appointment of two new members, and the change in the
manner of electing the Board only become operative if the
District is expanded in accordance with the annexation
process established by this bill.
16)Exempts the expansion of the District from the Act, except
as specified in this bill.
17)Provides that the Act applies to any other change of
organization or reorganization, following the reorganization
of the District pursuant to this bill.
Background
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The Act controls how local officials change the boundaries of
cities and special districts, putting LAFCOs in charge of the
proceedings. LAFCOs' boundary decisions must be consistent with
spheres of influence that LAFCOs adopt to show the future
boundaries and service areas of the cities and special
districts. Before LAFCOs can adopt their spheres of influence,
they must prepare municipal service reviews which analyze
population growth, public facilities, and service demands.
LAFCOs may also conduct special studies of local governments.
Most boundary changes begin when a city or special district
applies to LAFCO, or when registered voters or landowners file
petitions with a LAFCO. In limited circumstances, LAFCO can
initiate some special district boundary changes: consolidations,
dissolutions, mergers, subsidiary districts, or reorganizations
(AB 1335, Gotch, Chapter 1307, Statutes of 1993). 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.
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Finally, LAFCO's staff files formal documents to complete the
annexation.
The District was created in 1948 to provide healthcare services
to residents in the Coachella Valley within 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 Board had 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.
According to the District, with an operating budget of roughly
$9 million, the District allocates more than $3 million each
year on grants and other programs. The District has adopted a
grant program to invest 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 the residents of the District, 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.
Some public officials want to expand the District's boundaries
to provide services in communities within the Eastern Coachella
Valley that lack adequate access to health care.
Comments
Purpose of the bill. This bill responds to significant barriers
that impede Eastern Coachella Valley residents' access to health
care providers and services. Some of the barriers include
shortages in the number of primary care providers, shortages in
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various medical and surgical specialties, a lack of urgent care
services, and a lack of transportation. Solving these
persistent barriers has proven to be challenging. Even with
expanded Medicaid or commercial insurance coverage for eligible
residents through the Affordable Care Act, industry analysts
remain concerned that the number and capacity of providers will
prove inadequate to meet demand. Expanding the District will
help to address the persistent needs in these underserved
communities.
Precedent. This bill is one of several bills that the
Legislature has considered in recent years that limit the
discretion and authority that state law generally grant to
LAFCOs over boundary changes and reorganizations. For example,
AB 1232 (Huffman, Chapter 518, Statutes of 2009) allowed for the
consolidation of the Sewerage Agency of Southern Marin and its
member districts, after notice and hearing, but without protest
hearings, AB 2453 (Achadjian, Chapter 350, Statutes of 2014)
established a special process for forming the Paso Robles Water
District, and AB 3 (Williams, Chapter 548, Statutes of 2015)
created a special process for forming the Isla Vista Community
Services District. Continuing to enact special legislation
circumventing the LAFCO process for individual local government
boundary changes and reorganizations may set a precedent that
invites regular legislative involvement in all manner of
disputes over local service delivery and boundary issues.
Mandate. The California Constitution requires the state to
reimburse local governments for the costs of new or expanded
state mandated local programs. Because this bill imposes
additional duties on Riverside County officials, Legislative
Counsel says that it imposes a new state mandate. This bill
requires the state to reimburse local agencies if the Commission
on State Mandates (Commission) determines that this bill imposes
a reimbursable mandate.
Special legislation. The California Constitution prohibits
special legislation when a general law can apply (Article IV,
§16). This bill contains findings and declarations explaining
the need for legislation that applies only to the District.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
Unknown reimbursable one-time costs, likely over $50,000, for
the District to pay for costs 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
claim.
Unknown, likely minor reimbursable ongoing costs until 2020
related to the mandatory addition of two at-large 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.
Additional estimated one-time reimbursable costs of
approximately $300,000 to conduct activities related to the
establishment of seven voting districts, to the extent the
District expansion is approved by the voters (General Fund).
Redistricting costs could include public outreach as well as
legal, demographic, and communications consultant contracts.
Actual reimbursable costs would be subject to a determination
by the Commission.
SUPPORT: (Verified8/11/16)
Borrego Community Health Foundation
Clinicas De Salud Del Pueblo
Comite Civico del Valle
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Inland Congregations United for Change
La Union Hace La Fuerza
OPPOSITION: (Verified8/11/16)
California Association of Local Agency Formation Commissions
County of Riverside
Riverside County Local Agency Formation Commission
ARGUMENTS IN SUPPORT: Supporters argue that this bill, by
facilitating the expansion of the District's boundaries, will
reduce significant barriers that impede Eastern Coachella Valley
residents' access to health care providers and services.
ARGUMENTS IN OPPOSITION: Opponents argue that this bill
circumvents the LAFCO process for individual local government
boundary changes and reorganizations, which may set a precedent
that invites regular legislative involvement in all manner of
disputes over local service delivery and boundary issues.
ASSEMBLY FLOOR: 50-25, 5/12/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
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, Irwin, Levine, Lopez, Low, McCarty, Medina, Mullin,
Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas,
Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood,
Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chávez,
Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Jones,
Kim, Lackey, Linder, Maienschein, Mathis, Melendez, Obernolte,
Olsen, Patterson, Steinorth, Wagner, Waldron
NO VOTE RECORDED: Burke, Chang, Jones-Sawyer, Mayes, Wilk
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
8/22/16 23:16:43
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