Special Meeting
May 23, 2013 – 9:00 am

Shasta Lake City Council Chambers
4488 Red Bluff Street
Shasta Lake, California

The Shasta Local Agency Formation Commission welcomes you to its meetings which are regularly scheduled for the first Thursday of every other month beginning at 9:00 a.m. in the Board of Supervisors Chambers in the Shasta County Administrative Building or a City Council Chambers of an incorporated city in Shasta County, in or around Redding, California. (From time to time a meeting date, place and/or time may be changed due to holidays or other conditions which necessitate doing so.) Your interest is encouraged and appreciated. If requested, the agenda and documents in the agenda packet shall be made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 ( 42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. Upon receipt of the written request, the legislative body or its designee shall cause the requested materials to be mailed at the time the agenda is posted. . . “ (Section 54954.2)

AGENDA

1. Call to Order/Roll Call:

2. Pledge of Allegiance: Commissioner Russell

3. Public Comment: Members of the public may address the Commission concerning matters within the jurisdiction of LAFCO that are not listed on the agenda. Comments may be limited to three minutes per person. No action may be taken on these matters.

4. Operations and Administration
     a. Election of a Vice Chair (Action)
     b. Consideration of Executive Committee Purpose, Policy and/or Necessity (Action)

5. Commissioner Announcements

6. Staff Announcements
     a. Next LAFCO Meeting: June 13, 2013 (City of Redding) beginning at 9:00 am

7. Closed Session:
     a. Pursuant to Government Code Section 54956.9:
     Regarding Potential Litigation: 2 Cases (Action)

8. Closed Session:
     a. Pursuant to Government Code Section 54957:
     Evaluation of Performance of LAFCO Executive Officer (Action)

9. Closed Session Report – If Any Reportable Action Taken

10. Adjournment

Executive Committee
Special Meeting
April 29, 2013
3:00 pm

Shasta LAFCO Office
2516 Goodwater Avenue, Suite A
Redding, California

AGENDA

1. Call to Order/Roll Call:

2. Public Comment: Members of the public may address the Executive Committee concerning matters within the
     jurisdiction of LAFCO that are not listed on the agenda. Comments may be limited to three minutes per person. No
     action may be taken on these matters.

3. Closed Session: Pursuant to Government Code Section 54956.9(b):
     Regarding Potential Litigation: 2 Cases

4. Closed Session: Pursuant to Government Code Section 54954.5(e):
     Public Employee Performance Evaluation; Title: LAFCO Executive Officer

5. Closed Session Report

6. Adjournment

MINUTES
Special Meeting March 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 Redding City Council Chambers in Redding, CA. Commissioners Day, Haynes, Jones, Kehoe, Mathena and Morgan were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Alternate Commissioners Fust and Russell were present as members of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Morgan led the Pledge of Allegiance.

PUBLIC COMMENT
Public comment was opened at 9:02 am. Jan Lopez presented and read a letter regarding sphere of influence (SOI) updates. She proposed that the Commission reverse the existing exemption policies.

Jim Reed, Fall River Mills attorney, stated that a group of concerned taxpayers has asked him to sue LAFCO due to incomplete municipal service review (MSR) and sphere of influence studies.

Terry Briggs, Fall River Mills resident, advised that the meeting was futile and that only nine MSRs and no SOIs had been completed since 2006. He reminded the Commission of the date of its last audit and shared his disagreement with the bill for Fall River Valley CSD. Public comment was closed at 9:14 am.

CONSENT CALENDAR
By motion made (Mathena) and seconded, the consent calendar was approved. Commissioner Haynes abstained from voting on the minutes due to her absence at the previous meeting.

CONDUCTING AUTHORITY PROCEDINGS
Ms. Mickelson reported that on February 7, 2013, the Commission approved the ACID Spring Gulch Reorganization (LAFCO File #11-02). As it was not a 100% consent proposal, LAFCO must convene a Conducting Authority hearing to receive any written protest against the reorganization. To date, no protest has been received.
The public comment hearing was opened and closed at 9:16 am. As there was no protest submitted, the annexation will progress unhindered.

BUDGET AND FISCAL AFFAIRS
Ms. Mickelson reported that the LAFCO 2012-13 Budget is on track to end the year slightly over budgeted expenditures, mainly due to direct costs associated with paid projects, as well as the unreimbursed Fall River Valley CSD direct costs. Even with the unpaid Fall River Valley CSD invoices ($12,400), the Commission should anticipate ending the current Fiscal Year with a positive fund balance, due to the increase in paid proposals. The proposed budget does reflect a 3% increase to cost-of-share participants and is supported by a majority of the budget committee (Commissioners Haynes was not in favor, Commissioners Mathena and Morgan were). This would be the first increase to the cities, districts and the County in five years.

Staff recommended the following: that the Audit Reserve Account be partially funded at $2,500 this year and years to follow in order to have funding available for future audits or audit committee review; an increase to the Legal Counsel line item for the upcoming fiscal year due to anticipated legal activity; a new line item for Legal Reserves; and then funding the Legal Reserves line item at $2,500 and Legal Counsel at $2,500 to allow any remaining legal reserves to be carried over annually.

A copy of the proposed budget was circulated to all Cost-of-Share participants and agenda recipients and was published on the website. No comments were submitted.

Commissioner Haynes indicated that in her opinion certain line items in the budget could be reduced to avoid an increase to cost-of-share participants and would like to have a future discussion regarding employee benefits. Commissioner Baugh also would not like to see an increase in the budget and suggested Commissioner Travel/Transportation be eliminated for the year. Commissioner Mathena stated that if a small, manageable increase is not made a large one will occur in the future. Commissioner Morgan stated a small increase is necessary due to costs in Legal Counsel, Publications and Audit, coupled with the possibility of lawsuits.

Commissioner Baugh requested audit dates and asked how LAFCO and its membership would be affected financially by a possible lawsuit. Ms. Mickelson confirmed that the date of the last audit was 2008-09 and current audit findings are expected in the near future. She further advised that in the event of a lawsuit, any costs not covered would have to be assumed by cost share participants.

Public comment on the draft budget was opened at 9:36 am. Jan Lopez submitted and read a letter regarding the draft budget stating that Yuba LAFCO has a comparable budget ($192,000) and has done studies for 83 agencies. She made several proposals directing staff to complete studies, reverse policies, set up a committee, hold monthly meetings, et cetera.

Barbara Briggs, Fall River Valley CSD Vice Chair (but speaking as a rate payer) indicated the budget can be cut by contracting employees and that someone with familiar with financial matters should review costs. Public comment was closed at 9:45 am.

After discussion it was determined that the matter would be referred to the budget committee and be brought back at the April 4, 2013 meeting.

Ms. Mickelson reported that the Fall River Valley CSD invoice was placed on this agenda for follow-up and that the District has yet to answer any of the specific questions answered regarding the invoice. She requested direction from the Commission regarding further action. Commissioner Jones asked whether this was a typical invoice for an SOI/MSR. Ms. Mickelson stated this was a very atypical proposal brought forward by the District and was not LAFCO driven. Staff attempted on multiple occasions to propose more realistic options, all of which were declined by the District. The majority of the costs were due to the scope of the project; the District’s unwillingness to comply with LAFCO requests and substantial hours of staff time spent trying to locate information. Additionally, the issue was allowed to proceed to hearing based on the general manager’s promise to pay the bill. The Executive Officer noted that LAFCO has paid nearly $7,000 in direct costs on behalf of FRVCSD. As those costs are now being borne by every cost-share-participant, those agencies could seek legal action against LAFCO to recover those funds.

David Hall, voluntary temporary manager of Fall River Valley CSD, stated that the district is not trying to get out of paying the bill, but does not understand all of the charges. He questioned mapping costs as maps were provided and felt they should have been given an opportunity to correct them, although he did not know what type of maps were submitted. He questioned publication fees and staff time allotted and would like charges to be reviewed by the Board. Commissioner Baugh asked Mr. Hall if he had a suggestion for an amount owed, he did not. He added that the threat of a lawsuit is not coming from the district.

Commissioner Mathena questioned if the consultants and legal counsel hired by the District had been paid. Mr. Hall stated they had not.

Commissioner Kehoe left the meeting at 10:20 am.

Jan Lopez, speaking as the District’s consultant, says the district submitted an application and maps using GIS coordinates and was not notified that there was a problem with the maps. She stated the issue was brought before the Commission in November and denied, but should not have been heard until the MSR was adopted. Commissioner Baugh asked Ms. Lopez whether or not the maps contained assessor parcel numbers, names and addresses for notification purposes, she replied that they did not.

Barbara Briggs, Vice Chair of Fall River Valley CSD, clarified that Mr. Reed did not speak on behalf of the district. She states that the district had requested clarification on the bill as to what items were attributable to the SOI and does agree that they do owe something. Her belief was that items billed prior to the application submittal are MRS related. She wants a detailed breakdown as to what is SOI review, SOI expansion and MSR review so they can determine what they owe.

Michelle Bonnewell, Pittville resident, spoke to the charge of $500 for legal counsel regarding the confrontation at the September 2012 meeting and stated the District should not incur that cost. She stated the CSD had gone to great expense to move the project forward.

Diana Rogers, Fall River Valley CSD ratepayer, regrets that they do not have money to pay the bill and agrees they owe at least part of it. She reported that during a meeting, a board member said that she had been instructed by consultants not to pay the bill and the board has chosen not to make the bill available to the public. She added that a financial adviser is currently reviewing district finances as there are others they owe and no one she has spoken to would be in favor of a lawsuit, nor is the CSD board behind that effort.

Commissioner Jones suggested the District pay the undisputed portion of the invoice and then the disputed amount can be addressed. Commissioner Mathena indicated the finance or budget committee would be willing to review charges and meet with the District or come back before the Commission. Commissioner Day requested an itemized explanation from the District; Commissioners Haynes and Morgan agreed.

Terry Briggs, Fall River Valley CSD ratepayer, questioned the MSR time frame and whether or not he should ask another EO what acceptable costs are. Commissioner Baugh confirmed with Attorney Underwood that it would not be proper to negotiate an agency’s bill with a member of the public.

David Hall advised that he would put the matter on his agenda so the board could pay the undisputed portion of the bill. It was determined that the budget committee (Morgan, Mathena and Haynes) would serve as an ad hoc committee to discuss the remainder of the bill.

OTHER BUSINESS
Ms. Mickelson gave a brief GIS (Geographic Information System) presentation regarding what it is and how it is used and shared by LAFCO.

COMMISSIONER ANNOUNCEMENTS
There were no commission announcements.

STAFF ANNOUNCEMENTS
It was noted that the next LAFCO meeting would be held on Thursday, April 4, 2013 at 9:00 am at City of Anderson Council Chambers.

CLOSED SESSION
The Commission adjourned to Closed Session, pursuant to Government Code Section 54956.9(b), regarding Potential Litigation (1 Case).

REPORT FROM CLOSED SESSION
Attorney Underwood stated that there were no reportable actions.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 11:07 am.

ATTEST:

Marissa Jackson
Clerk to the Commission

Regular Meeting
April 4, 2013

Anderson City Council Chambers
1887 Howard Street
Anderson, California

The Shasta Local Agency Formation Commission welcomes you to its meetings which are regularly scheduled for the first Thursday of every other month beginning at 9:00 a.m. in the Board of Supervisors Chambers in the Shasta County Administrative Building or a City Council Chambers of an incorporated city in Shasta County, in or around Redding, California. (From time to time a meeting date, place and/or time may be changed due to holidays or other conditions which necessitate doing so.) Your interest is encouraged and appreciated. If requested, the agenda and documents in the agenda packet shall be made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 ( 42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. Upon receipt of the written request, the legislative body or its designee shall cause the requested materials to be mailed at the time the agenda is posted. . . “ (Section 54954.2)

                                                                                                      AGENDA

1. Call to Order/Roll Call:

2. Pledge of Allegiance: Commissioner Haynes

3. Public Comment: Members of the public may address the Commission concerning matters within the jurisdiction of LAFCO that are not listed on the agenda. Comments may be limited to three minutes per person. No action may be taken on these matters.

4. Consent Calendar
    a. Minutes/Previous Meeting: March 7, 2013 (Action)
    b. Fiscal Year 2012-13 3rd Quarter Transaction Register and Deposit Summary (Action)
    c. Consideration of Checking Account Statements (Action)

5. Budget and Fiscal Affairs
    a. Consideration and Adoption of 2013-14 Draft Budget as Required by Government Code §56381(c) (Action)
    b. Fall River Valley CSD Outstanding Invoices (Action)

6. Operations and Administration
    a. Policy Consideration: MSR Exemptions (Action)
    b. Policy Consideration: MSR Policy, re: Unresponsive Districts (Action)
    c. Consider Contract for Legal Services (Action)
    d. Nominations for the SDRMA Board of Directors (Action)
    e. Report on Upcoming or Potential LAFCO Activity (Information)

7. Commissioner Announcements

8. Staff Announcements
    a. Regular LAFCO Meeting: June 13, 2013 (City of Redding) beginning at 9:00 am

9. Closed Session
    a. Pursuant to Government Code Section 54956.9(b) Regarding Potential Litigation: 1 Case

10. Close Session Announcement

11. Adjournment

Special Meeting
March 7, 2013 – 9:00 am

Redding City Council Chambers
777 Cypress Avenue * Redding, California

The Shasta Local Agency Formation Commission welcomes you to its meetings which are regularly scheduled for the first Thursday of every other month beginning at 9:00 a.m. in the Board of Supervisors Chambers in the Shasta County Administrative Building or a City Council Chambers of an incorporated city in Shasta County, in or around Redding, California. (From time to time a meeting date, place and/or time may be changed due to holidays or other conditions which necessitate doing so.) Your interest is encouraged and appreciated. If requested, the agenda and documents in the agenda packet shall be made available in appropriate alternative formats to persons with a disability, as required by Section 202 of the Americans with Disabilities Act of 1990 ( 42 U.S.C. Sec. 12132), and the federal rules and regulations adopted in implementation thereof. Upon receipt of the written request, the legislative body or its designee shall cause the requested materials to be mailed at the time the agenda is posted. . . “ (Section 54954.2)

                                                                                                      AGENDA

  1. Call to Order/Roll Call:

  2. Pledge of Allegiance: Commissioner Morgan

  3. Public Comment: Members of the public may address the Commission concerning matters within the jurisdiction of
      LAFCO that are not listed on the agenda. Comments may be limited to three minutes per person. No action may be
      taken on these matters.

  4. Consent Calendar
      a. Minutes/Previous Meeting: February 7, 2013 (Action)
      b. Fiscal Year 2012-13 3rd Quarter Transaction Register and Deposit Summary (Action)
      c. Consideration of Checking Account Statements (Action)

  5. Conducting Authority Proceedings:
      a. Public Hearing to Receive Protest Regarding A.C.I.D. Reorganization: Spring Gulch/Anna Road; LAFCO File #11-02
          (Action)

  6. Budget and Fiscal Affairs
      a. Consideration and Adoption of 2013-14 Draft Budget as Required by Government Code §56381(c) (Action)
      b. Fall River Valley CSD Outstanding Invoices (Action)

  7. Other Business
      a. GIS Demonstration and Update (Information)
      b. Form 700 Distribution and Timeline (Information)

  8. Commissioner Announcements

  9. Staff Announcements
      a. Regular LAFCO Meeting: April 4, 2013 (City of Anderson) beginning at 9:00 am

10. Closed Session
      a. Pursuant to Government Code Section 54956.9 (b) Regarding Potential Litigation: 1 Case

11. Closed Session Announcement

12.  Adjournment

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