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CC – Item 4D – Staff Report – AB 2368 – Local Government Services Commission – Oppose S M....F.. O .E- \ R O\ * : staff_ TO: HONORABLE MAYOR AND MEMBERS ROSEMEAD CITY COUNCIL I, FROM: FRANK G. TRIPEPI, CITY MANAGER�7��E7 DATE: JUNE 2, 1998 l RE: AB 2368 (HERTZBERG) - LOCAL GOVERNMENT SERVICES COMMISSION - OPPOSE AB 2368 (Hertzberg)is another attempt by the Legislature to"streamline" local government services by forming an additional layer of government. This bill would authorize any county and a majority of cities within that county to establish a commission on local government services. The commission would be comprised of individuals selected by the Board of Supervisors and the City Selection Committee. The purpose of the commission would be to develop a governmental services plan addressing the"delivery and financing" of local goverment services. The bill would require the plan to be submitted for voter approval prior to the general election in November 2004. AB 2368 represents a new spin on the regional government proposals that have been emanating from the Legislature in recent years. The incentives for cities and counties to form a government services commission are financial. The bill seeks compliance by offering a 10% reduction in ERAF for participating jurisdictions. hi addition, the bill would authorize participating local governments to increase their share of sales tax revenues by an amount not to exceed one quarter of one percent (.025%) over the current limit of 1.25%as a method of financing the costs incurred by the proposed commission. The bill does not specify the services to be discussed and it does not clearly identify the need for the commission, except a general statement that the governmental services plan should "determine how to provide needed services in a manner that is more efficient, more accountable and less costly." However,the reduction in ERAF obligation alone should motivate most counties to participate,thus giving the proposal some weight. It is not clear,though,that ERAF relief would provide significant incentives to all cities,since the overall impact of ERAF has varied greatly in cities throughout the state. In addition, it is likely that the additional sales tax incentive to finance the commission's work would result in a large number of both proponents and detractors. COUNCIL AGENDA JUN ;; 91998 ITEM No. - GSC -D ) AB 2368 (Hertzberg) - Oppose June 2, 1998 Page 2. Staff has concluded that this bill represents little more than the latest attempt by the Legislature to impose its will with respect to regional government. The bill does not identify specific concerns and its implementation would serve to create an additional layer of government with the power to levy additional sales taxes. Even if the bill is amended significantly, it is difficult to envision supporting such a measure. AB 2368 is in currently in the Assembly Third Reading File. A copy of the bill and recent Committee analysis has been attached for the Council's review. RECOMMENDATION: Staff recommends that the City Council oppose AB 2368 (Hertzberg) and authorize the Mayor to send the appropriate correspondence. mmemo sb2368(gt MAY 28 '98 08:36AM GONSALVES & SON P.2/10 r- AMENDED IN ASSEMBLY MAY 22, 1998 AMENDED IN ASSEMBLY MAY 14, 1998 AMENDED IN ASSEMBLY APRIL 29, 1998 AMENDED IN ASSEMBLY APRIL 16, 1998 AMENDED IN ASSEMBLY APRIL 13,1998 CALIFORNIA LEGISLATURE-1997-98 REGULAR SESSION • ASSEMBLY BILL . No. 2368 Introduced by Assembly Member Hertzberg February 20, 1998 An act to add Chapter 6 (commencing with Section 51960) III to Part 2 of Division 1 of Title 5 of the Government Code, and • to add Sections 97.42 and 11003.5 to the Revenue and Taxation Code, relating to local government, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 2368, as amended, Hertzberg. Local government services. �I (1) Existing law authorizes local government agencies to provide services to one another by contract,to engage in joint �- projects, and to exercise powers in common through joint exercise of powers agreements. This bill would authorize the board of supervisors of any county and a majority of cities representing a majority of the population in cities in that county to establish a commission on local government services with specified membership. The 94 ' MAY 28 '98 08:36AM GONSPLVES & SON P.3/10 ft) cO y v "- n•.7:$ > v o v n Q0) -5 c o i0 • vL �,m ? 0 .0'J-, >. m v v sL. •c o � O� w0 bDOy � a O --. 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' ._ aaOpoyEa p a,0i'L -0wm0 .y y 00 Q op C 'o _ 0 ym Co- 0, opa5 � y '_' mm yr' 00 om , 0cQ.n 5o0a0co 0 0mpb� CG oo --- -- t; > n,--- a) a� C, cdo o ,. cto > �00 t.o m 3 o U o) o c, F ca v: ° c '0 L o. wp u bo C'J bO y —.-. 0 0 in a p, n, b°0 .y < r NMCi COI� OJC)) 0 --, ) c')i 4 -11)) 9 y Lc, O) NNN R � NNL-.1 DcIR° " N M .zr 1° c"J ate') c° C” ° ' MAY 29 '93 08:38RM GONSALVES & SON P.S/10 •AB 2368 —8 — 1 pursuant to Chapter 6 (commencing with Section 51960) C 2 of Part 2 of Division 1 of Title 5 of the Government Code. ' 3 SEC. 3. Section 11003.5 is added to the Revenue and 4 Taxation Code, to read: 5 11003.5. Prior to the allocation pursuant to Section 6 11005 of proceeds collected pursuant to this part, the 7 Controller shall allocate according to any governmental r' 8 services plan that has been adopted pursuant to Chapter 9 6 (commencing with Section 51960) of Part 2 of Division 10 1 of Title 5 of the Government Code vehicle license fee 11 revenue as determined pursuant to Section 11005 that is 12 derived from the jurisdiction of the local government 13 agencies included within the government services plan. 14 SEC. 4. Notwithstanding Section 17610 of the 15 Government Code,if the Commission on State Mandates 16 determines that this act contains costs mandated by the 17 state, reimbursement to local agencies and school 18 districts for those costs shall be made pursuant to Part 7 19 (commencing with Section 17500) of Division 4 of Title 20 2 of the Government Code. If the statewide cost of the . 21 claim for reimbursement does not exceed one million 22 dollars ($1,000,000), reimbursement shall be made from 23 the State Mandates Claims Fund. 24 Notwithstanding Section 17580 of the Government 25 Code,unless otherwise specified,the provisions of this act _ 26 shall become operative on the same date that the act 27 takes effect pursuant to the California Constitution. • 0 C 94 ' MAY 28 '98 O9:39RM GONSALVES 8 SON P.7i10 05/28/1998 Page 1 Joe A. Gonsalves s Son 5061 CA AB 2368 AUTHOR: Hertzberg TITLE: Local government services FILE: 17 LOCATION: Assembly Third Reading File SUMMARY: Authorizes the board of supervisors of any county and a majority of cities representing majority of the population in cities in that county to establish a commission on local government services with specified membership, responsible for developing a governmental service plan that addresses the delivery and financing of local government services, as specified; requires the plan to be submitted for voter approval no later than the general election in November 2004. STATUS: 02/20/1998 INTRODUCED. 03/16/1998 To ASSEMBLY Committee on LOCAL GOVERNMENT. 04/13/1998 From ASSEMBLY Committee on LOCAL GOVERNMENT with author's amendments. 04/13/1998 In ASSEMBLY. Read second time and amended. Re-referred to Committee on LOCAL GOVERNMENT. 04/16/1998 From ASSEMBLY Committee on LOCAL GOVERNMENT with author's amendments. C4/16/1990 In ASSEMBLY. Read second time and amended. Re-referred to Committee on LOCAL GOVERNMENT. 04/22/1998 From ASSEMBLY Committee on LOCAL GOVERNMENT: Do pass as amended to Committee on APPROPRIATIONS. 04/29/1998 In ASSEMBLY. Read second time and amended. Re-referred to Committee on APPROPRIATIONS. 05/14/1998 From ASSEMBLY Committee on APPROPRIATIONS with author's amendments. 05/14/1996 In ASSEMBLY. Read second time and amended. Re-referred to Committee on APPROPRIATIONS. 05/20/1996 In ASSEMBLY Committee on APPROPRIATIONS: To Suspense File. 05/21/1996 From ASSEMBLY Committee on APPROPRIATIONS: Do pass as amended. 05/22/1998 In ASSEMBLY, Read second time and amended. To third reading. 05/26/1998 In ASSEMBLY. Read third time. sailed to pass ASSEMBLY. Notice to reconsider. 05/27/1998 In ASSEMBLY. Reconsideration granted. 05/27/1996 In ASSEMBLY. Read third time and amended. To third reading. • MAY 28 '99 08:39AM GONSALVES & SON P.8i10 CA ,Ab 236B 05/28/90 Page 1 ab 2368 afl 980526 BILL ANALYSIS ASSEMBLY THIRD RREADING AB 2368 (Hertzberg) As Amended May 22, 1998 Majority vote SUMMARY: Allows local governments to create commissions on local government services to develop a plan to more efficiently deliver and finance local government services. Specifically, this bill: 1) Allows the board of supervisors of any county to adopt a resolution proposing the creation of the commission on local government services . If approved by the governing bodies of a majority of the cities in the county, representing a majority of the population of the incorporated areas of the county, the commission would be established. If there is only one city, the commission would be established if that city approves. If there is no city, the commission would be approved when the hoard of supervisors act. 2) Requires, if a commission is to be established, that it be established by January 1, 2000, and consist of up to 10 members appointed as follows: a) Six persons appointed by the board of supervisors, three of whom shall not be local government officers or employees. b) Six persons appointed by the city selection committee, three of whom shall not be local government officers or employees. If there are no cities, no city appointments would be made. c) Six persons appointed by the special district selection committee, three of whom shall not be local government agency officers or employees. If there are no special districts, no city appointments would be made. 3) Provides that any commission meetings shall be noticed, open and public (pursuant to the Ralph M. Brown Act) . 4) Requires each commission to develop and adopt a governmental services plan that will provide needed services in a manner that is more efficient, more accountable, and less costly. The plan may: a) Designate which local agencies should provide which services and how those services should be financed. b) Change the number of members on boards and commissions. c) Create a muleteer capital outlay plan for infrastructure and designate the local agencies responsible for its implementation. MRY 28 '98 O8:4OAM GONSALVES & SON F.9/10 d) Reallocate to agencies within the county the following: non-school property tax revenues, Bradley-Burns sales tax revenues, and vehicle license fees. e) Recommend to the local agency formation commission (LAFCO) the organization, reorganization, and boundaries of the local agencies covered by the government services plan. f) Include an increase in the local sales tax by 1/46 to finance the plan. 5) Requires each commission to complete its governmental services plan and submit it to the board of supervisors no later than December 31, 2003. 6) Requires, if the plan is approved by both the beard of supervisors and a majority of the cities representing a majority of the voters, that the plan be placed before the voters on or before the November 2004 election. If an increase in the sales tax is included, It would be approved or rejected by the voters as a part of the plan. 7) Requires amendments to the plan to be adopted by (a) the county, (b) a majority of the cities representing a majority of the population, and (c) the county voters. 8) Provides that, for any county that has adopted a governmental service plan, the following shall apply: a) The county, each city, and each special district in the county shall have their Educational Revenue Augmentation Fund (ERA?) contribution reduced by _06. b) The non-school and non-community college property tax revenue and the vehicle license fee shall be allocated according to the governmental services plan. EXISTING LAW: 1) Specifies that property taxes and vehicle license fees are allocated by statute. 2) Specifies that local government boundary changes (including consolidations, mergers, de-annexation, annexation, and mergers) must be approved by LAFCO. 3) Allows LAFCO to initiate boundary changes upon request or on its own motion. 4) Specifies that local governments may exercise common powers by agreement or by a separate entity. 5) Requires that the Legislature authorize local governments to increase sales taxes, beyond the existing 1.25% limit. 6) Requires the voters to approve general taxes by a majority vote and to approve special taxes by a two-thirds vote. Special taxes are taxes imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund. - mpY 29 '98 08:40RM GONSALVES & SON F. 12/10 FISCAL EFFECT: If all counties approve a plan, which should be expected because of the advantages of 108 reduction in the ERAF shift, the cost to the General Fund because of the reduction in the ERAF shift would be $340 million per year. If all counties impose a higher sales tax, the revenue to cities and counties would be about $900 million per year. COMMENTS: 1) The 10% ERAF reduction is so large that it should be expected that every county will have a streamlining commission and that each county will put a plan on the ballot. What is not clear is whether the plan will reduce the cost of and the number of local governments -- especially in comparison to the 5340 million annual cost to achieve what the plans propose- It is possible that some commissions will approve the status quo and will thus place the status quo on the ballot for the purpose of gaining additional revenue. 2) While giving local governments the authority to allocate taxes appears to provide more local control, the "only if my agency gets more revenue" mentality may reduce the ability for agencies to actually reallocate revenue. Analysis prepared by: Hubert Bower & Clyde Macdonald / algov / (915) 319-3958 END OF REPORT