Board of Directors Meeting

Transcription

1 Board of Directors Meeting Friday, 8 December :00 a.m. to 2:30 p.m. Best, Best & Krieger, 500 Capitol Mall, 17 th Floor Sacramento, California MEETING AGENDA Call to Order and Establish Quorum Chair Jones Page CONSENT 1. Minutes, 27 October, 2017 Board Meeting* Pamela Miller 3 ACTION 2. Overview of CALAFCO Administrative and Operational Policies* Pamela Miller 7 3. FY CALAFCO Quarterly Financial Report* Steve Lucas Quarterly Investment and Bank Account Report* Steve Lucas Board Committee Appointments* Chair Jones Appointment of CALAFCO Deputy Executive Officer* Pamela Miller 35 11:00 a.m CALAFCO Legislative Issues and Policies* Pamela Miller Presentation by League of CA Cities in consideration of League s formal legislative request 7.2 Review and potential re-adoption of Association s Legislative Policies for Provide input and direction to Legislative Committee on legislative items for 2018 INFORMATION Annual Conference Report* Pamela Miller Conflict of Interest Reports* Pamela Miller CALAFCO U Update David Church 11. CALAFCO Survey Update* Steve Lucas CALAFCO 2018 Staff Workshop Update Pamela Miller 13. Executive Director s Report Pamela Miller 14. Board Member Reports and Announcements Adjourn to February 23, 2018 Board of Directors Meeting at 10:00 a.m. in San Diego, CA. * Staff Report included in agenda packet. The remaining reports will be given orally at the meeting. If you have any questions or desire additional information please call Pamela Miller at (916) UPDATED 18 November

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3 Association of Local Agency Formation Commissions Board of Directors Meeting for Friday, 27 October 2017 (San Diego) DRAFT MINUTES CALL TO ORDER AND ESTABLISH QUORUM Chair Curatalo established a quorum and called the meeting to order with a flag salute at 7:43 a.m. Current Board Members Present: James Curatalo, Chair, District (San Bernardino) Gay Jones, Vice Chair, District (Sacramento) Cheryl Brothers, City (Orange) Bill Connelly, County (Butte) Shiva Frentzen, County (El Dorado) Michael Kelley, County (Imperial) Josh Susman, Secretary, Public (Nevada) Mike McGill, Treasurer, District (Contra Costa) Bill Kirby, City (Placer) John Leopold, County (Santa Cruz) Anita Paque, Public (Calaveras) Sblend Sblendorio, Public (Alameda)^ Current Board Members Absent: Gerard McCallum, Public (Los Angeles) John Marchand, City (Alameda) Ricky Samayoa, City (Yuba) Incoming Board Members Present: Debra Lake, District (Humboldt) Jo MacKenzie, District (San Diego) Margie Mohler, City (Napa) Susan Vicklund Wilson, Public (Santa Clara) Staff Present: Clark Alsop, Legal Counsel, BB&K Kris Berry, CALAFCO Deputy EO (outgoing DEO) Christine Crawford, CALAFCO Deputy EO (incoming DEO) David Church, CALAFCO Deputy EO (DEO) Carolyn Emery, CALAFCO Deputy EO (DEO) Steve Lucas, CALAFCO Executive Officer (EO) Pamela Miller, Executive Director (ED) ^Indicates did not stay for the entire meeting 1. Introduce and Seat New Board Members Chair Curatalo introduced and seated four new Board Members after which each offered comments about how pleased they were to be voted onto the Board: Debra Lake, District, Humboldt LAFCo Jo MacKenzie, District, San Diego LAFCo Margie Mohler, City, Napa LAFCo Susan Vicklund Wilson, Public, Santa Clara LAFCo 2. Acknowledge and Thank Outgoing Board Members 3

4 California Association of Local Agency Formation Commissions Draft Minutes Board of Directors Meeting 27 October 2017 Page 2 of 6 Chair Curatalo thanked the outgoing Board Member in attendance Sblend Sblendorio. Chair Curatalo thanked the outgoing Board Member not in attendance John Marchand. Vice Chair Jones thanked outgoing Board Chair Jim Curatalo and acknowledged him for his leadership this past year. Secretary Josh Susman also thanked Chair Curatalo for his leadership. Chair Curatalo thanked the Board and staff for their dedication and hard work and commented it has been a pleasure serving CALAFCO. CONSENT 3. Minutes, 18 August, 2017 Board Meeting On motion of Director Brothers, seconded by Director Connelly, the 18 August, 2017 Board Meeting minutes were approved with Directors Lake and Vicklund Wilson abstaining. ACTION 4. Adoption of updated Association Policies On motion of Director Leopold, seconded by Director Brothers and carried unanimously, the updated policies as presented in the staff report were adopted. 5. Election of Board Officers Director Brothers nominated Mike Kelley as Treasurer. Director Kelley accepted the nomination. Seeing no other nominations for the office of Treasurer, the Board took the following action: On motion of Director Brothers, seconded by Director Kirby and carried unanimously, the Board elected Mike Kelley as Treasurer. On motion of Director Leopold, seconded by Director Frentzen and carried unanimously, the Board elected the following slate of officers: Chair: Gay Jones Vice Chair: Josh Susman Secretary: Mike McGill Treasurer: Mike Kelley 6. Adopt Board Meeting Schedule for 2018 On motion of Director Brothers, seconded by Vice Chair Susman and carried unanimously, the Board adopted the proposed 2018 meeting calendar as presented in the staff report. 7. Legislative Committee Staff Appointments On motion of Director Frentzen, seconded by Director Leopold and carried unanimously, the Board approved the staff appointments to the Legislative Committee and Legislative Advisory Committee as presented in the staff report. 8. Appointment of CALAFCO Deputy Officer 4

5 California Association of Local Agency Formation Commissions Draft Minutes Board of Directors Meeting 27 October 2017 Page 3 of 6 Executive Director (ED) Miller stated Kris Berry has completed her two-year term of service as CALAFCO DEO for the central region. She thanked Kris for her dedicated service as DEO and commented on her other contributions such as on program planning committees and as a longstanding member of the Legislative Committee. ED Miller then shared the incoming central region DEO, who was appointed by her and EO Steve Lucas, is Christine Crawford from Yolo LAFCo. Christine was introduced to the Board. On motion of Director Frentzen, seconded by Vice Chair Susman and carried unanimously, the Board received and filed the report appointing Christine Crawford as the new DEO for the central region. 9. Appointment of Board Ad Hoc Subcommittee on Finances Immediate Past Chair Curatalo reminded the Board of the discussion they had regarding forming this ad hoc committee during their August 18 meeting. He shared the results of the Executive Committee meeting and their discussion regarding fair and equitable representation on the committee in terms of regional representation, urban-suburban-rural LAFCo representation, honoring those who volunteered to be on the committee from the current Board, as well as the request to have historical perspectives added from former Board members. He then announced members of the committee, as unanimously appointed by the Executive Board as: current Board members Cheryl Brothers, Bill Connelly, Mike McGill and Anita Paque; former Board members Roger Anderson (Santa Cruz LAFCo) and Jerry Gladbach (Los Angeles LAFCo); and Del Norte LAFCo Commissioner Blake Inscore. Chair Gay Jones will act as an ex-officio, nonvoting member of the committee. On motion of Director Frentzen, seconded by Director Leopold and carried unanimously, the Board appointed the ad-hoc committee members. INFORMATION CALAFCO Conference Report and Thank You As Conference Chair, Director Kirby thanked all of the members of the planning committee and acknowledged the leadership of Program Chair Carolyn Emery and ED Miller. DEO Carolyn Emery also thanked the members of the Program committee and the Board members who participated in planning the program. She also thanked ED Miller for her leadership. ED Miller also thanked everyone who worked hard to plan and execute the Conference. She commented it was a bit harder than anticipated to assume the hosting responsibilities. She informed the Board a full written report will be provided at the December meeting and that it was too early to determine the financial outcome of the Conference. 11. Board Member Reports and Announcements Director Brothers welcomed the new Board members and thanked the outgoing Board members for their service. Treasurer Kelley commented on how good the Conference was, as did Directors Paque, Leopold and Connelly. Secretary McGill commented he was concerned about the additional workload he sees on the horizon with respect to legislative requirements, the working of the ad hoc committee, and the 5

6 California Association of Local Agency Formation Commissions Draft Minutes Board of Directors Meeting 27 October 2017 Page 4 of 6 desire to go after additional funding based on the recent Little Hoover Commission report recommendation. Vice Chair Susman stated he was excited about moving into the Vice Chair role and increasing his participation on the Board, as well as the opportunities for CALAFCO in the future. Chair Jones welcomed the new Board members and thanked outgoing Board members. She commented we are successful because everyone pitches in and contributes to the success of the organization. EO Lucas commented the northern region roundtable this year had the best attendance he has ever experienced. DEO Church reported there will be a CALAFCO U course held in Orange County on December 4 and one in Sacramento on January 22. DEO Crawford shared she is looking forward to getting more involved in CALAFCO and thanked the Board for welcoming her. 12. Executive Director s Report ED Miller thanked the CALAFCO staff for all of their efforts, saying we could not get done what we do without them. Sher also thanked the Board for their support and hard work. ADJOURNMENT Chair Jones adjourned the meeting at 8:33 a.m. to the Friday, December 8, 2017 Board of Directors meeting at 10:00 a.m. in Sacramento, California. 6

7 BOARD OF DIRECTORS MEETING STAFF REPORT 8 December 2017 Agenda Item No. 2 Overview of CALAFCO Administrative and Operational Policies Prepared By: Pamela Miller, Executive Director Date: 8 December 2017 RECOMMENDATION DISCUSSION 1. Receive and File Report. As part of your corporate oversight, each year CALAFCO staff provides a brief overview of CALAFCO administrative and operational policies along with a summary of association operations. Board members have previously been provided with the current version of the Policies and Procedures Guide. Complete versions of CALAFCO corporation documents can be found on the CALAFCO website on the resources tab ( ATTACHMENTS 2a CALAFCO Operations Overview 2b Summary of CALAFCO Administrative and Operational Policies 2c CALAFCO Compensation Report 7

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9 CALAFCO Operational Overview Item 2a CALAFCO Annual Operations Overview CALAFCO Board of Directors Meeting December 8, 2017 Agenda Item 2-a California Association of Local Agency Formation Commissions CALAFCO Mission CALAFCO provides educational, information sharing and technical support for its members by serving as a resource for, and by collaborating with, the public, the legislative and executive branches of state government, and other organizations, for the purpose of discouraging urban sprawl, preserving open-space and prime agricultural lands, and encouraging orderly growth and development of local agencies. California Association of Local Agency Formation Commissions CALAFCO Board of Directors December

10 CALAFCO Operational Overview Item 2a What is CALAFCO? Nonprofit Corporation in the State of California registered with the Secretary of State State Charity registered with the Attorney General Registry of Charitable Trusts Private Foundation exempt from Federal income tax under section 501 (c)(3) Not subject to public agency laws California Association of Local Agency Formation Commissions CALAFCO Formation 1968 Initial steering committee 1969 Approval of by laws subject to ratification by members 1972 Formation approved by a majority of commissions California Association of Local Agency Formation Commissions 10 CALAFCO Board of Directors December

11 CALAFCO Operational Overview Item 2a CALAFCO Formation Staff volunteers from member LAFCos Counsel funded by San Bernardino LAFCo until 2005 Clark Alsop CALAFCO Legal Counsel since 1982 First CALAFCO office in 2005 California Association of Local Agency Formation Commissions CALAFCO Membership All 58 statewide LAFCos are members Currently 6 Gold Associate Members 24 Silver Associate Members California Association of Local Agency Formation Commissions 11 CALAFCO Board of Directors December

12 CALAFCO Operational Overview Item 2a CALAFCO Regions California Association of Local Agency Formation Commissions CALAFCO Organization California Association of Local Agency Formation Commissions 12 CALAFCO Board of Directors December

13 CALAFCO Operational Overview Item 2a CALAFCO Executive Directors First paid Executive Director in 1998 Mike Gotch Scott Harvey Bill Chiat Pamela Miller present California Association of Local Agency Formation Commissions CALAFCO Staff No employees Four contractors Executive Director (32 hrs/week) Executive Assistant (15 hrs/week) Legal Counsel (hourly as needed) Certified Public Accountant (15 hrs/qtr) California Association of Local Agency Formation Commissions 13 CALAFCO Board of Directors December

14 CALAFCO Operational Overview Item 2a CALAFCO Staff Volunteer Staff Executive Officer Deputy Executive Officers (3) Vice Chair, Legislative Committee Legislative Committee Conference and Workshop Host and Program Committees CALAFCO U Committees Special Projects Support for Awards Committee California Association of Local Agency Formation Commissions Operational Policies In 2007 Board adopted Policy Manual; updated several times Operational clarity In full compliance with IRS Form 990 requirements Areas include: Organizational structure; Fiscal Management; Operations; Board Operations California Association of Local Agency Formation Commissions 14 CALAFCO Board of Directors December

15 CALAFCO Operational Overview Item 2a Strategic Areas 1. Serve as an educational resource to member LAFCo Commissioners, LAFCo staff, Associate Members, and stakeholders. We will do this by offering a variety of educational forums, professional development and networking opportunities. 2. Focus efforts on Association member development and communication. We will do this by implementing strategies that build stronger member LAFCos and a resilient Association. CALAFCO will provide support, resources and timely, value-added communication tools for our LAFCo members and Associate Members. 3. Serve as an information resource to all Association members, work as a legislative and policy advocate for LAFCo issues and provide information to the Legislature and other stakeholders. We will do this by supporting and sponsoring research which collaboratively shares the work and data from member LAFCos and serves as a resource to all Association members. The Association will also advocate for legislative needs and positions on behalf of our members, by serving as an objective resource to the Legislature, organizations seeking to improve local government and to state agencies on local government services. California Association of Local Agency Formation Commissions Member Services Annual Conference fall Yosemite 2018 Sacramento 2019 Monterey Staff Workshop spring Marin CALAFCO U Courses 2 classes/year Research Papers California Association of Local Agency Formation Commissions 15 CALAFCO Board of Directors December

16 CALAFCO Operational Overview Item 2a Member Services Web site 5,500-6,000 visits/week List Serves EO, Clerks, Counsel, Analysts, Regions The Annual Sphere Quarterly Reports Membership Publications Directories, C-K-H California Association of Local Agency Formation Commissions Member Services Legislative Resource Limit to 20% of contract Propose and review LAFCo legislation Testify Serve on work groups Coordinate with peer associations LAFCo and Public Resource calls/ s per day California Association of Local Agency Formation Commissions 16 CALAFCO Board of Directors December

17 CALAFCO Operational Overview Item 2a Finances FY 2017/2018 $30,384 Income $433,487 $2,500 $3,000 $32,000 $213,603 $152,000 Dues Annual Conference Staff Workshop CALAFCO U Other Revenues Carryover from Prior Year California Association of Local Agency Formation Commissions Finances FY 2017/2018 $12,000 $3,875 $3,000 $14,398 $4,000 $12,500 Expenses $433,487 $34,150 $110,925 $200,564 $38,075 Board Expenses Professional Services Office Expenses Conference Staff Workshop CALAFCO U Legislative Services Research and Information Contingency Transfer to Fund Reserve California Association of Local Agency Formation Commissions 17 CALAFCO Board of Directors December

18 CALAFCO Operational Overview Item 2a Finances Fund Reserve Currently have a fund reserve of $162,754 Represents approx. 58% of non-conference, workshop and CALAFCO U operational expense budget (less Contingency) Requires Board approval for any allocation Funds are deposited with the Local Agency Investment Fund (LAIF) Managed by State Treasurer GuideStar Exchange Platinum Seal Fully transparent financial records California Association of Local Agency Formation Commissions Finances Maintain two bank accounts at U.S. Bank (checking and savings) Gold Associate All bills paid electronically by Executive Officer Books maintained by Administrator and reviewed quarterly by CPA Occasional check issued by Executive Director CALAFCO does not have credit cards California Association of Local Agency Formation Commissions 18 CALAFCO Board of Directors December

19 CALAFCO Operational Overview Item 2a Board Resources CALAFCO Executive Director typically accessible/available any time CALAFCO Administrator available in office two days/week, often other times by CPA meets with ED/Chair/Treasurer quarterly CALAFCO volunteer staff excellent resources CALAFCO website California Association of Local Agency Formation Commissions 19 CALAFCO Board of Directors December

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21 CALAFCO Administrative and Operational Policies As adopted and amended by the Board of Directors Summary from the CALAFCO Policies and Procedures Manual 27 October Organizational Structure and Responsibilities 1.1 Governance Map of CALAFCO Regions 1.2 Appointment of Officials 1.3 Assignment of Responsibilities 1.4 Executive Director Responsibilities 1.5 Executive Officer Responsibilities 1.6 Deputy Executive Officer Responsibilities 1.7 Legislative Chair Responsibilities 1.8 Legal Counsel Responsibilities 1.9 Executive Director and Staff Performance Evaluation 1.10 Representative Role of Board Members 1.11 Regional Representation for Board Officers and Committees 1.12 Regional Representation on Legislative Committee 1.13 Board of Director Officers 1.14 Succession of Board Officers 1.15 Board Action on Legislative Issues 1.16 Board Meeting Locations 2 Updating Procedures 3 Financial Management 3.1 Basis of Accounting 3.2 Accounting Records 3.3 Retention of Records 3.4 Fiscal Year 3.5 Annual Budget 3.6 Budget Revisions 3.7 Bottom Line Budgeting 3.8 Accounting Software 3.9 Financial Statements 3.10 Operational Reports and Tax Filing 3.11 Authority to Contract 3.12 Service Contract Renewals 3.13 Grants 3.14 Internal Control 3.15 Reserve Funds 3.16 Compensation and Reimbursable Expenses 3.17 Investment Policy 3.18 Conflict of Interest 3.19 Whistleblower 4. Operational 4.1 Dues 4.2 Conference and Workshops 4.3 CALAFCO University and Other Seminars 4.4 Communications Tools 4.5 Legislative Policies and Committee 4.6 Transparency and Accountability 4.7 Document Retention and Destruction 5. Board Operations 5.1 Bylaws 5.2 Meeting Agenda and Materials 5.3 Meeting Participation 5.5 Electronic Voting 5.6 Board Nomination and Election 21

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23 Board and Executive Compensation Report Fiscal Year Executive Director Executive Director services during the fiscal year were provided through a professional services agreement with Miller Management and Consulting Group on behalf of Pamela Miller. Total Executive Director Compensation* $135,357 July 1, 2016 June 30, 2017 Board of Directors Category Total Amount Professional Services $121,596 Transportation Reimbursement $1,200 Expense Reimbursement** $10,761 Use of Equipment*** $1,800 * The term compensation in this case includes all reimbursements to the Executive Director for which out of pocket payments on behalf of the Association were made. True compensation is found in the Professional Services line item. ** Includes purchases made for Association as CALAFCO does not have a corporate credit card as well as travel reimbursements. Of the $10,761, $4,495 were categorized in the budget under other appropriate line items such as expenses for the conference, workshop, subscription renewals, etc. This means $6,266 were expenses incurred as Executive Director. *** Pamela Miller provides computer and mobile phone services for CALAFCO through this annual fee CALAFCO does not provide medical or any other insurance, retirement contribution, vacation or sick leave, holiday pay, social security contributions, disability, car allowance or any other benefit or prerequisite. CALAFCO has a 16-member Board of Directors. Board service is entirely voluntary. Total Board of Directors Compensation $0 July 1, 2016 June 30, 2017 CALAFCO does not provide a salary, stipend, fee, per diem, travel or expense reimbursement or any other benefit or prerequisite to Board members. 23

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25 BOARD OF DIRECTORS MEETING STAFF REPORT 8 December 2017 Agenda Item No. 3 FY First Quarter Fiscal Report Prepared By: Stephen Lucas, Executive Officer Date: 8 December 2017 RECOMMENDATION 1. Receive and file the Quarterly Financial Report. DISCUSSION The FY CALAFCO adopted budget shows the year-to-date actuals and percent of budget as of September 30, 2017, the end of the first quarter. The Balance Sheet as of September 30, 2017 shows total assets and total liabilities and equity for the Association (see attachments). In terms of the adopted budget and revenues, much of the income for the first quarter is derived from the payment of CALAFCO member dues, and Associate member dues are received throughout the year. Dues from all 58 member LAFCos have been received, and all Associate members dues are current. Operating revenues are currently at 51.9% of budget. All Annual Conference revenue will be booked in the next quarter since the Conference was held in the second quarter. Total operating expenses stand at 13.5% of the budget, and do not reflect any Conference expenses, all of which will be booked in the second quarter. There are three areas in which expenses notably exceed 25% of budget. They are: Executive Director Expenses (34.7%) which reflects a site visit to Monterey for the 2020 Conference and a trip for the Executive Officer to San Diego LAFCo to represent CALAFCO for the retirement of long-time Executive Officer Mike Ott (in addition to regular quarterly expenses); Insurance Expenses (54.3%) reflecting payment of the annual premium for the officers and directors liability policy (there will be another annual premium in the second quarter for the property insurance policy); and Best Practices/White Papers (56%) due to the legal review of the White Paper on Ag Preservation Policies. Pursuant to the Board s direction in July, a transfer of $4,000 into Fund Reserves was completed. Overall the Association is in strong financial shape at the end of the first quarter of FY with member dues clearly covering the first quarter expenses. There will be a large amount of activity reflected in the next quarterly review to show the revenue and expenses for the Annual Conference. As the fiscal year progresses, we will see revenues level off and expenses increase. ATTACHMENTS 3a Quarterly Budget Report 3b Quarterly Balance Sheets 25

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27 CALAFCO Adopted Budget Fiscal Year INCOME Actuals REV Adopted Budget FY % of Budget 4000 DUES 4100 Member Dues 4110 Member LAFCos 200, , % 4220 Associate Members 4221 Gold Associate 4,000 6, % 4222 Silver Associate 4,800 7, % Total 4220 Associate Members 8,800 13, % Total 4100 Member Dues 208, , % 5000 CONFERENCES/WORKSHOPS/TRAINING 5100 Conferences 0 152, % 5200 Workshops 0 32, % 5300 Training Classes - CALAFCO U 0 3, % Total 5000 CONFERENCES/WORKSHOPS/TRAINING 0 187, % 5400 OTHER REVENUES 5500 Publication sales 0 1, % 5600 Miscellaneous revenue % 5700 Dividends & Interest % Total 5400 OTHER REVENUES 470 2, % Total Operating Revenues 209, , % Carryover from all prior years 30,383 30, % Total Income 239, , % EXPENDITURES 7000 BOARD EXPENSES 7010 Board Meeting Expenses 950 5, % 7020 Board Legal Services 1,382 7, % Total 7000 BOARD EXPENSES 2,332 12, % 7100 PROFESSIONAL SERVICES 7110 Executive Director 7111 Executive Director Contract 30, , % 7112 Executive Director Expenses 2,084 6, % 7115 Executive Director Transportation 300 1, % Total 7110 Executive Director 33, , % 7120 Legal Services - General 28 5, % 7130 Tax and Accounting Services 2,400 9, % 7140 LAFCo Stipends - Staff 7141 Executive Officer stipend 0 6, % 7142 Dep Executive Officer stipend 0 12, % Total 7140 LAFCo Stipends - Staff 0 18, % 7150 Administrative Services 6,818 26, % 7160 Other Professional Services 2,502 10, % Total 7100 PROFESSIONAL SERVICES 45, , % 27 Board Cash _REV for packet UPDATED 11/20/2017

28 Actuals REV Adopted Budget FY % of Budget 7500 OFFICE EXPENSES 7510 Office Rent 3,564 16, % 7520 Equipment Usage 450 1, % 7530 Supplies and Other Office 363 2, % 7540 Printing-Copying-Postage 109 2, % 7550 Communications 339 1, % 7560 Insurance Expenses 1,358 2, % 7570 Bank & Investment Expenses % 7580 Accredidations &Subscriptions 228 2, % 8510 Web Site Expenses 294 2, % 8520 Publications Expenses 8521 Newsletter Expenses 0 3, % 8522 Member Directory 0 2, % 8523 LAFCo Brochures % Total 8520 Publications Expenses 0 5, % 8540 Tax & Corp Filing Expense % Total 7500 OFFICE EXPENSES 6,936 38, % 8000 CONFERENCES 8010 General 0 100, % 8020 Legal 0 4, % 8030 Administrative Services 0 5, % Total 8000 CONFERENCES 0 110, % WORKSHOPS 8110 General 0 27, % 8120 Legal 0 3, % 8130 Administrative Services 0 4, % Total 8100 WORKSHOPS 0 34, % 8200 TRAINING - CALAFCO U 8210 General 0 2, % 8230 Administrative Services 0 1, % Total 8200 TRAINING - CALAFCO U 0 3, % 8300 LEGISLATIVE SERVICES 8320 Legis Comm - General Exp 0 2, % 8330 Legis - Bill Tracking Service 0 2, % 8340 Legis - Legal Services 0 8, % Total 8300 LEGISLATIVE SERVICES 0 12, % 8400 RESEARCH & INFORMATION 8410 Best Practice/White Papers 1,679 3, % Total 8400 RESEARCH & INFORMATION 1,679 3, % Subtotal Expenses 56, , % Contingency 0 14, % Total Expense 56, , % Transfer to Fund Reserve 4,000 4, % Net Balance 179,698 0 For Internal Use Only 28 Board Cash _REV for packet UPDATED 11/20/2017

29 California Association of Local Agency Formation Commissions Statement of Financial Position # September 30, 2017 ASSETS Current Assets Checking/Savings 1000 CASH Assets 1050 US Bank - Checking 69, US Bank - Savings/Overdraft 5, LAIF - Short Term Investments 354,358 Total 1000 CASH 428,456 Total Checking/Savings 428,456 Accounts Receivable 1100 ACCOUNTS RECEIVABLE 1105 LAFCo Member Dues Associate Member Dues 1, Conferences/Workshops/Trainings 0 Total 1100 ACCOUNTS RECEIVABLE 1,800 Total Accounts Receivable 1,800 Other Current Assets 1400 OTHER ASSETS Comments 1460 Deposits and Prepaid Expenses 37, /2018 Conf and 2017 Workshop Total 1400 OTHER ASSETS 37,000 Total Other Current Assets 37,000 Total Current Assets 467,256 TOTAL ASSETS 467,256 LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable 2000 ACCOUNTS PAYABLE 18,639 Pamela, Jeni, Clark and AMG Total Accounts Payable 18,639 Other Current Liabilities 2100 ACCRUED LIABILITIES 2160 Deferred Conf/Wrk Rev and Exp 106, Conference - Oct Deferred Membership Dues Accrued Expenses 0 Total 2100 ACCRUED LIABILITIES 106,165 Total Other Current Liabilities 106,165 Total Current Liabilities 124,804 Total Liabilities 124,804 Equity 3900 Unrestricted Net Assets 26,383 Carryover 3910 Fund Reserve 162,754 Net Income 153,315 Total Equity 342,452 See analysis below for breakdown TOTAL LIABILITIES & EQUITY 467,256 Net Balance - All prior and current year surpluses 179,698 Fund Reserve 162,754 Total Equity 342,452 For Internal Use Only Page 3 of 3 29

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31 BOARD OF DIRECTORS MEETING STAFF REPORT 8 December 2017 Agenda Item No. 4 Local Agency Investment Fund Report Prepared By: Stephen Lucas, Executive Officer Date: 8 December 2017 RECOMMENDATION DISCUSSION 1. Receive and file report The Association's reserve funds are deposited in the State of California Local Agency Investment Fund (LAIF) account. The balance in the LAIF account as of September 30, 2017, was $354, Interest with the LAIF account is credited on a quarterly basis with interest earned in one quarter being posted in the next quarter. The interest rate for the fourth quarter ending June 30, 2017 averaged 0.929% earning $ of interest income credited in the first quarter of FY Deposits into the LAIF account from checking in the first quarter (ending September 30, 2017) totaled $200,000, which reflects membership dues and some conference revenue. The LAIF account balance is typically higher in the first half of the year as it reflects major revenue from the conference and member dues and lower in the second half reflecting ongoing operational expenses. 31

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33 Prepared By: BOARD OF DIRECTORS MEETING STAFF REPORT 8 December 2017 Agenda Item No. 5 Board Committee Appointments Pamela Miller, Executive Director Date: 8 December 2017 RECOMMENDATION DISCUSSION 1. Make Board member appointments to the Legislative, Elections, Awards, and Conference committees. Each year the Board of Directors approves the appointment of Board members to the four standing CALAFCO committees. Those committees are the Legislative Committee, Board Recruitment Committee, Achievement Awards Committee, and Annual Conference Planning Committee. The goal is to have all Board members participating on at least one (preferably more) committee. Legislative Committee Pursuant to CALAFCO Policy 4.5, your board appoints five members to the Legislative Committee. There is one voting member and one alternate for each of the four regions, and one voting member and one alternate at-large. Because a quorum consisting of at least 50% of the appointed Board members is required for the Legislative Committee to take action and make decisions, attendance and participation is critical. There is a time commitment of approximately six to eight meetings during the year, which are a combination of in-person and conference calls. The in-person meetings are rotated throughout the state and can be joined by conference call if necessary. Additionally, as legislation can move very quickly, timely responses are also needed as part of participation. This committee requires a rather large time commitment on behalf of the members. Achievement Awards Committee Each year at the annual conference CALAFCO presents achievement awards to LAFCos and LAFCo personnel throughout the state based on nominations received from the membership. The charge of this committee is to help solicit, review, and select the achievement award recipients based on all nominations received. There is typically a LAFCo or CALAFCO staff person who assists the committee with this charge by coordinating the applications and meeting schedules. The time commitment required is a number of hours for full review of all applications (could be as many as 50 applications) and the selection process. There are typically two conference calls and some work done by for this committee. The first call is to set the scope of work and the second is to select the award recipients. Presentation by several committee members may be required at the annual conference. This committee should have one representative from each region as well as an at-large representative. 33

34 Election Committee Pursuant to CALAFCO Policy 5.5, each year the Board shall appoint an Election Committee of four members of the Board, one from each region, whose term is not ending in the coming year. The goals of the Committee are to provide oversight of the elections process and to encourage and solicit candidates by region who represent member LAFCos across the spectrum of geography, size, and urban suburban and rural population if there is an open seat for which no nominations papers have been received close to the deadline. They are assisted in the election oversight process by the four regional representatives appointed (Executive Officer and 3 Deputy Executive Officers). These committee members and staff conduct the election onsite during the caucuses. CALAFCO staff assists the Chair and committee with the execution of the nomination materials pursuant to the Policy requirements. The Board members who are eligible to serve on this committee, given the requirements outlined in the Policy, are: Northern: Bill Connelly, Debra Lake Coastal: Margie Mohler, Susan Vicklund Wilson Southern: Mike Kelley, Jo MacKenzie Central: Bill Kirby, Anita Paque Conference Planning Committee The annual conference planning committee typically has several members of the Board as participants. In accordance with CALAFCO Policy 4.2, the Program Committee may be chaired by a Board member who is appointed by the Chair of the Board. As one of the year s highlights, the annual conference requires a great deal of planning. A number of LAFCo personnel from throughout the state as well as other LAFCo Commissioners volunteer to participate in the program planning. Work is typically done through s and conference calls scheduled throughout the year. Calls are usually one hour in length and there approximately 8 planning calls. Committee members also volunteer to plan specific sessions during the conference. Participation from all four regions is necessary to ensure a properly balanced conference agenda. Now that CALAFCO is hosting the conference, Board member participation is critical. For continuity, it is also best to have the previous committee chair be a member of the following year s committee. 34

35 BOARD OF DIRECTORS MEETING STAFF REPORT 8 December, 2017 Agenda Item No. 6 Appointment of CALAFCO Deputy Executive Officer Prepared By: Pamela Miller, Executive Director and Stephen Lucas, Executive Officer Date: 8 December, 2017 RECOMMENDATIONS 1. Receive and file the appointment of Martha Poyatos as CALAFCO Deputy Executive Officer (DEO). DISCUSSION CALAFCO is staffed by a combination of contract and volunteer staff. The Association s Policies and Procedures provide that the Board appoint the Executive Officer (EO) upon recommendation of the Executive Director (ED); and that the CALAFCO EO appoint up to three DEOs in consultation with the ED. The Board s policies also provide that in as much as possible, the EO and DEOs shall include one member from each of the four regions. Current volunteer staff include Stephen Lucas, EO (Northern Region), David Church, DEO (Coastal Region), Carolyn Emery, DEO (Southern Region) and Christine Crawford, DEO (Central Region). As of December 8, 2017, David Church will step down from his role as DEO after four years of service. Staff has recruited Martha Poyatos (Coastal Region) to fill the DEO vacancy created by David, who has served CALAFCO with the utmost distinction these past four years. Martha is the San Mateo LAFCo Executive Officer. She began working at San Mateo LAFCo in 1993 and was appointed Executive Officer in Martha holds Bachelor of Arts Degrees in History and Spanish from S.F. State University, a Masters of Public Administration from Cal State Eastbay and a Certificate from the U.C. Berkeley Executive Seminar. During her tenure with San Mateo LAFCo she has processed many complex reorganization proposals including consolidation of fire districts, district dissolutions and formation of a community services district that supplanted a sanitary district. Her 24-year tenure with LAFCo makes her very well qualified to serve CALAFCO and she has the unanimous support of her commission. The current CALAFCO EO, in consultation with the CALAFCO ED, has appointed Martha as CALAFCO DEO effective December 8, We would like to acknowledge and thank the dedication and hard work David offered CALAFCO over the past four years. He chaired the program committee for the 2015 and 2016 annual conferences and coordinated CALAFCO U sessions in 2014 and 2017, among many other contributions. We appreciate the efforts and contributions of all of the CALAFCO volunteer staff. 35

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37 Prepared By: BOARD OF DIRECTORS MEETING STAFF REPORT 8 December, 2017 Agenda Item No Legislative Issues and Policies Pamela Miller, Executive Director Date: 8 December, 2017 RECOMMENDATIONS 1. Discuss League of California Cities request for CALAFCO support and involvement in 2018 legislation dealing with incorporation and inhabited annexation funding; 2. Either provide direction or input to Legislative Committee, as desired, on 2018 Legislative Issues and Policies, or re-affirm current Legislative Issues and Policies for 2018; 3. Provide direction to Legislative Committee on legislative priorities for EXECUTIVE SUMMARY There are several parts to this report, all of which are detailed in the discussion section below. First you will receive a presentation by the League of California Cities (League) regarding their request for CALAFCO s support for legislative efforts in 2018 to restore fiscal incentives (eliminated by the passage of SB 89 of 2011) that previously supported city incorporations and annexation of inhabited territory. This will be one of a number of things for your Board to consider as part of CALAFCO s legislative action priorities for The report outlines the known legislative issues on the horizon for consideration. Also for consideration is any follow up action the Board wishes to take resulting from the final recommendations in the Little Hoover Commission (LHC) report. You are also being asked to either re-affirm the current Legislative Issues and Policies for 2018 or provide direction to the Legislative Committee (Committee) for any desired changes your Board wishes to make. DISCUSSION Legislative Update 2017 in the review mirror In the first year of the two-year legislative cycle, the Legislature introduced 2,980 bills. Of those, 1,189 were signed by the Governor, 118 were vetoed, and 1,673 fell into the other category. This means they either died or are now a two-year bill. CALAFCO tracked 22 bills in 2017 and took formal positions on 11 of those bills. In a year that was supposed to be entered into with a light legislative plate, we assumed a lot of responsibility sponsoring three bills. AB 1325 (Omnibus), AB 464 (Gallagher) and AB 979 (Lackey 37

38 co-sponsored with CSDA) were all signed into law by the Governor. While that is great news for us, it was not without a great deal of effort and resource expenditure. In addition, CALAFCO was intimately involved with SB 448 (Wieckowski) and expended huge resources to get the bill amended (six times) and move our position from Oppose to Support. Adding in at least three bills that were introduced bypassing LAFCo, the Assembly Local Government Committee s (ALGC) oversight hearing on healthcare districts in early spring, and dealing with the LHC s ongoing study of districts and LAFCos, it was a very full year. We can be proud of our efforts and outcomes. A full legislative report for 2017 was provided at the Annual Conference. And as always, you can download the CALAFCO tracked bills and Capitol Track daily report from the CALAFCO website. RECOMMENDATION No action is required for this portion of the report. Legislative Policies for 2018 In 2007 your Board adopted a comprehensive set of legislative policies and procedures. The Legislative Policies serve as the guideposts for the Committee and the work of staff during the legislative session and with other stakeholders. The CALAFCO legislative procedure calls for the Board s annual review and adoption of the policies. Your Board adopted the current Policies and Priorities in January 2017 and they are included as attachment 7b. Additionally, from time to time the Board requests the Committee to review the Policies and make recommended changes to the Board. If your Board would like the Committee to conduct this review, they can do so at the December 15 meeting. Any recommendations made would then be considered by your Board at your next meeting on February 23, RECOMMENDATION Either provide direction or input to Legislative Committee, as desired, on 2018 Legislative Issues and Policies, or re-affirm current Legislative Issues and Policies for For CALAFCO consideration in 2018 looking ahead The coming year is shaping up very early to be busy once again. The Committee had its first conference call November 17 and the draft minutes for that meeting are included as attachment 7e. As a follow up to last year s commitment by the Board to the Committee to make the leftover items from the 2017 Omnibus bill priority for the 2018 Omnibus, the Committee is set to review those seven items in detail at their December 15 meeting. Because there were so many items carried over and because of the commitment made to make those items priority, the Committee Chair and Omnibus lead determined it was best not to seek additional proposals for inclusion this year. In late September, CALAFCO received a letter from the League, included as attachment 7c. The specific request is for CALAFCO s support for legislative efforts in 2018 to restore fiscal incentives (eliminated by the passage of SB 89 of 2011) that previously supported city incorporations and annexation of inhabited territory. The lack of financial incentive for these types of actions should be of great concern to LAFCos. The League has been leading the charge over the past several years on this issue and they are now asking for CALAFCO s help. Today your Board will hear directly from Dan Carrigg, League Deputy Executive Director and Legislative Director, and Michael Coleman, a leading expert of CA local government revenue on their request. Simply put, the League has secured authors for bills they intend to sponsor (one addressing 38

39 incorporations and one addressing inhabited annexations) and are asking CALAFCO for strong support in their efforts. After a brief presentation from Dan and Michael and the opportunity for questions and answers, your Board will be asked to consider this request along with all of the other possible issues for 2018 as you deliberate on CALAFCO s legislative priorities for action in The knowns are listed below. The unknowns, and we know there will be several, will be dealt with as they arise. It is always wise to leave room on the plate for our ability to effectively respond to those unknowns. Other known issues of importance for consideration include: 1. Little Hoover Commission (LHC) follow up. There are several recommendations from the LHC report worthy of considering follow up action. It is incumbent on CALAFCO to initiate any desired action rather than to wait for the Legislature to do it for us. Rarely do those instances work out in our favor. In addition, the CALAFCO working group on LHC generated several good ideas that did not make it into the LHC final report. Here are the follow up items for discussion: a. The Legislature should provide one-time grant funding to pay for specified LAFCO activities, to incentivize LAFCOs or smaller special districts to develop and implement dissolution or consolidation plans with timelines for expected outcomes. Funding should be tied to process completion and results, including enforcement authority for corrective action and consolidation. CALAFCO would add to that the funding to conduct the now mandatory dissolution of inactive districts (pursuant to SB 448). Should we decide to pursue this, the timing is such that it needs to be done immediately. We will not make the initial budget but may be able to make a May revise addition. It may, in fact, take several years of effort to succeed (if at all). As this is new territory for CALAFCO, I expect it will take a great deal of resources to navigate the process. Staff has already had meetings with several people regarding the potential process, and Director Leopold is set to meet with Secretary Laird on this matter prior to your Board meeting. b. The Legislature should convene an advisory committee to review the protest process for consolidations and dissolutions of special districts and to develop legislation to simplify and create consistency in the process. Protest provisions have long been discussed by CALAFCO as inconsistent, difficult to understand/track, and a big impediment to LAFCo-initiated actions. Several times recently the Committee and your Board have considered changes to these provisions which did not entail a total re-write (but rather a change to only one portion). However due to limited resources and other priorities, those changes fell down the priority list. The LHC heard CALAFCO when we said the protest provisions were a great deterrent for many LAFCos to initiate any kind of district action. Staff believes this discussion is a two-year discussion and should be led by the ALGC and/or the Senate Governance and Finance Committee (SGFC). This discussion will require the gathering of a number of stakeholders and many conversations, as well as CALAFCO coming to the table with some critical data points to support our views. Staff feels this should be undertaken in the same fashion any other major legislative re-write has been, and to begin the process CALAFCO should discuss this with staff of both committees and send a formal request to the Chairs for both committees. 39

40 c. The Legislature should adopt legislation to give LAFCO members fixed terms, to ease political pressures in controversial votes and enhance the independence of LAFCOs. The intent of this recommendation, which was offered by CALAFCO, is to have the appointing body (County, City Selection Committee and Special District Selection Committee) appoint their representatives to a fixed term rather than at the will of the appointing body. This was to help address political pressures felt by some of the appointees. Staff does not feel this is a top priority at this time given the other things on the table for consideration. d. Give LAFCo authority, under certain conditions, to create/approve variances of the composition of a legislative body currently authorized by the principal acts or other procedural/structural requirements that restrict a local LAFCo from efficiently and constructively taking action to address a desired action. This recommendation was generated by the CALAFCO working group and did not make it into the final LHC report. The working group felt strongly this kind of authority would eliminate many of the one-off bills being introduced that form districts with governing boards or authorities beyond the scope of LAFCos current approval authority (outside the scope of the principal act). This is a recommendation worthy of considering for a bill in e. Support the municipal service review process by requiring affected local agencies to provide written responses to any recommended actions made by LAFCo in preparing determinations. Give LAFCo the authority to require the service provider to report back to the LAFCo on any determinations within the timeline prescribed by the LAFCo. Require the service provider to hold a noticed public hearing to discuss the MSR or special study during the MSR/Special Study s official public comment period. Also generated by the working group and not included in the final report, this recommendation gets at holding service providers more accountable to the LAFCo and to their constituents for the studies conducted by LAFCo. During the LHC roundtable discussions, there was some pushback from CSDA on this recommendation and it will require, if pursued, a lot of stakeholder outreach. A definitive process would need to be created that all parties can agree to in order for CALAFCO to be successful in implementing this idea legislatively. Staff feels this is a good recommendation but does not rise to the level of importance for immediate consideration. 2. Drinking water and wastewater and disadvantaged communities. Staff is aware that Senator Hertzberg has been approached by environmental justice groups to author a bill to address the ongoing issue of access to safe drinking water and adequate wastewater. This is an issue previously championed by Senator Wolk. CALAFCO expended significant resources in 2016 on SB During the 2017 year, CALAFCO was contacted by the Senator s staff regarding the inclusion of these issues into SB 778, now a two-year bill. In July of this year CALAFCO received confirmation this was still on the Senator s radar. CALAFCO staff reached out to the Senator s staff recently to discuss the bill and is awaiting response. 40

41 Additionally, Assemblymember Caballero has AB 577, a two-year bill on expanding the definition of disadvantaged communities. The direction of the bill is uncertain at this time but staff anticipates it will require some attention on our part. 3. New process for forming water districts. CALAFCO was contacted by the lobbyist for Eastern Municipal Water District (EMWD) and we are all scheduled to meet in Sacramento prior to your Board meeting to discuss a bill they are sponsoring which will impact LAFCos. While the details of their bill are still unclear, I believe EMWD wants the State Water Resources Control Board (SWRCB) to have the authority to form new water districts by reorganizing public, mutual and private water agencies. The SWRCB currently has authority to mandate consolidations, but not formation of new districts. A verbal update will be provided to your Board during today s meeting when I have obtained more information about the intent of their bill. I envision this bill requiring a fair amount of CALAFCO resources. As you can see, there is much on the immediate horizon. Staff expects affordable housing, transportation, water, emergency response and greater transparency to all be key issues for debate in Sacramento this coming year. We can also expect to see more one-off bills affecting LAFCo. Verbal updates on any item noted above will be provided during today s meeting as CALAFCO has meeting scheduled on many of them between the time of writing this report and your meeting date. RECOMMENDATION Provide direction to Legislative Committee on legislative priorities for ATTACHMENTS 7a Letter from League of California Cities requesting legislative involvement 7b 2017 CALAFCO Legislative Policies 7c Draft minutes of November 17, 2017 Legislative Committee meeting 41

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43 1400 K Street, Suite 400 Sacramento, California Phone: Fax: September 28, 2017 To: Members, Board of Directors, CALAFCO Pamela Miller, Executive Director, CALAFCO From: Dan Carrigg, Deputy Executive Director/Legislative Director, League of California Cities Re: Request for CALAFCO s support for legislative efforts in 2018 Session to restore fiscal incentives (eliminated by the passage of SB 89 of 2011) that previously supported city incorporations and annexation of inhabited territory. Summary: Since the passage of SB 89 in 2011, a budget trailer bill that swept over $200 million annually in vehicle license fees from cities including special allocations that supported city incorporations and provided incentives for cities that annexed inhabited territory new city formation and many potential city annexations are no longer financially viable. Over the last seven years, legislative efforts have focused on providing a fix for four recently incorporated cities in Riverside County, which were severely harmed by the passage of SB 89. A breakthrough occurred in 2017 with the passage of SB 130 that provides a financial fix for the four cities. With the issue of the four cities finally addressed, the policy discussion must resume over how to restore opportunities for new incorporations and incentives for city annexations of inhabited territory. Given the mission of Local Agency Formation Commissions (LAFCOs), CALAFCO should be part of that effort. Solution: Introduce and support legislation in the 2018 Session that makes available the same financial fix for new incorporations and annexations that the Legislature provided to the four recently incorporated cities via the passage of SB 130. Policy Benefits Associated With a Solution: Enabling additional city incorporations and restoring fiscal incentives to encourage city annexations of inhabited areas provides benefits to both the affected communities and advances various LAFCO policy goals. In recent years, the state has enacted laws designed to promote compact growth and reduce vehicle miles traveled and greenhouse gas emissions. All these policy objectives are advanced when new cities form or unincorporated inhabited populations are annexed and LAFCO policies guide future city boundary expansion. City Incorporations: The urge for cityhood and local self-government springs from the residents of a community as they seek the benefits of local democracy; it is a chance to control their destiny, improve services and quality of life. In the Sacramento area, the City of Rancho Cordova along with neighboring cities of Citrus Heights and Elk Grove are outstanding examples of how empowering residents with more control over their destiny can improve a community. City incorporation also advances state policies. The land-use patterns of unincorporated areas often have not been subject LAFCO review. A LAFCO s primary role is to approve boundary changes while reducing sprawl and promoting orderly development, including protecting sensitive open space and farmland. LAFCOs must review the fiscal viability of any proposed city, which then must also be approved by local voters. After a city incorporates, population densities tend to increase and future expansion of the city must be approved by LAFCO. The newly incorporated city also becomes eligible for other state and federal funding resources available for cities. 43

44 City Annexations: Various existing LAFCO policies support and encourage the annexation of inhabited county islands and adjacent disadvantaged unincorporated areas to consolidate and improve local service delivery. Since the passage of SB 89, however, many such annexations simply do not pencil-out for cities to absorb new population and provide associated services. Fiscal Background: History of the VLF and 2004 VLF-Property Tax Swap: Prior to 1998, cities had three major sources of revenue: property tax; sales tax; and vehicle license fee (VLF) revenue. VLF originated as a local property tax levied on vehicles until 1933 when the Legislature standardized collection with a statewide system. The state-collected VLF was divided among cities and counties. The city portion was allocated on a per-capita basis, such that a city that annexed an inhabited area would receive a greater share of the VLF revenue allocated among cities. A city incorporation would also receive an allocation of VLF according to their population from this city pot. 1 Then in 1998, during a good-budget year for the state, legislators became enamored with the idea of cutting the car tax from 2 percent to 0.65 percent with promises to backfill local agencies for their losses. That commitment lasted only briefly. As state budget difficulties returned in the early 2000 s legislators questioned the backfill to local agencies and balked at the notion of allowing the triggers to be pulled which would allow VLF to be collected at its previous level of 2 percent. In 2004, this uncertainty was resolved with the VLF-Property Tax Swap that was solidified and constitutionally protected in Proposition 1A of The VLF-Property Tax Swap allowed all cities and counties in existence on that date to permanently swap dollar-for-dollar the amounts owed to them as VLF backfill for increased shares of local property tax. 2 The League advocated for the VLF-Property Tax Swap to also address future incorporations and annexations, but the fix did not make it into the final package. While all cities and counties in existence in 2004 were kept whole by the VLF-Property Tax Swap, the policy issue of how to address future incorporations or inhabited annexations was unresolved: unlike existing cities, there was no VLF or Property Tax in lieu of VLF provided to future incorporations or annexations. By neglecting this, the VLF-Property Tax Swap created a major impediment for future incorporations and inhabited annexations. AB 1602 (Laird) of 2006 provided solution for incorporations and annexations: The League worked with Assembly Member John Laird to fashion AB 1602, which addressed the lack of VLF for annexations and incorporations by providing newly incorporated cities and cities that annexed inhabited areas with permanent increased shares of the small pool of remaining city VLF. Four cities in Riverside County Eastvale, Wildomar, Menifee and Jurupa Valley all formed with reliance on these revenues. The incentives offered for inhabited annexations also triggered significant activity. Dozens of cities, including Fontana, San Jose, Chico, Temecula, Santa Clarita, San Ramon, Porterville, Visalia, San Bernardino, Tulare, Corcoran, Reedley, and Newport Beach annexed unincorporated areas in reliance on these revenues. SB 89 of 2011 sweeps all VLF revenue from recent incorporations and annexations: In 2011, during another state budget crisis, the Legislature passed SB 89 quickly with no public hearings and swept all of the remaining VLF funds as part of a budget solution. In so doing, the AB 1602 VLF-Property Tax swap patch was wiped out causing massive immediate financial losses to the four newly 1 County VLF allocations are not affected by city incorporations or annexations. 2 The additional property tax is shifted from schools. Schools are held harmless with compensating funding from the state general fund. 44

45 incorporated cities and dozens of cities that had annexed inhabited areas since New incorporations and inhabited annexations have been once again disincentivized. SB 130 of 2017 resolves four city problem via amendment to the VLF-Property Tax Swap: SB 130 resolves the problem created by SB 89 for the four Riverside County cities by providing those cities with shares of property tax to offset the amount of vehicle license fee revenue they would have received. SB130 essentially sets up these cities with Property Tax in Lieu of VLF just like other cities. While SB 130 does not resolve issues associated with future incorporations and annexations, it provides the legislative template to address these issues in the future. 45

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47 CALAFCO 2017 Legislative Policies As adopted by the Board of Directors on 12 January LAFCo Purpose and Authority 1.1. Support legislation which enhances LAFCo authority and powers to carry out the legislative findings and authority in Government Code et seq., and oppose legislation which diminishes LAFCo authority Support authority for each LAFCo to establish local policies to apply Government Code et seq. based on local needs and conditions, and oppose any limitations to that authority Oppose additional LAFCo responsibilities which require expansion of current local funding sources. Oppose unrelated responsibilities which dilute LAFCo ability to meet its primary mission Support alignment of responsibilities and authority of LAFCo and regional agencies which may have overlapping responsibilities in orderly growth, preservation, and service delivery, and oppose legislation or policies which create conflicts or hamper those responsibilities Oppose grants of special status to any individual agency or proposal to circumvent the LAFCo process Support individual commissioner responsibility that allows each commissioner to independently vote his or her conscience on issues affecting his or her own jurisdiction. 2. LAFCo Organization 2.1. Support the independence of LAFCo from local agencies Oppose the re-composition of any LAFCo to create special seats and recognize the importance of balanced representation provided by cities, the county, the public, and special districts in advancing the public interest Support representation of special districts on all LAFCos in counties with independent districts and oppose removal of special districts from any LAFCo Support communication and collaborative decision-making among neighboring LAFCos when growth pressures and multicounty agencies extend beyond a LAFCo s boundaries. 3. Agricultural and Open Space Protection 3.1. Support legislation which clarifies LAFCo authority to identify, encourage and ensure the preservation of agricultural and open space lands Encourage a consistent definition of agricultural and open space lands Support policies which encourage cities, counties and special districts to direct development away from prime agricultural lands Support policies and tools which protect prime agricultural and open space lands Support the continuance of the Williamson Act and restoration of program funding through State subvention payments. 4. Orderly Growth 4.1. Support the recognition and use of spheres of influence as a management tool to provide better planning of growth and development, and to preserve agricultural, and open space lands. 47