BILL ANALYSIS
SB 819
Page 1
Date of Hearing: June 27, 2007
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
SB 819 (Hollingsworth) - As Amended: May 30, 2007
SENATE VOTE : 38-0
SUBJECT : Local government: consolidation.
SUMMARY : Deletes the sunset of the statutory provisions that
allow local agency formation commissions to consolidate and
reorganize special districts that were not formed under the same
principal act. Specifically, this bill :
1)Deletes the July 1, 2008, sunset date for the statutory
provisions that allow local agency formation commissions
(LAFCOs) to consolidate and reorganize special districts that
were not formed under the same principal act.
2)Allows LAFCOs to initiate the formation of new special
districts.
3)Specifies that the provisions of the bill do not apply to any
application for a change of organization or reorganization
that a LAFCO has accepted for filing before January 1, 2008.
4)Specifies that the provisions of the bill shall not affect any
litigation pending on January 1, 2008.
EXISTING LAW :
1)Establishes in each county a LAFCO to review proposals for the
formation of new local agencies and changes in the
organization of existing local agencies.
2)Allows LAFCOs to consolidate and reorganize special districts
that were not formed under the same principal act, but only
through July 1, 2008.
FISCAL EFFECT : None
COMMENTS :
1)LAFCOs are charged with reviewing proposals for the formation
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of new cities and special districts and changes to the
organization of existing cities and districts. Besides
annexations and detachments of territory, other boundary
changes affect special districts, including:
a) Formation: the creation of a new special district.
b) Dissolution: the elimination of an existing special
district.
c) Merger: the district dissolves and a city takes over
its duties.
d) Subsidiary district: the district continues, but is
governed by a city council.
e) Consolidation: two districts combine into a single
district.
f) Reorganization: two or more boundary changes go into a
single proposal.
2)Most boundary changes begin when a city or special district
applies to LAFCO, or when registered voters or landowners file
petitions with LAFCO. In limited circumstances, a LAFCO can
initiate some special district boundary changes, including
consolidations, dissolutions, mergers, subsidiary districts,
and reorganizations [AB 1335 (Gotch), Chapter 1307, Statutes
of 1993]. LAFCOs cannot initiate the annexation of territory
to special districts nor can they initiate the formation of
new special districts.
3)Until 2005, a LAFCO could approve the consolidation of special
districts only when the districts relied on the same principal
act. For example, a LAFCO could consolidate two fire
protection districts into a single fire protection district,
but it could not consolidate a fire protection district with a
municipal water district. Practitioners convinced legislators
to delete the requirement that special districts must have the
same principal act to be eligible for consolidation [AB 2067
(Harman), Chapter 471, Statutes of 2004].
4)Under the legislation that will expire on July 1, 2008, a
petition filed with a LAFCO that proposes to consolidate two
special districts not formed under the same principal act must
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either designate which district will be the successor and
identify its principal act, or state that the proposal
requires the formation of a new district and includes a plan
for services. Also until July 1, 2008, if reorganization
includes the consolidation of two special districts not formed
under the same principal act, the bill allows a LAFCO to
approve the proposal only if two conditions are met:
a) The LAFCO must be able to designate one or more
successors or form one or more new districts that have the
powers of the consolidated districts.
b) The LAFCO must determine that the consolidation's public
service costs are likely to be less than or substantially
similar to the alternatives, and that the boundary change
promotes public access and accountability.
5)Until 2008, if a LAFCO initiates a reorganization that
includes the consolidation of two special districts not formed
under the same principal act, LAFCO can approve the
reorganization only if the LAFCO has either prepared a study
of governmental agencies, or conducted a municipal service
review that includes nine written determinations. In
addition, the LAFCO must meet three conditions:
a) All of the services provided by the districts before the
consolidation will be provided after the consolidation by
one or more successors or by a new district that has the
power to provide those services. The successor must be
currently providing the same service. The LAFCO cannot
designate a city as the successor unless the city covers
70% or more of one of the districts or the combined
districts and 70% or more of the district or districts'
registered voters reside in the city.
b) The consolidation's public service costs are likely to
be less than or substantially similar to the alternatives.
c) The consolidation promotes public access and
accountability.
6)Also until 2008, if a LAFCO intends to approve the
consolidation of two special districts not formed under the
same principal act, the LAFCO must determine whether any of
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the districts' current services could be discontinued because
the successor lacks the statutory authority to provide those
services. In that case, the LAFCO must consider forming a new
district.
7)Skeptical that the 2004 Harman bill would result in many
district consolidations, the Senate Local Government Committee
asked for a sunset clause, terminating these provisions on
July 1, 2008. However, six LAFCOs report using the statute.
The Lake County LAFCO, for example, consolidated two fire
protection districts, a community services district, and a
recreation and park district into a single fire protection
district. Four LAFCOs say that
they have 20 more district consolidations in process. Twenty
LAFCOs think that another
66 consolidations have potential. Local officials want these
provisions to be permanent. LAFCOs also say that it would
help consolidate districts if they could initiate the
formation of new districts to replace the ones they're
consolidating.
8)SB 819 makes permanent the statutory provisions that allow
LAFCOs to consolidate and reorganize special districts that
were not formed under the same principal act. SB 819 also
allows LAFCOs to initiate the formation of new special
districts, as such action is sometimes necessary as part of a
broader consolidation effort.
9)Government efficiency experts have grumbled for decades that
California has too many special districts. Critics have said
that LAFCOs, as the Legislature's watchdogs over local
boundaries, needed to do a better job of weeding out districts
that have outlived their usefulness. Legislators decided to
experiment by passing the 2004 Harman bill that let local
officials consolidate different types of special districts.
Despite previous skepticism, the experiment worked and holds
promise for eliminating redundant and inefficient districts.
SB 819 makes that experiment permanent and enhances LAFCOs'
initiation powers. Legislators should expect to see even
better performance from their watchdogs.
10)Proposing the elimination of special districts can trigger
strong political reactions from established institutions that
resist change. When the San Bernardino Valley Municipal Water
District applied to the San Bernardino LAFCO for approval to
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consolidate with the San Bernardino Valley Water Conservation
District, there was resistance and litigation. The Water
Conservation District's lawsuit to block the proposed
consolidation has not yet gone to trial. The San Bernardino
litigation appears to be the only lawsuit related to the
consolidation of dissimilar districts. Uncodified language in
SB 819 ensures that the provisions of the bill have no affect
on the pending lawsuit, or on any pending application before a
LAFCO.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of CA Water Agencies
CA Association of LAFCOs
CA Association of Special Districts
Friant Water Authority
Orange County LAFCO
San Bernardino LAFCO
San Bernardino Valley Municipal Water District
San Diego LAFCO
Opposition
None on File
Analysis Prepared by : Anya Lawler / L. GOV. / (916) 319-3958