BILL ANALYSIS
AB 1232
Page 1
Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
AB 1232 (Huffman) - As Amended: May 7, 2009
SUBJECT : Local agency formation commissions: powers and
duties.
SUMMARY : Allows the Marin County Local Agency Formation
Commission (LAFCO), when specific conditions are met, to
initiate and approve the consolidation of small wastewater
agencies, without protest hearings. Specifically, this bill :
1)Provides the Marin LAFCO, after notice and hearing, with the
power to initiate and approve a reorganization or
consolidation of small wastewater agencies, without protest
hearings, if all of the following conditions exist:
a) The Marin LAFCO, in its municipal services review (MSR)
of the wastewater agencies, completed within the last 10
years, makes findings or determinations related to
reorganization or consolidation, that if implemented, would
improve the financial and service level benefits, improve
government accountability, improve operational
efficiencies, and provide cost savings for the ratepayers;
b) The wastewater agencies have not implemented LAFCO's
findings or determinations as provided in the MSR; and,
c) The wastewater agencies affected have had three or more
illegal discharges in the last five years, based on
violations identified by the San Francisco Regional Water
Quality Control Board (SFRWQCB) that exceed 5,000 gallons
of untreated or partially treated wastewater to waters of
the state.
2)Defines "small wastewater agencies" to mean sanitation
districts and local governments that provide sewer and
wastewater collection or treatment services to 10,000 service
connections or less.
3)States that the provisions of this measure will become
effective on January 1, 2011.
AB 1232
Page 2
4)Makes findings and declarations about the impact of illegal
sewage spills.
5)Declares that this bill is a special statute because of the
unique circumstances applicable to the County of Marin.
EXISTING LAW :
1)Establishes the procedures for the organization and
reorganization of cities, counties, and special districts
under the Cortese-Knox-Hertzberg Local Reorganization Act of
2000 (Act).
2)Allows a LAFCO to initiate proposals for changes or
organization, including consolidation.
3)Defines "change of organization" in the Act to include
consolidation of cities or special districts.
4)Defines "proceedings" to mean proceedings taken by the LAFCO
for a proposed change of organization or reorganization.
5)Provides for noticing requirements for a protest hearing, and
specifies that during the hearing the LAFCO shall hear and
receive any oral or written protests, objections, or evidence
that is made, presented or filed.
6)Provides that a proposal for change of organization must be
abandoned if a majority protest is deemed to exist.
7)Requires a LAFCO to revisit its municipal service reviews and
adopted spheres of influence every five years.
FISCAL EFFECT : Unknown
COMMENTS :
LAFCO LAW: PROCESS FOR CONSOLIDATION OF DISTRICTS
1)Current law specifies various ways that special districts and
other agencies can be reorganized and modified, including
consolidation, dissolution, including dissolution with
annexation, a merger, or establishment of a subsidiary
district. AB 1232 focuses on consolidation - the formal
restructuring transactions that would combine two or more
AB 1232
Page 3
agencies into a single organization and would require a formal
LAFCO review and approval process - as the means to modify
special districts. A consolidation can be initiated by a
petition of registered voters or landowners, by a resolution
of the governing body of an affected local agency, or by LAFCO
itself.
BACKGROUND OF MARIN SITUATION
2)AB 1232 originates from problems in eleven sewer services
agencies located in southern Marin County, including six
sanitary districts, three cities, one community services
district and one joint powers agency. Three of the agencies
operate wastewater treatment plants - Sanitary District No. 5
(Tiburon), the Joint Powers Agency (Sewerage Agency of
Southern Marin - SASM), and the Sausalito-Marin City Sanitary
District (SMCSD). Ten of the eleven agencies operate sewerage
collection systems and pumping stations. All of the special
districts providing sanitary sewer services are governed by
independent boards, except for SASM, whose members are
appointed by each of its six member agencies.
3)The author notes that "the frequency and size of illegal
sewage spills of raw or partially treated sewage are
increasing often because of the improper sewer system
maintenance. By providing limited new authority to a LAFCO,
AB 1232 would increase the cost effectiveness and efficiency
of small wastewater agencies and reduce the impacts on water
quality due to illegal sewage spills. The San Francisco Bay
Regional Water Quality Control Board reports that over 2,000
separate illegal sewage spills occurred in the bay and
coastline between 2004
and 2007. Over 500 of the spills exceeded 1,000 gallons. One
of the largest spills was 2.5 million gallons in Marin County
which illegally discharged both untreated and partially
treated sewage into the San Francisco Bay."
4)In 2004, the Marin County Grand Jury (Grand Jury) released a
report on the southern Marin districts entitled "Southern
Marin Sewers - So Many Districts, So Few Users." The Grand
Jury reviewed the operations of the eleven agencies and found
that, for the most part, these agencies "appear to be
operating in a responsible and environmentally sound manner."
The Grand Jury pointed out that the "the unique patchwork
quilt of agencies, however, lacks a forum for cooperatively
AB 1232
Page 4
examining transcend district boundaries." The Grand Jury
recommended:
a) A periodic forum for interagency information sharing,
discussion, and dispute resolution be established;
b) A facilitator-run meeting of the eleven agencies
involved in southern Marin's wastewater collection be held
to identify opportunities for consolidation, collaboration,
and cooperation; and,
c) The opportunities identified in the facilitated meeting
become the basis for an in-depth study of consolidation
options.
5)In 2005, to reduce water quality problems and to increase
system efficiencies, the Marin County LAFCO conducted an MSR
and recommended a consolidation plan for the eleven small
wastewater agencies in southern Marin County. The report
concluded that the operation of numerous separate agencies
with duplicated staff, and over 40 elected officials, is not a
cost effective way to manage the single purpose service of
wastewater collection and treatment. The MSR identified
significant cost savings for the ratepayers that would occur
if agency functions were consolidated.
6)In a November 7, 2008, memo from the Executive Director of the
Marin County LAFCO to members of the LAFCO, it was noted that
the "Commission's actions in 2005 [through the MSR] recognized
the need for evolutionary change to southern Marin sewer
agencies and emphasized the efficiencies available from
functional consolidation as a preparation for eventual
political consolidation. SASM and its member agencies then
initiated but quickly discontinued a series of cooperative
actions to achieve those efficiencies" meaning that the
districts in southern Marin did convene meetings, as suggested
in the Grand Jury report, to identify opportunities for
collaboration and consolidation, but the collaborative
approach was stopped shortly thereafter.
PROVISIONS OF AB 1232
7)This bill sets up a process that would allow Marin LAFCO to
force the consolidation of small wastewater districts, when
specific conditions are met, without protest hearings. The
AB 1232
Page 5
specific conditions provided in the bill are the following:
a) Small wastewater agencies provide services for up to
10,000 service connections; and
b) The Marin LAFCO's MSR (completed in the prior 10 years)
recommends consolidation or reorganization that, if
implemented, would improve the financial and service level
benefits, improve government accountability, improve
operational efficiencies, and provide cost savings for the
ratepayers.
c) The wastewater agencies affected have had three or more
illegal discharges of untreated or partially untreated
wastewater that exceed 5,000 gallons in the previous five
years, as identified by the San Francisco Regional Water
Quality Control Board.
IS CONSOLIDATION OF DISTRICTS THE ANSWER ?
8)Protest proceedings are established in existing law to allow
registered voters and landowners to give oral or written
protests against a change of organization. AB 1232 removes
the ability of the Marin LAFCO to hold protest hearings for
public input and for an affected district to speak and
deliberate in a public forum on the issue of forced
consolidation and whether it is the best option for the
community. Protest proceedings are removed from the bill
because, according to the author, "there has been strong local
agency resistance to consolidation. That resistance has made
it impossible under existing laws to implement the LAFCO
consolidation recommendation because existing law requires a
majority of voters in the affected districts to approve the
consolidation."
9)There is the potential that a district would be forced,
against its will, under the provisions of this bill, to
consolidate with other districts or agencies. An unwilling
district could then sue LAFCO because LAFCO would be the
entity that initiates the forced consolidation. The Committee
may wish to consider whether Marin LAFCO would ever use this
process, given the legal implications.
10)In their initial letter of concern, the California
Association of Sanitation Agencies (CASA), writes:
AB 1232
Page 6
"CASA's major concern is that LAFCOs have little expertise in
water quality or wastewater treatment issues. CASA feels the
more appropriate way to address sanitary sewer overflows
(SSOs) is pursuant to existing statutory and regulatory
requirement under the Clean Water Act and Porter Cologne Act,
or direct consolidation such as designating agencies to be
consolidated in legislation. To provide a consistent,
statewide regulatory approach to address SSOs, the State Water
Resources Control Board adopted Statewide General Waste
Discharge Requirements for Sanitary Sewer Systems, Water
Quality Order No. 2006-0003 (Sanitary Sewer Order) on May 2,
2006. The Sanitary Sewer Order requires public agencies that
own or operate sanitary sewer systems to develop and implement
sewer system management plans and report all SSOs to the State
Water Board's online SSO database. Consequently, we feel that
the [CAL] EPA, State Water Board, and Regional Boards are in a
far better position to address SSOs than are LAFCOs. In fact
it is our understanding that the particular agencies
contributing to recent spills are currently under EPA orders."
11) Clean Water Action and San Francisco Baykeeper, writing in
support of AB 1232, note that "illegal sewage spills of raw or
partially treated sewage occur frequently in the Bay Area when
heavy rains infiltrate aging pipes and overwhelm poorly
maintained sewer systems. This problem has been particularly
evident in Marin, where small wastewater agencies have had a
history of capacity and compliance issues?.the problem is a
systemic one and requires a change to the wastewater
management framework." Additionally, "small wastewater
agencies, like the eleven small agencies in southern Marin,
are often unable or unwilling to bear the high cost of
maintenance and repair of sewer lines and treatment plants."
12)In their opposition letter, Ross Valley Sanitation District
(located in central Marin County), notes that "(1) it is
unfair for any LAFCO to impose reorganization or consolidation
of any public agency without the opportunity for a protest
hearing, and (2) if the bill is intended to affect southern
Marin then the language should be explicit to southern Marin."
13)While consolidation of smaller agencies may increase
administrative effectiveness and provide for better management
of those agencies, there are no guarantees that consolidation
is the answer to the question of how to prevent illegal sewage
AB 1232
Page 7
discharges. There may be other avenues to pursue that would
help sanitary districts update their aging infrastructure
including federal and state grants or funding, or heavier
enforcement if negligence is found on the part of the sanitary
districts. The Committee may wish to consider whether the
approach in the bill is the correct approach to address
illegal sewage discharges.
14)Right now this bill gives Marin LAFCO the power, under narrow
circumstances, to initiate consolidation of agencies without
protest hearings. The Committee may wish to consider whether
it makes more sense to have SFRWQCB serve as the petitioner
for the reorganization or consolidation through Marin LAFCO
because of SFRWQCB 's expertise in water quality issues and
enforcement actions related to sewage spills.
15)This bill will set a precedent of giving LAFCO more power
than under current law. This bill, if signed into law, could
pave the way for other instances where power could be taken
away from agencies and their customers and given to LAFCO.
The Committee may wish to consider the future implications
that this bill may set.
THRESHOLDS, TIMELINES AND BILL SCOPE
16)AB 1232 specifies several thresholds and timelines that would
need to be met in order for consolidation to be forced by the
Marin LAFCO. First, the bill specifies that there must be
three or more sewage discharges of 5,000 gallons in a
five-year period. Second, the definition of small wastewater
agencies applies to those sanitary districts that have 10,000
service connections or less. Lastly, the municipal services
review done by the commission has to be completed within the
prior 10-year period and make findings that reorganization or
consolidation would improve the financial and service level
benefits, increase operational efficiency, and provide cost
savings for the ratepayers. The Committee may wish to discuss
whether these thresholds are appropriate.
17)AB 1232, if signed into law, will take effect on January 1,
2011. The assumption for the smaller wastewater agencies in
southern Marin is that they have a few years to figure out a
plan to consolidate on their own terms, and then can initiate
consolidation before the bill's effective date. However, this
is not explicitly spelled out in the bill. The Committee may
AB 1232
Page 8
wish to consider giving a date certain to have LAFCO start the
consolidation process, but only if a solution has not been
reached locally by the agencies.
18)Currently AB 1232 only deals with Marin County, because of
the unique nature of the problems in southern Marin. The
Committee may wish to ask the author to narrow the scope of
the bill further, specifically to the agencies in southern
Marin County, and provide for a one-time special statute,
rather than setting up a process that can be used in the
future anywhere in Marin County.
REGISTERED SUPPORT / OPPOSITION :
Support
Clean Water Action
San Francisco Baykeeper
Opposition
Ross Valley Sanitary District
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958