BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 239 |Hearing |4/29/15 |
| | |Date: | |
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|Author: |Hertzberg |Tax Levy: |No |
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|Version: |4/23/15 |Fiscal: |Yes |
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|Consultant|Weinberger |
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LOCAL AGENCY FORMATION COMMISSIONS AND FIRE PROTECTION SERVICE
CONTRACTS
Requires a LAFCO to review a contract or agreement for new or
extended fire service outside of an existing service area.
Background
The Cortese-Knox-Hertzberg Local Government Reorganization Act
delegates the Legislature's power to control the boundaries of
cities and special districts to local agency formation
commissions (LAFCOs). The Act requires that cities and
districts must get a LAFCO's written approval before they can
serve territory outside their boundaries (AB 1553, Gotch, 1993).
However, 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.
State law allows cities and fire protection districts to
contract with a county to provide fire protection services
within the local agency's jurisdiction. Similarly, local
governments may contract with the California Department of
Forestry and Fire Protection (CAL FIRE) to provide fire
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protection services. CAL FIRE is providing fire protection
services within nearly 150 local jurisdictions pursuant to
cooperative agreements.
Some of these contracts and cooperative agreements result in a
local department shifting all responsibility for providing fire
protections services to a county or CAL FIRE, while others
supplement existing local fire services with additional services
provided by a county or CAL FIRE. However, because these
contracts and agreements solely involve public agencies and
existing services, they are not subject to LAFCO approval.
In some communities that recently entered into contracts or
agreements that shifted the responsibility for providing fire
protection services from one public agency to another, the
agreements have generated controversy while failing to produce
anticipated cost savings and administrative efficiencies. As a
result, firefighters' labor union officials want the Legislature
to require LAFCOs to give fire protection service contracts and
agreements more scrutiny than is required under current law.
Proposed Law
Senate Bill 239 requires a public agency to obtain a LAFCO's
approval to provide new or extended services under a fire
protection reorganization contract, pursuant to a specified
approval process.
SB 239 defines a "fire protection reorganization contract" as a
contract or agreement that:
Is for the exercise of new or extended fire protection
services outside a public agency's current service area;
Is executed pursuant to specified statutes allowing
local governments and CALFIRE to enter into fire protection
service contracts and agreements; and,
Does either of the following:
o Transfers responsibility for providing
services in more than 25% of the service area of any
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public agency affected by the contract or agreement.
o Changes the employment status of more than 25%
of the employees of any public agency affected by the
contract or agreement.
SB 239 applies the definition of a fire protection
reorganization contract to a contract or agreement that, in
combination with other contracts or agreements, meets the bill's
definition of a fire protection contract.
SB 239 requires a public agency to initiate a request for
commission approval of services provided under a fire protection
reorganization contract by adopting a resolution of application
as follows:
The legislative body of a public agency that is not a
state agency must adopt a resolution of application
proposing to provide new or extended services outside the
public agency's current service area.
The director of a state agency must initiate an
application, which must be approved by the Governor.
SB 239 requires that the legislative body of a public agency or
the director of a state agency must do all of the following
before submitting a resolution of application to the commission:
Obtain and submit with the resolution a written
agreement validated and executed by each affected public
agency and recognized employee organization that represents
firefighters of the existing and proposed service providers
consenting to the proposed change of organization.
Conduct an open and public hearing on the resolution.
SB 239 requires that a proposal for a change of organization
must be submitted with a plan for services prepared pursuant to
specified statutory requirements. The plan for services must
include:
A total cost estimate for providing new or extended
services.
The estimated cost of the new or extended services to
customers.
An identification of existing service providers and the
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potential fiscal impact to the customers of those existing
providers.
A plan for financing the exercise of the new or extended
services.
Alternatives for the exercise of the new or extended
services.
SB 239 requires a public agency to cause to be prepared by
contract an independent comprehensive fiscal analysis that
reviews and documents:
The costs to the public agency that has proposed to
provide new or extended services during the three fiscal
years following a public agency entering into a contract to
provide new or extended services outside its current
service area by contract or agreement, in accordance with
the following requirements:
o The analysis must include all direct and
indirect cost impacts to the existing service provider
in the affected territory.
o The analysis must review how the existing
service provider's costs compare to the service costs
in areas with similar populations and of similar
geographic size that provide a similar level and range
of services. The analysis must make a reasonable
determination of the costs expected to be borne by the
public agency providing new or extended services.
The revenues of the public agency that has proposed a
new or extended service outside its current service area
during the three fiscal years following the effective date
of a contract or agreement with another public agency to
provide a new or extended service.
The effects on the costs and revenues of any affected
public agency, including the public agency proposing to
provide the new or extended service, during the three
fiscal years that the new or extended service will be
provided.
Any other information and analysis needed to support the
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findings that a LAFCO must make to approve services under a
fire protection reorganization contract.
SB 239 requires the clerk of the legislative body of a public
agency or the director of a state agency adopting a resolution
of application to file a certified copy of the resolution with
the LAFCO executive officer. The bill specifies how a LAFCO
must process resolutions of application submitted to the
executive officer.
SB 239 requires a LAFCO to review and approve, disapprove, or
approve with conditions a fire protection reorganization
contract after a public hearing called and held for that
purpose. The bill allows an applicant to request
reconsideration if a contract is disapproved or approved with
conditions.
SB 239 generally prohibits a LAFCO from approving an application
unless the LAFCO determines that the public agency will have
sufficient revenues to carry out the exercise of the new or
extended services outside its current area. However, if the
LAFCO has determined that the public agency will not have
sufficient revenue to provide the proposed new or different
functions or class of services, SB 239 allows a LAFCO to approve
an application if the commission conditions its approval on the
concurrent approval of sufficient revenue sources pursuant to
state law. In approving an application, the LAFCO must provide
that if the revenue sources are not approved, the public
agency's authority to provide new or extended services must not
be exercised.
SB 239 prohibits a LAFCO from approving an application for
approval of a fire protection reorganization contract unless the
LAFCO finds, based on the entire record, all of the following:
The proposed exercise of new or extended services
outside a public agency's current service area is
consistent with the Cortese-Knox-Hertzberg Act.
The commission has reviewed the comprehensive fiscal
analysis.
The commission has reviewed the testimony presented at
the public hearing.
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The proposed affected territory is expected to receive
revenues sufficient to provide public services and
facilities and a reasonable reserve during the three fiscal
years following the effective date of the contract or
agreement between the public agencies to provide a new or
extended service.
SB 239 specifies the manner in which a LAFCO executive officer
must provide public notice by mail, in a newspaper, and on the
Internet, of a hearing to review an application for approval of
a fire protection reorganization contract. The bill allows a
LAFCO to continue a hearing and requires that a LAFCO must hear
and consider oral or written testimony presented by any affected
local agency, affected county, or any interested person who
appears at the hearing.
SB 239 specifies that a fire protection reorganization contract
is exempt from the statute that governs LAFCOs' approval of
extraterritorial service contracts.
The bill makes additional technical and conforming changes to
the Cortese-Knox-Hertzberg Act.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . When a contract or agreement between
two public agencies makes substantial changes to the
administration of fire protection services in a community, it
deserves to be scrutinized by LAFCO in a manner that is similar
to how a detachment and annexation of fire protection services
would be scrutinized under current law. When the Legislature
enacted the 1993 Gotch bill requiring LAFCO review of some
extraterritorial service contracts, it did so in response to
concerns that local governments were using service contracts to
circumvent LAFCO review of major changes to local service
delivery. However, the review requirement for extraterritorial
service contracts contained a substantial loophole for contracts
that only involved public agencies. SB 239 will narrow that
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loophole. Some recent fire protection service contracts between
public agencies have resulted in costly litigation and generated
deep divisions among community members. Other agreements have
been jeopardized by public officials' reliance on financial data
that later was determined to be inaccurate. Problems like these
can be avoided by providing more opportunities for the public to
review and consider independent analyses of proposed changes to
fire service delivery in their communities. By requiring a
public agency to submit a plan for extended services for fire
protection to LAFCO for review and approval, SB 239 will ensure
that the details of service delivery and costs are thoroughly
and independently examined, which will benefit the residents,
the public agency and the firefighters in all of the affected
areas.
2. Local control . Local voters elect county supervisors, city
council members, and special district board members to make
public policy in response to local needs. Local elected
officials strive to provide their communities' residents with
the best services at the most reasonable cost. They have to
answer to residents who are displeased with the quality and cost
of their services. As a result, a decision to enter into a
contract with another public agency to provide fire protection
services is a decision that elected officials make only after
considering the fiscal, administrative, and service delivery
implications for their communities. By requiring LAFCO review
of fire protection reorganization contracts, SB 239 diminishes
local officials' autonomy to contract for fire protection
services in the manner that they determine will best serve their
constituents.
3. Delegation of powers . SB 239 prohibits a LAFCO from
considering an application for approval of new or extended fire
protection service unless the application is accompanied by a
written agreement validated and executed by each affected public
agency and recognized employee organization that represents
firefighters of the existing and proposed service providers.
This requirement effectively gives some local officials and
private employee organizations authority to decide whether or
not a LAFCO can consider an application. The California
Constitution gives the State Legislature complete authority to
create local governments and set their boundaries. Because the
Legislature has delegated much of its authority over city and
special district boundaries to each county's LAFCO, LAFCOs are
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exercising a legislative power when they make decisions about
changes to local governments' organization. By empowering local
officials and labor organizations to determine whether a
proposal for new or extended services can be reviewed by a
LAFCO, SB 239 may delegate some legislative powers to those
other parties. As a general doctrine, the power to make laws
must be exercised by the Legislature, and may not be delegated.
However, courts have frequently upheld the delegation of
legislative powers to public boards or officers if the statutes
specify definite standards to be used to carry out the delegated
legislative purposes. By contrast, courts have invalidated
statutes that delegate uncontrolled discretion to third parties.
Granting local officials and employee organizations full
discretion to determine which proposed changes of organization a
LAFCO can consider may not be consistent with judicial
interpretations of the nondelegation doctrine.
4. Next in line ? Fire protection services aren't the only kind
of public service that local agencies provide outside of their
boundaries pursuant to contracts with other public agencies.
Local agencies commonly contract for law enforcement services,
utility services, and park and recreation services, among
others. Enacting SB 239 may invite requests from other interest
groups for LAFCOs to more carefully scrutinize other types of
contracts for services provided outside of existing service
areas.
5. Mandate . The Legislative Counsel's Office says that SB 239
would impose a state-mandated local program because it requires
local government officials to perform additional duties related
to the approval of fire protection reorganization contracts.
The California Constitution generally requires the state to
reimburse the costs of new or expanded state mandated local
programs. However, on June 3, 2014, California voters approved
Proposition 42, which amended the California Constitution to
require local agencies to comply with the California Public
Records Act. Proposition 42 also requires local agencies to
comply with any subsequent statutory enactment amending the
Public Records Act that contains specified findings that the
newly enacted statute furthers specified constitutional
provisions guaranteeing public access to public agency meetings
and records. SB 239 contains legislative findings that the bill
furthers the purpose of Section 3 of Article I of the California
Constitution by providing for notice in accordance with existing
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provisions of open meeting statutes. As a result, SB 239
disclaims the state's responsibility for reimbursing local
governments' costs of complying with the bill's requirements.
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Support and
Opposition (4/23/15)
Support : California Professional Firefighters; CALFIRE Local
2881; California Labor Federation.
Opposition : Alameda County LAFCO; Apple Valley Fire Protection
District; California Association of LAFCOs; California Building
Industry Association; California Special Districts Association;
California State Association of Counties; Contra Costa County
LAFCO; Covelo Fire Protection District; Happy Valley Fire
Protection District; Fire Districts Association of California;
Hesperia Recreation and Park District; League of California
Cities; Los Angeles County LAFCO; Rural County Representatives
of California; San Mateo County LAFCO; Saratoga Fire District;
Shasta Lake Fire Protection District; Squaw Valley Public
Service District.
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