Local Agency Formation Commission. Policy Analyst. Quarterly Legislative Report (July 2017)

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1 LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY 7a CHAIR DEREK J. MCGREGOR Representative of Cieneral Public VICE CHAIR DR. ALLAN BERNSTEIN Councllmember City of Tustin TO: FROM: SUBJECT: Local Agency Formation Commission Executive Officer Policy Analyst Quarterly Legislative Report (July 2017) LISA BARTLETT 5" 01st11Ct CHERYL BROTHERS Councllmemoer City of Fountain Valley TODD SPITZER 3'" District CHARLEY WILSON Santa Mi.lrgi.lrlta Water District JOHN WITHERS Irvine Ranch Wi.lter District WENDY BUCKNUM Councilmember City of Mission Viejo JAMES FISLER Mesa Water District KATHRYN FRESHLEY Representi.ltlve or Generi.11 Public MICHELLE STEEL 2"" Dlstrict BACKGROUND During the second quarter, proposed legislation of LAFCO interest has moved swiftly through various committees. The authors of the bills have been actively reviewing and amending proposed legislation in order to meet legislative committee deadlines. The most recent deadline was May 26th for Fiscal Committees to hear and report bills to the floor. Any proposed legislation with a fiscal impact that missed the deadline is considered /1 dead" unless it receives a rule waiver allowing further consideration. The Commission's staff has continued participation in the monthly CALAFCO Legislative Committee meetings to stay apprised of legislation of LAFCO interest. Under the direction of the CALAFCO Executive Board, the Committee has proactively engaged in discussions with appropriate legislators and their staff and key stakeholders regarding several bills introduced during this session. This report includes a summary of LAFCO related legislation and recommended positions for the Commission to consider. Additionally, the report provides an update on the Vehicle License Fee legislation and on the recent activity of the Little Hoover Commission. CAROLYN EMERY Executive Officer 2677 North Main Street. Suite I 050. Santa Ana. CA {714) FAX (714) hcrp://

2 Quarterly Legislative Report Page 2 of 9 PROPOSED BILLS OF LAFCO INTEREST ASSEMBLY Hil.l.S AB 1725 (Committee on Local Government)-Local Government: Omnibus AB 1725 is the annual CALAFCO Omnibus Bill which makes technical and nonsubstantive changes to the Cortese-Knox-Hertzberg Act of 2000 (CKH). The modifications assist in clarifying and providing consistency in how the Act is applied throughout the State. The CALAFCO Legislative Committee, approved the following five amendments that have been included as part of the Omnibus Bill by the Assembly Committee on Local Government: Processing LAFCO Applications: The CKH Act currently includes the term "proceedings" but are incomplete and inconsistent with LAFCO's authority regarding conducting proceedings and the application of fees. The proposed amendment will remove the phrase "for the proceedings taken" from the code section to accurately reflect the permissible application of fees for LAFCO proceedings. Affected Agency: Current law requires that the Executive Officer provide notice of the receipt of an application for a change of organization or reorganization to each /1 affected agency." Currently /1 affected agency" is not defined in the CKH Act and could be interpreted to include an unlimited number of agencies to be noticed. The proposed amendment to this section would provide consistency with current law by clarifying that the /1 affected local agency," which is defined in the CKH Act, is to be notified by the Executive Officer. Boundary Lines: The CKH Act defines contiguous as "territory adjacent to territory within the local agency." The proposed amendment replaces the term 11 adjacent" with "abuts or shares a common boundary" in order to provide clarity to the definition. Health Care Districts: Existing law mandates that upon the filing of an application for the formation, consolidation or dissolution of a local health care district, the respective LAFCO is required to notify all State agencies that have oversight, regulatory responsibility, or a contractual relationship to that health care district. The proposed amendment would amend the law to also require notification when an application is requesting detachment from a health care district.

3 Quarterly Legislative Report Page 3 of 9 Application Definitioni The Act currently includes a procedure for the Executive Officer to follow if a proposed change of organization or reorganization that includes the annexation of territory to any district is submitted by an applicant other than the affected district. The proposed amendment includes a minor change to this section to clarify that a proposed change of organization or reorganization is referenced as an "application" until a certificate of completion is issued by the Executive Officer. RECOMMENDED OC LAFCO POSITION: Adopt "Support" position for AB POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: California Association of Local Agency Formation Commission (CALAFCO), Local Agency Formation Commissions: Contra Costa, Fresno Imperial, Los Angeles, Merced, Nevada, Riverside, San Bernardino, Santa Clara, Solano, Sonoma, Stanislaus, Yolo Oppose: None on File BILL LOCATION/STATUS: Senate Governance and Finance Committee: Hearing date pending. AB 464 (Gallagher)-Local Government The CKH Act defines the process for LAFCOs to consider a proposal for change of organization. The law requires the applicant requesting a change of organization or reorganization to submit a plan for providing services within the affected area. The plan must include: 1) a list of services that will be extended; 2) the level and range of those services; 3) timeframe of when the proposed services can be feasibly extended to the area; and, 4) the upgrades or improvements that may be necessary as a result of the organization or reorganization. The purpose of AB 464 is to amend the Act by requiring that an applicant requesting a change of organization or reorganization must also identify within the plan, both the services currently being provided and services that will be extended to the affected territory. The proposed amendment will address an inconsistency in current law to allow a proposed organization or reorganization to move forward in those cases in which the affected area is already receiving services. RECOMMENDED OC LAFCO POSITION: Adopt "Support" position for AB 464.

4 Quarterly Legislative Report Page 4 of 9 POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: California Association of Local Agency Formation Commission (Sponsor): Association of California Healthcare Districts; California State Association of Counties; Local Agency Formation Commissions: Alameda, Butte, Calaveras, Contra Costa, Colusa, Fresno, Imperial, Lake, Los Angeles, Marin, Mendocino, Merced, Nevada, Riverside, San Bernardino, San Diego, Santa Clara, Santa Cruz, Solano, Sonoma, Sutter, Yolo, and Yuba Oppose: Unknown BILL LOCATION/STATUS: Governor's office. AB 979 (Lackey)-Local Government The CKH Act outlines the process for independent special districts to be seated on LAFCO. Currently for special districts to acquire a seat on LAFCO, each special district within the respective County must pass a resolution approving representation on the LAFCO. Currently, 30 of the 58 LAFCOs in the State have special district representation. The purpose of AB 979 is to amend the process for seating special districts on LAFCO by allowing the members of the Independent Special Districts Selection Committee, which is composed of special district presiding officers, to each submit one vote in favor or against special districts representation on LAFCO. This proposed streamlined process will not require the submittal of resolutions from the members of the special district committee. Instead, in order for the special district committee to deny or accept the representation on LAFCO, a majority vote is needed from its representatives. RECOMMENDED OC LAFCO POSITION: Adopt "Support" position for AB 979. POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: California Special Districts Association (Sponsor); California Association of Local Agency Formation Commissions (Sponsor); Association of California Healthcare Districts; Brooktrails Township Community Services District; California State Association of Counties; Chino Valley Fire District; Compton Creek Mosquito Abatement District; Cucamonga Valley Water District; Eastern Municipal Water District; Fallbrook Regional Health District; Goleta Sanitary District; LAFCOs: Alameda, Amador, Contra Costa, Los Angeles, Placer, Riverside, San Bernardino, San Diego, San Mateo, Yolo; McKinleyville Community Services District; Meeks Bay Fire Protection District; Mission Resource Conservation District; Montecito Water District; North Tahoe Fire Protection District; Palos Verdes Library District; Phelan Pinon Hills Community Services District; Rancho Simi Recreation and Park District; Rural County Representatives of California; Santa Clara Valley Water District; Summerland

5 Quarterly Legislative Report Pages of 9 Sanitary District; Three Valleys Municipal Water District; United Water Conservation District; Ventura River Water District; Western Municipal Water District. Oppose: None. BILL LOCATION/STATUS: Senate: Appropriation Committee: Hearing date pending. AB 577 (Caballero)-Definition of Disadvantaged Community Existing Water Code Section defines a disadvantaged community as "a community that has an annual median household income less than 80% of the statewide annual median household income." This definition is used by various agencies throughout the State. AB 577 proposed to amend the definition by modifying its language to also include "a community with less than 80 % of the statewide annual per capita income." RECOMMENDED OC LAFCO POSITION: Adopt "Watch" position for AB 577. POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: None Oppose: None BILL LOCATION/STATUS: Failed to be heard by the policy committee, expected to be reintroduced in January 2018.

6 Quarterly Legislative Report Page 6of9 SfNATE BILLS SB 634 (Wilk)-Santa Clarita Water District SB 634 proposes to consolidate the Castaic Lake Water Agency (CLWA) and the Newhall County (NCWD) into one agency, the "Santa Clarita Valley Water District." The bill proposes legislative consolidation bypassing the Los Angeles LAFCO procedural oversight governed by the CKH Act. Currently, the CKH Act establishes a process for an anticipated proposed reorganization which includes the following steps: Submittal of an application to LAFCO as defined by CKH Act. LAFCOs must hold a public hearing, take testimony, and approve or deny the proposed reorganization. LAFCO must hold a protest hearing to measure written protests as defined by CKH Act. If an election is needed after the protest, the registered voters will participate in the election. LAFCO staff submits the appropriate documents to the State to finalize the reorganization. Although the bill does bypass the LAFCO process, the districts proposing the consolidation are required to submit an application to LA LAFCO. Once LA LAFCO receives the application along with required documents, the bill requires LA LAFCO to approve the consolidation. LA LAFCO staff has been working closely with stakeholders and the author of the bill to address concerns and recommended amendments. If the bill is approved by the Legislature and signed by the Governor, the legislative consolidation only applies to the Los Angeles County districts listed in the legislation. RECOMMENDED OC LAFCO POSITION: Adopt "Watch" position for SB 634. POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: Castaic Lake Water Agency(co-source), Newhall County Water District (co-source), AMS Fulfillment, Association of California Water Agencies, Bizfed, California Wilderness Coalition, City of Santa Clarita, San Gabriel Mountains Forever, Climate Resolve, Community Hiking Club, Los Angeles Kathryn Barger, Santa Clarita Valley Chamber of Commerce, United Water Conservation District, Valley Industry Association, 18 individuals

7 Quarterly Legislative Report Page 7 of 9 Oppose: Food & Water Watch, Sierra Club California, Planning and Conservative League, Santa Clarita Organization for Planning and the Environment, 25 individuals BILL LOCATION/STATUS: Assembly: Water, Parks and Wildlife Committee: Hearing date pending. SB 448 (Wieckowski)-Local Government: Organization: Districts SB 448 proposes to define an "inactive" status for districts that meet certain criteria, and authorizes LAFCOs to dissolve inactive districts under certain conditions. An "inactive district/' as defined by the proposed legislation, must meet the following requirements: The district has no financial transactions in the previous year. The district does not have assets or equity. The district does not have outstanding debts, judgements, litigation, contracts, liens, claims, or postemployment liabilities. Once a special district meets these requirements, the local LAFCO will be required to dissolve the district after holding one public meeting on the dissolution. The dissolution of the district will not be subject to protest proceedings. SB 448 requires that the State Controller publish an updated comprehensive list of special districts annually on their website and special districts. CALAFCO is currently working with the bill author and additional amendments to the bill are expected. RECOMMENDED OC LAFCO POSITION: Adopt ''Watch" position for SB 448. POSITIONS OF OTHER AGENCIES AND ORGANIZATIONS: Support: California Association of Realtors Oppose: Association of California Healthcare Districts, California Association of Local Agency Formation Commission, California Association of Treasurers and Tax Collectors, California Special Districts Association, California State Association of Counties, Rural County Representatives of California. BILL LOCATION/STATUS: Assembly Local Government: Hearing date pending.

8 Quarterly Legislative Report Page 8of9 VEl l/cle LICl:NSE n:c lll'l>ate In January 30, 2011, the vehicle license fee (VLF) was removed by the State as a source of revenue for recent and future city incorporations and inhabited annexations. Four cities incorporated between January l, 2004 and January 1, 2012 in Riverside County were impacted by the "VLF take-away": Wildomar, Menifee, Eastvale, and Jurupa Valley. Since that time, multiple bills have been introduced in the Legislature to reinstate the gap that was created by this loss of revenue to local governments but have failed to make it through committees or have been vetoed by the Governor. Recognizing the importance of a revenue stream that supports the provision of local services to residents, Orange County LAFCO has supported each of the Legislature's attempts to restore the VLF revenue to newly incorporated cities and annexations. At the beginning of the Legislative Session, Senator Roth, once again introduced legislation that would reinstate VLF revenue for the four cities in Riverside County. The proposed legislation was ultimately included in a different bill introduced by the Senate Committee on Budget and Fiscal Review and signed by the Governor on May 12, Even though the latest effort did not include reinstatement of the VLF revenue for recent or future annexations, the Governor's approval of this legislation is a huge success resulting from a multi-year collaborative effort of many stakeholders. LITTLE IJOOVER COMMISSION UPDATE Over the past year the Little Hoover Corrunission (LHC) has held several hearings to discuss the role of LAFCOs and special districts. On June t1, LHC held a roundtable discussion to review and discuss a draft of proposed recommendations (Attachment A). The proposed recommendations were grouped into categories; governance and transparency, climate change adaptations, and healthcare districts. The attendees at the roundtable discussion included local representatives, State officials, and representatives from CSDA and CALAFCO. During the discussions, the stakeholders had the opportunity to comment on the draft recommendations, provide additional supporting information, and respond to questions from LHC Commissioners and staff. OC LAFCO Executive Officer continues her participation as a member of the CALAFCO LHC working group established to provide ongoing feedback to the LHC. The LHC's next meeting is August 24, at which time they will consider a final draft report from their staff.

9 Quarterly Legislative Report Page 9 of 9 RECOMMENDATIONS Staff reconunends that the Commission: 1. Receive and file the Legislative Quarterly Report. 2. Adopt recommended positions on the following bills: AB 1725 (Support) AB 464 (Support) AB 979 (Support) AB 577 (Watch) SB 634 (Watch) SB 448 (Watch) 3. Direct staff to submit letters of support for AB 1725, AB 464, and AB 979 (Attachments B-D). Respectfully Submitted,... A.Udmetirr.A: The Little Hoover Commission: Draft Recommendations Attachment B: Letter of Support for AB 1725 Attachment C: Letter of Support for AB 464 Attachment D: Letter of Support for AB 979

10 Attachment A State of California LITTLE HOOVER COMMISSION Witnesses at Little Hoover Commission's August and October 2016 public hearings and participants at the November 2016 advisory committee proposed numerous recommendations for consideration. At various business meetings in 2017, the Commission discussed these and other potential recommendations. A summary of potential recommendations currently under consideration follows. The June 22 roundtable discussion has been convened to consider If these recommendations are helpful, can be implemented or might have unintended consequences. The Commission also welcomes discussion on alternative suggestions. The primary focus of the roundtable meeting discussion will be on the recommendations related to governance and transparency, although potential recommendations focusing on climate change adaptation and healthcare districts also are included in this summary. GOVERNANCE - POTENTIAL RECOMMENDATIONS The Legislature, in committee hearings and floor votes, as well as the Governor in bill signings, should curtail a growing practice of Introducing bills to override LAFCO deliberative processes and decide local issues regarding special district boundaries and operations. The Legislature should provide one-time grant funding to pay for specified LAFCO activities, particularly to fund certain critical Municipal Service Reviews (MSRs) and to incentivize LAFCOs or smaller special districts to develop and implement dissolution or consolidation plans with timelines for expected outcomes. This grant process potentially could be overseen by the Governor's Office of Planning and Research. Funding should be tied to process completion and results, including enforcement authority for corrective action and consolidation. Alternatively or additionally, augment the existing LAFCO funding formula by allocating a certain percentage of local property taxes to fund LAFCOs as suggested in testimony from the California Association of Local Agency Formation Commissions (CALAFCO). After conducting a Municipal Service Review and finding dissolution or consolidation of special districts is warranted, provide LAFCOs the authority to initiate dissolutions or consolidations with a higher threshold for a public vote. Require special districts to hold a public hearing on findings and recommendations after the completion of a Municipal Service Review. The Legislature should provide LAFCOs the statutory authority to do reviews of inactive districts throughout California and dissolve them without the action being subject to protest and a costly election process. SB 448 (Wiekowski) would implement this recommendation. The bill was unanimously adopted by the Senate in May 2017, and currently is under consideration by the Assembly. As currently written, the bill also would require each county tax bill to list special district taxes and would require the State Controller, by 2019, to annually publish a list of all special districts in California. The Legislature should strengthen LAFCOs by easing a process to add special district representatives to the 28 county LAFCOs where districts have no voice. The Legislature should adopt legislation to give LAFCO members fixed terms, to ease political pressures in controversial votes and enhance the independence of LAFCOs. Milron Marks Commission on California Stnic Government Organization and Economy htm:// 925 L Street, Suite 805 Sacramento, CA fox ail littlchoovcr@lhc.ca.gov

11 TRANSPARENCY - POTENTIAL RECOMMENDATIONS Every LAFCO website should provide basic information and links to all of the special districts within each county service area, including a standardized dashboard reflecting revenues from property taxes and user fees, debt service and fund balance changes. Every special district should have a published policy for reserve funds, including the size and purpose of reserves and how they are invested. Every special district should have a website that provides the following information in an easy-tounderstand format:./ Name, location, contact data./ Services provided./ Governing body, including election information and the process for constituents to run for board positions./ Compensation details -total staff compensation, including salary, pensions and benefits./ Compensation details for the five staff with highest compensation (including salary, benefits, pensions, loans, annual leave balances, annual travel expenses)./ Budget (including revenues and expenditures, bond debt and the source of revenues, including fees, property taxes and other assessments, as well as other revenue)./ Reserve fund policy./ An explanation of how the revenue sources are consistent with state law and do not constitute a permissible tax./ Geographic area served and demographic data based on available census data./ Average and median customer fees and other customer charges./ Description of relationship and coordination with other local government agencies./ Copy of most recent Municipal Service Review./ Copy of most recent annual report provided to the State Controller's Office./ State and local agencies providing oversight of operations, compliance with state laws and financial reporting and audits and frequency of such reviews and links to the oversight bodies websites The California Special Districts Association, working with experts in public outreach and engagement, should develop best practices for independent special district outreach to the public on opportunities to serve on boards and special district elections including election results and voter participation data. The State Controller's Office should disaggregate information provided by independent special districts from dependent districts, nonprofits and joint powers authorities on its By the Numbers and Employee Compensation websites. (SB 448 would require the State Controller to list all special districts on its website by 2019.) The State Controller's Office should standardize definitions of special district financial reserves for state reporting purposes. The Secretary of State, working with county, city and special district representatives and the State Controller, should streamline or consolidate its public agency reporting requirements. 2

12 CLIMATE CHANGE ADAPTATION - POTENTIAL RECOMMENDATIONS The Legislature should place a requirement in statute that special districts formally include climate adaptation and climate mitigation as key operational considerations within their governing documents and missions. The California Special Districts Association (CSDA}, in conjunction with its member districts, should document and share climate adaptation experiences with the Integrated Climate Adaptation and Resilience Program's adaptation information clearinghouse being established within the Governor's Office of Planning and Research (OPR}. Similarly, CSDA and member districts should step up engagement in the state's current Fourth Assessment of climate threats, a $5 million state research project designed to support the implementation of local adaptation activities. The CSDA also should promote climate adaptation information sharing among its members to help districts with fewer resources plan for climate impacts and take actions. The Legislature should replicate statewide a program established by Oakland-based East Bay Municipal Utility District, in which real estate transactions trigger an inspection of sewer lines on the property and require repairs if broken. Or, as an alternative, it should commission a study of costs versus benefits - possibly by a university or the appropriate state department. Such a study would build long-term support, if feasible, for legislation. State regulatory agencies should explore the beginnings of a new regulatory framework and adaptive approach that incorporates moveable baselines when defining a status quo as climate impacts mount. The California Special Districts Association, and special districts, as some of the closest-to-theground local governments in California, should step up public engagement on climate adaptation, and inform and support people and businesses to take actions that increase their individual and community-wide defenses. The California Special Districts Association and special districts should lead efforts to seek and form regional partnerships to maximize climate adaptation resources and benefits. HEALTHCARE DISTRICTS-POTENTIAL RECOMMENDATIONS The Legislature should work with the Association of California Healthcare Districts to enact proposals the association developed in 2016 to accomplish these two objectives:./ Update the 1945 legislative "practice acts" that enabled voters to create local hospital districts, renamed healthcare districts in the early 1990s. Experts widely agree that statutory language in the acts no longer reflects rapid changes in healthcare during the past half century, especially regarding roles of healthcare districts without hospitals../ Make healthcare districts directly respond to local healthcare needs by conducting needs assessments every three years and demonstrate annually how they are addressing those needs. This information will be shared with the local LAFCO that oversees the district. 3

13 The Legislature, which has been increasingly inclined to override local LAFCO processes to press changes on healthcare districts, should defer these decisions to LAFCOs, which in statute already have that responsibility. The Association of California Healthcare Districts and its member districts should step up efforts to define and share best practices among themselves. 4

14 Attachment B LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY CHAIR DEREK J. MCGREGOR Represencaclve of General Public VIC E CHAIR DR. ALLAN BERNSTEIN Councilmember City of Tustin LISA BARTLETI s District CHERYL BROTHERS Counc1lmember City of Founcain Valley TODD SPITZER SupeNlsor 3 1 Dlsvlct C HARLEY WILSON S<lnta Margarlia Water District JOHN WITHERS IMl'll! Ranch Wacer Otsu/ct W ENDY BUCKNUM Councilmember City of Mission Vitjo Honorable Cecilia Aguiar-Curry, Chair Assembly Committee on Local Government California State Assembly State Capitol, Room 5144 Sacramento, CA RE: Support - AB 1725: Committee on Local Government Omnibus Bill Dear Chair Aguiar-Curry: The Orange County Local Agency Formation Commission (LAFCO) is pleased to support the Assembly Committee on Local Government Bill AB 1725, which makes technical, non-substantive changes to the Cortese-Knox Hertzberg Local Government Reorganization Act of 2000 (the Act). These changes promote greater clarity and efficacy in LAFCO' s ability to fulfill its role in facilitating and encouraging efficient delivery of municipal services. This legislation helps insure that the Act remains a vital and practical law that is consistently applied throughout the state. We appreciate your Committee's authorship of this bill and support of LAFCO' s mission. Respectfully, JAMES FISLER Mesa Water D1strlcc KATHRYN FRESHLEY Representative of General Public MICHELLE STEEL SupeN1sor 2"" Dlstrict Derek J. McGregor Chairman Cc: Orange County Ad Hoc Committee Orange County Legislators Pamela Miller, Executive, CALAFCO CAROLYN E MERY Executive Officer North Main Street Suite I 050. Santa Ana. CA (714) FAX (714) http//

15 Attachment C LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY CHAIR DEREK J. MCGREGOR Representative of General Public VICE CHAIR DR. ALLAN BERNSTEIN Counc1lmemt>er Cny or Tuslin LISA BARTLETT s 1 District The Honorable Governor Edmund G. Brown, Jr. State of California State Capitol Building Sacramento, CA RE: Request to Sign AB 464 (Gallagher) Local Government Reorganization CHERYL BROTHERS Councllmember Clcy of Fountain Valley TODD SPITZER 3'" D1suict CHARLEY WILSON Santa Margarita Water Dlsuict JOHN WITHERS IMne Ranch Water District WENDY 8UCKNUM Councllmember Cicy or Mission Viejo JAMES FISLER Mesa Water District KATHRYN FRESHLEY Representative of Gener<tl Public MICHELLE STEEL 2"" DiSUICt CAROLYN EMERY Executive Officer Dear Governor Brown: The Orange County Local Agency Formation Commission (LAFCO) respectfully requests that you sign Assembly Bill 464 (Gallagher) which is now before you for action. AB 464 makes necessary technical changes to existing LAFCO law to solidify the current practice of LAFCOs approving annexations of areas already being served by a local agency through an out of area service agreement (Government Code Section 56133). As a result of a court decision in 2014 in the case of City of Patterson v. Turlock Irrigation District, all future annexations of an area receiving services through an approved out of area service agreement will not be valid. What began as a local issue has now become a critical statewide concern. This bill seeks to remedy that problem by ensuring that within certain conditions, LAFCOs can continue to evaluate applications which include the annexation of territory where services are already being provided through an out of area service agreement. Further, it allows for common sense boundary alignments and more predictable growth planning. By allowing the annexation of these areas, AB 464 also ensures the people paying for and receiving the services, can participate in elections and potentially serve on the governing board of the service provider. It is important to note that this bill does not change the current rights of a city, district, or landowner to oppose an annexation, nor does it change any protest provisions in current law. It simply ensures the ability for LAFCOs to continue the practice of common sense boundary oversight for service 2677 North Main Street Suite I 050. Santa Ana. CA (714) FAX (714) /

16 Request to Sign AB 464 (Gallagher) Local Government Reorganization Page 2 of 2 providers. As there are many pending annexations throughout the state that are associated with previously approved out of area service extensions, this legislation is critical to the successful annexation of these areas. The bill has had unanimous support in both the Assembly and Senate and makes necessary corrections to existing law to allow for the ongoing annexation of areas that may already be receiving services. As AB 464 is good public policy, we respectfully urge you to sign AB 464. Respectfully, Derek J. McGregor Chairman Cc: Orange County Ad Hoc Committee Orange County Legislators Pamela Miller, Executive, CALAFCO

17 Attachment D LOCAL AGENCY FORMATION COMMISSION ORANGE COUNTY C HAIR DEREK J. MCGREGOR Repre5entatNe of General Public VICE CHAIR DR, ALUl.N BERNSTEIN Counci/member City of Tustin LISA BARTLETT 5'" Dlsrrlct CHERYL BROTHERS Councllmember City of Founrain Valley TODD SPITZER 3 District CHARLEY WILSON S;;inta Margarita Water District JOHN WITHERS IMne Ranch wacer District W ENDY 8UCKNUM Councilmember City of Mission Viejo JAMES FISLER Dlreccor Mesa Water District KATHRYN FRESHLEY Represencacive or General Public ALTERNAIE MICHELLE STEEL 2""District CAROLYN EMERY Executive Officer Assembly Member Tom Lackey California State Assembly State Capitol, Room 2174 Sacramento, CA RE: Support of AB 979-Local Government Dear Assembly Member Lackey: The Orange County Local Agency Formation Commission (LAFCO) is pleased to support AB 979. Co-sponsored by the California Association of Local Agency Forµiation Commissions (CALAFCO), this bill facilitates streamlining the process of seating special districts on Local Agency Formation Commissions (LAFCOs). The statutory mission of LAFCOs is to discourage urban sprawl, preserve agricultural land and open space, encourage the orderly formation and development of local agencies, and ensure the efficient provision of services by those local agencies. By statute, each LAFCO is composed of representatives from the county, cities within the county, and a member of the public (with each seat having an alternate). Special districts have the ability to opt into representation on LAFCOs and since 1972, special districts have chosen to obtain representation on 30 of the 58 LAFCOs.. Under current law, special districts may acquire representation on a LAFCO if a majority of all special districts in the county adopt a Board resolution supporting such action, with all of them having to be adopted within a one-year period. This can be a time intensive process requiring resources and an organized effort. AB 979 simplifies this process by mirroring the existing election process for appointment of LAFCO commissioners through the independent special districts selection committee and a more streamlined process allowing for each district to vote on the matter. Simplifying the LAFCO representation process would empower special districts in the 28 counties with no special district representation to more effectively consider their participation on LAFCO North Main Screet Suite I 050, Sama Ana. CA (714) FAX (7 14)

18 Support of AB 979-Local Government Page 2 of 2 Orange County LAFCO currently includes special district representation and our Commission believes special district representation on LAFCO provides a more diverse and balanced decision-making foundation to the LAFCO process. For these reasons, we are pleased to support AB 979 and thank you for authoring this important piece of legislation. Respectfully, Derek J. McGregor Chairman Cc: Orange County Ad Hoc Committee Orange County Legislators Pamela Miller, Executive, CALAFCO