MINUTES
Regular Meeting – August 6, 2009
(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL/INTRODUCTIONS
Chairman Gover called the meeting to order at 9:00 am at the City of Redding Council Chambers, 777 Cypress Ave, Redding, CA. Commissioners Farr, Fust, Gover, Haynes & Kehoe were present. Commissioner Baugh & Dickerson were absent. Executive Officer Mickelson and Clerk Smith were present as staff.

PLEDGE OF ALLEGIANCE
Commissioner Fust led the Pledge of Allegiance.

PUBLIC COMMENT
Ms. Kathy Jalquin addressed the Commission. She stated that the three things couldn’t be hidden for long: the sun, the moon and the truth. She went on to say that if Commissioner Haynes continued doing what she was doing, that she (Ms. Jalquin) would sue LAFCO.

MINUTES
The minutes of June 11, 2009 were presented. By motion made and seconded (Kehoe, Farr) the Commission approved the June 11, 2009 minutes as amended. Amendments included; changing Commission to Commissioner on page 3 paragraphs 9 and 10.

BUDGET & FISCAL AFFAIRS
Fiscal Year 2009-10 1st Quarter Transaction Register to Date Commissioner Haynes asked about seeing a transaction register that included June expenditures. Ms. Mickelson stated that she would transmit the year-end detail to the Commissioners.
The 1st Quarter Transaction Register was presented for review and adoption. By motion made and seconded (Haynes, Kehoe) the Commission approved the 1st Quarter Transaction Register.

Consideration of Checking Account Statements
Adopted August 6, 2009

Ms. Mickelson presented the following bank statements: US Bank: two statements dated May 31, 2009 and June 30, 2009; Tri Counties Bank: two statements dated June 17, 2009 and July 19, 2009; and LAIF:
two statements dated May 2009 and June 2009. By motion made and seconded (Haynes,Fust) the Commission approved the bank statements as presented.

SPECIAL STUDIES AND REPORTS
Municipal Services Review: Status Report
Commissioner Fust asked Ms. Mickelson if the Commission had decided how to handle districts that had
yet to respond to LAFCO in regard to an MSR. Ms. Mickelson stated that the Commission had decided in
the past that they would not allow any type of jurisdictional boundary changes until an MSR is complete.
Commissioner Farr wanted to know what would happen should a district apply to expand their
boundaries into another district that hasn’t yet completed a MSR.
Ms. Mickelson stated that it would be a Commission decision and done on a case by case basis.
Ms. Mickelson provided the Commission with the current MSR update. This was an information item
only. No action was taken.
Countywide Spheres of influence Review: Status Report
Ms. Mickelson provided the Commission with the current Countywide Spheres of Influence Report. She
noted that changes to the proposed schedule would be likely, given that some Districts would be
bringing applications forward on their own as well. This was an information item only. No action was
taken.

CHANGES OF ORGANIZATION AND/OR REORGANIZATION
Report on Upcoming or Potential Proposals
The Executive Officer provided a brief summary to the Commissioners regarding upcoming and expected
proposals. Discussion followed. No action was taken.

OPERATIONS & ADMINISTRATION
Consider Responses to Legal Request for Proposals and Determine Scope of Legal Counsel Needs
Commissioner Kehoe was asked to update the full Commission as to the Executive Committee’s findings.
Commissioner Kehoe stated that the Executive Committee looked into LAFCO needing full time legal
counsel verses an on-call legal counsel. The Executive Committee recommended amending the current
Adopted August 6, 2009

RFP for Legal Counsel to include an on-call or ad hoc type of service. This would give other firms an
opportunity to submit a proposal to LAFCO.
Chair Gover added that the current RFP that was sent out excluded some firms, including LAFCO’s
current legal counsel, due to the current proposal.
Commissioner Farr asked if we could renegotiate with current legal counsel and not send out a new RFP.
Ms. Mickelson stated that legal counsel recommended sending out a new RFP.
Discussion followed.
By motion made and seconded (Kehoe, Haynes) the Commission directed staff to recirculate a modified
FRP to the legal community.
Discussion: Commissioner Farr expressed that he did not feel it was necessary to recirculate but would
support the Executive Committee. He did want to know if the same legal counsel who contracts with the
City of Shasta Lake were to contract with LAFCO, would he have to recuse himself?
Ms. Mickelson stated that in general, he would not need to recuse himself due to the attorney
representing both agencies.
SDRMA Board of Director Elections
Ms. Mickelson presented the Commission with potential candidates for Directors of the SDRMA Board.
The Commission took no action.
Designation of CALAFCO Voting Delegate
By motion made and seconded (Farr,Fust) the Commission designated Ms. Mickelson for the CALAFCO
Voting Delegate.

COMMISSIONER ANNOUNCEMENTS
Chair Gover addressed a letter that was received in regards to the budget process. Since the letter was
addressed to the Chair and Vice Chair the Commission had not yet seen the letter Chair Gover was
referring to.
Commissioner Kehoe suggested the letters be circulated to the full Commission, placed on a later
agenda if necessary, as well as policy considered on how to circulate communication addressed only to
certain members of the Commission.
Adopted August 6, 2009

STAFF ANNOUNCEMENTS
The next regular LAFCO meeting (Commissioner Workshop) will be at 9:00 am on September 3, 2009 at
the McConnell Foundation Guest House. It was noted that although the Workshop will be focused
toward Commissioner Education, that members of the public would be able to attend as well.
Commissioner Kehoe asked that specific directions to the Guest House be distributed with the agenda as
well.

CLOSED SESSION
None

CLOSED SESSION REPORT
None

ADJOURNMENT
There being no further business, Chairman Gover adjourned the meeting at 9:55 am.

Respectfully submitted,

Jessica Smith Date
Clerk to the Commission

MINUTES
Regular Meeting – June, 11, 2009
(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL/INTRODUCTIONS
Chairman Gover called the meeting to order at 9:00 am at the City of Anderson Council Chambers, 1887 Howard Street, Anderson, CA. Commissioners Baugh, Farr, Fust, Gover, Haynes, Kehoe & Webster were present. Commissioner Dickerson was absent. Executive Officer Mickelson, Counsel Johnson and Clerk Smith were present as staff.

PLEDGE OF ALLEGIANCE
Commissioner Fust led the Pledge of Allegiance.

PUBLIC COMMENT
There was no public comment submitted.

MINUTES
The minutes of April 2, 2009 were presented. By motion made and seconded (Baugh, Haynes) the Commission approved the April 2, 2009 minutes as amended. Commissioner Webster abstained.

BUDGET & FISCAL AFFAIRS
Fiscal Year 2008-09 4th Quarter Transaction Register to Date
The 4th Quarter Transaction Register was presented for review and adoption. By motion made and seconded (Baugh, Fust) the Commission approved the Transaction Register.

Consideration of Checking Account Statements
Ms. Mickelson presented the following bank statements: US Bank: two statements dated March 31, 2009 and April 30, 2009; Tri Counties Bank: two statements dated April 19, 2009 and May 17, 2009; and LAIF: two statements dated March 2009 and April 2009. By motion made and seconded (Baugh, Haynes) the Commission approved the bank statements as presented.

Consideration of Continuation of Annual Independent Audit Practice
Ms. Mickelson reminded the Commission that Shasta LAFCO went out for an audit RFP almost one year ago. At the time, the RFP specified that the audit may be an annual or biennial process. Our current CPA firm responded that a biennial audit wouldn’t save LAFCO much money because they would have to audit back to the previous audit anyway. An audit was then completed for the 2007-08 Fiscal Year and no decision was made as to the frequency of the audits performed.

Commissioner Fust noted that the cost is almost the same to do either an annual or biennial audit. Commissioner Baugh added that he felt that the cost seemed high to him considering that LAFCO is a small agency. Ms. Mickelson stated that LAFCO could generate and circulate another RFP.

Commissioner Kehoe asked if the Shasta County Auditor’s office could perform an audit and if would be cost effective for LAFCO. Ms. Mickelson stated that when she had previously discussed that option with the Auditor’s office, they had declined to perform such a service.

Commissioner Baugh brought up the idea of looking for some possible alternatives, such as employing an accountant that could perform the audit.

By motion made and seconded (Baugh, Kehoe) the Commission directed staff to re-circulate an audit RFP as well as explore other options and report back findings to the Commission.

Public Hearing: Consideration and Adoption of 2009-10 Final Budget as Required by Government Code Section 56381 (c)
Ms. Mickelson presented the Commission the 2009-10 Final Budget. She noted that the requested Final Budget was $9,000 less than the adopted draft budget (a 3% decrease).

Commissioner Kehoe questioned why LAFCO was requesting an increase of fees when other public entities are taking cuts. Commissioner Baugh added that he too did not feel comfortable increasing rates during these current economic conditions. While he acknowledged that in the very near future LAFCO is going to face some very steep increases he would like to hold of any type of increases for as long as possible since we are dealing with economic conditions that are not typical.

Discussion followed as to what items in the budget could be cut to keep contributions the same as last fiscal year.

At 9:47 a.m. public comment on the 2009-10 Proposed Final Budget was opened.

Alternate Public Member Mathena suggested appointing an Audit Committee to replace the Annual Audit, as well as considering the potential cost of legal counsel since LAFCO’s current legal counsel submitted a termination of services letter.

Ms. Char Workman-Flowers of Clear Creek CSD stated that they had to cut back on employees and they have had reduced fees of 22%.

At 9:55 a.m. the public comment period was closed.

The Commission again began discussion as to which line items could be reduced or cut.

Commissioner Kehoe asked how the contribution amounts were calculated. Ms. Mickelson stated that it’s based on Government Section Code 56381. The revenue figures are based on revenue that is reported to the State Controller and that the report runs about 2-3 year years behind. Each independent special district’s share is then apportioned in proportion to each district’s total revenues. This is all calculated by the Auditor’s office, as per Government Code Section 56381(a).

The Commission asked Ms. Mickelson if staff would be able to rework the numbers, thereby reducing expenses and keeping contributions the same as last fiscal year.

Ms. Mickelson responded that if the Commission would take a ten minute recess, staff should be able to collaborate and make adjustments to the presented Final Budget.

At 10:07 the Commission took a ten minute recess.

At 10:17 the meeting resumed with Ms. Mickelson presenting four suggested changes to the budget: (1) decreasing the Accrued Benefits line item by $8350, (2) decreasing the Audit line item by $3500, (3) decreasing the Travel & Conferences by $3000 which would preclude any of the Commissioners from attending the annual conference and (4) thus since the Contingency line item is based on total expenditures this item would decrease by $741. All four changes to the budget would decrease total expenditures by $18,091, which would allow contribution rates to remain the same as last fiscal year.

Commissioner Baugh asked Ms. Mickelson if staff recommends adopting the budget with the changes proposed. Ms. Mickelson stated that the Final Budget she originally presented to the Commission is what staff recommends, however, she would certainly support the Commission’s decision. Ms. Mickelson again noted that the Commission had been living on a carry-over budget for years and that marked increases would be soon-coming in the following years.

Commissioner Baugh suggested looking at LAFCO’s fee schedule as a way to increase revenues in the future. Commissioner Haynes asked if it was necessary to pay for legal counsel to attend LAFCO Commission Meetings. Commissioners Baugh and Kehoe concurred with Commissioner Haynes and suggested that it be brought back as an agenda item.

By motion made and seconded (Baugh,Fust) the Commission adopted the 2009-10 Final Budget, with amendments, as required by Government Code Section 56381 (c). The amendments noted were: 1) Decreasing the Accrued Benefits line item by $8,350. 2) Decreasing the Audit line item by $3,500. 3) Decreasing the Travel & Conferences by $3,000 4) Decreasing the Contingency line item by $700. Commission Farr dissented. When asked by another Commissioner, Commissioner Farr explained that he supported the staff recommendation, specifically the Final Budget that was presented to the Commission.

SPECIAL STUDIES AND REPORTS
Municipal Services Review: Final City of Shasta Lake
By motion made and seconded (Farr, Baugh) the Commission approved the City of Shasta Lake Final Municipal Services Review as presented.

Commissioner Farr thanked staff for all the time and effort that went into preparing the City of Shasta Lake MSR.

Commissioner Fust appreciated the document and thought it was well done.

Report/Opinion from Counsel, re: Principal County Status
Counsel Johnson presented her findings to the Commission regarding Principal County Status. Commissioner Fust asked that if an annexation were to take place, would a tax exchange agreement have to take place. Counsel Johnson stated that yes there would have to be an agreement set in place.

By motion made and seconded (Farr, Fust) the Commission accepted the Report/Opinion from Counsel, re: Principal County Status.

CHANGES OF ORGANIZATION AND/OR REORGANIZATION
Report on Upcoming or Potential Proposals
The Executive Officer provided a brief summary to the Commissioners regarding upcoming and expected proposals. Discussion followed. No action was taken.

OPERATIONS & ADMINISTRATION
Consider PTO Accrual Limit and Administrative Leave Cash-out Policy and Contract Amendment
Ms. Mickelson presented the Commission with Contract and Policy changes drafted by legal counsel.

By motion made and seconded (Kehoe, Fust) the Commission adopted the Draft Contract and Policy Changes, which includes the Executive Officer accruing no more than 300 hours of PTO and to receive payment of up to a maximum of 48 hours per year of unused Administrative Leave.

Discussion: Commissioner Farr asked if under paragraph 7, line 5, it should say in lieu of Administrative Leave and not PTO. Counsel Johnson agreed that it should say Administrative Leave and would make the change.

COMMISSIONER ANNOUNCEMENTS
None

STAFF ANNOUNCEMENTS
The next regular LAFCO meeting will be at 9:00 am on August 6, 2009 at the City of Redding.

CLOSED SESSION
None

CLOSED SESSION REPORT
None

ADJOURNMENT
There being no further business, Chairman Gover adjourned the meeting at 11:30 am.

Respectfully submitted,

Jessica Smith
Clerk to the Commission