LAFCO Policy & Procedures

CHAPTER V. — POLICIES THAT MAY APPLY FOR SOME APPLICATIONS

This section includes specialized policies, requirements and criteria that apply to some LAFCO actions or will be triggered by some applications. There may be cases where the Commission must use its discretion in the application of these policies, so that potential or real conflicts among policies are balanced and resolved based on project specifics and consistent with the requirements of Cortese-Knox-Hertzberg.

A. SPECIAL STUDIES

Among the purposes of LAFCO of Mendocino County are the discouragement of urban sprawl and the encouragement of the orderly formation and development of local agencies based upon local conditions and circumstances. One of the objectives of the Commission is to make studies and obtain and furnish information which will contribute to the logical and reasonable development of local agencies so as to advantageously provide for the present and future needs of each county and its communities. [565301]

1. The Commission shall initiate and make studies of existing governmental agencies. Special studies shall include, but not be limited to, inventorying those agencies and determining their maximum service capabilities. In conducting those studies, the Commission may ask for land use information studies, plans of cities, districts, including school districts, community college districts, regional agencies and state agencies and departments. [56378]

2. Cities, counties, districts, regional agencies and state agencies and departments shall comply with the requests of the Commission for that information and the Commission shall make its studies available to public agencies and any interested person. [56378]

3. The Commission may apply for or accept, or both, any financial assistance and grants-in-aid from public or private agencies or from state or federal government or from a local government. [56378]

B. REORGANIZATION

Reorganization means any two or more changes of government initiated in a single proposal [56073]. Reorganization may be initiated by petition of registered voters or landowners, by resolution of the governing body of an affected agency or by LAFCO. (See Section C below, LAFCO Initiated Proposals)

Petition Signature Requirements

1. A petition for reorganization shall be signed so as to comply with the applicable signature requirements for each of the various changes of organization proposed in the petition. [56864.1(a)]

2. If a proposal for reorganization includes a proposal for the formation of a new district, the petition shall comply with the signature requirements, if any, of a petition for formation of a district as set forth in the principal act designated in the petition for formation. If there are no requirements in the principal act then the requirements of C-K-H as to dissolutions as indicated in Section 56870 shall be met [56864.1(b)].

3. If a person is qualified to sign for two or more of the changes of organization proposed by the petition that person need sign only once and his/her signature shall be counted as if that person had signed and requested each change of district [56854.3].

4. Petitions for the consolidation of two or more districts shall be signed as follows: For registered voter districts, by not less than 5 percent of the registered voters within each of the several districts [56865(a)] For landowner districts, by landowner-voters within each of the several districts constituting not less than 5 percent of the number of landowner-votes owning land within each of the several districts and who also own not less than 5 percent of the assessed value of land within each of the several districts [56865(b)].

5. Petitions for a merger of a district of limited powers, which overlaps a city, or for the establishment of the district as a subsidiary district of the city, shall be signed as follows. For a resident voter district, by either of the following: Five percent of the registered voters of the district or; five percent of registered voters residing within the territory of the city outside the boundaries of the district [56866(a)]. For a landowner-voter district, by either of the following: Five percent of the number of landowner-voters within the district who also own not less than 5 percent of assessed value of land within the district or; five percent of the registered voters residing within the territory of the city outside the boundaries of the district [56866(b)].

6. Petitions for the dissolution of a district shall be signed as follows except as otherwise provided in Section 56871: For resident voter districts by either of the following: Not less than 10 percent of registered voters within a district or; not less than 10 percent of the number of landowners within the district who also own not less than 10 percent of the assessed value of land within the district [56870(a)]. For landowner-voter districts, by not less than 10 percent of the number of landowner-voters within the district who also own not less than 10 percent of the assessed value of land within the district [56870(b)].

7. Petitions that include the annexation of territory to or detachment of territory from a district shall be signed as follows: For a registered voter district, by any of the following: Not less than 25 percent of the registered voter within the district proposed to be annexed or detached or; not less than 25 percent of the landowners within the territory proposed to be annexed or detached who also own not less than 25 percent of the assessed value of land within the territory [56864(a)]. For a landowner-voter district, by not less than 25 percent of the number of landowners owning land within the territory proposed to be annexed who also own not less than 25 percent of the assessed value of land within the territory [56864(b)].

Note: Mandatory Approval of Reorganization if Requested by Two or More Agencies

8. If a majority of the members of each of the legislative bodies of two or more local agencies adopt substantially similar resolutions of application making a proposal either for the consolidation of districts or for the reorganization of all or any part of the districts into a single local agency, the commission shall approve, or conditionally approve the proposal. The Commission shall order the consolidation or reorganization without election, except as otherwise provided in Section 57081(b). [56853(a)]

9. The commission shall not order a material change in the provisions of a consolidation or reorganization, as set forth in the proposals of the local agencies that would add or delete districts without the written consent of the applicant local agencies [56853(d)].

10. The commission may order material changes in the provisions or the terms and conditions of the consolidation or reorganization provided: The subject agencies have given their written consent for such changes 56853(b)] If each agency has not given written consent, each subject agency has been given mailed notice of any proposed change prior to ordering the change and the subject agencies have had 30 days to respond and have not requested a separate noticed hearing on the proposed changes [56853(b)]. If a separate noticed hearing is requested on the proposed changes, at that hearing commission may make changes to the terms and conditions as it considers appropriate [56853(b)].

C. LAFCO INITIATED PROPOSALS

LAFCOs are authorized to initiate proposals for consolidation of special districts, dissolution of special districts, mergers of special districts, establishment of special districts as subsidiary districts to cities, or reorganizations that include any of the preceding changes of organization [56375(a), 56378, and 56425]. (See Chapter V, Section B above, Reorganization.)

1. It shall be LAFCO policy that prior to approving a LAFCO initiated change of organization or reorganization, two studies will be conducted. Initially, the Commission will prepare a Sphere of Influence Study or other Special Study in accordance with state law. Based upon the conclusions of the first study, the Commission will determine whether to conduct a Reorganization Study to comprehensively investigate proposed changes of organization. (See Chapter V, Section B, Reorganization below)

2. A Sphere of Influence Study or a Special Study may be initiated by the Commission [56378, 56425].

3. Affected agencies will be notified in writing of an impending Sphere of Influence Study or Special Study.

4. A Sphere of Influence Study or Special Study will be scheduled for consideration by the Commission at a noticed public hearing. At the hearing, the Executive Officer will present a report and recommendation to either take no further action or conduct a Reorganization Study.

5. A Special Study whose purpose is to gather information may or may not require a CEQA review. A Sphere of Influence Study or Reorganization Study will require a CEQA review.

6. If a determination is made to conduct a Reorganization Study, the Commission will adopt a Resolution of Application that describes the proposed change of organization or reorganization. Where the change of organization or reorganization affects more than one special district, the Commission may decide to use a reorganization committee [56853(c)] Funding for the reorganization committee will be identified in consultation with other agencies.

7. A LAFCO initiated proposal will be considered “submitted” on the date the LAFCO Resolution of Application is adopted. Prior to commencing a Reorganization Study, affected agencies will be given 60 days from the date of the Commission Resolution of Application to submit a resolution proposing a change of organization or reorganization substantially similar to the Commission proposal. If an affected agency submits such a proposal within 60 days, LAFCO will process the affected agency proposal in accordance with LAFCO procedures and take no further action on the Reorganization Study.

8. A Reorganization Study conducted by LAFCO or a Reorganization Committee shall include, but not be limited to, the following: A description of the special district(s), the district(s) sphere of influence and services provided by the district(s). Current and future need of services provided by the special district(s) Alternate means of providing services (e.g. change in government organization or functional realignment of services) Fiscal analysis of existing and alternate means of providing services. Discussion of past reorganization efforts Information identified in a service review conducted in conjunction with the adoption or update of a sphere of influence study Comments from affected public agencies and interested parties

9. If a Reorganization Committee is used, the committee will determine its rules for voting, selection of committee chair, other administrative procedures and additional areas of study beyond that indicated in Item 7 above. The Executive Officer will provide staff support to the Reorganization Committee. At the conclusion of the Reorganization Study, the committee will prepare a recommendation to the Commission that will be incorporated into the Executive Officer’s report and recommendation to the Commission.

10. The Commission will consider the Executive Officer’s report and recommendation concerning the Reorganization Study at a noticed public hearing. At the hearing or within 35 days the Commission may adopt a resolution denying, modifying or approving the proposed change of organization or reorganization.

11. Prior to approving a LAFCO initiated proposal, the Commission must:

Consider any conflicting change of organization or reorganization proposal that was submitted with 60 days from the submission of the LAFCO initiated proposal [56655] Find that public service costs are likely to be less than, or substantially similar to the costs of alternative means of providing the service [56881(b)(1)]
Find that the change of organization promotes public access and accountability for community service needs and financial resources [56881(b)(2)]

12. If a LAFCO initiated proposal is approved, the Commission will order the change of organization or reorganization without an election, provided that majority protest or sufficient petitions requesting an election have not been filed as provided in Sections 56854 and 57113. (See Item 13 and 14 below) The Commission shall not authorize the conducting authority to approve a merger or establishment of a subsidiary district without the consent of the affected city [56854(b).

13. If a LAFCO initiated proposal is wholly denied, the Commission may not initiate a substantially similar proposal for one year, except the Commission may waive this prohibition if the Commission finds that this is detrimental to the public interest [56884].

14. For any proposal initiated by the Commission, a public protest hearing will be held in the affected territory [57008]

15. The Commission will order the change of organization or reorganization subject to an election if it finds either of the following: [57113] For an inhabited territory, that a petition requesting that the proposal be submitted to confirmation by the voters has been signed by at least 10% of the number of landowners within any affected district who own at least 10% of the assessed value of the land within the territory; or at least 10% of the voters entitled to vote as a result of residing within, or owning land within, any affected district within the affected territory. For a landowner-voter district that the territory is uninhabited and a petition requesting that the proposal be submitted to confirmation by the voters signed by at least 10% of landowners within any affected district within the affected territory, who also own at least 10% of the assessed value of land within the territory. If there are less than 300 voters, the petition must be signed by 25% of the voters entitled to vote.

D. SPHERE OF INFLUENCE

LAFCO is required to adopt a sphere of influence for each local agency within its jurisdiction. “In order to carry out its purpose and responsibilities for planning and shaping the logical and orderly development and coordination of local government agencies so as to advantageously provide for the present and future needs of the county and its communities, the commission shall develop and determine the sphere of influence of each local government agency within the county and enact policies designed to promote the logical and orderly development of areas within the sphere.” [56425]

General Policies for Spheres of Influence

1. A sphere of influence is defined as a “plan for the probable physical boundary and service area of a local government agency, as determined by the commission” [56076]. Every determination on changes of organization or reorganization shall be consistent with the spheres of influence of the local agencies affected by that determination [56375.5]. A sphere of influence is primarily a planning tool that will: Serve as a master plan for the future organization of local government within the county by providing long range guidelines for the efficient provision of services to the public. Discourage duplication of services by two or more local government agencies. Guide the Commission when considering individual proposals for changes of organization. Identify the need for reorganization studies and provide the basis for recommendations to particular agencies for government reorganizations.

2. In determining the sphere of influence for all local agencies the Commission is required to consider and make a written statement of determinations with respect to each of the following: [56425(e)] The present and planned land uses in the area, including agricultural and open space lands. The present and probable need for public facilities and services in the area. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The existence of any social or economic communities of interest in the area if the commission determines they are relevant to the agency. Before making these determinations the Commission will review the factors to be considered in the review of a proposal as detailed in Section 56668.

3. When adopting, amending or updating a sphere of influence for a special district the commission shall do all of the following: [56425(h)] Require existing districts to file written statements with the Commission specifying the functions or classes of services provided by those districts. Establish the nature, location and extent of any functions or classes of services provided by existing districts.

4. As mandated by law, in order to prepare and update spheres of influence in accordance with Section 56425, the commission shall conduct a service review of the municipal services provided in the county or other appropriate area designated by the commission [56430]. (See Section D, Service Reviews below)

5. As mandated by law, the adequacy of each adopted sphere of influence will be reviewed every 5 years following the initial sphere determination or initial sphere review. At approximately 5-year intervals, a preliminary sphere evaluation will be conducted by LAFCO. The evaluation will include a recommendation by the Executive Officer to either proceed with a comprehensive sphere update study or to affirm the existing sphere. Each subject agency will be notified of the pending review of its sphere of influence and will be invited to participate actively in any restudy efforts deemed necessary by the Commission. Each agency will complete a sphere of influence questionnaire relating to its services and plans. Failure to respond will be regarded as concurrence with the Executive Officer’s recommendation.

6. Changes in land use, planning policy, demographics, service capabilities, resource availability, increased demand for public services, or requests for changes in organization or reorganization may justify the need to perform a comprehensive update study to amend or affirm spheres of influence.

7. Any person or local agency may file a written request with the Executive Officer requesting a Sphere of Influence Study/Amendment. [56428] The request shall state the nature of the proposed amendment, state the reasons for the request, include a map of the proposed amendment and contain any additional data and information as may be required by the Executive Officer. The Executive Officer shall conduct the study/amendment (1) according to his or her discretion as to size, complexity and inclusion of a need for a service review of the affected agency and (2) according to the provisions of C-K-H as specifically referenced in Section 56428 including CEQA and (3) according to any other provisions of C-K-H and the policies and procedures of LAFCO implementing C-K-H. [56428(g)]

8. Fees for conducting sphere of influence/service reviews shall be apportioned according to the following: The applicant agency is responsible for the cost of a review and revision of sphere of influence studies/service reviews required for changes of organization or reorganization. The affected agency(s) are responsible for the costs of the review and updates required by law every five years. The Commission is responsible for the cost of a LAFCO initiated review and revision of sphere of influence for purposes of Reorganization. LAFCO will seek cooperative cost sharing agreements with the agencies involved. The party that requests a review according to Item 7 above will be charged the actual costs associated with the sphere review and/or amendment including CEQA.

9. Except for minor changes involving one or two parcels, no change of organization or reorganization will be allowed until an initial or 5-year updated sphere of influence review and service review as required by Sections 56425 and 56430 are completed. Agencies may submit proposals for a change of organization or reorganization along with a sphere update study and service review so that they can be conducted concurrently. This would be the most cost effective means of completing the requirements of Sections 56425 and 56430.

10. The Commission may recommend governmental reorganizations to particular agencies in the county, using the spheres of influence as the basis of for those recommendations. The Commission shall make all reasonable effort to ensure wide public dissemination of the recommendations. [56425(g)]

11. The Commission may initiate proposals for consolidation of districts, dissolution, merger, establishment of a subsidiary district or a reorganization that includes any of these changes of organization, if that change of organization or reorganization is consistent with a recommendation or conclusion of a study pursuant to Section 56378 (special studies) or Section 56425 (sphere of influence studies) if the Commission makes the determinations specified in Section 56881(b) [56375(a)]. (See Section A, Special Studies and Section B, LAFCO Initiated Proposals above)

12. When more than one agency can serve an area, LAFCO shall consider each agency’s service capacity, financial capabilities, costs of service, social and economic interdependencies, topographical factors, LAFCO policies and input from affected communities and agencies.

13. LAFCO will make every attempt to bring about amicable agreements on spheres of influence but ultimately, if a conflict between agencies should arise, LAFCO is the final determiner of the sphere of influence.

14. Inclusion of territory within an agency’s sphere of influence does not assure annexation of that territory into that agency. There are a number of factors the Commission must review before it can approve an annexation.

15. Spheres of Influence for cities and districts shall promote the long-term preservation and protection of the County agricultural, resource and open space lands.

16. Once a sphere of influence has be adopted, it shall be reviewed and updated, as necessary, not less than once every five years [56425(f)]

General Guidelines for Determining Spheres of Influence

17. Territory that is currently receiving services from a local agency, or territory that is projected to need an agency’s services within the next 5-10 years may be considered for inclusion within an agency sphere. Additional territory may be considered for inclusion if information is available that will enable the Commission to make determinations as required by Section 56425.

18. Territory will not be considered for inclusion within a city’s sphere of influence unless the area is included within the city’s general plan land use element.

19. A special district that provides services, which ultimately will be provided by another agency (e.g. mergers, consolidations) will be assigned a zero sphere.

20. When more than one agency can serve an area, agency service capabilities, costs for providing services, input from the affected community, and LAFCO’s policies will be factors in determining a sphere boundary.

21. If more than one agency appears equally qualified to serve an area, and if fiscal considerations, agency service capabilities, and community input do not clearly favor a specific agency, overlapping spheres may be approved.

22. If additional information is necessary to determine a sphere boundary or if the Commission determines not to approve overlapping spheres, a partial sphere may be approved and a special study area may be designated.

23. A local agency may be assigned a coterminous sphere with its existing boundaries if:

There is no anticipated need for the agency’s services outside its existing boundaries.
There is insufficient information to support inclusion of areas outside the agency’s boundaries in a sphere of influence.
The agency does not have the service capacity, access to resources (e.g. water rights) or financial ability to serve an area outside its boundaries.
The agency’s boundaries are contiguous with the boundaries of other agencies providing similar services.
The agency’s boundaries are contiguous with the sphere of influence boundaries previously assigned to another agency providing similar services.
The agency requests that their sphere of influence be coterminous with their boundaries.

24. If territory within the proposed sphere boundary of a local agency does not need all of the services of the agency, a service specific sphere of influence may be designated.

Guidelines for Updating City Spheres of Influence

25. After completion of the initial requirements to conduct a sphere of influence update and service review, once every five years thereafter a preliminary sphere evaluation will be prepared by the Executive Officer for each city in Mendocino County to determine whether a sphere update study should be conducted. A preliminary evaluation may be conducted at any time if requested by a city. Applications for changes of organization or reorganization may trigger a preliminary sphere evaluation by the Executive Officer; the closer the time to the five year mark, the greater the likelihood of a preliminary sphere evaluation upon receipt of an application for a change of organization or reorganization. If the initial review has not been made as required by law, then LAFCO will require a sphere of influence update and service review. Applications for changes of organization or reorganization with a sphere of influence amendment will trigger a preliminary sphere evaluation and may require a comprehensive sphere update study.

26. A preliminary evaluation will begin with a questionnaire requesting the city to update pertinent information.

The city’s response should include:

Information necessary to complete a statement of determinations required under Section 56430.
Each city’s assessment as to the need for a sphere update, sphere change or sphere amendment.
Information as to changes in land use (e.g. General Plan or Specific Plan changes), planning policy, demographics, service capabilities, resource availability or increased demand for public services.
Necessary maps and legal descriptions
Other data or information as considered appropriate by the Commission or the Executive Officer

27. The preliminary sphere evaluation will be distributed to the subject city, other affected agencies, the county and other interested parties.

28. The preliminary sphere evaluation will include one of the following recommendations by the Executive Officer: Proceed with a comprehensive sphere of influence update study because of significant changes in circumstances from the previous study or last update Affirm the city’s existing sphere of influence without an update study Amend the city’s existing sphere of influence with a comprehensive update study Amend the city’s existing sphere of influence without a comprehensive update study (e.g. minor amendments)

29. The subject city will be requested to respond to the preliminary sphere evaluation and recommendation within 90 days. Failure to respond within 90 days will be regarded as concurrence with the evaluation and recommendation.

30. The Executive Officer will present his/her preliminary sphere evaluation and recommendation, along with the response and recommendations from the subject city and comments received from other local agencies or interested parties, to the Commission at a noticed public hearing.

31. At the hearing the Commission may approve, with or without changes, or deny the Executive Officer’s recommendation.

32. If the Commission determines to proceed with a city comprehensive sphere update study/service review, applications for jurisdictional changes will be considered incomplete until the sphere update is completed. Exceptions will be made if the Executive Officer has issued a Certificate of Filing prior to the Commission’s decision to proceed with an update study.

33. Within 90 days of a public hearing where the Commission determines to proceed with a comprehensive sphere of influence update study/service review, LAFCO staff in cooperation with city staff will develop a work plan, time table and mapping requirements needed for completing the update study, service review and appropriate environmental study.

34. City staff, in cooperation with LAFCO staff, will prepare a comprehensive sphere update study/service review according to the agreed upon work program and timetable. If the city chooses not to participate in the development of the sphere update study, then the Executive Officer may proceed with the process using LAFCO staff or consultants. Costs for this process will be billed to the city.

35. At least 30 days prior to formally submitting the sphere update study to LAFCO, the city must distribute its proposal to all affected agencies and other interested parties who have requested a copy, other than the county. Affected agencies must be notified that their comments will be received by LAFCO for purposes of evaluating the update study.

36. At least 60 days prior to formally submitting the sphere update study to LAFCO the city must distribute the study to the county. Representatives of the city are required to meet with representatives of the county to discuss the proposed sphere and its boundaries and explore methods to reach agreement on the boundaries, development standards and zoning requirements within the sphere. The purpose of the discussions between the city and the county is to ensure that development within the sphere occurs in a manner that reflects the concerns of the city and is accomplished in a manner that promotes the logical and orderly development of the sphere territory.

37. Upon receipt of the sphere update study from the city, LAFCO staff will review the spheres of influence for affected districts in conjunction with the review of the city sphere update study.

38. The Executive Officer will present a report and recommendations concerning the city sphere update study and sphere amendment, if any, to the Commission at a noticed public hearing. The report may include recommendations to amend the spheres of affected special districts.

39. The Commission will approve, with or without changes, or deny the Executive Officer’s recommendation for the comprehensive sphere update.

Guidelines for Updating Special District Spheres of Influence

40. After completion of the initial requirements to conduct a sphere of influence update and service review, once every five years, a preliminary sphere evaluation will be prepared for each special district to determine whether a comprehensive sphere update study is warranted. A preliminary evaluation may be conducted at any time if requested by a district. Applications for changes of organization or reorganization may trigger a preliminary sphere evaluation by the Executive Officer; the closer the time to the five year mark, the greater the likelihood of a preliminary sphere evaluation upon receipt of an application for a change in organization or reorganization. If the initial review has not been made as required by law, then LAFCO will require a sphere of influence update and service review. Reasonable questions as to the lack of financial resources, infrastructure capacity, availability of resources, inability to provide service to the affected territory or the potential to degrade service to the existing territory of the district will trigger a comprehensive sphere of influence review and service review. Applications for changes of organization or reorganization with a sphere of influence amendment will trigger a preliminary sphere evaluation and may require a comprehensive sphere update study. The adoption, amendment or update of a special district sphere of influence will be closely coordinated with other affected jurisdictions that provide similar services.

41. A preliminary evaluation will begin with a questionnaire requesting the district to update pertinent information. The district’s response should include: Information necessary to complete a statement of determinations required under Section 56430 (service reviews). Each district’s assessment as to the need for changes in sphere boundaries. A written statement specifying the functions or classes of service provided by the district as required by Section 56425 Identification of the nature and location of facilities that provide the services as required by Section 56425 Necessary maps and legal descriptions as required by the Executive Officer Other data or information as considered appropriate by the Commission or the Executive Officer

42. The Executive Officer will review each district’s response and make a preliminary evaluation as to whether a comprehensive sphere update appears to be warranted.

43.The preliminary evaluation will include one of the following recommendations by the Executive Officer:

Proceed with a comprehensive sphere of influence update study because of significant changes in circumstances from the previous study or last update
Affirm the district’s existing sphere of influence without a comprehensive update study
Amend the district’s existing sphere of influence with a comprehensive update study
Amend the district’s existing sphere of influence without an update study (e.g. minor amendments)

45. The Executive Officer will notify the district of his/her recommendation. The recommendation shall be distributed to each affected city and special district, the county and other interested parties.

46. The district will be requested to respond to the recommendation of the Executive Officer concerning the preliminary sphere of influence evaluation. Failure to respond within 90 days will be regarded as district concurrence with the preliminary evaluation.

47. The Executive Officer will present his/her preliminary sphere evaluation and recommendation, along with the response and recommendations from the subject district and comments received from other local agencies or interested parties, to the Commission at a noticed public hearing.

48. At the hearing the Commission may approve, with or without changes, or deny the Executive Officer’s recommendation.

49. If the Commission determines to proceed with a comprehensive district sphere update study, applications for jurisdictional changes will be considered incomplete until the sphere update is completed. Exceptions will be made if the Executive Officer has issued a Certificate of Filing prior to the Commission’s decision to proceed with an update study.

50. Within 90 days of a public hearing where the Commission determines to proceed with a comprehensive sphere of influence update study, LAFCO staff in cooperation with district staff will develop a work plan, timetable and mapping requirements needed for completing the update study/service review and appropriate environmental study. LAFCO will then conduct the update study using LAFCO staff, consultants or district staff at the discretion of the Executive Officer.

51. Comprehensive sphere update studies for special districts may be conducted individually, or as part of a larger study that considers either cities and/or other special districts. Service Reviews will be conducted in conjunction with the sphere update and will include determinations as required in Section 56430.

52. The Executive Officer will present a report and recommendation concerning the comprehensive special district sphere update to the Commission at a noticed public hearing.

53. The Commission will approve, with or without changes, or deny the Executive Officer’s recommendation for the comprehensive sphere update.

E. SERVICE REVIEWS

In order to prepare and update spheres of influence in accordance with Section 56425, the commission shall conduct a service review of the municipal services provided in the county or other appropriate area designated by the commission. [56430]

1. The commission shall include in the area designated for service review the county, the region, the sub region, or any other geographical area as is appropriate for an analysis of the service or services to be reviewed, and shall prepare a written statement of its determinations with respect to each of the following: [56430(a)]

Infrastructure needs or deficiencies.
Growth and population projections for the affected area.
Financing constraints and opportunities.
Cost avoidance opportunities.
Opportunities for rate restructuring
Opportunities for shared facilities.
Government structure options, including advantages and disadvantages of consolidation or reorganization of service providers.
Evaluation of management efficiencies.
Local accountability and governance

2. Local agencies that are subject to LAFCO review, or are required to have a sphere of influence, are subject to service reviews.

3. The Commission shall conduct a service review before or in conjunction with, but no later than the time it is considering an action to establish a sphere of influence or update a sphere of sphere of influence. Minor amendments to a sphere of influence, as determined by LAFCO, may not require a service review.

4. Generally, reviews will be prepared in conjunction with sphere of influence studies or updates however service reviews may also be conducted independent of the sphere of influence process. LAFCO will conduct service reviews independent of the sphere of influence updates based on a number of factors, including but not limited to:

Concerns of the affected agencies, the public or LAFCO
Public demand for a service review
Pubic health, safety, or welfare issues
Service provision issues associated with areas of growth and/or development or request for changes of organization or reorganization

5. As part of the budgetary process, LAFCO will develop a work plan of service reviews to be addressed during the fiscal year. During this process, LAFCO shall establish a fee for conducting services review and may recover reasonable costs for preparation of a service review study beyond the standard LAFCO fee. Agencies that are to be part of the annual review process shall be notified of their selection for review and their respective costs. The fee may be adjusted according to the degree of help and support provided by agency staff and the degree of difficulty of obtaining the requisite information for the service review.

LAFCO may alter the annual service review work program at any time in response to changing circumstances, new information, or direction from the Commission.

6. In conducting a service review the commission will use state guidelines to the extent considered appropriate by the Commission to comprehensively review all of the agencies that provide the identified service or services within the designated geographical area. Service reviews will fall into two categories:

Routine reviews that are anticipated to be uncomplicated and straightforward with few concerns about the adequacy of public services. Routine service reviews may be conducted for single agencies or for multiple agencies that provide similar services.
Intensive reviews that are anticipated to require detailed analysis of complex and controversial issues. Categorizing a service review as intensive may be the result of analysis of pending LAFCO proposals for boundary changes, major sphere changes, lack of resources or of service provision concerns identified by LAFCO, other agencies, or the public.

7. Service reviews will address identified services within the service review boundary, which are associated with growth and development. Target services include, but are not limited to, water, sewer, drainage, libraries, roads, parks, police and fire protection. General government services such as courts, social services, human resources, treasury, tax collection, and administrative services will generally not be included. LAFCO will determine which services will be included in each service review.

8. LAFCO will determine the final geographic boundary and agencies that will be the subject of a service review. Factors that may be considered in determining a service review boundary include, but are not limited to, existing city and special district jurisdiction and sphere boundaries, topography, geography, community boundaries, tax assessment zones, infrastructure locations, transportation systems, and roads, areas with shared facilities, areas with shared social and economic communities of interest plus other factors as determined by LAFCO.

9. LAFCO may hold public scoping meetings, as necessary, for selected service reviews to gather additional input on the following issues:

Additional agencies to be included within a service review.
Geographic area of a service review
Concerns of affected agencies
Areas of concern to be addressed in a service review

10. AFCO may establish a service review committee to provide technical and/or policy advice to LAFCO staff. The service review committee may consist of LAFCO Commissioners, representatives from special districts, cities and other members as determined by LAFCO.

11. Local agencies may submit service review proposals to LAFCO. If it is determined by LAFCO that the agency has the requisite staff and ability to assist the Executive Officer to conduct the service review then the Commission may allow the agency to perform the service review under the direction of the Executive Officer.

12. LAFCO staff will prepare a final service review report that includes the determinations required by state law. The report may identify future studies or actions which LAFCO or agencies may take to implement the recommendations of the report.

13. The Commission will consider the service review report and determinations at a noticed public hearing. The report will be available for public review 21 days prior to the hearing.

14. The service review process does not require LAFCO to initiate changes of organization based on service review findings; it only requires that LAFCO make determinations regarding the provision of public services per the provisions of Section 56430. However, LAFCO, local agencies and the public may use these determinations to pursue changes to services, local jurisdictions or spheres of influence.

F. OUT-OF-AREA SERVICE AGREEMENTS

1.A city or district may provide new or extended services outside its jurisdictional boundaries only if it requests and receives written approval by LAFCO (§56133). It is the general policy of LAFCO that out-of-area service agreements, especially for sewer and water, be permitted only on parcels within the sphere of influence and contiguous to the boundaries of an agency in anticipation of annexation. (Some exceptions may apply—See Chapter III, Section F, Boundary Lines and Item 2 below)

2. Out-of-area service may be permitted either for non-contiguous parcels or outside the sphere of influence of the agency, if the agency provides documentation of a threat to the health and safety of the public, or the affected residents, and notice is given to service providers as specified in §56133(c)(2).

3. Contracts or agreements solely involving two or more public agencies where the public service is to be provided is an alternative to, or substitute for, public services already being provided by an existing public service provider and where the level of service is consistent with the level of service contemplated by the existing service provider are not required to be approved by LAFCO. However, prior to extending surplus water service to any project that will support or induce development, the city or district shall first request written approval from the commission in the affected county.

4. Contracts or agreements for the transfer of non-potable or non-treated water and for provision of surplus water to agricultural lands for projects that serve conservation purposes or that directly support agricultural industries are not subject to LAFCO review. Service extensions providing surplus water to any project that will support or induce development requires written approval from the Commission.

5. Generally, an out-of-area service agreement will be for the provision of a single purpose service and not the full range of services an agency may provide. As a condition of approval for an out of area service agreement the Commission will require the completion of the annexation within a specified time frame, unless there are circumstances that would preclude the ability of the agency to provide the full range of services to the area .

6. Written approval for emergency connections may be authorized by the Executive Officer and service may be provided prior to review by the Commission only under all of the following circumstances. The emergency connection does not require major infrastructure development such as trunk lines, or pump stations and can be accomplished primarily by using existing facilities except for parcel lines for hookup. The agency or landowners provides documentation of a threat to the health and safety of the public or the affected residents, such as a failing well or septic system. (Documentation could be a letter from the Mendocino County Health Department, a septic tank firm, a letter from a sanitation district or water agency certifying that the subject parcel’s system is in failure) The territory is within the Sphere of Influence of the agency; and

An application to annex the territory will be submitted within a defined time frame by the agency.

7. Emergency connections authorized by the Executive Officer will be reviewed by the Commission at the next regularly scheduled LAFCO meeting.

G. REGIONAL HOUSING NEEDS—FAIR SHARE PLANNIING

Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 added a new requirement that LAFCOs must consider “the extent to which a proposal will assist the receiving entity in achieving its fair share of the regional housing needs as determined by the appropriate council of governments” [56668(l)]. CKH also requires LAFCOs to consider regional growth goals and polices established by a “collaboration of government officials formally representing their jurisdictions”. [56668.5] The result of these new provisions, one mandatory and one permissive, is to not only to involve LAFCO in housing issues by specifically emphasizing fair share housing needs but to also give LAFCO the formal ability to consider regional growth goals as established by regional and sub regional COGs.

Every city and county is required to have a Housing Element as part of its General Plan. (See Government Code 65580 et seq. Planning and Zoning Law, Division 1, Chapter 3, Article 10.6) In preparing the Housing Element the city or county must identify adequate sites which will be made available through appropriate zoning and development standards, and with services and facilities, to meet the housing needs. [65583]

The regional housing needs numbers are determined by MCOG. Numbers of housing units are established for each city and county for the next five years by income categories (low, low/moderate, moderate, etc.). Emphasis is on the adequate provision of low and low/moderate income housing. Cities and counties must use these numbers in their Housing Elements. [65584] The Housing Element must also be accepted by the State Department of Housing and Community Development. The approved Housing Element will be considered the best source for LAFCO in determining if the proposal will assist a receiving entity to achieve its fair share of the regional housing needs.

1. The law only requires LAFCOs to consider the “receiving entity”. This typically means cities. A county would only be a “receiving entity” in the case of a detachment from a city.

2. Housing Element requirements and regional housing needs are not applicable to special districts. However, special districts may provide needed services for a city or county to meet its fair share of regional housing needs. Therefore, this factor will be considered for proposals for changes of organization or reorganization by districts, even though a district is not a “receiving entity”.

3. Housing Elements of the General Plan are required to be updated every five years. LAFCO is not responsible for enforcing the requirement that cities and the county have approved Housing Elements. However, the fact that there are no current fair share need numbers could be cause for denial for a proposal based on both the lack of the ability to consider the factor relating to fair share need and the inability to consider the factor relating to consistency with the receiving entity’s general plan.

4. LAFCOs have no authority to determine or transfer fair share housing needs. This process is described under Government Code Section 65584.5 and there is no mention of LAFCO involvement. If supported by substantial evidence in light of the whole record and legal counsel opinion it may be possible for LAFCO to condition a proposal upon a county and city transferring regional housing needs pursuant to the process specified by law. It would be best if counties, cities, MCOG and HCD agreed upon the transfer process prior to LAFCO action and urge LAFCO to consider it as part of established regional growth goals and policies. A similar example between cities and the county would be the process for tax sharing agreements.

5. It can be argued that MCOG will determine fair share housing needs based upon a city’s existing boundaries. In setting the numbers, MCOG cannot bind or rely upon LAFCO to approve any change of organization or reorganization. Thus in theory there shouldn’t be any need for redistribution of fair share housing needs relating to a change of organization or reorganization. However, it is clear that this may be an issue where a developer needs to annex to a city for the purposes of obtaining needed services and that development could not occur without the availability of the services provided by the city and the agreement of the city and the county to the process.

H. PROPERY TAX EXCHANGE

Revenue and Taxation Code Section 99 and Government Code Section 56810 provide that, in any jurisdictional change, the County Auditor shall adjust the allocation of property tax revenue for local agencies whose service area or service responsibilities would be altered. Reallocation of property tax revenues associated with a jurisdictional change, other than a city incorporation or a district formation, is governed by Revenue and Taxation Code, Section 99. City incorporations and district formations are governed by Section 56810 of the Government Code.

Jurisdictional Changes Other Than a City Incorporation/District Formation

1. Following receipt of a proposal, but prior to issuing a Certificate of Filing, the Executive Officer will inform the assessor and the auditor of the filing and specify each local agency whose service area or service responsibility will be changed. Once the assessor has determined the assessed valuation of the territory subject to the jurisdictional change, this information is forwarded to the auditor who, in turn, will advise each local agency of the estimated amount of property tax revenue subject to a negotiated exchange.

2. Upon receipt of the auditor’s estimate, the local agencies have 60 days to negotiate and adopt resolutions agreeing to the amount of the property tax revenues to be exchanged.

3. If the jurisdictional change affects the service area or service responsibility of one or more special districts, the board of supervisors negotiates the property tax exchange on behalf of the districts. Prior to entering into the negotiation, however, the board must consult with the affected districts. Consultation shall include, at a minimum, notification to each member and executive officer of the district board of the pending consultation and provision of adequate opportunity to comment on the negotiation.

4. The Executive Officer shall not issue a Certificate of Filing until all of the local agencies involved in the negotiation process present resolutions agreeing to the exchange of property tax revenues.

5. At the time of the public hearing on the proposal, if the Commission modifies a proposal, any local agency whose service area or service responsibility would be altered by the jurisdictional change may request, and the Executive Officer must grant 15 days to renegotiate the exchange of property tax revenues.

6. If property tax exchange resolutions are not presented to the Executive Officer within the initial 60-day negotiation period, or within the 15-day renegotiation period, all proceedings related to the jurisdictional change are automatically terminated.

7. Not later than the date on which the Certificate of Completion is recorded, the Executive Officer shall notify the auditor of the exchange of property tax revenues and the auditor shall make appropriate adjustments.

8. With respect to the adjustment of property tax revenues, a county and any local agency or agencies within the county may develop and adopt a master property tax transfer agreement. The agreement may be revised from time to time by the partners subject to the agreement.

Alternate Procedures for City Annexations of Unincorporated Territory

Under the following described circumstances a city and a county may utilize alternate property tax exchange procedures. These procedures apply to city annexations of unincorporated territory for which proceedings are initiated on or after January 1, 1998 and on or before January 1, 2005.

If the property tax exchange is not conducted or completed in accordance with the 60-day negotiation period requirement and is not covered by a master property tax exchange agreement, the following procedures shall apply:

9. The city and the county shall mutually select a third party consultant to perform a comprehensive, independent fiscal analysis, funded in equal portions by the city and the county, that specifies estimates of all tax revenues that will be derived from the annexed territory and the costs of city and county services with respect to the annexed territory. The analysis shall be completed within a period not to exceed 30 days, and shall be based upon the general plan or adopted plans and policies of the annexing city and the intended uses for the annexed territory.

10. If, upon the completion of the analysis period, no exchange of property tax revenue is agreed upon by the city and the county, the city and the county shall mutually select a mediator, funded in equal portions by those agencies, to perform mediation for a period not to exceed 30 days.

11. If, upon the completion of the mediation period, no exchange of property tax is agreed upon by the city and the county, the city and the county shall mutually select an arbitrator, funded in equal portions by those agencies, to conduct an advisory arbitration with the city and the county for a period not to exceed 30 days. At the conclusion of this arbitration period, the city and the county shall present to the arbitrator its last and best offer with respect to exchange of property tax revenues. The arbitrator shall select one of the offers and recommend that offer to the governing bodies of the city and the county. If the governing body of the city or the county rejects the recommended offer, it shall do so during a public hearing and shall, at the conclusion of that hearing, make written findings of fact as to why the recommended offer was not accepted.

12. These alternative procedures shall be concluded no more than 150 days after the initiation of proceedings before the Commission, unless one of the periods is extended by mutual agreement of the city and the county.

Jurisdictional Changes for City Incorporation or District Formation

Following receipt of a proposal that includes a city incorporation or a district formation, the Commission shall notify the county auditor of the proposal and the services that the new jurisdiction proposes to assume within the area. The Commission shall also inform the auditor of the existing service providers within the area subject to the proposal.

If the proposal would not transfer all of an affected agency’s service responsibilities to the proposed city or district, the Commission and county auditor shall do all of the following:

13. The county Auditor shall determine the proportion that the amount of property tax revenues derived by each affected local agency bears to the total amount of revenue from all sources, available for general purposes, received by each affected agency in the prior fiscal year. The “prior fiscal year” means the most recent fiscal year for which data on actual direct and indirect costs and revenues are available preceding the fiscal year in which the Commission approves the city incorporation or district formation. The “total amount of revenue from all sources available for general purposes” is the total amount of revenue that may be used on a discretionary basis for any purpose and does not include any of the following:

Revenue, which by statute, is required to be used for a specific purpose
Revenues from fees, charges of assessments that are levied to specifically offset the cost of particular services and do not exceed the cost reasonable borne in providing those services.
Revenue received from the federal government that is required to be used for a specific purpose.

14. The Commission shall determine, based on information submitted by each affected local agency an amount equal to the total net cost to each affected local agency during the prior fiscal year of providing those services that the new jurisdiction will assume within the area subject to the proposal. The “total net cost” means the total direct and indirect costs that were funded by general purpose revenues of the affected local agency and excludes any portion of the total cost, which was funded by any revenues specified in 1 above.

15. The Commission shall multiply the amount determined pursuant to paragraph 2 above for each affected agency by the corresponding proportion determined pursuant to paragraph 1 above to derive the amount of property tax revenue used to provide services by each affected local agency during the prior fiscal year within the area subject to the proposal. The county auditor shall adjust this amount by the annual tax increment to the fiscal year in which the new city or district receives its initial allocation of property taxes.

If the proposal would transfer all of an affected agency’s service responsibilities to the proposed district:

16. The Commission shall request the auditor to determine the property tax revenue generated for the affected service providers by tax rate area, or portion thereof, and transmit that information to the Commission.

After the applicable process described above is completed:

17. At the time the Executive Officer records a Certificate of Completion, the auditor shall be notified of the amount determined according to by the applicable process described above and, where applicable, the period of time within which, and the procedure by which, the transfer of property tax revenues will be affected and the auditor shall transfer that amount to the new jurisdiction.

18. Any action brought by a city or district to contest the determinations of the county auditor or the Commission with regard to the amount of revenue to be exchanged shall be commenced within three years of the effective date of the city incorporation or district formation.

I. ENVIRONMENTAL REVIEW

Like other public agencies, LAFCO is required to comply with the California Environmental Quality Act (CEQA) for purposes of considering the environmental impact of its actions. Each proposal must receive the appropriate environmental review for consideration by the Commission in making its decision. The environmental review must include review of (1) the proposed development as detailed in the development plan, (2) infrastructure development such as trunk lines, pump stations, processing plant upgrades, etc. needed for purpose of meeting the requirements of the proposed development and (3) the impact of the LAFCO’s decision regarding boundary changes. Depending on the particulars of an application, LAFCO may be the Lead Agency or the Responsible Agency.

For a detailed discussion of environmental requirements please refer to our separate document entitled, Policy and Procedures for the Processing of Environmental Documents which are incorporated into these policies and procedures by reference.

Mendocino County Local Agency Formation Commission

LAFCO Policy & Procedures

CHAPTER V. — POLICIES THAT MAY APPLY FOR SOME APPLICATIONS