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TO: BOARD OF SUPERVISORS
FROM: VAL ALEXEEFF, DIRECTOR
GROWTH MANAGEMENT & ECONOMIC DEVELOPMENT AGENCY
DATE: MAY 7, 1996
SUBJECT: AB 2846 (SWEENEY)
SPECIFIC REQUEST(S)OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
OPPOSE AB 2846 (Sweeney) subject to CSAC efforts to obtain amendments.
FISCAL IMPACT:
Potential loss to County revenues as a result of annexation agreements.
BACKGROUND/REASONS FOR RECOMMENDATIONS:
The interval of time has not permitted getting this item on either the agenda of the Planning
Commission or the Mayors' Conference. Since the League of California Cities, which represents the
eighteen cities in Contra Costa County, is a sponsor of the Bill, our request for the outcome of a
Mayors' Conference vote is fairly predictable. The Planning Commission does not address fiscal
city/county issues. However if the Board still want us to pursue these questions, we will set them for
the next agenda.
Attachment A includes two CSAC bulletins on this Bill. CSAC is opposed because it would remove
place tax sharing determination from LAFCO's hands and would enable cities to prevent county
approvals within city spheres of influence.
Attachment B includes a listing of annexations that the cities and county have negotiated over the past
five years. 1 t
CONTINUED ON ATTACHMENT:-k_YES SIGNATURE: Y
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON May 7, 1996 APPROVED AS RECOMMENDED_ OTHER_X
IT IS BY THE BOARD ORDERED that AB2846 (Sweeny) is REFERRED to the City and
County Relation's' Committee, the Community Development Department, the Growth
Management aand Economic Development Agency, and the Public Managers Association
V '1'L ON'SUPF'1ZVIS01Fs
report. I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
COPY OF AN ACTION TAKEN AND ENTERED ON THE
X UNANIMOUS(ABSENT ) MINUTES OF TILE BOARD OF SUPERVISORS ON THE
DATE SHOWN.
AYES: NOES:
ATTESTED May 7, 1996
ABSENT: ABSTAIN:
PAIL BATCHELOR,CLERK OF TME BOARD OF
SU ERVISORS AND CfJUNTY ADMINISTRATOR
VA:dg B �"`� ,DEPUTY
sweeney.bo
Contact: Val AlexeeIT(646-1620)
CC: County Administrator
County Counsel
GMEDA Departments
AB 2846 (Sweeney)
May 7 , 1996 ATTACHMENT A
Page 2
Alt 2846(Sweency) Bulletin \r bele
AB 2846 by Assembly Member Michael Sweeney passed the Assembly Local.Governnnent Committee
by a vote of 7 to 1,with 1 abstention. Assembly Member Brett Granlund provided the only no vote,
while Assennlby Member Tom Hannigan abstained from voting. Those voting for the bill include:
Assembly Members Richard Rainey,Chair, (mace Napolitano,Vice Chair,Dick Ackerman,Pete
Knight,Bob Margett,Kevin Murray and author, Sweeney.
The bill remains extremely critical to county governments'future fiscal stability. Section 2 of the bill
would remove control of counties to ensure that we receive an equitable share of revenues from future
annexations. AB 2846 would ensure from the outset that an annexation proposed by a city procceds,
regardless of agreernetrt with the county. Further,rather than local elected bodies ultimately
determining the tax-sharing agreement,appointed Local Agency Formation Commissions(LAFCos)
would detennine the property tax exchanges between the city and county. Should the annexed
property include sales tax-generating business,the county would stand to lose a substantial amount of
current revenue. The approach in the bill removes any ircerrtive for the city to agree to an equitable
sharing of revenue sources that the county is currently dependent upon,especially those other than
property taxes. This exposure to loss of revenue and lack of ga:urantee for revenue from future
development would greatly impair counties'ability to meet countywide services in the justice, health
and welfare area of which 85 percent to 90 percent of our budgets are dedicated. These county-wide
services are provided to primarily city residents.
Although an improvement from the introduced version,which would have prohibited counties from
developing in the unincorporated areas within a city's sphere of influence,the bill still would remove
control over land use in the unincorporated areas when annexations are proposed. For instance,if a
city chooses to annex land for a green belt,a county has lost any land-use decision authority since the
annexation may proceed without county agreement. There remains no recourse for the county or
development community should the city choose to keep the land in open space into perpetuity. Under
current law,the development community has an alternative to negotiate with a county should a city
have a"no growth"policy. AB 2846 would remove that alternative. Although claims have been
made that failure to reach agreement on tax-sharing agreements have delayed development,tine private
sector remains opposed to the bill.
In fact,CSAC finds many more successes than failures. Many counties have successfully negotiated
tax sharing agreements with their cities and are moving forward with annexations. Fresno Cunty,for
example,has agreed to more than 50 annexations inn the past three years. In fact,the only instances
where counties have denied proposed annexations is when cities are seeking to annex sales tax
generators,leaving behind residential development and refusing to fairly negotiate.
During the testimony,the League of California Cities quoted from its recently released report,
"Conflicts on the City's Edge,"which addresses annexations,development and tax negotiations.
CSAC became aware of the report the week of April 22. A preliminary review shows that the report,
aside from being extremely biased,contains rnischaracterizations and inaccuracies. CSAC will be
preparing a comprehensive response and will urge the Legislature to await that response prior lir
placing judgment.
lU� VUl L1ICLGLL - ♦iuw nLuu.1�.a .. �a i� i +a,ru �. � ;dui .
AB 2846 (Sweeney) Da
May 7 , 1996
Page 3
April 23, 1996
The Honorable Michael Sweeney
Member of the Assembly
State Capitol,Room 2016
Sacramento,California 95814
ICI': AB 2846(Sweeney)--As Amended April 22, 1996
Development Standards: Annexations
OPPOSE
Dear Assembly Member Sweency:
The California State Association of Counties(CSAC)would like to.inform you of our continued
opposition to AB 2846,as recently anncnded. However,pursuant to our discussion earlier today,
we would also like to provide you with suggested amendments for your consideration.
First,CSAC appreciates the progress that.has been made on Section 1 of the bill relating to
development standards. The language reflects the conceptual agreement reached by interested
parties. "llrcre are two points of clarification that we would suggest. The fust is regarding vvhere
or when the negotiated agreement on developmet:at standards is triggered. We believe it should
specifically apply when the city begins planning for a particular area outside its lxnundaries within
its sphere in the general plan,not necessa•rily just:when a.city amends a general plan. In.other
words,the agraentent should be reached based on a planning area,not on a project by project
basis. This would also encourage the negotiations to occur early on in tlnc planning stage.
The second point of clarification we would suggest is related to Section 65964(e),where an
existing agreement is intended to be grandfathered: We would request tdnat language be added
which would clarify that existing agreements need not be included in respective general plans.
Many jurisdictions already have binding agreements that they do not want to have to revisit.
Section 2 of the bill remains a more difficult area to resolve. While an improvement from directly
Jeopardizing county land use authority,the approach outlined in Ala 2846 would remove any
incentive for"good faith"negotiations on behalf of cities in reaching equitable tax sharing
agreements for annexations. The language would ensure from the outset that the annexations
proceed without county agreement,and would authorize LAFCOs to determine the property;tax
exchange between cities and counties. "this,in our opinion,would limit the scope of revenues
considered in any annexation to property taxes without consideration of other'revenues a county
may stand to lose in the annexation. Ala 2846 would greatly
impair counties ability to ensure that Nye receive an equitable share of'revenues trorn future
annexations and future development;regardless of continued countywide service responsibilitics,
provided primarily to city residents.
CSAC finds that there have been many successful agreements reached between cities and counties,
even in some dilficuh negotiations. The primary obstacles to such agreements have been a lack of
factual information and identifying the real issues. CSAC offers the language attached,which would
replace the changes in law proposed to Section 2 of AB 2846. We believe this approach would lead to
the most productive negotiations possible,allow cities and counties to continue to negotiate equitable
sharing of revenues at stake in fiftur e annexations,and provide for an open process based on an
impartial analysis which will best serve the interests ofthe people of California.
Ilrank you in advance for your consideration of our suggested arnendrnents. CSAC looks forward to
productive negotiations with you and your stalron this extremely important issue to the fiscal stability
of county government.
Sincerely,
Steven C. Szalay
Executive Director
cc: Assembly Member Richard:Rainey,Chair, Asscrnbly Local (rovemment Cornnnittec
Members of the Ccmimittee
AB 2846. (Sween. x).. .:..:..:.... .. �,'I
L• . ... .._.... _. ..
May 7 , 1996
Page 4
TAX SI IARING LANGUAGE
A13 2846
In the event a tax sharing agreement is not reached by the city and the
county within days of on a proposed annexation, the city
and county shall retain an independent third party who shall determine the fiscal
impact of the annexation upon the city and the county. The cost ofthe fi.sc(d
analysis shall be born equally by the city and the county. Vie analysis shall
specifically consider the fiscal impact on the county and the affected city
including but not limited to: (1) The cost of municipal services which will be
assumed by the city upon the annexation; (2)The cost of countywide services that
will continue to be provided by the county after•the annexation both for developed
land and the costs of countywide services that will be borne by the county upon
the development of the annexed territory; (3)The total revenues from all sources
currently generated by the territory to be annexed and the total revenues
reasonably projected to be generated by the territory to be annexed upon
development; (4) The impact of the annexation on the ability of the county to
finance countywide services after the annexation, and, (S) The impact ff1he
annexation on the ability of the city to finance municipal services in the city after
the annexation.
For the purposes of this section, when territory to be annexed is already
developed the consultant shall determine the cost of municipal services which will
transfer from the county and special districts to the annexing city at the.sanne
levels of service provided by the county and special dist•icls plus a reasonable
projection ofgrowth. Municipal service costs shall not be measured at a level
which represents an increase or enhancement of service over that which the
county is currently providing. Wizen the proposed territory to be annexed is
undeveloped or not completely developed, the consultant shall develop a
reasonable projection of both the municipal costs accruing to the annexing city
and the ongoing costs of countywide programs upon development. The cost of
countywide programs is defined as direct and indirect operating costs plus
applicable capital expenditure costs in such progr•mns as:indigent health care
acrd public health,public assistance,courts,jails, social services, district
attorney,public defender,probation, assessor(including the costs of assessment
appeals), county counsel, coroner,weights and rrreasures, agricultural
commissioner, and animal control.. The cost of municipal services is defined as
the direct and indirect costs plus arty applicable capital expenditures for the
programs which would be transferred from the county to the annexing city such
as: police,fire, sewer, lighting,planning and zoning and inspection.
Furlhennore, both County and City costs shall be slated in terns of"net cost"
meaning the costs remaining after crediting subventions, revenues_from services,
or intergovernmental transfers,
If the parties are unable to agree to a revenue sharing agreement within 60
days, the affected city and county shall mutually select a third part)mediator to
evaluate the fiscal impact analysis required by this section. The mediator shall
issue, bayed on the it formation contained in the f seal impact analysis required
by this section, a recommendation regarding the tax sharing ugr•eemenl to the
respective governing bodies of the affected city and county. The ICEC sharing
agreement shall be determined by the governing bodies of the affected city and
county. This section shall apply to all annexations initiated after the effective
date of this statute.
AB 2846 (Sweeney) ATTACHMENT B
May 7, 1996
Page '-5
CITIES/COUNTY ANNEXATIONS 1990-95
ET'FECTIT'E TXTL Cl 'Y ACREAGE.;
DATE
2-24-95 FUA-2 Boundary Reorg (LAFC94-29) Antioch 529
6-12-95 Cereghino (LAFC 95-11) Walnut Creek 3.52
4-19-94 A-93-1 Boundary Reorg Brentwood 46
9-02-94 Pinole Vista Boundary Reorg Pinole 0.457
4-28-94 Doris Ave. (LAFC 94-8) Walnut Creek 4.156
9-13-94 Canyon Lakes Phase Xl San Ramon 23.5
4-16-93 John Muir Historic Site Martinez 339
5-26-93 West Sunset Area Anx No. 92-1 Brentwood 50
10-13-93 Highland Ave Park Martinez 0.452
12-1-93 Brentwood Hills (Termo Property) Brentwood 100
5-26-93 FUA-1 Boundary Antioch 2,672
12-22-93 FUA-2 Boundary Reorg (LAFC92-37) Antioch 260
1-16-92 PillsburyBayol Walnut Creek
5-8-92 Eckley Place Walnut Creek
2-20-92 Confetti Boundary Reorg Antioch
3-2-92 91-2 Boundary Reorg Brentwood
3-2-92 91-9 Boundary Reorg Brentwood
5-28-92 Garlin Ranch Brentwood
5-28-92 Gerry/Balfour Brentwood
3-25-92 Grayson Road #1 Pleasant Hill
10-14-92 Grayson Road #2 Pleasant Hill
5-7-92 Morello/Midhill Martinez
6-9-92 Crystyl Ranch Concord
6-29-92 Franklin Canyon Boundary Hercules
8-25-92 Avila Road Boundary Reorg Pittsburg
11-17-92 North Brentwood Reorg Brentwood
11-17-92 Hancock Ranch Brentwood
11-17-92 Brentwood Hills Country Club Brentwood
3-19-91 Diablo View 90-04 Boundary Reorg Antioch
AB 2846 (Sweeney) ATTACHMENT B
May 7, 1996
Paged 6
EE rtvE TITLE ary acnEAc ;
DATE
3-28-91 Mira Vista 89-04 Boundary Reorg Antioch
4-1-91 Lawrence Road Boundary Reorg Danville
7-18-91 Rhode/Whitehead Boundary Reorg San Ramon
7-26-91 Pebble Creek Boundary Reorg Pittsburg
8-14-91 Willow Pass Boundary Reorg Pittsburg
11-4-91 Laurel Lane Boundary Reorg Richmond
11-25-91 90-3 Boundary Reorg Brentwood
1-10-90 Thomas Property Walnut Creek
1-9-90 Valley View Boundary Reorg Richmond
3-21-90 Canyon Lakes Phase VIII San Ramon
4-11-90 Canyon Lakes Phase IX San Ramon
11-30-90 Canyon Lakes Phase X San Ramon
4-23-90 Del Beccaro/Lehman Walnut Creek
9-5-90 Mayman/Bal Walnut Creek
5-11-90 East Eighteenth Street/Bridgehead Rd Antioch
I1-28-90 Sierra Vista Antioch
6-11-90 Riverview Marina No. 113 Boundary Reorg Pittsburg
8-16-90 Oakwood Boundary Reorg Clayton
8-27-90 Coggins-Buskirk#2 Pleasant Hill
10-10-90 Hill/Rotholz Martinez
12-3-90 Northeast Industrial Area No. 110 Pittsburg
12-13-90 Southwest Boundary Reorg Pittsburg
12-16-90 Minnesota Ave Brentwood
12-16-90 Edwards Boundary Reorg Richmond
12-26-90 1 Bancroft Village#2 1 Walnut Creek