BILL ANALYSIS Ó
AB 2414
Page 1
(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
AB
2414 (Eduardo Garcia)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: |50-25 |(May 12, 2016) |SENATE: |27-11 |(August 29, |
| | | | | |2016) |
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Original Committee Reference: L. GOV.
SUMMARY: Establishes an annexation process for the Desert
Healthcare District (District).
The Senate amendments:
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1)Require the District, instead of the Riverside County Board of
Supervisors (Board of Supervisors), to file the resolution of
application to expand the District's boundaries and to pay for
any associated fees.
2)Authorize the Riverside County Local Agency Formation
Commission (Riverside LAFCO) to condition the annexation on
the District's imposition of sufficient revenues to provide
services within the annexed territory including, but not
limited to the concurrent approval of special taxes for
benefit assessments.
3)Require the District's Board of Directors (Board), following
the expansion of the Board, to adopt a resolution to divide
the District into seven voting districts, number the voting
districts consecutively, and to elect Board members by voting
district beginning with the first District election after
January 1, 2020.
4)Require the Board, in establishing the voting districts, to
provide for representation in accordance with demographic,
including population, and geographic factors, of the entire
are of the District.
5)Require the Board to fix the time and place and give public
notice for a hearing on the proposed establishment of the
voting districts, at which and elector of the District may
present his or her views and plans for the proposed division
of District.
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6)Require the Board's resolution pursuant to 3) above, to
declare the voting districts and describe the boundaries of
each voting district. Require any necessary procedures for
implementing the election of the Board by voting districts to
be established and implemented on or before January 1, 2020.
7)Require one member of the Board to be elected by the electors
of each of the voting districts. Prohibit a person from
holding office as a Board member unless he or she has been a
resident of the voting district from which he or she is
elected from for the 30 days next preceding the date of the
election. Provide an appointment process for a vacancy on the
Board, as specified.
8)State that it is the intent of the Legislature that the
District maximizes the use of its assets to provide direct
health services to individuals within the District through
direct operation of or funding to provide to organizations
that own or operate hospitals and other facilities and
services.
AS PASSED BY THE ASSEMBLY, this bill:
1)Established an annexation process for the District to include
the East Coachella Valley region, as specified, and provided a
new governance structure for the expanded District's Board.
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2)Required the Board of Supervisors, on or before January 5,
2017, to file a resolution of application with Riverside
LAFCO, to initiate LAFCO proceedings for the District's
expansion.
3)Required the Board of Supervisors to pay any fees associated
with the resolution of application, and to hold a hearing and
provide specified notice.
4)Required Riverside LAFCO to complete the proceeding and direct
the election. Prohibited the resolution of application from
being subject to any protest proceedings. Prohibited
Riverside LAFCO from disapproving the resolution of
application.
5)Required 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.
6)Required Riverside LAFCO to direct the Board of Supervisors to
conduct the election for the District's expansion and any
necessary funding source that requires voter approval.
7)Required the Board, 30 days after the expansion of the
District, to adopt a resolution to appoint two additional
Board members that are registered voters and residents of the
territory annexed pursuant to this bill.
8)Found and declared that a special law is necessary and general
law cannot be made applicable as specified.
FISCAL EFFECT: According to the Senate Appropriations
Committee, there are:
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1)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.
2)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.
3)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.
COMMENTS:
1)LAFCO Law. LAFCOs regulate local government boundary changes
through the approval or denial of proposals by other public
agencies or individuals for these procedures. The Act
establishes procedures for local government changes of
organization, including annexations to a special district.
The Act prescribes a process for the inclusion or addition of
territory to a district (district annexation), which is
similar to most boundary changes that require numerous steps:
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a) application to LAFCO, by petition or resolution; b) noticed
public hearing, testimony, and approval or disapproval by
LAFCO in which they can impose terms and conditions; c)
additional public hearing for protests (if more than 25% of
voters file protest, the LAFCO must order an election on the
proposed annexation, and if more than 50% of voters protest,
then the LAFCO must terminate the proceedings); d) an
election, if there were significant protests; and, e) LAFCO
staff files documents to complete the annexation.
In the past several years, the Legislature has established a
modified LAFCO process or exempted specified requirements in
the LAFCO process for the formation of several special
districts following a history of failed attempts at the local
level, including AB 2453 (Achadjian), Chapter 350, Statutes of
2014, for the creation of the Paso Robles Water District; and,
AB 3 (Williams), Chapter 548, Statutes of 2015, for the
formation of the Isla Vista Community Services District.
2)Bill Summary. This bill establishes an annexation process for
the District to include the East Coachella Valley region that
is exempt from the statutes that govern the usual process
under LAFCO for district annexations. This bill requires the
District, on or before January 5, 2017, to submit to Riverside
LAFCO a resolution of application to initiate LAFCO
proceedings to expand the District's boundaries to include the
East Coachella Valley region. This bill requires Riverside
LAFCO, within 150 days of receiving the resolution of
application, to complete specified proceedings and direct the
election for the expanded District.
Under this bill, the expanded District must include all
communities currently served by the District and the
communities of Indian Wells, La Quinta, Indio, Coachella, and
the unincorporated area of Bermuda Dunes, Mecca, Thermal
Oasis, North Shore, and Vista Santa Rosa. Riverside LAFCO
would not have the usual power to disapprove the application
and the protest provision would not apply to the proposed
annexation. The District would only be expanded, if supported
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by a majority of voters within the territory proposed to be
annexed to the District and the passage of any necessary
funding. If the District is expanded, this bill requires,
within 30 days, the five-member Board to appoint two new Board
members, who are residents and registered voters in the area
annexed to the District. This bill also requires after
January 1, 2020 for Board members to be elected by seven
voting districts and prescribes the process by which the board
must divide the District. This bill is author-sponsored.
3)Author's Statement. According to the author, "Currently,
there are significant barriers preventing Eastern Coachella
Valley residents' access to health care providers and
services. This has been well-documented by numerous
stakeholders in the region. Some of the barriers include
shortages in the number of primary care providers, shortages
in various medical and surgical specialties, a lack of urgent
care services, and a lack of transportation. Solving the
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. Eastern
Coachella Valley stakeholders and I believe that expanding the
current healthcare district is best to address these
persistent needs. Pointing to the impact and success of the
[District] in addressing the health needs of its current
constituency."
4)Desert Healthcare District. 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, and
in 1997, the Board voted to lease the hospital to Tenet Health
Systems for a 30-year period. The District continues to own
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the lease and other assets, including the Las Palmas Medical
Plaza, while Tenant 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 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.
The relationship between LAFCOs and healthcare districts is
unique in comparison to other special districts. The
principal act for healthcare districts and the formation of
some healthcare districts predate the Knox Nisbet Act, which
created LAFCOs. As a consequence of the ambiguity in current
law, the District has experienced past issues with allegations
of grant recipients providing service outside of the
boundaries of the District and within the communities
identified for potential annexation by this bill. Due to the
unique nature of healthcare services and the long history of
healthcare district's principal act, the Legislature may wish
to consider, beyond the scope of this individual bill, if
there is a need to more clearly define the relationship
between LAFCOs and healthcare districts, and undertake a
closer examination of healthcare district's service
boundaries.
5)Arguments in Support. The Borrego Community Health Foundation
argues, "The [District] has a long history of acknowledged
success in serving [their] residents. [The District's]
leaders are acutely aware of and are sympathetic to health
disparities in the East Coachella Valley and have collaborated
with other agencies to provide services within the limitation
of their fiduciary obligations to the District's residents.
Expanding the current District will take away their limitation
to help end the healthcare disparities that currently exist."
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6)Arguments in Opposition. Riverside LAFCO argues,
"Unfortunately, our primary issue, stripping LAFCO of its
discretionary authority, remains unaddressed. While we have
been and will continue to be available to assist the District
with expansion of its boundaries, we do not believe additional
legislation is necessary to accomplish this intended
annexation."
Analysis Prepared by:
Misa Lennox / L. GOV. / (916) 319-3958 FN:
0004852