Notes on CA LAFCO
Incorporation Conference
The information disseminated at the conference was on point with the issue at hand, incorporation in today’s environment. Presenters were knowledgeable and candid. It was stated over and over, however, that each LAFCO is different. I asked the same questions of various speakers, stated somewhat differently in an attempt to arrive at consensus on a particular issue. Each presenter also covered some of the same topics so the flow of certain topics may appear somewhat disjointed. The information, however, will undoubtedly prove invaluable.
Reasons for Incorporation
1. Control of land use.
2. Provide new or different levels of service
3. Capture revenues
4. Enhance community identity (name, zip code, etc)
Steps for Petition Process
1. File a Notice of Intent.
2. Fees-$8,300
3. Map showing proposed boundaries
4. Reasons for incorporation
5. Terms and conditions
6. Three Chief Petitioner signatures
Petition-General Terms and Conditions
1. Name of
2. Form of the new government
3. Elected versus appointed City Clerk and Treasurer
Petition-Specific Terms and Conditions
1. Undo the Los Alamitos SOI to exclude Rossmoor
2. Transfer all District assets and reserves to the
3. Include the Lighting Assessment District as a part of the
4. Avoid any language that would trigger an EIR (improve vs. increase).
5. Include any boundary changes.
Application by Agency Resolution
1. Starts the process more quickly
2. Allows the expenditure of public funds for payment of fees
3. Does not indicate level of voter support
Application by Petition
1. Any resident can circulate a petition (including an elected official or
employee of the District while not on duty)
2. Any person registered to vote can be a Chief Petitioner
3. Any person can circulate a petition as a volunteer or for pay
4. Petition signers must be Rossmoor residents registered to vote
5. The OC County Registrar of Voters will validate all signatures
6. Generates community interest
7. Fund raising is looked upon as favorable by LAFCO
Dual track Application by Petition and Agency Resolution
1. Allows for the positive aspects of each process
2. Minimizes the negative aspects of each process
Petition Document
1. LAFCO and Legal Counsel review Petition Document (PD)
2. PD refers to Cortese-Knox-Hertzberg Act
3. PD defines the boundaries and includes a preliminary map
4. PD calls for dissolution of RCSD and assumption of its functions
5. PD spells out reasons for incorporation (see PD)
6. PD spells out terms and conditions (see PD)
7. PD requests that the Los Alamitos SOI be unwound to exclude
Rossmoor
8. PD requires that signers be registered voters of Rossmoor
9. PD requires three Chief Petitioners
Petition Drive
1. Notice of Intent to Circulate Petition is filed with LAFCO
2. Fees of $8,300 are paid
3. A 21-day waiting period precedes circulation of Petitions
4. LAFCO notifies all affected agencies
5. Petition requires valid signatures of 25% of registered voters
6. Petition timeline-no longer than six months from first signature
7. Petition must be submitted to LAFCO within 60 days of last
signature
8. Petitions signatures must be validated by OC Registrar of Voters
9. OC LAFCO requires all signatures must be validated ($2.00 per
signature)
10. Petitioner have 15 additional days to gather more petitions if the
number is insufficient
11. A Certificate of Sufficiency is issued by LAFCO if requisite number
of signatures are validated
Application to LAFCO
1. Map and legal description of boundaries
2. Map must be approved by
Equalization
3. Justification for the proposal
4. Plan for transfer/provision of services
5. LAFCO issues Certificate of Filing if Application is complete
Initial Feasibility Analysis (IFA)
1. Not required by OC LAFCO
2. RPC Governance Study contains the ingredients of an IFA
3. The study can provide a platform for conducting a required
Comprehensive Financial Analysis (CFA)
Plan for Transfer/Provision of Services-Required Services
1. General legislative functions
2. Police protection
3. Planning and land use
4. Public Works
5. Animal Control
6. All other services to be provided are optional
Comprehensive Fiscal Analysis-Initial Steps
1. LAFCO bids for and contracts with a financial consultant
2. District/community pays for consultant
3. Current consultant fees are estimated at $100,000+
4. District/community pays for LAFCO staff costs
5. Staff costs are estimated at $25,000+
Comprehensive Fiscal Analysis-Requirements
1. County fiscal data from most current year (August 2007)
2. Proposed city costs for at least three years
3. Costs and revenues of any affected agency for three years
4. Property tax transfer
5. Sales tax
6. State subventions (VLF)
7. Existing special taxes
8. Fees for service
9. All other sources of revenue
10. All potential expenditures
11. Existing levels of current services must be maintained
12. CHP traffic enforcement costs must be included in police
protection costs
13. Adequate financial reserves must be included (5-10%)
14. Revenue neutrality must be factored in
Vehicle License Fees
1. AB 1602 allocates a portion of VLF to newly incorporated cities
2. VLF for first year could be as high as $898,000
3. AB 1602 sunsets on
4. Rossmoor would have to incorporated by that date to receive VLF
5. Timeline for incorporation could be as long as three years.
6. Extension of the sunset date should be a high priority for
communities contemplating incorporation
Comprehensive Fiscal Analysis-Iterations
1. Consultant prepares initial analysis
2. LAFCO staff reviews and comments
3. Preliminary CFA submitted to LAFCO Commissioners
4. Commissioners/public review and comment
5. Final CFA presented at the public hearing
Revenue Neutrality
1. CFA serves as the basis for negations
2. County must be kept whole
3. Appropriations
limit set for
4. City cannot assume service responsibility during effective date of
incorporation and first full fiscal year
5. County continues to provide services during this transition period
6.
7. District negotiates with County on neutrality
8. District negotiates with affected agencies
9. LAFCO can impose neutrality if impasse occurs
10.
Environmental Review
1. LAFCO incorporation proceedings require SEQA review and findings
2. OC LAFCO requires a Negative Declaration (approximately$10,000)
3. A SEQA challenge tolls all proceedings until issue resolved or
adjudicated
LAFCO Commission Hearing
1. LAFCO sets date of public hearing
2. LAFCO Executive Director (EO) prepares staff report
3. EO report must meet all legal requirements
4. Report must contain findings that incorporation is consistent with
Cortese-Knox-Hertzberg Act
5. Report must contain conditions of approval, if any
6. Report must contain a description of the final boundaries
7. Report must contain name of
8. Report must contain the effective date of incorporation
9. LAFCO’s denial of proposed incorporation is effective for one year
Request for Reconsideration
1. Any person or agency may file a Request for Reconsideration
2. Request must be filed within 30 days of adoption of resolution of
approval
3. Request for Reconsideration tolls all further proceedings.
4. A public hearing must be held after 21 days notice.
5. Reconsideration must be based on new information
6. LAFCO does not have the authority to modify the incorporation
proposal
7. A delay of two to three months is possible in this instance
LAFCO Commission Actions
1. No later than 35 days after the Hearing, LAFCO is required to adopt
a Resolution stating their determination on Incorporation
2. The Resolution must contain all lawful factors, conditions of
approval, if any, and all required findings
Election
1. If incorporation is approved, the measure is placed on the ballot for
the next general election, unless a special election is requested
2. General and/or special election costs are borne by petitioners and
could be substantial
3. The LAFCO EO must draft an impartial analysis of the incorporation
issue for inclusion on the ballot
4. A simple majority is required for approval of the incorporation
5. A companion ballot measure for a Utility Users Tax (UUT) must also
be approved on the same ballot
6. A simple majority is required for approval of the UUT
7. Both measures must pass for incorporation to take place
Outstanding Issues
1. Identifying the method for placing the UUT measure on the ballot
2. Determining a strategy for dealing with/negotiating with affected
agencies
3. Determining a strategy for navigating successfully through the
environmental review process
4. Determining a strategy for navigating successfully through the
revenue neutrality process
5. Evaluating the validity of the CFA during the Commission comment
period prior to finalization of the report
6. Creating a strategy for establishing a positive relationship with
LAFCO
Commissioners and
7. Establishing a campaign for success
Critical Path Issues
1. Length of the CFA process
2. Length of the petition validation process
3. Length the environmental review process/possible legal challenge
4. Length of revenue neutrality negotiations
5. Length of a possible Request for Reconsideration process
6. Timing of the date of incorporation
7. Timing of the election cycle
8. Timing of the VLF sunset on
Respectfully submitted,
Henry Taboada
Consulting General Manager
RCSD