1. 1 LAFCO FEES The Statutory and Legal Framework 2010 Annual CALAFCO Meeting Hilton Hotel, Palm Springs Scott Browne

2. 2 Legal Framework for LAFCO Fees Constitutional Limitations – Prop 218 General Local Agency Statutory Fee Regulations CKH Requirements Court Decisions

3. 3 Constitutional Limitations Article 13D of the California Constitution (Proposition 218) No State Commission or Statewide agency Local Control; no State appointees A LAFCO in every county to make decisions at a local level but intended to promote state policies

4. 4 Statutory Fee Regulations on Local Agencies Two Types of Fee Regulation: – Agency Application Fees – Impact Mitigation Fees Agency Application Fees Regulated by GC 66014- 66017 Impact Fees Regulated by AB 1600 GC 66000 et seq.

5. 5 Application Fee Requirements (Pg. 1) §66014 Specifically Includes LAFCo Fees Fees shall not exceed the estimated reasonable cost of providing the service for which the fee is charged. § 66014 Must hold a “public meeting” to adopt fees and Provide public Fee Justification Report 10 days prior to meeting Fee changes must be adopted by formal resolution

6. 6 1977 - Municipal Organization Act (MORGA) Updated city annexation procedures and incorporated LAFCo role 1983 - Deadlines to prepare spheres – LAFCOs must plan now 1985 - Cortese-Knox Local Government Reorganization Act – Recodification 1993 - AB 1335 (Gotch) LAFCO can initiate certain changes of organization LAFCO can waive conducting authority hearing Easier to seat special districts Legislative History – Part 2

7. 7 Broaden LAFCO funding formula Make LAFCO conducting authority for changes Require periodic Sphere of Influence updates Require Municipal Service Reviews Require LAFCO to adopt policies and act consistent with those policies Require cities to prezone land Add new factors – water supply, regional housing Legislative History – Part 3 2000 – CORTESE-KNOX-HERTZBERG Major reform of LAFCo Law

8. 8 Legislature Has Continued to Use LAFCo to Promote Particular Policies Added provisions to factors LAFCo Must Consider: – Environmental Justice (56668(o)) – AB 853 Service Needs of “Disadvantaged inhabited communities” (56425 (e)(2)) Legislative History – Part 4 Post 2000 Additions to CORTESE-KNOX- HERTZBERG

9. 9 LAFCOs are Independent State laws guide LAFCO action, but give broad discretion to Commission to apply law in light of local circumstances LAFCo Decisions are legislative—Courts will defer to LAFCo decision as long as procedurally correct and consistent with state law CKH Section 56325.1 Mandates that Commissioners act independently of their appointing agency on behalf of the interest of the public as a whole.

10. 10 What the Courts have said about LAFCO LAFCO is engaged in the pursuit of an overriding State purpose and is the Legislature ’ s “ watch dog ” for governmental efficiency LAFCO is independent, not part of County LAFCO is quasi-legislative; limited legal challenge to LAFCO decisions LAFCO is an agency of “ broad discretionary authority ” LAFCO cannot directly regulate land use but must consider land use issues in making its decisions

11. 11 As a planning agency LAFCO Develops and periodically updates Spheres of Influence for cities and districts Prepares Municipal Service Reviews to help Update Spheres of Influence and coordinate the provision of services Works cooperatively with public and private agencies and interests

12. 12 As a regulatory agency LAFCO Regulates boundaries of existing agencies, creation of new ones and the local governmental structure Can approve changes only if consistent with spheres of influence and Commission policies Controls extension of public services by contract without annexations Is prohibited from directly regulating how land is used... but

13. 13 LAFCO does not have jurisdiction over Urban Development not requiring annexations or formations Redevelopment agencies Mello-Roos districts School districts Special purpose districts Municipal Advisory Councils COGS or Area Planning Commissions Transit Districts Joint Powers Authorities

14. 14 LAFCO Authority LAFCo has broad discretion to approve or disapprove projects LAFCo has limited authority to directly impose conditions on its approval LAFCo can impose fees and other mitigations LAFCo Cannot Directly Impose Regulations on Land Use but this does not mean LAFCo does not regulate Land Use LAFCo’s Can Utilize Their Broad Disapproval Authority to encourage land use agencies to modify projects to make them consistent with LAFCo policies.

15. 15 Environmental review of LAFCO decisions Most LAFCO approvals are "projects" under CEQA Pre-zoning makes a city the lead agency, and LAFCO then is a responsible agency LAFCO ’ s role under CEQA as a Responsible Agency is limited Categorical exemptions are tailored to LAFCO actions - Classes 19 and 20