Synopsis: Those who believe that their rights are protected by State and local laws and by government agencies that enforce them may be surprised to learn that is not always the case Two specific California government entities, special districts and Local Agency Formation Commissions, operate with far fewer legal restrictions than counties and cities. Citizens who have disagreed with the decisions and policies of these agencies have found that they had very limited recourse.
California Special Districts
California independent special districts are autonomous local government entities that provide services such as fire protection, water, and sewer services. According to the California Special Districts Association (CSDA), there are nearly 2,300 independent special districts in California, and about 84% of those districts perform a single function, such as sewer, water, fire protection. More than a fourth of all districts are "enterprise districts," operating much like businesses, and charging customers for their services. The CSDA website includes a statement that, "Special districts are accountable primarily to the voters who elect their boards of directors and the customers who use their services." The districts are also subject to some types of oversight by Local Area Formation Commissions (LAFCO's).
However, as noted in a 2000 report by the Little Hoover Commission, "California Special Districts – Relics of the Past, or Resources for the Future?," the mechanisms that are in place to ensure accountability of other government entities are not always effective for special districts. According to the Commission's report, "The traditional oversight and accountability mechanisms—the electoral process, public meetings, and financial reporting—have not been effective in promoting the kind of rigorous examination required of democratic institutions. To increase their visibility and accountability, special districts should be required to aggressively publicize information about their finances and activities to policy-makers and the public."
A 2009 Santa Cruz Grand Jury report, "Who is Watching our Special Districts?" appears to indicate that in spite of the Little Hoover Commission's recommendations, little has changed. In response to a complaint, the Grand Jury investigated the operations of a special district that allegedly was operating without any written rules, thus violating Public Resources Code 5784.13(e). The Grand Jury report noted that, "Without bylaws and established parliamentary procedures, the governing board of a special district is virtually answerable to no one except the electorate, which in many cases is apathetic towards the operation of the district until an issue of critical neighborhood concern arises. Between election cycles, this leaves members of the public, as well as members of the district's board, with no method of redress if there are concerns with the activities of the governing board."
The report noted that a part of the LAFCO mandate "is to perform Municipal Service and Sphere-of-Influence reviews of special districts every five years." It also recommended that the local LAFCO step in to improve the accountability of special districts. The report stated that in Santa Cruz County, "no governmental agency has provided special district oversight to ensure existence of and operation within bylaws and parliamentary procedures." The Santa Cruz LAFCO agreed. However, when asked to take corrective action, the agency declined.
The Grand Jury report recommended that, "Santa Cruz LAFCO commissioners should require all existing special districts to have bylaws and parliamentary procedures and to submit copies for LAFCO's files within six months." LAFCO refused to implement the recommendation, stating, "This recommendation will not be implemented and it may exceed LAFCO's authority under state law and may conflict with the enabling statutes for various special districts. If legal support existed for such a requirement, LAFCO would not choose to implement it because LAFCO believes that the decision to adopt bylaws and parliamentary procedures should be made by each district board, and that LAFCO should not prioritize its limited staff time in an effort to enforce special districts to adopt bylaws and parliamentary procedures."
Santa Cruz LAFCO also declined to implement a recommendation that "The LAFCO commissioners and/or the County Board of Supervisors should draft enforceable penalties for failure to comply with these recommendations, following adoption." LAFCO's refusal to implement the recommendation was based on its stated view that the recommendation might not be legal under state law, and the fact that, "LAFCO has major pending applications to review and significant state mandates to comply with. LAFCO must use its limited resources to provide thorough reviews and public hearings on applications, and to meet the state mandates". It was further stated that, "The public and the Grand Jury should deal directly with any district they believe is failing to provide adequate transparency in conducting the public's business."
The experience of the Santa Cruz residents who tried to improve the oversight over the actions of local special districts is not unique. A September 6, 2009 article by Ryan Sabalow, published in the Redding Record Searchlight, states, "Those who oversee and sit on these boards say you get democracy at its finest and easy local access to decision-makers. Other observers say you get the potential of cronyism, mismanagement and waste. Shasta County grand jurors reported they found the latter this summer when they probed the Shasta Mosquito and Vector Control District."
According to the article, the local Grand Jury alleged that $38,000 of taxpayer money had been used to pay one District Board member's personal legal fees. The article includes a quote from the head of a major California watchdog agency: "This is what you end up with when you scatter government around and hide it under so many rocks," said Terry Francke, the director of Californians Aware, a nonprofit Sacramento legal center that fights for open government records and public meetings. "You can't pick them all up." Cited in the article are three recent incidences of alleged wrongdoing in special districts in Anderson, Mountain Gate, and Shasta Counties.
In San Luis Obispo County, as in Santa Cruz and Shasta Counties, lack of oversight over the activities of special districts has frustrated some residents' attempts to effect change. For example, some have cited issues with the Cayucos Sanitary District (CSD), which provides sewer and garbage collection services for the town of Cayucos.
Concerns have primarily focused on the risk of conflicts of interests. CSD Board President Robert Enns, who has been on the Board for many years, owns and operates a business that installs underground utilities, including sewer lines and hookups. Residents have also complained that it is sometimes difficult to obtain public information from the CSD. One request for CSD financial information was refused by District Manager Bonnie Connelly, who justified the refusal by citing the Patriot Act.
The lack of government oversight over local special districts puts the responsibility on voters. According to the article "What's so Special About Special Districts –A Citizen's Guide to Special Districts in California," the options for corrective action include making direct complaints to the Board and, if that fails, initiative, referendum, or recall.
Local Area formation Commissions (LAFCO's)
LAFCO's were established in 1963 to address concerns related to out-of-control development. The agencies were intended to manage urban sprawl, to preserve open space and agricultural land, and to provide improved management of the provision of government services. LAFCO' s decide which government entity will have jurisdiction over specific issues within specific geographic areas within a county. LAFCO's also have limited jurisdiction over California Special Districts.
While the initial intent of the establishment of LAFCO's was positive, it has been alleged that these agencies have far too much power, and that their power is sometimes misused. As noted in an October 2008 Santa Ynez Valley Journal article, "LAFCO No Laughing Matter," by Joan Hartman, "LAFCOs are independent agencies that enjoy almost unprecedented discretion. They are not directly accountable to the people over whom they exercise power. Although LAFCOs are required to put their policies in writing and are encouraged to make their policies and notices of public hearings available on their websites, they are not required to make written findings to justify their decisions, and those decisions cannot be appealed to any higher authority.
"LAFCO decisions are final and conclusive. As a hybrid agency, LAFCO's performance is not evaluated by either the state, the county or any other local entity. So if you disagree with a LAFCO decision to create a special district for which you will pay, or a decision to allow annexations for major new development in your community, or you believe LAFCO has disregarded its mandate to discourage urban sprawl into agricultural lands, you have very little recourse."
A followup article, "Problems with an Indirect Democracy," authored by Hartmann, Bob Field, and Gail Marshall, further describes the problems related to the lack of citizen oversight and control of LAFCO's, and the impact on Santa Barbara County. That article notes that, "Despite its profound authority over development, the commission operates mostly in obscurity, and its structure shields it from scrutiny and significantly biases its decisions in several ways."
Focusing on the manner in which LAFCO commissioners are appointed, the authors allege that in Santa Barbara, the LAFCO is decidedly pro-development because "North County politicians have a much stronger pro-development bias" and because the North County is over-represented in the local LAFCO.
Because the commissioners are appointed, voters have no control over the situation. The authors point out that, " . . . the public has almost no grounds on which to challenge the agency's decisions. Although state law sets out guidelines for LAFCO, commission members exercise their independent judgment on behalf of their view of public interest. There is no administrative appeal of this agency's decisions. LAFCO does not have to produce any written findings to support its decisions. So if a person were to seek judicial review, there is no clear standard of review. To prevail, one would have the difficult task of showing fraud or a prejudicial abuse of discretion." The authors further allege that although, " . . . LAFCO was created explicitly to protect agricultural lands from sprawling urban development. In Santa Barbara County, however, the tendency has been for it to have the opposite effect."
In addition to concerns regarding lack of public oversight and control of LAFCO's and their actions, there has been considerable criticism of the secrecy with which these agencies sometimes conduct their business. Criticisms include the California Association of LAFCO's (CALAFCO).
CALAFCO is organized as a 501(c)(3)nonprofit corporation, and its Board of Directors consists of public officials who serve on the member LAFCO's. According to its website, CALAFCO "serves as an organization dedicated to assisting member LAFCOs with educational and technical resources that otherwise would not be available. The Association provides statewide coordination of LAFCO activities, serves as a resource to the Legislature and other bodies, and offers a structure for sharing information among the various LAFCOs and other governmental agencies." However, the organization does not volunteer a great deal of information regarding the specific information and support that it provides
CALAFCO is funded by the counties where the LAFCO's operate. However, despite the fact that the organization obtains its funding from public sources, the organization appears to consider itself exempt from the open meeting requirements that its member LAFCO's are required to follow. In his December, 2007 article, "Access Denied: Local Governments and the Open Meeting End-Run," attorney Ronald Zumbrun described an attempt by one of his associates to attend a CALAFCO Board of Directors meeting in Sacramento.
After some difficulty determining the location and time of the meeting, the associate went to the meeting place but was denied the right to attend. According to Zumbrun, "My associate entered the meeting room while the CALAFCO Board was in the middle of discussing a particular item. The Board took notice of his presence and thereupon required him to identify himself on the record. Of course, the Brown Act expressly prohibits such forced identifications. (Gov. Code, § 54953.3.) My associate identified himself, his association with The Zumbrun Law Firm, and his involvement in the pending litigation against San Mateo LAFCO. He further expressed his interest in hearing whether CALAFCO would offer San Mateo the amicus "support" requested.
"The CALAFCO Board hastily declared that they were not required to hold public meetings and that discussions with San Mateo LAFCO regarding the pending litigation were protected by some generic privilege as communications regarding legal strategy. My associate expressed his concern that CALAFCO was not a party to any litigation, and that it was rather a disinterested group of public officials discussing matters of public interest and he wished to be present during the discussions. Indeed, the court of appeal has explicitly held that the Brown Act does not authorize closed session meetings when a nonprofit corporation discusses litigation in which it is not a party. (Shapiro v. Board of Directors of the Centre City Development Corporation (2005) 134 Cal.App.4th 170.) Nevertheless, the CALAFCO Board refused to allow him to attend the meeting."
According to Zumbrun, "Under the Brown Act, the Board of Directors of a private, nonprofit corporation is subject to open meeting requirements when the corporation (1) is created by a local government agency to exercise authority that the agency may lawfully delegate, or (2) receives funds from a local government agency and its Board of Directors includes a member of the local government agency. CALAFCO is a publicly funded entity whose Board of Directors is comprised exclusively of local government officials selected from among the individual LAFCOs. Therefore, CALAFCO should be required to comply with the Brown Act's open meeting requirements."
Zumbrun further stated, "The use of CALAFCO as an umbrella organization under which the county LAFCOs can pursue their agendas free from the restraint of open meeting laws flouts these democratic ideals."
At a Grand Juror training session held in Sacramento in 2009, CALAFCO's Executive Director, Bill Chiat stated that the only recourse the public had against LAFCO's was the court system. He reportedly added, "And we never lose in court." Based on that statement, it appears that CALAFCO and its member LAFCO's may continue to ignore laws such as the Brown act unless there is a change in the fundamental structure of the system.
Opportunity for Abuse by Special Interest Groups
In some ways, California Special Districts, LAFCO's, and CALAFCO appear "untouchable." With little oversight and little public awareness of their day-to-day functions, these organizations make an easy target for special interest groups that can benefit from placing their people on the organizations' boards.
Most of SLO's special districts operate in relative anonymity, with little public awareness of how the districts are spending taxpayer dollars. Most residents have no idea whether their local special districts are spending taxpayers' money for the public good or to benefit special interest groups. As noted in the Santa Cruz example, developers can and allegedly do gain control of LAFCO's and, instead of supporting stated purposes of the organization—preservation of agricultural land and prevention of urban sprawl—can potentially do the opposite.
SLO LAFCO members listed on the agency's website include Duane Picanco, mayor of Paso Robles, Richard Roberts, public member, Katcho Achadjian, State Assemblyman, David L. Brooks, Special District Member, Templeton Community Services District, Ed Eby, Special District Member, Nipomo Community Services District, Bruce Gibson, County Supervisor, and Kris Vardas, Pismo Beach City Councilmember. In many ways, these people control the future of the County. Yet they are appointed, not elected, to the LAFCO and their decisions are not subject to any oversight by any government agency.
As in the case of Santa Barbara County, it has been suggested that some of the SLO LAFCO members are strongly pro-development. This could lead to loss of, rather than preservation of, prime agricultural land in SLO County and to the urban sprawl and overdevelopment that LAFCO's were originally chartered to prevent.
Concerned citizens have only the ballot box to exercise any control over special districts, and no means of controlling the actions of LAFCO's other than the courts. Only action and change initiated at the highest levels of state government can bring these government entities accountable to the public they are supposed to serve. Meanwhile, they continue to operate outside of many of the laws intended to ensure that government agencies serve the public's best interests.
