BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Dave Cox, Chair
BILL NO: AB 853 HEARING: 6/16/10
AUTHOR: Arambula FISCAL: Yes
VERSION: 6/9/10 CONSULTANT: Detwiler
CITY ANNEXATIONS OF DISADVANTAGED COMMUNITIES
Existing Law
The Cortese-Knox-Hertzberg Act creates a local agency
formation commission (LAFCO) in each county to control the
boundaries of cities and most special districts. To plan
for the future boundaries and service areas of each city
and special district in its county, a LAFCO must adopt a
policy document called a sphere of influence. Every five
years, a LAFCO must, as needed, review and update those
spheres. For each sphere of influence, the LAFCO must
prepare written determinations regarding:
Present and planned land uses.
Present and probable need for public facilities and
services.
Present capacity of public facilities and adequacy
of public services.
Any relevant social and economic communities of
interest.
When a LAFCO acts on a proposed boundary change, its
decision must be consistent with the spheres of influence
of the affected city or special district.
Boundary change procedures, such as city annexations,
require four or possibly five steps:
An application to the LAFCO, including
environmental review.
A public hearing for the LAFCO's review and
approval.
Another formal hearing to measure public protests.
The possibility of an election, if there was
significant protest.
The ministerial filing of final documents.
The courts repeatedly refer to the LAFCOs as the
Legislature's watchdog over boundary changes. When it
comes to proposals for changing city and district
boundaries, the LAFCOs generally have discretion to
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approve, approve with conditions, or disapprove
applications. However, in certain situations, a LAFCO must
approve boundary changes (e.g., city annexations of
designated urban service areas, city-requested annexations
of smaller unincorporated islands, and special districts'
requests to consolidate) or disapprove other boundary
changes (e.g., city incorporations if they fiscally harm
counties or formations of new districts that lack enough
revenue).
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Background
The U.S. Census Bureau identifies a "census designated
place" as the statistical counterpart of a city in that it
is a named place with a concentration of residents,
housing, and commercial activity, but located in a county's
unincorporated territory. Of the 598 census designated
places in California, 241 have household median incomes
that are less than 80% of the statewide household median
income. Some of these disadvantaged unincorporated
communities are county islands (mostly surrounded by
cities), some are fringe communities (at or near the edge
of cities), and others are "legacy communities"
(geographically isolated). More than 1 million people live
in these island, fringe, and legacy communities.
Many disadvantaged communities lack public services and
facilities like sanitary sewers, domestic water, storm
drains, or paved streets. Some cities and special
districts are reluctant to annex these areas because of the
costs for improving public works and extending public
services. Residents of disadvantaged unincorporated
communities say they have a hard time even applying to a
LAFCO because of the cost of the complex procedural steps
that annexations require.
Proposed Law
I. Comprehensive plans . Assembly Bill 853 requires a
local agency formation commission (LAFCO) to adopt a
comprehensive plan to address the infrastructure
deficiencies for unincorporated fringe communities,
unincorporated island communities, and unincorporated
legacy communities. AB 853 requires that LAFCO's
comprehensive plan must include:
A feasibility analysis for the extension of
municipal services, annexation, consolidation, or
other LAFCO actions.
Sources of potential federal, state or local
funding. For each infrastructure category the plan
cannot include an assessment for capital costs levied
on residents of a disadvantaged community that exceeds
1.5% of the community's household median income.
Timelines for acting.
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The bill requires the LAFCOs to adopt these comprehensive
plans concurrently with regular reviews and revisions of
the spheres of influence or before acting on any request to
amend a sphere of influence, whichever comes first.
The LAFCO must consult with local agencies which may
provide guidance and comments. In preparing the
comprehensive plan, the LAFCO may use the existing
statutory procedures for preparing a city's sphere of
influence which involve consultation between the city and
the county.
AB 853 requires that all of the agencies identified in the
LAFCO's comprehensive plan comply with the adopted actions
and timelines. The bill allows a local agency to challenge
a comprehensive plan and requires the LAFCO to adopt a
written response to the challenge within 90 days.
AB 853 prohibits a LAFCO from approving an annexation to a
city if that city is not in compliance with a comprehensive
plan action relating to a community that lacks wastewater
or drinking water services constituting a serious public
health hazard.
For this requirement, AB 853 defines:
An "unincorporated fringe community" as inhabited
unincorporated territory that:
o Is within 1.5 miles of a city or within
or adjacent to a city's sphere of influence.
o Has infrastructure deficiencies,
including wastewater, drinking water, storm
drainage, paved streets or if there is a serious
infrastructure-related health hazard.
o Is a disadvantaged community with an
annual median income that is less than 80% of the
county annual median household income.
An "unincorporated island community" as inhabited
unincorporated territory that:
o Is surrounded or substantially surrounded
by a city, cities, county boundaries, or the
Pacific Ocean.
o Has infrastructure deficiencies,
including wastewater, drinking water, storm
drainage, paved streets or if there is a serious
infrastructure-related health hazard.
o Is a disadvantaged community with an
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annual median income that is less than 80% of the
county annual median household income.
An "unincorporated legacy community" as inhabited
unincorporated territory that:
o Is more than 1.5 miles from a city and
not adjacent to a city's sphere of influence.
o Has infrastructure deficiencies,
including wastewater, drinking water, storm
drainage, paved streets or if there is a serious
infrastructure-related health hazard.
o Is a disadvantaged community with an
annual median income that is less than 80% of the
county annual median household income.
II. Spheres of influence . Assembly Bill 853 requires a
LAFCO to review its spheres of influence every five years
and update them, as necessary. When a local agency
formation commission (LAFCO) prepares a sphere of
influence, AB 853 requires the LAFCO to adopt written
determinations regarding the existence of a comprehensive
plan and the local agency's compliance with the
comprehensive plan. The bill also prohibits a LAFCO from
approving any change to a sphere of influence unless all of
the relevant local agencies are in compliance with the
comprehensive plan.
III. City annexations . Assembly Bill 853 requires a
county board of supervisors to petition the local agency
formation commission (LAFCO) for the annexation to a city
of an unincorporated fringe community or an unincorporated
island community if:
25% of the voters or landowners in the
unincorporated fringe community or unincorporated
island community file with the board a petition to
initiate an annexation.
The unincorporated fringe community or
unincorporated island community has infrastructure
deficiencies, including wastewater, drinking water,
storm drainage, paved streets or if there is a serious
infrastructure-related health hazard.
The subject territory is a disadvantaged community.
For this requirement, AB 853 defines:
An "unincorporated fringe community" as inhabited
unincorporated territory that is within 1.5 miles of a
city, or within or adjacent to the city's sphere of
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influence.
An "unincorporated island community" as inhabited
unincorporated territory that is surrounded or
substantially surrounded by one or more cities, a
county boundary, or the Pacific Ocean.
A "disadvantaged community" as a community with an
annual median household income that is less than 80%
of the county annual median income.
Comments
1. The wrong side of the tracks . Disparities in public
facilities and services are nothing new. For decades, some
neighborhoods have enjoyed good schools, parks, libraries,
street lights, and police protection, while other areas
have endured rutted streets, low water pressure, inadequate
sewers and storm drains, and no curbs or sidewalks. There
are plenty of reasons for these differences, including
fiscal limits and political realities. A coalition of
advocates has compiled compelling information about these
persistent patterns. They want legislators to change the
rules for allocating public works funds, land use
decisions, and annexations so that these disadvantaged
unincorporated communities can remedy their past problems.
AB 853 tackles that challenge by inserting these concerns
into the LAFCOs' spheres of influence and city annexation
decisions. The Legislature told LAFCOs nearly 40 years
ago to adopt spheres of influence to guide their thinking
about cities' future service areas and boundaries. After
four decades, these unfair disparities still persist. By
putting these conditions faced by disadvantaged communities
squarely in front of the LAFCOs, the bill makes it harder
for local officials to ignore the questions of social
equity.
2. Scarce resources . The classic definition of politics
is that it's the process by which a society allocates
scarce resources. Without enough money to satisfy every
need, each community sorts out its priorities and spends
its revenues accordingly. In a state that's geographically
large, economically varied, and demographically diverse,
it's no wonder that different communities make different
choices about where to provide public services and
facilities. The local elected officials who set policy for
the 58 counties, 480 cities, and 3,400 special districts
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struggle with the question of "who gets what." When
combined with the constitutional limits on raising new
local revenues, the state's archaic revenue and taxation
laws result in the fiscalization of land use. Hemmed in by
these fiscal realities, local officials often chase land
uses that generate more revenue while shunning low revenue
neighborhoods that need expensive public works. Before
legislators tell the cities and LAFCOs what to do about
disadvantaged communities, they need to straighten out the
state-local fiscal relationship.
3. Find the focus . Attempting to help disadvantaged
communities get better public facilities and services, AB
853 changes the contents of the LAFCOs' spheres of
influence, changes the procedures for reviewing, adopting,
and amending spheres of influence, and requires county
supervisors to apply for certain city annexations. Instead
of a bill that scatters attention across the spectrum of
the LAFCOs' activity, the Committee may wish to consider
focusing legislative attention on some key items that will
produce a strong initial effect. For example, the
Committee may wish to consider amending AB 853 to avoid the
elaborate require the LAFCOs to identify disadvantaged
communities with infrastructure deficiencies as part of
their regular municipal service reviews. That simpler
requirement would substitute for the bill's new mandate for
complex comprehensive plans. The Committee may also wish
to consider requiring the LAFCOs to identify disadvantaged
communities when they adopt and amend the spheres of
influence of cities and special districts that provide
basic infrastructure: domestic water, sanitary sewers, and
structural fire protection. Finally, the Committee may
wish to spell out the deadlines for county governments to
apply for city annexations when asked by disadvantaged
communities' residents.
4. Vegetables first, then dessert . It's almost always
easier for cities to annex and approve construction on
undeveloped land than it is to tackle the problems of
inhabited neighborhoods, especially if they lack adequate
public works. In some counties, boundary maps show scores
of unincorporated islands and skipped over neighborhoods.
Cities, counties, and LAFCOs have successfully collaborated
to accelerate the annexation of county islands --- Orange,
San Bernardino, San Mateo, Santa Clara, and Ventura
counties stand out. State law helps by requiring the
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LAFCOs to approve city-requested island annexations. The
Fresno, Kern, and Ventura LAFCOs firmly tell cities that
they have to take over county islands before they can annex
more fringe property. AB 853 adapts that approach by
prohibiting a LAFCO from approving an annexation if that
city hasn't complied with a comprehensive plan action for
poor neighborhoods that have public health problems with
sewers or water. The bill takes the existing island
annexation precedent and flips it to benefit disadvantaged
communities that need cities' help.
5. Noble motives, unpredictable consequences . Turning
ignored communities into strong neighborhoods is AB 853's
worthy goal. The bill relies on the existing tools of
LAFCOs and boundary changes to focus attention on the 1
million Californians who live in the underserved island,
fringe, and legacy communities. But state legislators and
local officials should be wary of the rush to extend
growth-inducing public facilities and growth-supporting
public services into remote rural areas. Installing sewers
and expanding water supplies will improve the public
health, but their very existence may also accelerate land
speculation and urban sprawl. It's one thing to clean-up a
distressed island of poverty surrounded by a city, but it's
quite another problem if helping a remote "legacy
community" becomes a speculator's excuse to justify
leapfrog development. The Committee may wish to consider
scaling back AB 853 so that the bill focuses attention on
the problems facing county islands and fringe communities.
6. Dodging districts ? Not every city provides the full
range of municipal services; many rely on special districts
to provide sewer, water, and drainage facilities and
services. AB 853's requirement for the LAFCOs to prepare
comprehensive plans for disadvantaged communities applies
to both cities and special districts. However, the bill's
implementation requirements apply only to cities and not
special districts. AB 853 prohibits a LAFCO from approving
a city annexation if the city is not in compliance with a
comprehensive plan action for a disadvantaged community
that faces public health hazards because of poor wastewater
or drinking water services. Why not districts? When
disadvantaged communities ask for help, AB 853 requires
county supervisors to apply for city annexations. Why not
districts? The Committee may wish to consider why the bill
targets the 480 cities, but not the 3,400 special
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districts.
7. Watch your language . AB 853 introduces the terms
"unincorporated fringe community," "unincorporated island
community," and "unincorporated legacy community" to the
LAFCOs' vocabulary. These new terms and their definitions
will frame future decisions. For that reason, legislators
should be sure that these words have the right meanings. A
"unincorporated fringe community" must be within 1 miles
of the city limits or within or adjacent to a city's sphere
of influence. There is no rational basis for setting an
arbitrary 1 mile standard. There could be a significant
gap of active farmland between a city's limits and an aging
mobilehome park. Instead of putting arbitrary distances
into the statute, the Committee may wish to consider
defining a fringe community as a settled place within a
city's sphere of influence. Conversely, an "unincorporated
legacy community" must be more than 1 miles beyond city
limits and not in a city's sphere of influence.
Legislators should be wary of the rush to extend
growth-inducing public facilities into remote rural areas.
Installing sewers and expanding water supplies will improve
the public health, but their very existence may also
accelerate land speculation and urban sprawl. It's one
thing to clean-up a pocket of poverty surrounded by
existing development, but it's quite another problem if
helping a remote "unincorporated legacy community" becomes
a speculator's excuse to justify leapfrog development. The
Committee may wish to consider scaling back AB 853 so that
the bill focuses attention on the island and fringe
communities.
8. Missed the point . AB 853 attempts to prohibit the
LAFCOs' comprehensive plans from relying too heavily on
benefit assessments to pay for needed public works. For
each infrastructure category, a comprehensive plan cannot
include an assessment for capital costs levied on residents
if the assessment exceeds 1.5% of the disadvantaged
community's median household income. This standard won't
work for two reasons. First, property owners, not
residents, pay for benefit assessments. Because residents
don't pay benefit assessments, the bill's standard never
applies. Second, the bill doesn't refer to the annual
payments, but instead refers to "an assessment for capital
costs." A benefit assessment to rebuild a neighborhood's
storm drains may cost hundreds of thousands of dollars, but
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when spread over 30 years, the annual payments may be more
modest.
9. Two related bills . In 2008, the Committee passed SB
194 (Florez) to raise the questions of disadvantaged
communities' needs in local general plans, Proposition 84
funding, air pollution control grants, federal Community
Development Block Grant funds, and wastewater project
funds. Although the Senate passed a truncated version of
that bill in January, the Assembly Rules Committee has yet
to refer SB 194 to a policy committee for hearing. In
April, the Committee passed SB 1174 (Wolk) to require
cities and counties to plan for disadvantaged communities
in their general plans. The Senate sent that bill to the
Assembly earlier this month. AB 853 raises similar policy
concerns, but within the context of LAFCOs and boundary
laws.
10. Back to Rules . When the Senate Rules Committee
referred AB 853 last year, it said that the bill must come
back to the Senate Rules Committee for further
consideration if it passed the Senate Local Government
Committee.
Assembly Actions
Assembly Local Government Committee: 5-2
Assembly Floor: 47-30
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Support and Opposition (6/10/10)
Support : California Rural Legal Assistance Foundation,
PolicyLink.
Opposition : American Planning Association-California
Chapter, California Association of Local Agency Formation
Commissions, California Special Districts Association,
California State Association of Counties, League of
California Cities, City of Lynwood, Counties of Los Angeles
and Sacramento, San Bernardino LAFCO, San Diego LAFCO.