BILL ANALYSIS
SENATE LOCAL GOVERNMENT COMMITTEE
Senator Patricia Wiggins, Chair
BILL NO: AB 1172 HEARING: 6/17/09
AUTHOR: Galgiani FISCAL: Yes
VERSION: 6/4/09 CONSULTANT: Detwiler
EASTERN SAN JOAQUIN COUNTY WATER DISTRICT
Background and Existing Law
The Stockton-East Water District and the Central San
Joaquin Water Conservation District (San Joaquin County)
are two of the 13 special districts that operate under the
Water Conservation District Law of 1931. Water
conservation districts' boards of directors can have three,
five, or seven members who are elected by registered voters
by districts. With majority-voter approval, a district can
change the size of its board. Water conservation districts
can charge water rates to customers, levy ground water
charges on pumping, and receive a share of property tax
revenues.
A seven-member board of directors governs the Stockton-East
Water District which covers the City of Stockton and
unincorporated communities east to the Stanislaus County
line. Stockton-East sells irrigation water to farmers and
ranchers and wholesales water supplies to the City of
Stockton, the California Water Services Company, and some
smaller agencies. Special legislation allows the District
board to levy annual "ground water assessments" and charge
customers for "stream-delivered water," but imposes
statutory limits on the amounts. Unlike other water
conservation districts, Stockton-East elects its directors
from divisions; candidates must reside in divisions, but
the election is districtwide. The special legislation also
sidesteps the boundary changes laws and automatically
annexes territory to the District when property annexes to
the City of Stockton (AB 2030, Monagan, 1971).
The Central San Joaquin Water Conservation District also
has a seven-member board and serves agricultural areas
south of the Stockton-East Water District and east to the
Stanislaus County line. In addition to the regular powers
of water conservation districts, the District's board has
special statutory authority to collect a uniform charge per
acre. The special legislation set a minimum annual charge
AB 1172 -- 6/4/09 -- Page 2
of $10 per parcel and a maximum charge of up to $2.50 an
acre (AB 641, Johnston, 1983).
The Cortese-Knox-Hertzberg Act creates a local agency
formation commission (LAFCO) in every county to control
city and special district boundaries, including the
consolidation of special districts. The LAFCOs must adopt
and regularly review spheres of influence that designate
the probable future boundaries and service areas of cities
and special districts. A LAFCO'S decisions on boundary
changes must be consistent with its adopted spheres of
influence.
If two districts file substantially similar applications
proposing their consolidation, a LAFCO must approve or
conditionally approve the consolidation. Unless there is
significant protest from the affected registered voters,
the LAFCO must order the consolidation without an election.
In their application to consolidate, the special districts
can propose terms and conditions that spell out the details
for combining the districts, including what happens to the
districts' property, employees, debts, bonds, and water
rights, and the continuation of previously authorized
charges, fees, assessments, or taxes. Where state law
provides for alternative methods of selecting a district's
governing body or for varying the size of a district's
governing body, the LAFCO can designate how to select the
members of the consolidated district's board. After
notifying the subject districts, the LAFCO can change the
districts' proposed terms and conditions.
Prompted by local fiscal problems and lawsuits, the
Stockton-East Water District and the Central San Joaquin
Water Conservation District have been discussing
consolidation. Although the San Joaquin County LAFCO has
not yet revised the districts' spheres of influence, the
districts are preparing their consolidation application.
They want the Legislature to pass special legislation to
make the consolidation easier.
Proposed Law
Assembly Bill 1172 adds a chapter to the Water Conservation
District Law that applies only to the proposed Eastern San
AB 1172 -- 6/4/09 -- Page 3
Joaquin County Water District.
When the San Joaquin County Local Agency Formation
Commission (LAFCO) approves the consolidation of the
Stockton-East Water District and the Central San Joaquin
Water Conservation District, AB 1172 provides:
The name of the consolidated district will be the
Eastern San Joaquin County Water District.
The consolidated district will be governed by the
special legislation passed in 1971 for the
Stockton-East Water District and the Water
Conservation District Law of 1931.
Notwithstanding the Water Conservation District
Law, the consolidated district can impose a
groundwater charge or assessment under either the
special legislation passed in 1971 for the
Stockton-East Water District or Water Conservation
District Law.
Notwithstanding the Water Conservation District
Law, the consolidated district will have nine
directors who represent divisions determined by the
San Joaquin County LAFCO.
The consolidated district's board of directors can
reduce the number of its members to seven.
If the consolidated district's board reduces its
membership, the board must reapportion the divisions.
AB 1172 changes the references in the special statute that
applies to the Central San Joaquin Water Conservation
District to the proposed Eastern San Joaquin County Water
District.
Comments
1. Let's get together sometime . California's 3,400
special districts make inviting targets for reformers who
think we have too many local governments. When special
districts are ready to consolidate, legislators should give
them all the help they need. Because the Stockton-East
Water District and the Central San Joaquin Water
Conservation District operate under their own special
statutes in addition to their principal act, they need
extra help in making their proposed consolidation happen.
By spelling out some of the governance and financing
details, AB 1172 smoothes the way for a voluntary
AB 1172 -- 6/4/09 -- Page 4
consolidation of two of the largest water districts in San
Joaquin County.
2. Details, details, details . While a willingness to
consolidate is a laudable goal, legislators should remember
the old proverb: the devil's in the details. Several of
the details in AB 1172 are unnecessary, while others raise
important constitutional questions involving Proposition
218. If legislators want to promote the consolidation of
the Stockton-East Water District and the Central San
Joaquin Water Conservation District, the Committee may wish
to consider amendments that:
Delete topics from the bill that are better handled
locally.
Explain how the consolidated district's board
expands and contracts.
Recognize that constitutional requirements apply to
the consolidated district's new, increased, and
extended charges and assessments.
Clarify when the bill's provisions become
operative.
Without these additional amendments, AB 1172 may create
more problems than it attempts to solve.
3. Let LAFCO work . The Cortese-Knox-Hertzberg Act
anticipates that LAFCOs will work with other local
officials, property owners, and residents to sort out the
necessary details for boundary changes, including district
consolidations. AB 1172 asks the Legislature to establish
the name of the consolidated district (page 2, lines 15 and
16). The bill wants the Legislature to recognize the
districts' groundwater charges and assessments (page 2,
lines 23-26). Further, the bill says that the San Joaquin
County LAFCO will determine the consolidated district's
internal electoral divisions (page 3, lines 6-9). State
law already allows the LAFCO to take care of these terms
and conditions and more, so that the Legislature doesn't
need to get involved at this level of detail. The
Committee may wish to consider amendments that avoid
excessive legislative interference and let the San Joaquin
LAFCO figure out the appropriate terms and conditions.
4. Expansion and contraction . Unlike many other special
districts' principal acts, the Water Conservation District
Law doesn't allow consolidated districts to have
temporarily expanded boards of directors and allow the
AB 1172 -- 6/4/09 -- Page 5
LAFCO to sort out the board's subsequent contraction. AB
1172 creates special provisions just for the proposed
consolidation (page 3, lines 1-13). The Committee may wish
to consider adding broader authority for an expanded
governing board to the Water Conservation District Law so
that other districts can take advantage of this opportunity
in the future. That approach lets the San Joaquin County
LAFCO sort out the size of the consolidated district's
board and how it should contract over time.
5. Supervision ? When changing the size of a water
conservation district's board of directors, current law
requires the county supervisors to review the proposal and
the district's voters must approve the deal. When a LAFCO
presides over a district consolidation, the
Cortese-Knox-Hertzberg Act requires the commission to work
out the expansion and contraction with public hearing on
the terms and conditions. AB 1172 follows neither of these
paths. The bill allows the board of directors of the
consolidated district to avoid going to the voters or LAFCO
and simply reduce the number of its members from nine to
seven without any outside supervision (page 3, lines 9 &
10). Allowing local officials to consolidate political
power without broad public participation or outside review
may result one faction pushing another faction out of
office. The Committee may wish to consider amendments that
require the consolidated district to follow either the
Water Conservation District Law (county review, voter
approval) or the LAFCO process.
6. Proposition 218 compliance . Proposition 218 (1996)
imposed constitutional limits on local officials' ability
to impose, increase, and extend taxes, assessments, and
fees. There are special provisions for property-related
fees, with some exceptions for sewer, water, and refuse
collection charges. Proposition 218 grandfathered some
local taxes, assessments, and fees, but required any new or
extended revenues to comply. The procedures for imposing
fees, charges, and assessments in the Stockton-East Water
District's 1971 special statute and the Central San Joaquin
Water Conservation District's 1983 special statute may not
meet Proposition 218's standards. Following the
precedents used for other special districts, the Committee
may wish to consider amending AB 1172 to allow the
consolidated district to continue the existing districts'
charges and assessments at their current rates. But new,
AB 1172 -- 6/4/09 -- Page 6
increased, or extended charges and assessments would have
to comply with Proposition 218's constitutional
requirements.
7. Operative date . AB 1172 says that its provisions for
the proposed Eastern San Joaquin County Water District take
effect when the San Joaquin County LAFCO approves the
consolidation (page 2, lines 9-14). The bill's changes to
the Central San Joaquin Water Conservation District's 1983
special statute will take effect on January 1, 2010.
Because the districts have yet to apply to the San Joaquin
County LAFCO, because the LAFCO has yet to revise the
district's spheres of influence, and because voter protests
may trigger an election, it may be early 2010 before the
bill's statutory changes are needed. To avoid creating a
state law that applies to a consolidated district that
doesn't yet exist, the Committee may wish to consider
amending AB 1172 to clarify that, while the bill will be
effective on January 1, 2010, its provisions won't become
operative until the proposed consolidation's actual
effective date.
8. Technical amendments . The Committee should adopt
technical amendments so that the bill refers to the"Central
San Joaquin Water Conservation District" and not the
"Central San Joaquin Conservation District" (page 2, line
13; page 3, lines 30 & 31).
9. State mandate, but locals pay . With few exceptions,
the California Constitution requires the state to pay when
it mandates new programs or higher service levels. One
valid exception is when the affected local agency asked for
the mandate. By requiring an expanded board of directors
for the proposed consolidated district, AB 1172 results in
a state mandated local program. The bill, however,
properly disclaims the state's duty to reimburse that cost
because local officials asked for the mandate.
Assembly Actions
Assembly Local Government Committee: 7-0
Assembly Floor: 73-0
Support and Opposition (6/11/09)
AB 1172 -- 6/4/09 -- Page 7
Support : Stockton-East Water District, Central San Joaquin
Water Conservation District, Association of California
Water Agencies, California Special Districts Association,
San Joaquin County LAFCO.
Opposition : Unknown.