HomeMy WebLinkAbout2008-12-16 - Executive-Administrative-Organizational Committee Meeting Agenda Packet•
Yorba Linda
Water District
EXECUTIVE-ADMINISTRATIVE-ORGANIZATIONAL COMMITTEE MEETING
Tuesday, December 16, 2008, 4:00 p.m.
1717 E. Miraloma Avenue, Placentia, CA 92870 - Tel: (714) 701-3020
AGENDA
•
COMMITTEE
Director John Summerfield, Chair
Director William R. Mills
STAFF
Michael A. Payne, General Manager
Ken Vecchiarelli, Asst. General Manager
INTRODUCTION OF VISITORS AND PUBLIC COMMENTS
Any individual wishing to address the committee is requested to identify themselves and state the matter on which
they wish to comment. If the matter is on this agenda, the committee Chair will recognize the individual for their
comment when the item is considered. No action will be taken on matters not listed on this agenda. Comments are
limited to matters of public interest and matters within the jurisdiction of the Water District. Comments are limited to
five minutes.
ACTION ITEMS
This portion of the agenda is for items where staff presentations and committee discussions are needed prior to
formal committee action.
Recommendations for Waiving Customer Service Fees and Conditions for
Payment Extensions
•
DISCUSSION ITEMS
This portion of the agenda is for matters such as technical presentations, drafts of proposed policies, or similar items
for which staff is seeking the advice and counsel of the Committee members. This portion of the agenda may also
include items for information only.
2. Report on Legislative Activities - Sacramento Advocates
3. Report on Grant Activities - Townsend Public Affairs
4. General Counsel's Monthly Summary Billing Reports
5. Report on MWDOC Governance Study Being Prepared by LAFCO
ADJOURNMENT
The next regularly scheduled meeting of the Executive-Administrative-Organizational
Committee will be held January 20, 2009 at 4:00 p.m.
OR'G \A_
Items Distributed to the Committee Less Than 72 Hours Prior to the Meetinq
Pursuant to Government Code section 54957.5, non-exempt public records that relate to open session agenda items
and are distributed to the Committee less than seventy-two (72) hours prior to the meeting will be available for public
• inspection in the lobby of the District's business office located at 1717 E. Miraloma Avenue, Placentia, CA 92870,
during regular business hours. When practical, these public records will also be made available on the District's
internet website accessible at http://www.ylwd.com/.
Accommodations for the Disabled
Any person may make a request for a disability-related modification or accommodation needed for that person to be
able to participate in the public meeting by telephoning Michael A. Payne, General Manager, at 714-701-3020, or
writing to Yorba Linda Water District, P.O. Box 309, Yorba Linda, CA 92885-0309. Requests must specify the nature
of the disability and the type of accommodation requested. A telephone number or other contact information should
be included so the District staff may discuss appropriate arrangements. Persons requesting a disability-related
accommodation should make the request with adequate time before the meeting for the District to provide the
requested accommodation.
•
•
2
ITEM NO.
Barry S. Brokaw Sacramento Advocates, Inc.
Donne Brownsey A California based Public Affairs and Governmental Relations Firm
• Daniel E. Boatwright 1215 K Street, Suite 2030 - Sacramento, CA 95814
General Counsel Phone (916) 448-1222 ■ Fax (916) 448-1121
MEMORANDUM
To: Yorba Linda Water District Board of Directors
From: Barry Brokaw
Re: State Capitol Monthly Update
Date: December 11, 2008
Overview
In my October report, I wrote that the Governor's Department
of Finance reported revenues were running under expectations, and it appeared to them that the State
Budget would be running $3.2 billion in the red by the June 30, 2009 closure of this fiscal year. State
Treasurer Bill Lockyer examined the same data and predicted the deficit would be $4.6 billion.
Looking back, that was a very cheery prediction.
In November I wrote that Governor Schwarzenegger announced the state budget deficit continued to
increase, and was running at a rate of $11.2 billion by the close of this fiscal year, with red ink
is continuing through June 2010 producing a deficit then estimated by the state Department of Finance
to be $24.2 billion (with a $28 billion estimate by the non-partisan Legislative Analyst) by June
2010. The total State General Fund is $103 billion, so cuts alone won't come close to solving a
problem of this magnitude, especially since so much of the budget is locked in due to voter-approved
ballot actions of previous years.
The Governor announced a plan in November to close to close $9.2 billion of the $11.2 billion
budget deficit through new taxes and budget cuts, and called the Legislature into a lame duck
Special Session to confront the problem. The lame duck session expired November 30th without
passage of a budget plan. Democrats proposed a combination of program cuts and tax increases
to address $16.2 billion of the two-year problem, but the measure could not garner any
Republican votes, so if failed.
Fast forward to mid-December, and a new Special Session has been called to run concurrently
with the regular 2009-10 legislative session. On December 1, the first day of the new legislative
session, the governor declared a fiscal emergency and ordered the Legislature to convene another
special session under Proposition 58, the voter-approved measure that requires lawmakers to
approve a budget solution and send it to the governor for his signature within 45 days. If
legislators fail to place a bill on the governor's desk by the deadline, they would not be allowed to
take up any bills other than the one to fix the budget.
• On December 8, lawmakers of both houses heard the State Treasurer, State Controller, the
Director of the Department of Finance and the Legislative Analyst warn of new catastrophic state
consequences if the logjam is not broken. At that joint session, the Department of Finance
pegged the deficit through June 30, 2010 at $28 billion, and the director said the numbers would
be worse when the governor unveils his upcoming budget in January, as revenues continue to
• drop. [UPDATE]: Governor Schwarzenegger announced late yesterday (December 10) that
with the economy reeling and revenues plummeting, previous projections of $11.2 billion in
red ink during the current year have risen to $14.8 billion in the $103 billion general fund -
and more than $25 billion in 2009-10 - a $40 billion hole.
How Laree will the Budeet Deficit Budeet be?
Even with yesterday's announcement, many experts think those numbers are almost certainly too
low, which is one of the many complications in the frantic search for a political solution.
Even the Democrats, who are not tax-increase averse, could only come up with new taxes and
spending cuts adding up to only $16.2 billion over the two fiscal years, plus some bookkeeping
maneuvers to pick up couple of billion more. That still left them $10 billion short of solving the
problem as they defined it and even that package couldn't win approval, thanks to Republican
opposition. Republicans feel they have been put into a corner by the Democrats and the
Governor. While privately, their leaders know new taxes and fees will be part of the solution,
they are trying to exact key reforms for providing the votes for passage. They want a firm
spending limit on state government growth as part of the deal, along with reforms to the
California Environmental Quality Act that will allow speedier project approval; changes in labor
laws that will allow overtime after 40 hours worked in a week rather than after an eight hour day;
flexibility in meal and break provisions; an easing of AB 32 (greenhouse gas emission
• reductions) requirements for truck fleets; research and development credits for manufacturers;
and other measures they believe to be critical economic stimuli.
Watch for the restoration of the vehicle license fee at the two percent of value level as part of the
ultimate deal. That fee would bring in $6 billion a year.
One of the Capitol's nightmare scenarios is that legislators and Gov. Arnold Schwarzenegger by
some miracle cobble together a scheme to cover the current deficit number, only to find out later
that it falls many billions of dollars short. They would have exhausted themselves politically,
closing all options, without really solving the problem.
Privately, many of those involved in the budget believe that the deficit could easily top $15
billion this year and $20 billion next year, not only because the economy is continuing to contract
and state revenues are continuing to decline, but because local property taxes are likely to fall
short and the state is obligated to make up those shortfalls to schools.
Impact on YLWD
*The longer the impasse continues, the greater the budget shortfall becomes in the short term,
and the greater need to pare back more between July 1, 2009 and June 30, 2010. A suspension of
Proposition 1 A becomes likely, placing even greater pressures on county budgets, especially as
property tax revenues continue to sharply fall in response to the teetering real estate market.
• *State staffing reductions will hurt the Proposition 50 and Proposition 84 programs, delaying
action on proposals for funding.
2
*Proposition 1 E expenditures, which provide $4.09 billion for flood control projects, may be
halted, if a budget deal is not in place before Christmas, according to the state Treasurer.
• • Work on passage of a $10 billion water storage bond proposal, a top priority of the Governor in
this new legislative cycle, could also be delayed. Current interest on the General Obligation
Bonds approved by state voters is approximately $7 billion a year, one of the single highest line
items in the State Budget.
*Legislation with any new state or local government costs will be dead on arrival (which may
not necessarily be bad news).
The January 2009 report to the Board of Directors should REALLY be interesting!
•
0
ITEM NO. 9
To: Yorba Linda Water District, Executive Committee
From: Christopher Townsend, President
Sean Fitzgerald, Senior Director
Heather Dion, Director
Date: December 9, 2008
Subject: Activity Report
On December 8`" the Assembly and Senate convened Joint Session of the Legislature. The
purpose of the session was to hear from the officials who oversee the State's finances. The
witnesses that spoke to the Joint Session were State Controller John Chiang, State
Treasurer Bill Lockyer, Department of Finance Secretary Mike Genest, and Legislative
Analyst Mac Taylor.
While each speaker addressed a different facet of the State's financial situation, the four
officials were unified in their primary message: The State is in the midst of a significant
economic downturn. This downturn has resulted in a multi-year budget deficit that is
• currently estimated at $25 billion and growing. In order to effectively and responsibly
address this deficit the Legislature must consider all potential fixes and must act
immediately. Any delay in action will only result in an increased deficit and a dwindling
number of solutions.
After the four officials spoke, the members of the Joint Session engaged in a question and
answer session for the next hour. Questions were raised regarding the State's financial
condition, as well as the potential impact on the State if various proposed reductions or
revenue enhancements. The questions demonstrated that most members had not
suspended their ideologies despite the gravity of the current budget situation.
Legislative Analyst - Mac Taylor
The Legislative Analyst provided a brief outline of the State's current budget situation. (The
LAO's presentation is attached to this email).
• The current budget problem, if no action is taken, would amount to $28 billion over
the next 19 months.
o $9 billion shortfall in the current FY 2008-09 budget year
o $19 billion deficit projected in 2009-10.
• This budget session is different from prior budget shortfalls due to:
o Anticipated long recovery from current economic slowdown
o A number of solutions have already been used in previous years
o A large ongoing operations costs
• If the Legislature were to attempt to address the budget deficit through taxes alone,
• all of the following taxes would need to be adopted:
o 2 cent sales tax (would result in highest sales in the nation)
o 15 percent income tax surcharge (would result in highest income tax in the
nation)
o 2 percent corporate tax increase ( would result in highest corporate tax rate in
the nation)
• • If the Legislature were to attempt to address the budget deficit through cuts alone, all
of the following payments would need to be eliminated:
o Eliminate funding for UC and CSU
o Eliminate funding for welfare payments
o Eliminate funding to in-home support services and mental health
• If the Legislature approved the proposal laid forth by the Governor, the proposal
would come close to addressing the budget shortfall in the 2008-09 budget year and
the 2009-10 budget yeas; however, the State would face a $10 billion shortfall
beginning in FY 2010-11.
• The LAO stressed that it is vitally important for the Legislature to act as soon as
possible. The sooner the Legislature acts:
o Provides more revenue/cuts in current year
o Any current year deficit will have to be addressed in the upcoming budget
o Signals to other parties of the cuts to come
o Provides flexibility for State's cash flow
Department of Finance, Secretary Mike Genest
As the Secretary for the Department of Finance, Mr. Genest is responsible for overseeing
the creation of the State's budget and works very closely with the Governor in creating his
budget proposals.
The main emphasis of Mr. Genest is that the State must act immediately to prevent the
budget from further spiraling out of control. As an example, Mr. Genest indicated that the
• Legislature's failure to act on the Governor's proposal, which he released in November,
resulted in a $2 billion loss in potential solutions (i.e. same proposal would net $2 billion less
than it did two months ago).
Mr. Genest indicated that if the Governor's proposal is adopted soon, then the budget deficit
will be made more manageable in the FY 2009-10 budget year. The Department of Finance
projects that if the Legislature adopts the Governor's proposal (or a similar proposal) by
February 2009 the State will face a $2.3 billion deficit at the end of the 2008-09 budget year
and would be facing a $3.6 billion deficit in 2009-10. If no action is taken by February 1,
2009, then the current year deficit would end at $9.5 billion and the projected deficit for
2009-10 would be over $25 billion.
In addition to the large budget deficit that would result from inaction, the State will face a
shortage of cash if the Legislature fails to adopt budget solutions. In fact, if no actions are
taken, the State will be forced to borrow from internal and external sources in order to pay
the State's bills. The State will also be forced to not pay certain vendors beginning in
March. The State Controller spoke about this in more detail.
State Controller, John Chiang
The Controller's primary message was that inaction on the part of the Legislature would
have dire effects on the State.
The budget is a yearly spending plan based on anticipated revenues. The budget is the
• responsibility of the Department of Finance, whereas the Controller is responsible for the
State's day-to-day cash management.
Mr. Chiang indicated that the State spends the most cash in the first quarter of each year
and the bulk of the collections come in fourth quarter. This cash demand cycle requires the
Controller to borrow from several internal and external sources each year in order to pay all
of the State's obligations on time.
is This year the State is looking at potentially running out of cash in late February or early
March. There are several reasons for the State's current cash shortage:
o The State's revenue is lower than was projected in the FY 2008-09 budget. It is
likely that the State will fall $7 billion to $9 billion below projections.
o The Controller identified a need to sell $7 billion in revenue anticipation notices in
order to even out the cash cycle. The State was only able to sell $5 billion, thereby
resulting in a $2 billion cash shortage.
o The State's revenue continues to come in below projections. The State's November
revenue fell below revised projections.
The failure to act will pose major problems in March and the State could potentially have a
negative cash balance when the new fiscal year begins on July 1St
The Controller indicated that the State only has a few choices should the State run out of
cash:
o Cash management - Determine mandated payments and prioritize payments
accordingly. This is a temporary solution.
o Revenue anticipation warrant - External borrowing with a high interest rate,
potentially in the range of 10%.
o Warrants (IOUs) - Only once since the Great Depression has the State issued
IOUs. Not all State obligations can be paid for using IOUs. Additionally, any
revenue that comes to the State after IOUs have been issued must be dedicated to
• the IOUs.
A cash shortage will result in significant costs to the State in the form of federal penalties,
higher interest rates, and lawsuits. These options are significantly worse than any cut or
revenue enhancements.
State Treasurer, Bill Lockyer
The Treasurer spoke last and made an effort not to duplicate information that the previous
speakers had provided. The primary focus of the Treasurers testimony was that a delay in
action by the Legislature will result in a halting of hundreds of infrastructure projects and
cause great harm to the State's economy.
The Treasurer oversees the bond funds that are used finance highway, school, and other
voter approved bond construction projects. This fund is about to run out of money. The
funds that are in this account supply cash to various infrastructure projects and other large
cash needs. The account is the replenished by the regular sale of bonds. The bonds that
are sold to replenish the account are directly tied to the State's financial health. That is to
say, if investors do not have confidence in the State's finances then they will not purchase
the bonds.
Failure by the Legislature to act on the budget will make it nearly impossible for the
Treasurer to sell these important bonds. If the Treasurer runs out of money, the State will
need to halt hundreds of infrastructure projects throughout the State. Additionally, there will
• be no funds for any type of economic stimulus that the Legislature may wish to adopt based
on long-term infrastructure investments. The infrastructure projects that would be halted
would result in a $12 billion loss to private companies and the loss of 200,000 construction
related jobs.
Federal Hiahliahts
The new Congress will be sworn in on January 3rd, and the President elect will be sworn in
• on January 20th. This means Congress will finish up the remaining spending bills in early
January with the intention of the President signing them immediately after he is sworn into
office. Running simultaneously to completion of the FY 09 appropriations cycle, Congress
will be putting together one or more economic stimulus packages. One of which is intended
to provide funding through existing federal and state agencies for high priority project ready
construction projects that can be underway within 120 days of being funded. Congress is
particularly interested in infrastructure projects including transportation projects, highways,
and water and sewer infrastructure.
It is particularly important for the District to be considering what capital construction projects
might fit the generic federal criteria that has been discussed through various state and
national membership associations. Additionally, regional entities such as MWDOC are
compiling a list of top Orange County water infrastructure projects that should be
considered for an economic stimulus package and rehabilitation of the Hidden Hills
Reservoir is one of those top regional projects included in the priority list.
Based on the completion of the FY 09 appropriations cycle, the start of the FY 2010 cycle
and the economic stimulus package opportunities, TPA is working with the District to
determine what other priority level projects could be submitted for both FY 2010 federal
appropriations and/or the economic stimulus package. The timeline for these submittals will
be early February 2009.
•
0
•
YORBA LINDA WATER DISTRICT
MONTHLY SUMMARY BILLING CHART
BILLING MONTH: October
•
Matter Matter Date Task Order
Name Number Opened Amount
CURRENT FISCAL YEAR 2008 -2009
Current Billing Total Billed to Date Total Billed 2007 -2008
October 28, 2008 Current Fiscal Year Prior Fiscal Year
CONSTRUCTION CONTRACTS
002
7/31/2007
N/A
$0.00
$975.50
$11,223.18
OCWD ANNEXATION
040
1/13/1994
N/A
$2,187.50
$5,040.00
$60,261.09
HIDDEN HILLS RESERVOIR
068
8/25/2003
$2,375.00
$2,375.00
RWQCB
073
12/18/2002
$0.00
$636.21
$2,161.00
LAKEVIEW RESERVOIR
081
3/2/2005
$20,000.00
$0.00
$1,224.00
$36,645.72
NON - CONSTRUCTION AGREEMENTS
084
4/5/2005
$11,000.00
$3,132.93
$21,557.07
$15,888.25
CELL TOWER
085
7/28/2006
$15,000.00
$490.00
$490.00
$24,162.90
WATER RATES/WATER CONSERVATION
087
7/31/2006
$10,000.00
$3,017.00
$14,062.00
$26,960.50
BOD PROCEDURES
089
3/27/2006
$5,000.00
$770.00
$10,644.50
$8,732.10
TOTAL
$11,972.43
$57,004.28
$186,034.74
M
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YORBA LINDA WATER DISTRICT
MONTHLY SUMMARY BILLING CHART
BILLING MONTH: November
Matter Matter Date Task Order
Name Number Opened Amount
CURRENT FISCAL YEAR 2008 -2009
Current Billing Total Billed to Date Total Billed 2007 -2008
November 24, 2008 Current Fiscal Year Prior Fiscal Year
CONSTRUCTION CONTRACTS
002
7/31/2007
N/A
$0.00
$975.50
$11,223.18
OCWD ANNEXATION
040
1/13/1994
N/A
$0.00
$5,040.00
$60,261.09
HIDDEN HILLS RESERVOIR
068
8/25/2003
$3,155.50
$5,530.50
RWQCB
073
12/18/2002
$0.00
$636.21
$2,161.00
LAKEVIEW RESERVOIR
081
3/2/2005
$20,000.00
$700.00
$1,924.00
$36,645.72
NON - CONSTRUCTION AGREEMENTS
084
4/5/2005
$11,000.00
$3,266.29
$24,823.36
$15,888.25
CELL TOWER
085
7/28/2006
$15,000.00
$0.00
$490.00
$24,162.90
WATER RATES/WATER CONSERVATION
087
7/31/2006
$10,000.00
$3,760.50
$17,822.50
$26,960.50
BOD PROCEDURES
089
3/27/2006
$5,000.00
$1,878.00
$12,522.50
$8,732.10
TOTAL
$12,760.29
$69,764.57
$186,034.74
rage i or z
ITEM NO.
Mike Payne
From: Heather Dion [hdion@TownsendPA.com]
Sent: Monday, December 15, 2008 6:52 PM
To: Mike Payne
Subject: Budget Update - Dec. 15, 2008
Today the Republican legislative leaders unveiled their proposal to deal with the State's massive budget
deficit. Currently, the budget deficit is projected to be in excess of $41 billion over the next 18 months.
If adopted, the proposal released by the Republican leaders today would reduce that deficit by
approximately $22 billion.
The Republicans have proposed large cuts to State spending in order to reduce the deficit, as well as
provide new revenue by shifting funds from voter approved measures. The proposal unveiled today
contains approximately $15.6 billion in cuts and $6.5 billion in new revenues to the State. Below are
several of the major provisions of the Republican proposal released today:
Snendine Reductions
• Reduce Proposition 98 funding to K-12 and community colleges to the minimum amount
allowed by State law, eliminate deferred maintenance payments, and other Prop 98 reductions.
These cuts would total approximately $10.6 billion
• Ten percent across the board cut to the UC and CSU systems ($264.2 million).
• Increase student to faculty ratio at institutes of higher education to 20.5/1 ($340.9 million).
• Five percent cut to the budget for the Legislature ($26.2 million)
• Eliminate COLAs for the judicial branch ($205.2 million)
• State employee compensation changes, including furloughing state employees one day each
month ($80-2.5 million)
• Medi-Cal changes, including: suspension of COLA, reduction in eligibility, elimination of certain
optional benefits. ($703.5 million)
• Reduction in SSI/SSP grants to the federal minimum ($1.3 billion)
• CalWorks changes, including: modification to welfare to work program requirements, implement
self sufficiency reviews, and 10 percent reduction to grants ($913.1 million)
• Eliminate State funding for transit agencies ($459.6 million)
Revenue Enhancements
• Redirect $2.1 billion in unspent State and County Proposition 10 funding (First 5 children's health
programs). This would require voter approval.
• Redirect $3.9 billion in unspent Proposition 63 mental health program funding. This would
require voter approval.
• Various funding transfers which total over $460 million
In addition to the above spending reductions and revenue enhancements, the Republicans are seeking
12/16/2008
Page 2 of 2
several modifications to State laws and regulation that they feel will create a friendlier business climate
in California and result in a considerable economic benefit. These changes include reducing the burdens
placed on business by environmental regulations such as CEQA and the upcoming AB 32 requirements.
Additionally, the Republicans are proposing to lessen several workplace labor laws to provide
employers and employees with flexibility surrounding working hours and rest periods.
It should be noted that this proposal has not been reviewed by the Legislative Democrats or the
Governor's Office. It is unlikely that the above proposal will be able to garner a 2/3 vote of the
Legislature needed for passage; however, this proposal does serve as a Republican starting point for
upcoming budget negotiations.
Assembly Speaker Karen Bass has indicated that she would like the Assembly to vote on a budget
deficit reduction proposal prior to Christmas, but she has not indicated what provisions will be
considered by the body.
We will continue to keep you updated on the latest budget happenings; in the meantime, if you have any
questions or need any additional information, please let us know.
Heather Dion
Director
Townsend Public Affairs
2699 White Road, Suite 251
Irvine, CA 92614
9491399-9050 - Office
9491476-8215 - Fax
9491836-6810 - Mobile
12/16/2008
Page 1 of 2
r
ITEM NO. 0
Mike Payne
From: Legbandt, Benjamin [blegbandt@oclafco.org]
Sent: Thursday, December 11, 2008 4:05 PM
To: Mike Payne
Subject: LAFCO application process and out of area service agreements
Hello Michael,
It was a pleasure to speak with you this morning and this email is intended to outline some of the
questions you had.
One question was in reference to out-of-area service agreements. Section 56133 (Attached) refers to
out of area service agreements and the need for LAFCO approval. There is an exception for contracts
or agreements between public agencies where the level of service will not be adversely affected
(Section 56133(e)). If the City of Placentia were to contract for sewer services with the Yorba Linda
Water District there would be no need for LAFCO approval. In addition to the attached code section, I
am also attaching the Orange County LAFCO policy regarding out of area service agreements for your
reference.
Another question was in regards to the LAFCO application process. Please find the attached
document outlining the annexation process. Additionally, I will discuss the application itself in detail
below.
Application materials
o LAFCO processing fees
■ District Annexation = 7,900 ($1,600 non-refundable deposit)
■ In the case of YLWD annexing the entirety of the City of Placentia, the
Commission may require an enhanced processing fee to pay for a special
study of the plan for serving the area.
o Justification of proposal questionnaire (available for download from our website at:
htto://www.oclafco.ora/forms)
o Plan for services (includes, but is not limited to the following items)
■ Description of services to be extended to the area
■ Level and range of those services
■ An indication of when the services can feasibly be extended to the affected
territory
■ An indication of any improvements or upgrades to infrastructure.
■ Information pertaining to the financing of the services to be provided
o Map & Legal description approved by the County Surveyor's Office
■ (Please contact Wanda Bale at (714) 834-3510)
o CEQA documentation
o Indemnification agreement signed by applicant
■ This is included in the application packet available online
In regards to the MWDOC governance study timeline, staff is still in the process of revising the
document and we will send it to you as soon as the revisions are finalized.
On behalf of the LAFCO staff, I would like to say that we wish you a happy semi-retirement and we look
forward to working with your predecessor in the future. If you have any questions feel free to contact
me or any LAFCO staff at (714) 834-2556.
Best regards,
12/16/2008
Ben
Benjamin Legbandt
Policy Analyst
Orange LAFCO
12 Civic Center Plaza
Room 235
Santa Ana, CA 92701
(714) 834-2556
Page 2 of l
12/16/2008
I. PURPOSE
Policy & Procedures for the Review and/or
Processing of Out-of-Area Agreements by the
Executive Officer (Gov't Code §561331___
Original: 09/12/2001 Date of last
Revision:
N/A
To establish the Commission's policy and procedural guidelines for 1) consulting with
public agencies to determine whether their out-of-area service agreements are
subject to LAFCO review and 2) reviewing, processing, and approving out-of-area
agreements in accordance with the provisions of Government Code §56133.
II. POLICY STATEMENT
It is the policy of this Commission to delegate to the Executive Officer the authority
to 1) consult with public agencies to determine whether their out-of-area service
agreements are subject to LAFCO review and 2) review, process, and approve out-
of-area agreements not exempt under the provisions of Government Code Section
56133 to ensure that such agreements do not create growth opportunities without
appropriate oversight. It is also the policy of this Commission to require that any
such agreements not previously considered by this Commission be considered in
connection with future applications for related changes of organization and not to
unilaterally seek out and review out-of-area service agreements for compliance with
Section 56133.
III. PROCEDURAL GUIDELINES
A. The Executive Officer, within 30 days of receipt of a request for a LAFCO
determination as to whether a city or district agreement to provide new or
extended services outside its jurisdictional boundary is exempt from LAFCO
review, shall:
1. Determine whether the agreement is exempt from LAFCO approval.
The following agreements shall be exempt from LAFCO approval:
a. Agreements solely involving two or more public agencies where
the public service to be provided (by Agency A) is an
alternative to, or substitute for, public services already being
provided by an existing public service provider (Agency B) and
where the level of service to be provided (by Agency A) is
consistent with the level of service contemplated by the existing
service provider (Agency B). For purposes of this subsection,
"already being provided" means the services are within the
agency's (Agency B's) service area. "Contemplated" means 1)
the service level is anticipated in a master plan or some other
long-range planning document (of Agency B) and 2) sufficient
Infrastructure and capacity exists (by Agency A) to provide the
service.
General Policies & Procedures of the Orange County Local Agency Formation Commission - 131-
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b. Agreements for the transfer of non-potable or non-treated
water.
C. Agreements solely involving the provision of surplus water to
agricultural lands for projects that serve conservation purposes
or that directly support agricultural industries provided,
however, that agreements for the extension of surplus water
service to a project that will support or induce development
shall not be exempt from the provisions of this policy.
d. Agreements for an extended service that a city or district was
providing on January 1, 1994.
e. Agreements involving local publicly owned electric utilities as
defined by Public Utilities Code Section 9604, which do not
involve the acquisition, construction, or installation of electric
distribution facilities by a local publicly owned electric utility,
outside of its jurisdictional boundaries.
B. For agreements determined not to be exempt from this policy, the Executive
Officer, within 30 days of a request for LAFCO approval, shall determine
whether the request is complete and acceptable for filing or whether the
request is incomplete. If the request is deemed incomplete, the Executive
Officer shall Immediately notify the applicant of that determination, specifying
those parts of the request that are incomplete and an explanation of the
manner in which the deficiencies may be made complete.
C. Not more than 90 days from determining pursuant to a complete request that
an out-of-area service agreement is subject to LAFCO review, the Executive
Officer shall approve, disapprove, or approve with conditions the agreement
for new or extended services provided, however, that the Executive Officer
shall approve or approve with conditions any such agreement only under the
following conditions:
The new or extended services to be provided under the agreement by
the applicant city or district, outside of its jurisdictional boundaries and
within its sphere of influence, is in anticipation of a later change of
organization.
2. The new or extended services to be provided under the agreement by
the applicant city or district, outside of its jurisdictional boundaries and
outside its sphere of influence, is in response to an existing or
impending threat to the public health or safety of the residents of the
affected territory and both of the following requirements are met:
a. The applicant city or district has provided the Executive Officer
with documentation of a threat to the health and safety of the
public or the affected residents.
b. The Executive Officer has notified any alternate service
provider, including any water corporation as defined in Public
Utilities Code Section 241 or sewer system corporation as
General Policies & Procedures of the Orange County Local Agency Formation Commission - 132 -
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defined in Public Utilities Code Section 230.6, that has filed a
map and a statement of its service capabilities with the
Commission.
D. If the Executive Officer disapproves the agreement or approves the
agreement with conditions, the applicant may, within 30 days of the decision,
request a reconsideration. Such request must state the reasons for the
reconsideration.
General Policies & Procedures of the Orange County Local Agency Formation Commission - 133-
LAFCO Annexation Process
Application submitted by:
a. Landowner petition
OR
b. Resolution of application by affected agency
CONTENTS OF APPLICATION
(Materials are generally submitted during and throughout the process.)
■ LAFCO processing fees
■ Justification of proposal questionnaire
■ Plan for services
■ Property owner consent form(s), if applicable
■ Map & legal (metes and bounds) description approved by the County Surveyor's
Office
■ CEQA documents
■ Resolutions by affected agencies agreeing to a transfer/split of the ad valorem
property tax revenues generated in the affected territory
■ Prezoning
■ Indemnification agreement signed by applicant(s) and/or real parties in interest
2. Within 30 days of submission of the application:
a. For landowner petitions, LAFCO issues either a Certificate of Sufficiency or a
Notice of Insufficiency for the petition.
b. LAFCO sends the applicant a status letter notifying the applicant that the
application is either complete or incomplete.
Approximately 30 days after submission of the application, and after submission of a
map & legal description approved by the County Surveyor's Office:
a. LAFCO issues notice to the County Assessor of the proposal.
b. The Assessor determines which Tax Rate Areas (TRAs) are involved in the
proposal and calculates the total assessed valuation (AV) of the affected territory.
c. The Assessor issues a report with the TRAs and AV for the proposal to the
County Auditor.
d. The Auditor determines the total ad valorem property tax revenues that are
subject to negotiation as part of the proposal.
e. The Auditor issues a report to the affected agencies (e.g., city, county) identifying
the total dollars that are subject to negotiation and notifying the agencies that
they have 60 days from the date they receive the report to reach agreement on
the transfer of property tax revenues from the county to the city.
Upon determination by the Executive Officer that the application is complete, the
Executive Officer issues, and sets a hearing date for the proposal within, a Certificate
of Filing.
5. LAFCO notices and holds a public hearing on the proposal and takes one of the
following actions at the hearing:
a. Approves the application subject to terms and conditions
b. Approves the application with modifications and subject to terms and conditions
c. Denies the application
6. If LAFCO approves the application, within 35 days of the hearing, LAFCO adopts
the resolution making determinations and approving the application and sends a
copy of the resolution to the applicant.
7. If LAFCO approves the application, within 30 days of the hearing, LAFCO notices
and sets a date for a protest hearing, unless waived pursuant to Government Code
Section 56663. From the date that the legal notice of the protest hearing is published
in a newspaper, registered voters and landowners within the affected territory may
file written protests with LAFCO until the close of the protest hearing. LAFCO
determines the window of time protests may be submitted (21 to 60 days) at the time
it approves the application.
8. LAFCO holds the protest hearing and makes a determination on the value of written
protests filed and not withdrawn. LAFCO may continue the hearing to a future date
to allow time to review protests. Upon making a determination on the value of
written protests, LAFCO takes one of the following actions, depending on whether
the territory's inhabited or uninhabited:
Uninhabited
If a majority protest exists, terminate the annexation. For uninhabited territory, a
majority protest exists if protests are filed by landowners owning at least 50% of
the assessed valuation.
■ If a majority protest does not exist, order the annexation.
Inhabited
■ If a majority protest exists, terminate the annexation. For inhabited territory, a
majority protest exists if protests are filed by at least 50% of the registered voters.
■ Order an election if protests are filed by: (a) at least 25%, but less than 50%, of the
registered voters; or (b) at least 25% of the number of landowners owning at least
25% of the assessed valuation.
■ Order the annexation if protests are filed by: (a) less than 25% of the registered
voters; or (b) less than 25% of the number of landowners owning less than 25%of
the assessed valuation.
9. If the annexation is ordered, LAFCO records a Certificate of Completion with the
County Recorder's Office upon satisfaction of all terms and conditions in the
resolution ordering the annexation.
10. Upon recordation, LAFCO sends documents and fees (paid by the applicant) to the
State Board of Equalization (SBE) for purposes of altering the SBE's TRAs to reflect
the change of organization.
application for a reorganization including any of those changes
of organization or the initiation by the commission of any of
those changes of organization or any reorganization including
any of those changes of organization, the commission shall
notify all state agencies that have oversight or regulatory
responsibility over, or a contractual relationship with, the local
hospital district that is the subject of the proposed change of
organization or reorganization, of its receipt of the application
or the initiation by the commission of the proposed change of
organization or reorganization and the proposal, including, but
not limited to, the following:
(a) The State Department of Health Services, including, but
not limited to, Licensing and Certification and the Medi-Cal
Division.
(b) The Office of Statewide Health Planning and
Development, including, but not limited to, the Cal-Mortgage
Loan Insurance Division.
(c) The California Health Facilities Financing Authority.
(d) The California Medical Assistance Commission.
A state agency shall have 60 days from the date of receipt of
notification by the commission to comment on the proposal.
The commission shall consider all comments received from
any state agency in making its decision.
Recreation and park districts; 56131.7. Upon the filing of an application for the formation of,
notification of state agency consolidation of, or dissolution of a recreation and park district
formed pursuant to the Recreation and Park District Law,
Chapter 4 (commencing with Section 5780) of Division 5 of
the Public Resources Code, or of an application for a
reorganization that includes any of those changes of
organization, or the initiation by the commission of any of
those changes or organization or any reorganization that
includes any of those changes of organization, the executive
officer shall notify the Director of the State Department of
Parks and Recreation. The director shall have 60 days from the
date of receipt of notification by the executive officer to
comment on the proposal.
The commission shall consider all comments received from
the director in making its decision.
Services by contract outside 56133. (a) A city or district may provide new or extended
city and district boundaries services by contract or agreement outside its jurisdictional
boundaries only if it first requests and receives written
approval from the commission in the affected county.
(b) The commission may authorize a city or district to
provide new or extended services outside its jurisdictional
boundaries but within its sphere of influence in anticipation of
a later change of organization.
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Threat to public safety
(c) The commission may authorize a city or district to
provide new or extended services outside its jurisdictional
boundaries and outside its sphere of influence to respond to an
existing or impending threat to the public health or safety of
the residents of the affected territory if both of the following
requirements are met:
(1) The entity applying for the contract approval has provided
the commission with documentation of a threat to the health
and safety of the public or the affected residents.
Notice to alternate service
(2) The commission has notified any alternate service
provider
provider, including any water corporation as defined in Section
241 of the Public Utilities Code, or sewer system corporation
as defined in Section 230.6 of the Public Utilities Code, that
has filed a map and a statement of its service capabilities with
the commission.
Proceedings for review
(d) The executive officer, within 30 days of receipt of a
request for approval by a city or district of a contract to extend
services outside its jurisdictional boundary, shall determine
whether the request is complete and acceptable for filing or
whether the request is incomplete. If a request is determined
not to be complete, the executive officer shall immediately
transmit that determination to the requester, specifying those
parts of the request that are incomplete and'the manner in
which they can be made complete. When the request is
deemed complete, the executive officer shall place the request
on the agenda of the next commission meeting for which
adequate notice can be given but not more than 90 days from
the date that the request is deemed complete, unless the
commission has delegated approval of those requests to the
executive officer. The commission or executive officer shall
approve, disapprove, or approve with conditions the contract
for extended services. If the contract is disapproved or
approved with conditions, the applicant may request
reconsideration, citing the reasons for reconsideration.
Exemptions
(e) This section does not apply to contracts or agreements
solely involving two or more public agencies where the public
service to be provided is an alternative to, or substitute for,
public services already being provided by an existing public
service provider and where the level of service to be provided
is consistent with the level of service contemplated by the
existing service provider. This section does not apply to
contracts for the transfer of nonpotable or nontreated water.
This section does not apply to contracts or agreements solely
involving the provision of surplus water to agricultural lands
and facilities, including, but not limited to, incidental
residential structures, for projects that serve conservation
purposes or that directly support agricultural industries.
However, prior to extending surplus water service to any
Ir
34
project that will support or induce development, the city or
district shall first request and receive written approval from the
commission in the affected county. This section does not apply
to an extended service that a city or district was providing on or
before January 1, 2001. This section does not apply to a local
publicly owned electric utility, as defined by Section 9604 of
the Public Utilities Code, providing electric services that do not
involve the acquisition, construction, or installation of electric
distribution facilities by the local publicly owned electric
utility, outside of the utility's jurisdictional boundaries.
CHAPTER 4. NOTICE
Means of notice 56150. Unless the provision or context otherwise requires,
whenever this division requires notice to be published, posted,
or mailed, the notice shall be published, posted, or mailed as
provided in this chapter. Unless the provision or context
otherwise requires, whenever this division requires notice to be
given that notice shall also be given in electronic format on a
website provided by the commission, to the extent that the
commission maintains a website.
Notice given by clerk; 56151. Notice authorized or required to be given by
contents publication, posting, or mailing shall be given by the clerk or
executive officer and shall contain all matters required by any
particular provision of this division. If any ordinance,
Resolution or ordinance resolution, or order of any legislative body or the commission
sufficient gives notice and contains all matters required to be contained in
any notice, the clerk or executive officer may cause a copy of
that ordinance, resolution, or order to be published, posted, or
mailed, in which case no other notice need be given by the
clerk or executive officer.
Notice given by clerk or 56152. Whenever any notice is required to be given and the
executive officer if not duty of giving that notice is not specifically enjoined upon
specified some officer, agency, or person, the clerk or executive officer,
as the case may be, shall give notice or cause that notice to be
given.
Publication in newspaper(s) of 56153. Notice required to be published shall be published
general circulation pursuant to Section 6061 in one or more newspapers of general
circulation within each affected county, affected city, or
affected district. If any newspaper is a newspaper of general
circulation in two or more affected cities or affected districts,
publication in that newspaper shall be sufficient publication for
Publication in two or more all those affected cities or affected districts. If there are two or
counties more affected counties, publication shall be made in at least
35