MINUTES
Regular Meeting February 7, 2013

(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
Chairman Baugh called the meeting to order at 9:00 am at the Shasta County Board of Supervisors Chambers in Redding, CA. Commissioners Day, Jones, Kehoe, Mathena and Morgan were present. Commissioner Haynes was absent. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk Marissa Jackson were present as staff. Alternate Commissioner Farr was present as a member of the audience. Chairman Baugh welcomed incoming Commissioner John Day to the meeting.

PLEDGE OF ALLEGIANCE
Commissioner Day led the Pledge of Allegiance.

PUBLIC COMMENT
There was no public comment submitted.

NOTICED PUBLIC HEARINGS
Ms. Mickelson reported that the Anderson Cottonwood Irrigation District (ACID) had submitted an application for proposal to annex 19 parcels (approximately 88 acres) and to concurrently amend the District’s Sphere of Influence to include the affected area. The annexation was proposed because the properties have historically received services from ACID and have recently been determined to be outside District boundaries. The annexation would allow for continuation of historical services. This is an inhabited, non-100% consent application. Tax exchange agreements are in place and a negative declaration has been adopted by ACID. One comment was received by a property owner outside of the boundary and CalFire submitted a letter of support.

The public comment hearing was opened at 9:03 am.

ACID consultant Duane Miller, of DK Miller Engineering, reported that the project is a clean-up issue which brings everyone into compliance by placing current customers inside District boundaries.

The hearing closed at 9:06 am. By motion made (Kehoe) and seconded, the annexation was approved unanimously.

CONSENT CALENDAR
By motion made (Kehoe) and seconded (Day), the consent calendar was approved.

BUDGET AND FISCAL AFFAIRS
Ms. Mickelson reported that the LAFCO 2012-13 Budget is on track to end the year at or below budget. Expenditures are currently at 58%, some of which is due to increased expenses for specific proposals noted in legal, planning and publications line items. Revenue is tracking above expected due to an influx of paid proposal deposits and will offset the specific costs associated with those particular proposals. The significant amount of money owed by the Fall River Valley Community Services District (FRVCSD) remains as an overdue receivable for expenditures funded on their behalf. The unpaid invoices of more than $12,000 are scheduled to be sent to collection, or to potential recovery methods as determined by the Commission if acceptable payment arrangements are not made immediately. Payment has been discussed with the District on several occasions. A letter was received from them February 6, 2013 at 9:00 pm indicating that they are not prepared to pay at this time. As the cost-share participants that fund LAFCO are subsidizing the unpaid bill, Ms. Mickelson asked the Commission to provide direction.

Terry Briggs spoke as a ratepayer regarding FRVCSD’s bill, stating the District has concerns about the breakdown of expenses and requires an itemization.

Commissioner Baugh questioned how LAFCO can get to the end of the year considering the line items which are grossly over budget in regard to the FRVCSD unpaid invoice. Ms. Mickelson stated that reserve funds could be transferred and utilized to offset operating expenses, if necessary. If the reserves become inadequate, LAFCO can go to the Board of Supervisors and request a loan through the end of the fiscal year.

Commissioner Kehoe noted that FRVCSD’s letter requested additional time to pay the invoices, but did not specify a time frame. He stated that we need to request of them what kind of time frame they need, the specific issues they have with the billing statement and what their capacity to pay is, as well as alternatives they may have as far as a payment schedule. Commissioner Mathena would like to see this item on the March 7, 2013 agenda.

The mid-year budget was adopted by motion made (Kehoe) and seconded.

SPECIAL STUDIES AND REPORTS
Ms. Mickelson reported that the Gore/Steiner Annexation to ACID is moving forward and tax negotiations are underway. Mayers Memorial Hospital District annexation has been filed and tax agreements were adopted by Shasta and Modoc Counties. We received a letter from Modoc County dated February 5, 2013 indicating a rescission of the previously adopted revenue sharing resolution. Without those agreements from Modoc and Lassen, Mayers would need to modify the project boundaries to exclude areas outside of Shasta County.

The cemetery district Spheres of Influence are being completed, along with basic Municipal Services Reviews. South County Fire maps and Spheres of Influence are also very close to completion.

OPERATIONS & ADMINISTRATION
Ms. Mickelson provided some background regarding a policy decision made in 2002, after Cortese-Knox-Hertzberg took effect, specifying what types of agencies they would subject to a municipal services review (MSR). The following agencies were determined to be subject to the services review requirement: county, county service areas, cities, community services districts, water districts and fire protection districts. The Commission then determined that cemetery districts, health care districts, irrigation districts, mosquito abatement districts and resource conservation districts were not subject to a municipal services review; however they are subject to a sphere of influence determination. This historic decision was made ten years ago, just after the significant law revision. Other LAFCOs have not made this exemption.

The Mayers proposal, since it includes multiple counties, creates an obvious conflict between LAFCO policies as both Lassen and Modoc would require an MSR in order for the annexation to move forward. Ms. Mickelson agreed that the MSR is a vital tool and has questioned the exemption several times, but there has not yet been a pressing need to change policy and as such, the Commission has opted not to do that. She further advised that the Commission could opt to require MSRs for all of the previously exempted entities.

At minimum, the Executive Officer recommends a change in adopted policy to require health care districts to be subjected to Municipal Services Reviews. This change could be made by adding Health Care Districts to the list of agencies requiring a MSR and striking out health care districts in the sentence listing the exemptions. In addition, staff recommends adding the following (underlined) statement to adopted policy: Therefore, it is the position of Shasta LAFCO that these districts and the services they provide are not subject to municipal services reviews, unless deemed necessary by the Executive Officer in the course of completing a Sphere of Influence or Reorganization proposal. The proposed change to policy would allow for flexibility, yet would provide for an MSR requirement in situations where it was warranted.

If Shasta LAFCO does not require an MSR for the Mayers proposal, then Modoc and Lassen will not support the annexation. If it does go forward, Shasta LAFCO would need to assume that litigation would follow. She strongly recommended that the Commission require an MSR for Mayers and contract with a consultant due to the scope required of a health care district MSR. Commissioner Mathena concurred that the process is very complicated and a consultant specializing in health care districts was warranted.

Commissioner Kehoe asked for Mayer’s position on the matter. Ms. Mickelson responded that the District has not been contact with LAFCO regarding these issues.

Terry Briggs addressed the Commission inquiring as to how many MSRs had been completed since 2008. He also wanted to know why Mayers pursued their project and bothered other districts with it. Ms. Mickelson advised that the information is available on the LAFCO website and Commissioner Baugh stated that LAFCO cannot answer for the Hospital District.

Jan Lopez, as a member of the public, then distributed and read a three-page letter regarding MSR requirements for health care districts which she said she needed to bring to the Commission’s attention. She added that it is LAFCO’s responsibility to initiate general reviews and to recommend contracting out doesn’t feel right.

Matt Rees, CEO of Mayers Memorial Hospital District, then entered the meeting room. He asked for a six-month continuance on the annexation application as they are waiting to find out what will become of the ambulance service in Adin. A committee is looking at all of the options, one being the expansion of Mayers. They are also looking at forming a JPA in which case Mayers would not negotiate with the Counties, but the JPA for a zero sum tax agreement.

Ms. Mickelson cautioned the Commission that an extension was not on the agenda and that any action taken must be regarding MSR policy. It was determined that the issue will be brought back before the Commission at a future date.

COMMISSIONER ANNOUNCEMENTS
Commissioner Morgan announced that he has a new granddaughter who was born February 5th.

STAFF ANNOUNCEMENTS
Ms. Mickelson thanked Commissioner Farr for his service over the past two years, and for his presence in the audience as alternate. Ms. Mickelson also reminded the Commission that a special LAFCO meeting will be held on Thursday, March 7, 2013 at 9:00 am at City of Redding Council Chambers. She also noted that the LAFCO Offices will be closed February 11th and 18th.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 9:49 am.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES
Regular Meeting December 6, 2012

(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
Chairman Baugh called the meeting to order at 9:00 am at the City of Shasta Lake Council Chambers in Shasta Lake, CA. Commissioners Farr, Fust, Jones, Kehoe, Mathena and Morgan were present. Commissioner Haynes was absent. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk Marissa Jackson were present as staff. Alternate Commissioner Russell was present as a member of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Farr led the Pledge of Allegiance.

PUBLIC COMMENT
There was no public comment submitted.

CONSENT CALENDAR
By motion made (Kehoe) and seconded, the consent calendar was approved.

OPERATIONS & ADMINISTRATION
Ms. Mickelson reviewed the past actions regarding the waiver of the Environmental Review Fee for the Fall River Valley Community Services District. At the September 2012 Commission meeting, the Fall River Valley CSD requested a waiver of the required Environmental Review Fee charged by LAFCO. Attorney Mark Atlas and Board Members David Hall and Sky Snyder spoke for the District. Commissioner Haynes made a motion that included, among other items, for the standard Environmental Review Fee of $750 to be waived in light of the unique facts of this application that include but are not limited to the fact that the District has served as the lead agency for CEQA review. The motion passed (6-1; with Commissioner Kehoe dissenting).

At the November 15, 2012 Commission meeting, Commissioner Farr moved to reconsider this item. A second was provided and the motion to reconsider and to set the matter on the next regular agenda passed (4-2; Commissioners Jones and Haynes dissenting, and Baugh recused).

A clarification regarding this fee was requested by some Commissioners. To summarize, Ms. Mickelson explained that the intent of the adopted fee is to recover costs associated with LAFCO staff reviewing, commenting and researching the CEQA document, as a responsible agency. These costs are incurred prior to the LAFCO application being submitted, thus the fee was separated out from the deposit amount, in order for agencies to better project their actual LAFCO expenses.
Clearly, the Fall River Valley proposal was not a typical LAFCO project. What was typical, however, was that the District served as the Lead agent for CEQA and LAFCO as the responsible agency. The adopted fee schedule is very clear that the cost of a Sphere Update or Amendment will require a deposit towards the actual cost AND the Environmental document review fee. The adopted schedule is also very clear that the fees charged for CEQA when LAFCO is the lead agent are different than those shown for when LAFCO acts as the responsible agency.

Given the broad nature of the discussion at the September Commission meeting, staff feels that the waiver of the fee was done in good faith, as an indicator of good will towards working with the District towards the consideration of their Sphere Amendment request. There was, however, seemingly some misunderstanding as to what this fee represents. A copy of Shasta LAFCO’s Fee Schedule was attached to the staff report that delineates costs as related to each category. Ms. Mickelson stated that as a responsible agency named by the District, it is LAFCO’s obligation to review the study and respond, and thus, staff time is charged out of that EIR fee.

Commissioner Baugh confirmed with Mr. Underwood that every commissioner present would be able to vote on the matter. A motion was made (Farr) to rescind the previous action; the motion was seconded and ultimately passed with two dissenting votes (Jones, Fust).

SPECIAL STUDIES AND REPORTS
Ms. Mickelson reported that the Spring Gulch Annexation to ACID and Mayers Memorial Hospital District are still in the review phases. The Spring Gulch Annexation was still awaiting the completion of the required tax exchange negotiation. Mayers has completed a tax exchange resolution with Modoc County, but there has been no resolution adopted by Shasta or Lassen Counties yet. An application was recently received for the Gore/Steiner Annexation to ACID, as well. The Shasta Red Annexation to CSA #8 has been discussed with LAFCO staff as a likely proposal. The cemetery districts’ Spheres of Influence are being completed, along with Municipal Services Reviews. South County Fire maps are also very close to completion.

COMMISSIONER ANNOUNCEMENTS
Commissioners Mathena, Morgan and Russell reported on the Monterey LAFCO Conference in October. Commissioner Kehoe congratulated Redding City Councilman Cadd, who was present in the audience, on his recent election.

STAFF ANNOUNCEMENTS
Ms. Mickelson reminded the Commission that the next LAFCO Meeting will be held on Thursday, February 7, 2013 at 9:00 am at Shasta County Board of Supervisors Chamber. LAFCO Offices will be closed December 24-26 and December 31- January 2. Staff will attend a CSDA Board Member training in January and will then prepare a modified training to offer Special District Board Members in our local area at some point in the Spring.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 9:33 am.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES
Regular Meeting November 15, 2012

(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
Chairman Baugh called the meeting to order at 9:00 am at the Redding City Council Chambers in Redding, California. Commissioners Baugh, Farr, Haynes, Kehoe, Jones, Mathena and Morgan were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk Marissa Jackson were present as staff. Alternate Commissioners Fust, Russell and Yarbrough were seated at the dais as observers.

PLEDGE OF ALLEGIANCE
Commissioner Morgan led the Pledge of Allegiance.

PUBLIC COMMENT
Public comment was opened and closed at 9:03 am. There were no comments submitted.

CONSENT CALENDAR
The minutes of September 6, 2012 were pulled from the consent calendar by Chairman Baugh.

Commissioner Kehoe requested that September 6, 2012 minutes be amended under Special Studies and Reports to clearly state that he (Commissioner Kehoe) had voted no on the issue of the fee waiver for Fall River Valley Community Services District. Fall River Valley CSD General Manager John Van den Bergh requested that minutes be amended to reflect six points made by attorney Mark Atlas and that the paragraph on page two following the recess be stricken from the record.

Commissioner Mathena made a motion to adopt the minutes as amended by Commissioner Kehoe and the motion failed for lack of a second. Commissioner Farr then moved that Commissioner Kehoe’s correction be made a part of the record and that the record also show that points made by Mr. Atlas were outlined in his August 3, 2012 letter to LAFCO. Commissioner Jones provided the second. The motion passed, with Commissioner Kehoe voting against it and Commissioners Baugh and Morgan abstaining

By motion made (Mathena) and seconded (Haynes), the remainder of the consent calendar was approved unanimously.

OPERATIONS & ADMINISTRATION
Consideration of Budget Committee Recommendation re: Audit Contract
Ms. Mickelson reported that pursuant to the Commission’s direction, the Budget Committee met with two candidates on November 1, 2012. The Committee recommended hiring Don Reynolds, CPA to perform an audit for the Fiscal Year ending June 30, 2012. By motion made (Mathena) and seconded (Kehoe) the recommendation to hire Don Reynolds was approved and the Executive Officer was authorized to sign the contract for services.

SPECIAL STUDIES AND REPORTS
Municipal Service Review: Fall River Valley Community Services District Draft
Ms. Mickelson noted corrections made to the document as follows: district name corrections were made to the footer and table of contents. On page three in the last paragraph, the word ‘County’ was inserted before ‘Board’ and the duplicate phrase ‘In the 1970s’ was stricken. In the last paragraph and sentence of page four the word ‘foot’ was changed to ‘feet’. On page five in the first paragraph, third line, the word ‘wastes’ was changed to ‘waste’ and in the last line of paragraph two, the word ‘their’ was stricken. On pages six and ten, all instances of ‘Fall River Mills’ were changed to ‘Fall River Valley.’ Ms. Mickelson further advised that this was a very early draft and not typically seen by the Commission as it would normally go to the District staff for review of material changes before being presented, but due to scheduling of the Sphere of Influence (SOI) hearing it was deemed necessary to have some type of document to present to the Commission because it does have some bearing on today’s hearing. Ms. Mickelson stated that she still needs clarification as to the issue of Parks and Recreations and would like direction as to continuing to work with the District to complete a draft document for Commission review. No input has been received from the District with regard to this draft.

John Van den Bergh presented the District’s comments to the Commission Clerk. He says the MSR is dependent on services they have and requested the Commission consider the resolution on page 18 of the SOI document so the District will know if they have park services. Mr. Van den Bergh states the MSR is far from complete and does not address the nine required topics and as such would like to have the discussion postponed until he has a complete draft, which he would like to have before the December 6, 2012 meeting.

Commissioner Baugh questioned Attorney Underwood as to when the Commission should address the parks resolution. Mr. Underwood stated that it was presented as part of the agenda packet and could be acted upon at the Commission’s discretion and would be reflected in the next draft of the proposed MSR. Commissioner Baugh stated the document was lacking and should be tabled. Commissioner Mathena pointed out that had the comments been submitted by Fall River Valley CSD prior to the meeting, the draft document would have been much more complete which is further indication of the lack of cooperation by the District with LAFCO and insisted that cooperation increase on the part of the District.

Commissioner Kehoe stated it was regrettable to be getting District comments at the last minute as it is not the way to do business in an effective and efficient way, but does agree with his colleagues. He listed several concerns, beginning with page six, paragraph three, ‘the District does not have an adopted policies for employee and contractor performance incentives’ and under Fiscal at the end of the page, ‘Fall River Valley Community Services District’s proposed budget for the current fiscal year projects a net income of ($76,497).’ Also, the top paragraph on page seven, ‘The District receives most of its revenue from services charges paid by water and sewer customers. They also receive property taxes, income from water sales and grant funding. The District has three outstanding bonds that total approximately $190,000 in long-term debt.’ Commissioner Kehoe stated these items are cause for great concern and is interested in knowing what that equation is as to debt retirement in juxtaposition to the income that is coming in. In paragraph three of page seven, ‘Revenues rose by 3%, expenses however, rose by 19%’ and the entire fourth paragraph of page seven is of great concern, ‘According to the audit findings, the District has an inadequate segregation of duties, thereby exposing them to risk of financial statement mismanagement, errors and fraud…Another significant finding was the lack of records regarding the District’s financial activities.’

No action was taken on the MSR and the draft document was left with staff for completion.

Consideration of Fall River Valley Community Services District Sphere of Influence Amendment
The Executive Officer reported that this item was brought by the Fall River Valley CSD and her staff report was made available to them at the beginning of the month to allow time to bring forth their Board action regarding this item. The District submitted a request for initiation of proceedings for a Sphere Amendment, proposing to add approximately 316,528 acres to their current Sphere of 1,350 acres, representing an increase of 23,446% over their current Sphere. The proposal was prepared by District staff and consultants at the bequest of the CSD Board and was not a collaborative proposal made with LAFCO staff. No alternatives to the proposal were presented by the District. This is not an annexation, but a request to add substantial territories to the SOI, only. Shasta LAFCO policies and applicable government code encourage annexation within the Sphere area. Specifically, Pursuant to Section 56668(h) of the LAFCO Act, Shasta LAFCO encourages and will favorably consider proposals where it can be demonstrated and findings or determinations can be made that the proposal is consistent with the sphere of influence of any local agency. Thus, Commissioners must consider a SOI addition to be a preliminary, yet substantial step in the annexation process.

Ms. Mickelson further reported that the process was limited in scope due to lack of cooperation with other agencies, consideration of realistic service capacity, confusion regarding the definition and nature of Spheres of Influence and lack of community support and that this proposal does not meet the mandates of the LAFCO mission. Ms. Mickelson requested that the Commission consider the proposed boundaries of an SOI amendment as prepared by LAFCO staff which includes District-owned properties currently outside of their boundaries, other parcels currently receiving service outside of the District and other parcels potentially considered for annexation in the District’s near growth plans.

Commissioner Baugh confirmed that the Commission was in receipt of all comments received and that all legal publications had been made and all signatures and fees had been provided by the District. Ms. Mickelson reported that there was an outstanding balance of just under $9,000 that the District had not paid.

Mr. Underwood reported that procedural prerequisites had been met and there were statutory findings to be made by the Commission so long as the legislative record supports the decision. Also, that there are findings of fact that must be reflected in the final proposed resolution after comments in today’s public hearing and that it may be advisable to take comment and consider adjustments to the proposed SOI at a later date.

Ms. Mickelson added that at the last meeting, staff was directed to waive the environmental review fee and to prepare a resolution regarding the issue of latent powers for Parks and Recreation services. The resolution included on page 18, was drafted by Mr. Underwood as directed. The Executive Officer, however, did not agree with the resolution as she had not been presented with proof that the District actually had a history of performing Parks and Recreation services. She felt that the law was clear and that the Commission should rely on their action taken in 2006 based on the District’s submitted survey response regarding active powers under the CSD law revision. The correction of latent powers is a simple process which could be resolved without undoing a decision made in the past and Ms. Mickelson would be willing to waive staff time to consider an application for parks and recreation service. Given that so much of the SOI expansion, grants and potential funding opportunities are based on parks and recreation services this must be done correctly. The issue can be easily resolved with a letter from the District requesting activation of Parks and Recreation services and outlining various factors as indicated in Government Code Section 56824.10.

Public comment began at 10:10. Commissioner Baugh requested that Mr. Van den Bergh address the issue of unpaid fees. Mr. Van den Bergh stated that he intends to pay the fee if he deems them as appropriate. Regarding the SOI he stated that first the resolution must be approved, next services can be described in an MSR, which must be approved, and then applied to an SOI, in correct sequence. Mr. Van den Bergh stated that using the words ‘latent services’ was inappropriate because they have been providing parks services since 1982 as reflected in the Lions Club agreement on page 19 of the SOI and that the Commission has to acknowledge that they are a parks district. He reminded Commissioners a motion passed at the last meeting that a resolution should be created and again asked for it to be considered as it was delaying the complete MSR and he disagrees with having to ask for latent powers. He asked that the discussion be continued to the February 7, 2013 meeting.

Commissioner Baugh confirmed that Mr. Van den Bergh was asking that the MSR be approved prior to the SOI being considered and whether or not he would like to comment on the SOI. Mr. Van den Bergh agreed that he wanted the MSR approved first and the matter continued. He further stated he would like the public comment period to be extended to January; he added that he wanted to comment on public comments after they were made, but not the SOI.

Cassel resident, Edie Baltzer, strongly opposed the SOI, has no need of their services and does not wish to be included in what she referred to as, “the land grab”. She stated that the CSD thinks they will encompass and operate PG&E’s current recreation properties and already have great difficulty maintaining their current responsibilities.

Jerry Duerre, Fall River Mills resident and business owner, stated he has never seen any evidence of the FRVCSD providing any park services, including the Lions park. His business has provided the equipment for that park and always billed the Lions Club, never the CSD. He also represents Pine Grove Cemetery District in McArthur and needs no service from them. He reported that no one he has spoken to is in favor of the expansion.

Jerry Monath, FRVCSD Board-elect member, speaking as a member of the public because he will not be seated until December, states that no one knows why the area is so large, including former directors. He and those he has spoken to agree with an SOI expansion, but of a modest size because Parks and Recreation are luxury items. No one on Black’s Mountain will be realistically offered anything as a result of the proposed SOI and he opposes it.

Diana Rogers, member of the Fall River Mills Cemetery District Board and Municipal Advisory Committee, objects as the SOI is too large. Much of the area is farms and Forest Service land and there is no way to provide any of the CSD services to the bulk of the areas. She asked that the Commission adopt Option 1 of the Executive Officer’s Staff Report or postpone the issue until the new CSD Board is seated in December. Property divestment negotiations still have not been completed with PG&E for areas the CSD is requesting and some areas are not even being considered. Ms. Rogers stated that she is a member of the American Legions who donated the land to the CSD and the CSD has always referred issues to the Lions club because the Lions maintain it.

Michelle Bonnewell, Pittville resident, states she is hearing misinformation and that the Mountain Echo newspaper has a vengeance against the CSD, including opposition to the SOI. She states that information is published prior to the CSD receiving it and the process has been corrupted despite the CSD’s effort and expense to educate LAFCO. She requests the comment period be left open and provided 5 copies of the September 11, 2012 issue of the Mountain Echo and advised issues were archived online.

Commissioner Baugh invited Mr. Van den Bergh to speak again and stated that the plethora of letters received were mainly in opposition. As such, Commissioner Baugh asked for clarification regarding the pattern of mismanagement and illegal conduct within the agency, as mentioned in the letters, and how the District could possibly provide services to the remote region.

Mr. Van den Bergh stated that Cassel had been included because they asked for it. If they didn’t want to be included they can be removed, as could Little Valley. He states that there was not one comment made in the letters against the SOI. He says the letters contain misinformation and the SOI cannot increase taxes. He also stated that the CSD was poorly managed and all errors have been corrected and now has a positive cash flow. He came to Fall River Valley to preserve it and provide his services, he states that the proposal was already in existence and he is merely executing the Board’s wishes. He says it is not possible to take over the districts without the permission of LAFCO and does not believe fire protection would change. He states the SOI is not a power-grab but an empowerment to the community to work with them to provide services if they can find financing and again requested a continuance.

Public comment was closed at 10:43.

A short recess was taken.

The meeting resumed at 10:53. Mr. Underwood indicated that procedural prerequisites were met and is within the purview of the Commission to consider the SOI options and or bring it back at a later date. He recommended the Commission accept the CSD’s signed indemnification agreement. Commissioner Morgan stated it was his assumption that the CSD did not have latent powers for Parks and Recreation and observed the overwhelming number of letters opposing the SOI. He added that he believed the resolution needed to be changed to not include Parks and Recreation.

Commissioner Kehoe summarized letters received; residents in the proposal area resist the intrusion of government, the boundaries are unrealistic, there are grave questions as to the stability, economics and managerial ability to provide services and there may be a degradation of services if this SOI is adopted. He advised that he will be considering these factors in his decision.

Commissioner Jones stated that the SOI was massive and an effort to influence, which the people clearly do not want. He would also want to look at Option 1 to determine any deficiency and whether or not the people would approve it. He stated he could not support the increase and believes the Commission needs to listen to the people.

Commissioner Mathena agreed and noted that PG&E indicated that there was no deal in place. He stated his opposition to the Sphere of Influence as proposed by the CSD, but would entertain the proposal by the Executive Officer due to the smaller size.

Commissioner Haynes cited the overwhelming opposition (both written and verbal) and agrees with the previous comments made by her colleagues. She further stated that she would be worried if she lived in that district, but would like to keep an open mind should the District return with support letters.

Commissioner Farr noted that staff had presented an alternative which primarily encompassed District-owned lands which might allow for future considerations for Parks and Recreation functions, but stated it still was not clear to him whether or not that was a latent power. He stated that based on information provided he is not sure it would stand up to scrutiny. He further noted that based on his recollection the District had discussed other latent powers they wished to include at previous Commission meetings. Commissioner Farr stated that he would like to consider continuing the matter at the request of the District if: (1)the District provides a letter and information requesting latent power authority for Parks and Recreation, if that is what they choose to limit it to; (2) The attorney to provide information to assist in making the decision; (3) the matter be brought back for discussion; and (4) the final MSR document as it has been Shasta LAFCO’s policy that it be completed prior to adopting an SOI.

Chairman Baugh stated that he had read all documentation provided over the years and was troubled by the size and aggressiveness of the proposed increase. When considering a sphere, his perception is that it is an area of influence and the eventuality would be the ability to provide services within that area. It is incomprehensible that this small service area could expand by 23,446% and there is no desire on the part of other agencies to be encompassed by this District. Chairman Baugh stated he didn’t see any way he would be willing to approve such an aggressive increase in the SOI and he does not see the benefit to the people involved. He stated that he would be open to Staff’s recommendation as it seems logical, but would like to see a deed to the park to determine the true owner.

Commissioner Mathena pointed out that if Option 1 was approved, and the issue of latent powers for the park was addressed, the property would still need to be annexed allowing the public time for input. He then proposed that the Commission approve Option 1 as presented by Staff and continue work on the MSR with increased cooperation and address the latent powers question. Commissioner Baugh asked if he would like to include in the motion to accept the CSD’s indemnification agreement and clarified that he was referring to the Executive Officer’s recommendation regarding latent powers. Commissioner Mathena answered yes to both. Ms. Mickelson asked for clarification that they were moving to approve Staff Option 1 with the condition of the District bringing forward a latent powers request regarding Parks and Recreation Services. Commissioner Mathena stated yes, along with the MSR.

Commissioner Farr stated he would second the motion so they could have discussion, but is not in favor of the motion stated as he doesn’t believe the SOI should be changed until the latent powers and MSR are completed. He added that the SOI request may change or disappear and would rather support a motion that follows the procedure of completing the MSR and latent powers before a decision is made on changing the SOI.

Commissioner Jones asked the Executive Officer whether anyone in the community located within Option 1 proposal had asked for a sphere change, other than the District. Ms. Mickelson stated no. Commissioner Jones asked the reason behind Option 1. Ms. Mickelson stated that since the District had not provided any alternatives she worked with the GIS provider to include District-owned properties, parcels they were providing exterior services to and properties the District had delineated for potential annexations down the road, to draft a proposed reasonable sphere boundary.

Commissioner Haynes stated that it appears to be premature to approve any SOI. Commissioner Kehoe states that the motion suggested approval of Option 1, but felt an inclination to kill the proposed SOI. Commissioner Morgan agrees with Commissioner Farr that Option 1 is assuming too much and the sphere is too large, more input is needed to make a meaningful decision and cannot support the motion. Commissioner Mathena stated that the Executive Officer has done a good job preparing the SOI and does not want to continue the item, but instead wants to send a message that Option 1 is the only option. Commissioner Baugh states that he is in agreement with Commissioner Kehoe and wants to vote no on the issue to end the question and fear for residents of the area. Should the District wish to bring back a small increase, it could be considered. A vote was taken on the motion (Option 1 as drafted by staff, accepting the District’s indemnification signature, conditioned upon a latent powers request by the District) and the motion failed.

Commissioner Kehoe moved that the SOI be categorically rejected as proposed by the District. Commissioner Jones seconded the motion and it passed unanimously.

Commissioner Farr moved to accept the indemnification agreement, Commissioner Morgan seconded and the motion passed unanimously.

Commissioner Farr stated they should not proceed with anything until the District decides whether or not to proceed with a latent powers letter. Attorney Underwood stated that in the absence of direction on the latent powers issue, Staff would need to proceed consistent with the resolution and certification of services from 2006 and the Commission can give direction based on evidence as they see it. Commissioner Kehoe asked that Mr. Underwood clarify for those in attendance what the latent powers issue entailed. Mr. Underwood did so. Commissioner Jones questioned Staff as to whether or not the MSR could be complete without clarification of latent powers and if she saw any resolution in the near future. Ms. Mickelson stated the MSR could be complete, but could only cover sewer and water, however simple resolution could come in the activation of latent powers if there was a spirit of cooperation by the District.
Commissioner Morgan stated that the issue needed to be cured and Commissioner Haynes stated that she thought the District may have provided services at the Lions Park. Chairman Baugh stated that ownership had no bearing and that they should wait for the District to act. Commissioner Kehoe confirmed that staff had sufficient direction to proceed.

Commissioner Farr made a motion to reconsider the action taken at the previous meeting to waive fees payable by the District to LAFCO against staff’s recommendation and consider it at the next meeting as he felt he had made the wrong decision. Attorney Underwood confirmed that the issue could be reconsidered. Commissioner Mathena seconded the motion.

Commissioner Morgan excused himself and left the meeting. Alternate Commissioner Fust then took his place at the dais.

Alternate Commissioner Fust noted that he also needed clarification regarding the environmental document review fee and in light of that, would agree that revisiting the previous action was warranted.

At 11:51 the Commission opened the floor for public comment. John Van den Bergh stated he had spent an enormous amount of money to get this done and it was rejected out of hand. He added that the people of the District cannot afford to keep paying for this and urged the Commission to put it behind them and move on. Public comment closed at 11:53.

A vote was taken, those in favor were: Commissioners Kehoe, Mathena, Fust and Farr. Those against were: Commissioners Jones and Haynes. Chairman Baugh recused himself as he was not in attendance at the previous meeting. The motion carried.

COMMISSIONER ANNOUNCEMENTS
None

STAFF ANNOUNCMENTS
None

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 11:56 am.

ATTEST:

Marissa Jackson
Clerk to the Commission