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

                                                                                                     MINUTES
                                                                              Regular Meeting September 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
Vice Chairman Mathena called the meeting to order at 9:01 am at the Anderson City Council Chambers, Anderson, CA. Commissioners Farr, Fust, Haynes, Kehoe, and Jones were present. Commissioners Baugh and Morgan were 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 Mathena led the Pledge of Allegiance.

PUBLIC COMMENT
Public comment was opened at 9:02 am. Michelle Bonnewell and Barbara Briggs addressed the commission regarding the Fall River Valley Community Services District’s Sphere of Influence Proposal. Peter Scales spoke about past experiences with the County and LAFCO. Public comment was closed at 9:13 am.

CONSENT CALENDAR
By motion made (Commissioner Kehoe) and seconded the Commission approved the consent calendar as presented. Commissioner Fust stated that he would abstain from the minutes as he had not been present at the previous meeting.

SPECIAL STUDIES AND REPORTS
Report on Upcoming or Potential LAFCO Activity
Ms. Mickelson reported that the Spring Gulch Annexation to ACID and the Mayers Memorial Hospital District Annexations are both awaiting tax exchange negotiations and resolutions prior to being set for hearing. Matt Rees from Mayers Memorial Hospital District stated that he did not fully understand the tax-exchange process and it has caused him a delay in the proposal.

Ms. Mickelson further reported that the Fall River Valley CSD Sphere of Influence Amendment is still being reviewed and has items awaiting revision. She discussed the specific issues of the Environmental Review fee remaining as unpaid and the latent powers activation request as still missing. At 9:45, the Commission allowed the public to comment on this specific item. Attorney Mark Atlas and Board Members David Hall and Sky Snyder spoke for the District. Mr. Atlas specifically outlined the points made in his August 3, 2012 letter to LAFCO. Public comment was closed at 10:22 am. Commissioner Haynes moved that the 2006 resolution chronicling activated powers be amended or replaced to address the issue of latent powers to reflect, based on facts recently presented by the applicant that appear to support a change to LAFCO’s certified list of active powers, that parks powers had been exercised by the District prior to and as of the 2005, and that this is therefore not a latent District power; that the standard Environmental Impact Fee of $750 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; and that the matter be set for hearing on November 1, 2012. Under discussion of the motion Commissioner Kehoe voted no and the motion passed. Commissioner Kehoe observed that in order to move forward in a spirit of harmony and community accomplishment the one thing required was to slay individual and corporate egos and move forward in the spirit of cooperation, both on behalf of the district and LAFCO otherwise we will continue to submerge ourselves in this debilitating acrimony which does no one any good.

At 10:39 am the Commission took a recess.

At 10:45 the Commission returned from recess. Commissioner Mathena expressed his personal apology to Ms. Mickelson for what he has observed and understands she has endured in the form of personalized verbal and written attacks by Fall River CSD supporters that have been directed at her during the pending SOI application process, and requested that the Commission be informed if any such attacks continue. Commissioner Kehoe stated that he was in no way intimidated by the threat of a lawsuit. He expressed hope the Commission will continue to do what it believes is right regardless of whether there is any threatened legal action as a result. Ms. Mickelson stated that she should be able to go to the restroom without being belittled and threatened. She expressed concern that threats and harassment directed at her is escalating and becoming increasingly personal. Commissioner Kehoe stated that considering the fact that the Commission’s employee has put them on notice that she feels threatened and harassed by one or more Fall River CSD supporters, and as such questioned Attorney Underwood as to what course of action the Board needed to take. Mr. Underwood responded that he believed it would be best to have that conversation with the Chair in a more private session, and to follow-up as then determined appropriate.

Sphere of Influence Update Plan and Schedule
The Executive Officer reported the following Sphere of Influence (SOI) Update Plan has been created based on the expected workload and agency considerations. The plan is to have all SOI’s updated within two years. By motion made (Commissioner Mathena) and seconded the plan was approved.

OPERATIONS & ADMINISTRATION 
Consideration of Audit and Audit Committee RFP Responses

Ms. Mickelson reported that four RFPs had been received for the Audit and one for the Audit Committee. Commissioner Haynes made a motion to delay the vote and send the matter before the Budget Committee. The motion was approved.

Policy and Procedure Update: Records Retention Policy Amendment
The Executive Officer reported that clarification was needed regarding electronic copies and presented the following verbiage: “All permanent records as indicated by the Records Retention Policy will be maintained as originals for as long as they physically viable. An electronic version of the document will suffice if and when deemed appropriate and necessary by the Executive Officer.” By motion made (Commissioner Fust) the update was passed unanimously.

OTHER BUSINESS
Assignment of CALAFCO Business Delegate and Alternate
Ms. Mickelson recommended nominating Commissioner Mathena as the voting delegate and Commissioner Russell as the alternate. The motion to support the staff recommendation was made by Commissioner Fust and was approved by the Commission.

COMMISSIONER ANNOUNCEMENTS
Commissioner Haynes noted that she would not be present at the December 6th meeting. Commissioner Fust announced that he will no longer tolerate attacks on staff and will leave the meeting, even if it means losing the quorum.

ADJOURNMENT
There being no further business, Vice Chairman Mathena adjourned the meeting at 11:06 am.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES

Regular Meeting June 7, 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 9:01 am at the City of Shasta Lake Council Chambers, 4488 Red Bluff Street, Shasta Lake, CA. Commissioners Farr, Kehoe, Haynes, Mathena, Morgan and Yarbrough were present. Commissioner Jones arrived a few moments later and Alternate Commissioner Yarbrough took a seat in the audience. Executive Officer Amy Mickelson and Clerk Marissa Jackson were present as staff. Alternate Commissioners Russell and Yarbrough were present as members of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Kehoe led the Pledge of Allegiance.

PUBLIC COMMENT
There was no public comment submitted.

NOTICED PUBLIC HEARINGS
Fiscal Year 2012-13 Final Budget Hearing

The Executive Officer presented the Fiscal Year 2012-13 Final Budget and confirmed that all required notices were made. Commissioner Baugh thanked Commissioners Haynes, Mathena and Morgan for their work on the Budget Committee.

Chairman Baugh acknowledged the written public comment received and advised that copies were available to those in attendance. The comments submitted by Fall River Valley CSD are hereby adopted as a part of this record. At 9:08 am, the Public comment period on Fiscal Year 2012-13 Final Budget was opened. There being no comments, the Public comment period was closed at 9:08 am.

By motion made (Commissioner John Mathena) and seconded the Fiscal Year 2012-13 Final Budget was approved unanimously.

MINUTES
The minutes of April 5, 2012 were presented. By motion made (Commissioner Brenda Haynes) and seconded the Commission approved the April 5, 2012 minutes.

BUDGET & FISCAL AFFAIRS
Fiscal Year 2011-12 3rd and 4th Quarter Transaction Register

The Fiscal Year 2011-12 3rd and 4th Quarter Transaction Register was distributed for adoption and review. By motion made (Commissioner David Kehoe) and seconded the 3rd and 4th Quarter Transaction Register was approved.

Consideration of Checking Account Statements
Ms. Mickelson presented the following bank statements: US Bank: two statements dated March 31, 2012 and April 30, 2012; Tri Counties Bank: two statements dated April 17, 2012 and May 17, 2012; and LAIF: two statements dated March 2012 and April 2012. By motion made (Commissioner Stephen Morgan) and seconded the bank statements were approved as presented.

CHANGES OF ORGANIZATION AND/OR REORGANIZATION
Report on Upcoming or Potential LAFCO Activity
Ms. Mickelson reported that the Spring Gulch Annexation to A.C.I.D. is ready for hearing, pending the completion of a Tax Exchange Agreement.

Mayers Memorial Hospital District is expected to submit their application within the week and are working on a tight time frame, pending Commission approval, to be included on the upcoming tax rolls. For that to occur, the item must be final by October 1, 2012.

Fall River Valley Community Service District’s Sphere of Influence Amendment application has been submitted and is currently being reviewed for completeness. Staff will communicate any further needs to the District and once determined as complete, will begin proceedings on the proposal.

OPERATIONS & ADMINISTRATION
Authorization to Open Separate Checking Account at US Bank and Close Tri Counties Account
Ms. Mickelson reported that Tri Counties Bank will no longer waive monthly fees if a minimum balance of $2500 is not maintained. US Bank can provide the same type of checking account/debit card free of charge. Staff recommended (1) opening a separate account at US Bank with an initial deposit of $2000 and (2) closure of the existing Tri Counties Bank account. A motion for approval was made (Commissioner John Mathena) and passed unanimously.

Formation of Audit Committee
Ms. Mickelson reported that there has been on-going discussion over the past few years regarding the need for an audit; however none has been performed due to high costs and low transaction volumes. Staff recommends formation of an Audit Committee to review procedures, transactions and financial policies which would assist with due diligence benchmarks and future audit preparation. Staff also recommends circulation of an RFP to local audit experts requesting that they serve on the Audit Committee and receive an hourly contract rate for services. Since the last audit was performed four years ago, Commissioner Kehoe stated that we should have a full audit completed and then form a committee afterward. A motion was made (Commissioner Larry Farr) to proceed with an RFP that includes two proposals, one for a full audit and one to serve on an Audit Committee. Commissioner Kehoe states that he will vote in favor of the motion, but supports the idea of a formal audit, not an informal review. The motion passed unanimously.

COMMISSIONER ANNOUNCEMENTS
Commissioner Farr welcomed LAFCO to City of Shasta Lake’s new Council Chamber facilities.

STAFF ANNOUNCEMENTS
Ms. Mickelson reminded the Commission that the next LAFCO Meeting will be held on Thursday, August 2, 2012 at 9:00 am at Anderson City Council Chambers, unless a special meeting is necessary prior to that date.

CLOSED SESSION
The Commission convened to closed session at 9:26 am pursuant to Government Code Section 54954.5(e) to for a Public Employee Performance Evaluation of the LAFCO Executive Officer.

CLOSED SESSION ANNOUNCEMENT
At 10:12 am the Commission reconvened to open session. Chairman Baugh announced that the closed session was conducted under Government Code Section 54954.5 and further reported that a formal review of the Executive Officer was made. He stated that the review was exceedingly positive and the Commission appreciates her efforts and are excited for and supportive of her work as the Executive Officer. Although Ms. Mickelson received high marks from every member of the Commission, no raise will be granted at this time due to the difficult economic times. Commissioner Farr requested that the results of the vote be disclosed for the record. There was a motion made by Commissioner David Kehoe to support the recommendation of the Executive Committee, which recommended that compensation rates be maintained. The motion was seconded by Commissioner Brenda Haynes. Commissioners Brenda Haynes, Patrick Jones, David Kehoe and Les Baugh voted in favor of the motion. The motion was opposed by Commissioners John Mathena, Stephen Morgan and Larry Farr.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 10:15 am.

ATTEST:

Marissa Jackson
Clerk to the Commission

                                                                                            MINUTES
                                                                           Regular Meeting April 5, 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 action taken.)

CALL TO ORDER/ROLL CALL
Vice Chairman Baugh called the meeting to order at 9:00 am at the Shasta County Board of Supervisors Chambers in Redding, CA.  Commissioners 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 present as members of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Jones led the Pledge of Allegiance.

PUBLIC COMMENT
Jan Lopez, in response to a Mt. Echo quote which said all requested information had not been provided to LAFCO, stated she provided a binder to staff prior to the October 2011 meeting.

Barbara Briggs, former Fall River Valley CSD Board Member and current Treasurer stated that they had originally started work on an SOI expansion in 2008 after many management issues and are now prepared to provide information to have the work completed in a timely manner.

Sandra Jensen, Fall River Valley CSD Board Member and local business owner, reported that the District has received a partial grant and loan in the amount of $1,000,000 and as such are now facing sensitive time frames.  She stated that the District currently has rate payers and assets that are outside their boundary and would like to move toward the annexation to get in compliance.

Michelle Bonnewell, from Rochester, New York, stated that she has been watching the process and finds it very interesting how contributing factors work together and will continue to observe the process.

NOTICED PUBLIC HEARINGS
The Executive Officer presented the Fiscal Year 2012-2013 Draft Budget for review and reported that LAFCO is on track to end the year slightly below budgeted expenditures, assuming no significant unanticipated expenses arise. Staff again recommended that the Commission authorize an Audit Committee or an Independent Audit within the next fiscal year. Ms. Mickelson reported that no written comments were submitted regarding the Draft Budget. She reminded the Commission that a Draft Budget must be adopted by May 1st. After the Draft Budget is adopted, a Final Budget will be circulated to the public and presented to the Commission prior to the June 15th deadline.

At 9:20 am, the Public comment period on the Fiscal Year 2012-2013 Draft Budget was opened. 

John Van den Bergh, manager of Fall River Valley CSD stated he would like the Commission to outsource the administrative function of LAFCO as some other LAFCOs have done. 

The Public comment period was closed at 9:23 am.

Commissioner Kehoe motioned to approve a Budget Committee.  Commissioners Haynes, Mathena and Morgan volunteered to form the Budget Committee for Fiscal Year 2012-2013.  No one wished to pursue the issue of outsourcing the Executive Officer position. By motion made (Commissioner David Kehoe) and seconded, the Fiscal Year 2012-2013 Draft Budget was approved.

MINUTES
The minutes of February 6, 2012, were presented. By motion made (Commissioner David Kehoe) and seconded, the February 6, 2012, minutes were approved. 

BUDGET & FISCAL AFFAIRS
Fiscal Year 2011-12 3rd Quarter Transaction Register
The Fiscal Year 2011-12 3rd Quarter Transaction Register was presented for review and adoption. By motion made (Commissioner John Mathena) and seconded, the 3rd Quarter Transaction Register was approved.

Consideration of Checking Account Statements
Ms. Mickelson presented the following bank statements: US Bank: two statements dated January 31, 2012 and February 29, 2012; Tri Counties Bank: two statements dated February 20, 2012 and March 18, 2012; and LAIF: two statements dated January 2012 and February 2012. By motion made (Commissioner John Mathena) and seconded, the bank statements were approved as presented. 

SPECIAL STUDIES AND REPORTS
Mountain Gate CSD Final Municipal Services Review
Ms. Mickelson reported that staff had worked with the District at length on the final draft and no significant changes had been made. District Manager Jeff Cole reported to the Commission that he is happy with the document.  Commissioner Fust suggested including a schematic of the piping system on page 9 pursuant to Proposition 108 infrastructure requirements.  Staff will determine whether or not the information is available to include.  By motion made (Commissioner John Mathena) and seconded, the Municipal Services Review was approved with the prescribed changes.

Report on Upcoming or Potential LAFCO Activity
Ms. Mickelson reported that the Spring Gulch Annexation to A.C.I.D. application had been submitted and there is work pending on the tax exchange resolutions prior to the application being accepted as complete.  She recently met with the consultant and was advised that we should expect an application for the McConnell/Steiner Annexation to A.C.I.D. in the near future.

Staff has met with Mayers Memorial Hospital District regarding their potential annexation.  The District is facing stringent time lines and has indicated that they would pay the applicable costs of a special meeting, if necessary.

Ms. Mickelson further reported that she and Commissioner Russell attended a community meeting in Cassel to discuss a potential annexation by Burney Fire Protection District that may impact services currently provided by the Cassel Volunteer Fire Department/CSA 1.  No formal application has been filed with LAFCO. Commissioner Russell reported that the meeting was productive and discussions are continuing at the community level.

OPERATIONS & ADMINISTRATION
Policy and Procedure Update
Staff requested direction from the Commission regarding the following issues:

Regarding mid-term vacancies, historically the Vice Chair has assumed the responsibilities of the Chair and a new Vice Chair position has been elected, however this is not clearly stated in our policies.  By motion made (Commissioner John Mathena) and seconded the policy amendment was unanimously approved as suggested.

The Executive Committee has been comprised of varying membership (i.e., no more one member from each type of appointing agency) which is not currently delineated in policy.  By motion made (Commissioner Brenda Haynes) and seconded, the policy delineation was approved.

Staff questioned whether or not a policy should be instituted stating when or how often the third member of the Executive Committee is appointed as existing policy is silent on the issue.  Annual appointment by the Chair and approval by the Commission was approved by motion made (Commissioner John Mathena).

The LAFCO application and application standards need to be updated to reflect electronic submission and newer requirements.  Staff requested direction to make formatting and procedural changes reflecting those needs which will allow for compliance with new standards and save costs for districts. By motion made (Commissioner Brenda Haynes) and seconded, the changes were approved.

Election of Chair and Vice Chair
Due to numerous elections and appointments, the Commission was asked to hold the election of Chair and Vice Chair at today’s meeting rather than in June.  Those elected would serve 26-month terms ending in June 2014.  The Commission agreed. Commissioner Haynes nominated Commissioner Baugh as Chair and the motion was approved (Commissioner David Kehoe) unanimously as made.  Commissioner Kehoe nominated Commissioner Mathena as Vice Chair and the motion carried.

Naming of Executive Committee
The Executive Committee is comprised of the LAFCO Chair, Vice Chair and one additional member appointed by the Chair. Chairman Baugh nominated Commissioner Haynes and the motion was approved as made. 

Executive Officer Compensation Survey
This study was brought at the request of Commissioner Morgan who wanted to know the compensation of like-LAFCOs.  Ms. Mickelson advised that she had based the study on LAFCOs with similar Executive Officers positions with comparable populations and special district numbers.  She offered to include LAFCOs which are geographically closer, but reiterated that they operate differently.  Commissioner Mathena said that the study is fine as it stands. Commissioner Morgan indicated that the Budget Committee needs to address it.  The survey will be taken under advisement by the Executive Committee through the Executive Officer performance review process, as indicated by adopted policy.

COMMISSIONER ANNOUNCEMENTS
Commissioner Farr asked for a status update regarding the CALAFCO Executive Officer retirement and recruitment.  Ms. Mickelson advised that Bill Chiat will continue to serve through October 2012 and the CALAFCO Board is currently drafting and circulating the job announcement.

STAFF ANNOUNCEMENTS
Ms. Mickelson reminded the Commission that the next LAFCO Meeting will be held on Thursday, June 7, 2012, at 9:00 am at the Shasta Lake City Administrative Center. 

She also announced that LAFCO is co-hosting an AB1234 Ethics training session on April 19th at the Lema Ranch. She noted that all of the Special Districts, cities and the County had been invited to participate.

CLOSED SESSION
The Commission convened to closed session at 10:31 am pursuant to Government Code Section 54956.9(b) Regarding Potential Litigation. 

CLOSED SESSION ANNOUNCEMENT
At 10:48 am the Commission reconvened to open session. Counsel Underwood announced that the closed session was conducted under Government Code Section 54956.9 and that there were no reportable actions.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 10:48 am.

Attest:

Marissa Jackson   
Clerk to the Commission

  MINUTES
Regular Meeting February 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 Fust called the meeting to order at 9:00 am at the Redding City Council Chambers, 777 Cypress Avenue Street, in Redding, California. Commissioners Baugh, Farr, Fust, Haynes, Kehoe, Mathena and Alternate Commissioner Yarbrough were present. Executive Officer Mickelson and Clerk Marissa Jackson were present as staff. Alternate Commissioners Russell and Morgan were present as members of the audience.  

PLEDGE OF ALLEGIANCE 
Commissioner Yarbrough led the Pledge of Allegiance. 

PUBLIC COMMENT 
There was no public comment submitted.

MINUTES
The amended minutes of December 1, 2011 were presented. At the request of Commissioner Kehoe, Executive Officer Mickelson read the amendments aloud. By motion made and seconded (Yarbrough, Mathena) the minutes were approved. Commissioner Haynes abstained.

BUDGET & FISCAL AFFAIRS
Fiscal Year 2011-12 2nd Quarter Transaction Register
The Fiscal Year 2011-12 2^nd Quarter Transaction Register was presented for review and adoption. By motion made and seconded (Haynes, Baugh), the 2^nd Quarter Transaction Register was approved.  

Fiscal Year 2011-12 3rd Quarter Transaction Register
The Fiscal Year 2011-12 3^rd Quarter Transaction Register was presented for review and adoption. By motion made and seconded (Mathena, Yarbrough), the 3^rd Quarter Transaction Register was approved.  

Consideration of Checking Account Statements
Ms. Mickelson presented the following bank statements: US Bank: two statements dated November 30, 2011 and December 31, 2011; Tri Counties Bank: three statements dated November 17, 2011, December 18, 2011 and January 17, 2012; and LAIF: two statements dated November 2011 and December 2011. The Commission approved (Yarbrough, Haynes) the bank statements as presented.  

Fiscal Year 2011-12 Mid-Year Budget Review
Ms. Mickelson reported that the LAFCO budget is on track to end the year at or below budget, pending no unanticipated expenses. Overall, expenditures are at 48% of the projected year’s total through December 31, 2011 and revenue is tracking at 100% of expected. The Commission approved (Baugh, Yarbrough) the Fiscal Year 2011-12 Mid-Year Budget Review as presented.

Commissioner Jones entered the meeting at 9:15 and remained in the audience.  

OTHER BUSINESS 
Discussion of a Possible Statewide Name Change
Ms. Mickelson reported Shasta LAFCO recently received communication from a CALAFCO Board Member regarding the possibility of changing the agency name (statewide) to something that would more accurately reflect what LAFCO does on a daily basis. Commissioner Yarbrough inquired as to costs related to such a name change. Ms. Mickelson estimated that it could cost up to $1,000 for Shasta LAFCO to make a name change. Commissioner Kehoe questioned the Brown Act compliance of the correspondence and stated that he did not support the change. Commissioner Fust agreed. The commission determined that a letter should be directed to CALAFCO and to the CALAFCO board member stating that not only did the Commission not support the name change proposal, but also indicating their displeasure at being contacted individually by a CALAFCO board member. The discussion was formed as a motion (Baugh, Kehoe) and passed unanimously.

 
Announcement of the Special District Commissioner Elections
The Executive Officer met with counsel prior to the meeting and ballot results were tabulated. Commissioners Morgan and Haynes will serve as Special District Commissioners and Commissioner Fust will serve as the alternate. Ms. Mickelson thanked Commissioner Morgan for his service as the alternate and Commissioner Haynes for her continued service. She thanked Commissioner Fust for his service as Chair and past Vice Chair.

 
COMMISSIONER ANNOUNCEMENTS
Commissioner Haynes thanked Commissioner Fust for his service. Commissioner Farr reported that the City of Shasta Lake Council Chambers had not yet been completed, but that the new facility should be available for use very soon. 

STAFF ANNOUNCEMENTS
Ms. Mickelson announced that the next LAFCO Meeting will be held on Thursday, April 5, 2012 at 9:00 am at County of Shasta. She reminded the commission that her evaluation information would be distributed soon and asked them to complete the evaluation form when received. She also reminded the Commission that Form 700s are due to the LAFCO office no later than March 28^th. 

ADJOURNMENT
There being no further business, Chairman Fust adjourned the meeting at 9:25 am.  

Respectfully submitted, 

Marissa Jackson 
Clerk to the Commission