BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1318| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1318 Author: Wolk (D) Amended: 4/12/16 Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 5-1, 4/6/16 AYES: Hertzberg, Beall, Hernandez, Lara, Pavley NOES: Moorlach NO VOTE RECORDED: Nguyen SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 4/20/16 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines, Bates SENATE APPROPRIATIONS COMMITTEE: 4-2, 5/23/16 AYES: Lara, Beall, Hill, McGuire NOES: Bates, Nielsen NO VOTE RECORDED: Mendoza SUBJECT: Local government: drinking water infrastructure or services: wastewater infrastructure or services SOURCE: Leadership Counsel for Justice and Accountability DIGEST: This bill requires Local Agency Formation Commissions (LAFCOs) to recommend and adopt plans for providing water or wastewater services to disadvantaged unincorporated communities (DUCs) that lack those services. ANALYSIS: Existing law: SB 1318 Page 2 1)Creates a LAFCO in each county to control the boundaries of cities, county service areas, and most special districts. 2)Requires a LAFCO to: a) Adopt a policy document for each city and district called a sphere of influence, in order to promote orderly development within the sphere. b) Make boundary decisions that are consistent with the spheres of influence of the affected cities or districts. c) Update spheres of influence at least every five years, as necessary. d) Periodically conduct a "municipal service review" (MSR) that analyze and make determinations about seven topics: i) Growth and population projections; ii) Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies, including the water, sewer, and fire protection needs of DUCs; iii) Agencies' financial abilities to provide services; iv) Opportunities for sharing facilities; v) Accountability for community service needs; SB 1318 Page 3 vi) The location and characteristics of any DUCs; and vii) Other matters relating to effective or efficient services. 3)Allows local governments to only exercise their powers and provide services where LAFCO allows them to, specifically: a) Within their boundaries (which are set by LAFCO); b) Within their spheres of influence but outside their boundaries (with authorization by LAFCO), and; c) Outside their spheres to address a major threat to public health if the extension is consistent with LAFCO's policies. 4)Imposes restrictions, pursuant to SB 244 (Wolk, Chapter 513, Statutes of 2011), relating to DUCs on LAFCOs, cities, and counties, including: a) Prohibits annexations to a city of territory greater than 10 acres if a DUC is contiguous with the territory proposed for annexation, unless there is an application with the commission to annex the unincorporated area or if the residents of the affected territory oppose annexation. b) Requires LAFCOs to include in the MSR a description of the location and characteristics of any DUCs within or contiguous to the sphere of influence and to consider the water, sewer, or fire protection needs of DUCs within the sphere when considering updates. SB 1318 Page 4 c) Allows LAFCOs to assess options for governmental reorganizations or consolidations that improve the efficiency and affordability of service delivery and review whether water systems in the area are in compliance with the Safe Drinking Water Act. d) Requires cities and counties to review the water and fire service needs of DUCs in their general plans. This bill: 1)Prohibits annexations of territory greater than 10 acres to a special district that provides drinking water or wastewater services to 500 or more connections if a DUC is contiguous with the territory proposed for annexation, unless there is an application with the commission to annex the unincorporated area or if the residents of the affected territory oppose annexation. 2)Requires a sphere of influence to promote orderly development in areas adjacent to the sphere. 3)Requires certain spheres of influence to determine the water, wastewater, and fire protection needs of DUCs adjacent to the sphere. 4)Prohibits LAFCOs from removing a disadvantaged community from a sphere of influence unless the commission makes a finding that the removal will improve services to that community. 5)Requires LAFCOs to: SB 1318 Page 5 a) Assess options to improve the efficiency and affordability of service delivery for DUCs that lack drinking water and wastewater services and review whether water systems in the area are in compliance with the Safe Drinking Water Act, if information is available. b) Perform MSRs sufficient to have reviewed the entire county by January 1, 2022 and every five years thereafter. c) File a map of the county with the Office of Planning and Research that identifies DUCs that lack drinking water and wastewater services. d) Recommend plans to address water and wastewater service deficiencies and adopt actions necessary to implement those plans, within two years of identification of the deficiency. 6)Excludes the actions necessary under the plan from protest provisions, except in the DUC that would receive service. 7)Exempts LAFCOs from developing and implementing such plans if they make findings that there is no technical or economically feasible way of connecting the DUC to an existing water or wastewater system. 8)Prohibits certain sphere of influence changes if the LAFCO has not adopted and taken actions necessary to implement the plan by 2022, or if an agency identified in a plan has not provided service within three years of being designated in the plan as the service provider for a DUC. Background SB 1318 Page 6 LAFCOs, along with the planning agencies of cities and counties, are supposed to ensure that services are effectively and efficiently delivered to all communities throughout the state. Nevertheless, some communities continue to lack adequate public services, including safe drinking water and functioning wastewater systems. These communities are often poor and are located in the unincorporated area of a county. In some cases these DUCs are remote and far from other communities with better public services; in others, a city may share a border with a DUC that has been excluded from its boundaries. In recent years, the Legislature has taken several steps to try to address some of the service problems experienced by DUCs. SB 244 (Wolk, 2011) aimed to prevent cities from carving out DUCs and to identify service deficiencies. SB 244 made it easier for LAFCOs to identify boundary changes and governmental reorganizations necessary to fix water service problems faced by DUCs. Subsequent legislation-SB 88 (Committee on Budget and Fiscal Review, Chapter 27, Statutes of 2015)-took this effort a step further by authorizing the State Water Resources Control Board (SWRCB) to order a consolidation of neighboring water systems where it is economically feasible in order to address public health threats. To date, SWRCB has begun the consolidation process with two water systems in communities that border the city of Tulare. Some advocates for DUCs want to provide additional incentives for local governments to serve DUCs that lack safe drinking water or adequate wastewater service. Comments 1)Purpose of the bill. Many communities in California continue to suffer from third-world level drinking water and wastewater services. In many cases, these communities' border cities or special districts with more than enough capacity to serve them, but their boundaries have been drawn to specifically exclude them. Despite recent legislative efforts, some cities SB 1318 Page 7 continue to look to serve new development outside of their current boundaries before helping neighboring communities. While SB 244 helped highlight the disparity in services for DUCs, stronger measures are needed to ensure that LAFCOs and local governments faithfully carry out their responsibilities. SB 1318 is simply the next step. It incentivizes cities and special districts that want to serve new development to help meet the needs of existing communities with drinking water and wastewater problems, and codifies best practices that conscientious LAFCOs already follow. SB 1318 won't solve all of the problems of DUCs, but it provides an important tool to get the state closer to its goal of ensuring that all Californians have access to safe, affordable drinking water. 2)Burden on LAFCOs. SB 1318 imposes a number of burdens on LAFCOs that they may not have the resources or expertise to pursue, including mandatory studies of territory outside of an agency's sphere, mandatory assessments of alternatives for communities that lack adequate drinking water or wastewater, and developing plans for service provision. Cities, counties, and special districts fund LAFCO operations, but many of those agencies are still recovering from the recession. Is now the right time to impose additional financial responsibilities on local agencies that are just getting to their feet? 3)Restrictions on development. A viable development needs certain services, including drinking water and wastewater, but a local government can only provide those services where LAFCO lets them. By restricting the ability of LAFCO to approve service extensions or sphere of influence updates, SB 1318 could pose additional obstacles to much needed development throughout the state. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee: SB 1318 Page 8 Significant local costs which are not reimbursable from the state. Minor costs to the Governor's Office of Planning and Research to post maps of certain DUCs on its Web site. (General Fund) SUPPORT: (Verified5/25/16) Leadership Counsel for Justice and Accountability (source) California Environmental Justice Alliance California Food Policy Advocates California League of Conservation Voters California Rural Legal Assistance Foundation Clean Water Action Community Water Center Environmental Justice Coalition for Water Environmental Working Group Natural Resources Defense Council Policy Link Pueblo Unido Community Development Coalition San Joaquin Valley Sustainable Agriculture Collaborative Sequoia Riverlands Trust Sierra Club California The Trust for Public Land OPPOSITION: (Verified5/25/16) Calaveras County LAFCO California Apartment Association California Association of Local Agency Formation Commissions California Association of Realtors California Building Industry Association California Business Properties Association California Chamber of Commerce California Manufacturers and Technology Association California Municipal Utilities Association SB 1318 Page 9 California Special Districts Association City of Sacramento Contra Costa LAFCO Costa Mesa Sanitation Cucamonga Valley Water District Desert Water Agency El Dorado LAFCO Elsinore Valley Municipal Water District Imperial County LAFCO Kern County LAFCO League of California Cities Merced County LAFCO Nevada County LAFCO Orange County LAFCO Placer County LAFCO Riverside County LAFCO San Bernardino LAFCO San Diego LAFCO San Mateo LAFCO Santa Cruz LAFCO Sonoma LAFCO Stanislaus County LAFCO Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119 5/25/16 13:50:27 **** END ****