BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Dave Cox, Chair
BILL NO: AB 853 HEARING: 6/30/10
AUTHOR: Arambula FISCAL: Yes
VERSION: 6/23/10 CONSULTANT: Detwiler
CITY ANNEXATIONS OF DISADVANTAGED COMMUNITIES
Background and Existing Law
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 California's disadvantaged 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 to improve public works and extend public services.
Residents of disadvantaged unincorporated communities say
they have a hard time even applying to a local agency
formation commission (LAFCO) because of the cost of the
complex procedural steps that annexations require.
The Cortese-Knox-Hertzberg Act creates a LAFCO in each
county to control the boundaries of cities and most special
districts. The courts repeatedly refer to the LAFCOs as
the Legislature's watchdog over boundary changes. To plan
for the future boundaries and service areas of the cities
and special districts, a LAFCO must prepare informational
reports called municipal service reviews and then adopt a
policy document for each city and district called a sphere
of influence. Boundary decisions by the LAFCOs must be
consistent with the spheres of influence of the affected
cities or districts.
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State law lists the factors that a LAFCO must consider when
it reviews proposals. One factor is the extent to which
the proposal will promote environmental justice; the fair
treatment of people of all races, cultures, and incomes
regarding the location of public facilities and provision
of public services (SB 162, Negrete McLeod, 2007).
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Proposed Law
I. Disadvantaged community . When the voters passed
Proposition 84, "The Safe Drinking Water, Water Quality and
Supply, Flood Control, River and Coastal Protection Bond
Act of 2006," they authorized $5.4 billion in state bonds.
Proposition 84 set aside some of that money for
disadvantaged communities, which it defined as communities
with median household incomes less than 80% of statewide
average. Assembly Bill 853 adds a definition of
"disadvantaged inhabited community" to the
Cortese-Knox-Hertzberg Act, relying on the Proposition 84
definition, but requiring it to be inhabited territory.
II. Municipal service reviews . In the late 1990s, the
Commission on Local Governance for the 21st Century
reviewed the LAFCOs' activities, including how they
prepared their spheres of influence. The Legislature
adopted the recommendation that LAFCOs must periodically
conduct "municipal service reviews" to inform their
decisions about spheres of influence. Municipal service
reviews must analyze and make determinations about six
topics (AB 2838, Hertzberg, 2000; AB 1744, Assembly Local
Government Committee, 2007):
Growth and population projections.
Present and planned capacity of public facilities
and adequacy of public services, including
infrastructure needs or deficiencies.
Agencies' financial abilities to provide services.
Opportunities for sharing facilities.
Accountability for community service needs.
Other matters relating to effective or efficient
services.
Assembly Bill 853 adds disadvantaged inhabited communities'
location and characteristics, including infrastructure
needs or deficiencies, to the required contents of
municipal service reviews.
III. Spheres of influence . Starting January 1, 2008, and
then every five years, a LAFCO must, as needed, review and
update the spheres of influence for each city and special
district in its county. For each sphere, the LAFCO must
prepare written determinations regarding:
Present and planned land uses.
Present and probable need for public facilities and
AB 853 -- 6/23/10 -- Page 4
services.
Present capacity of public facilities and adequacy
of public services.
Any relevant social and economic communities of
interest.
Assembly Bill 853 requires a LAFCO to review its spheres of
influence every five years and update them, as necessary.
For the next review and update after July 1, 2011, AB 853
requires the sphere of influence for a city or special
district that provides sewers, nonagricultural water, or
structural fire protection to include the present and
probable need for public facilities and services of any
disadvantaged inhabited community.
IV. City annexation applications . Boundary change
procedures, such as city annexations, require four or
possibly five steps:
An application to the LAFCO.
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.
An application begins when (1) a local agency submits a
resolution of application to the LAFCO, (2) when voters or
landowners submit a petition to the LAFCO, or (3) in
limited cases, when the LAFCO itself initiates the
proposal. In addition to maps, data, and other
information, boundary change proposals require
environmental review. The LAFCO's executive officer cannot
accept a city annexation application unless the city and
county have negotiated a property tax exchange.
Assembly Bill 853 requires a county board of supervisors to
adopt a resolution of application for a city annexation, or
a reorganization that includes a city annexation, within
180 days of receiving a petition from the voters or
landowners of a disadvantaged inhabited community. The
petition must be signed by either at least 25% of the
affected territory's voters or at least 25% of the affected
territory's landowners who own 25% of the land's assessed
value. AB 853 limits this provision to affected territory
which is:
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All or part of a disadvantaged community.
Inhabited territory.
Within the city's sphere of influence.
Contiguous to the city.
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 disadvantaged
unincorporated communities can remedy their past problems.
AB 853 tackles that challenge by inserting these concerns
into the LAFCOs' municipal service reviews, spheres of
influence, and city annexation applications. The
Legislature told the LAFCOs nearly 40 years ago to adopt
spheres of influence to guide their thinking about cities'
future service areas and boundaries. Ten years ago,
legislators told the LAFCOs to examine infrastructure
deficiencies in their municipal service reviews.
Nevertheless, unfair disparities still persist. By putting
the 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
struggle with the classic question of "who gets what."
When combined with the constitutional limits on raising new
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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. Focused attention . To help disadvantaged communities
get better public facilities and services, AB 853 changes
the contents of the LAFCOs' municipal service reviews and
spheres of influence, and requires county supervisors to
apply for certain city annexations. The bill inserts
disadvantaged communities' concerns in three, increasingly
focused ways. First, AB 853 inserts a general reference to
disadvantaged communities' needs as part of the LAFCOs'
broad municipal service reviews. Second, based on the
municipal service reviews, the bill targets the spheres of
influence for cities and districts that provide sewers,
nonagricultural water, and structural fire protection ---
the three services that are essential to suburban and urban
development. Third, the bill requires county supervisors
to help disadvantaged communities by applying for limited
city annexations, when asked. The bill's petition
threshold is five times higher than what current law
requires for directly petitioning a LAFCO for a city
annexation. This focused attention adapts the structure of
the Cortese-Knox-Hertzberg Act to the disadvantaged
communities' concerns.
4. Dodging districts ? Not every city provides the full
range of municipal services; many rely on special districts
to provide sewers, water, and fire protection. AB 853
tells the LAFCOs to consider disadvantaged communities'
infrastructure and service needs when they prepare
municipal service reviews and spheres of influence for both
cities and special districts. However, the bill's
implementation requirement applies only to cities and not
special 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 districts.
5. Legislative history . The Senate Local Government
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Committee heard AB 853 at its June 16 hearing, listening to
a dozen witnesses. The Committee members discussed the
bill with Assembly Member Arambula who then wanted more
time to work on his bill. The June 23 amendments deleted
the proposal for the LAFCOs to adopt new "comprehensive
plans" and deleted the proposal to prevent the LAFCOs from
approving annexations to cities that weren't in compliance
with the comprehensive plans. The amendments also deleted
complicated definitions of disadvantaged, fringe, island,
and legacy communities and instead rely on Proposition 84's
vocabulary to define disadvantaged communities. The
Committee will hear the amended bill on June 30.
6. 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. The Assembly Housing and Community Development
Committee will hear the Florez bill on June 30. In April,
the Committee passed SB 1174 (Wolk) to require cities and
counties to plan for disadvantaged communities in their
general plans. The Assembly Local Government Committee
will hear the Wolk bill on June 30. AB 853 raises similar
policy concerns, but within the context of LAFCOs and
boundary laws.
7. 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
Support and Opposition (6/24/10)
Support : California Rural Legal Assistance Foundation,
PolicyLink.
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Opposition : American Planning Association-California
Chapter, California Association of Local Agency Formation
Commissions, California State Association of Counties,
League of California Cities, City of Lynwood, Regional
Council of Rural Counties, Counties of Los Angeles and
Sacramento, Orange LAFCO, San Bernardino LAFCO, San Diego
LAFCO.