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HomeMy WebLinkAbout05-18-00 06.a.4) CASA Spring Conference Central dontra Costa Sanitary District May 18, 2400 TO: CHARLES W. BATTS FROM: JAMES M. FELLY SUBJECT: CASA SPRING CONFERENCE The CASA spring meeting was dominated by the Little Hoover Commission Report and local government finance reform efforts. The CASA Executive Director's_Report, which discusses these matters in some detail, is attached. I have also attached an Association of California Water Agencies News Release, which provides a suggested special district response to the Little Hoover Commission Report. Mike Dillon said the big question is "will the Little Hoover Commission Report be made part of the mix when (if) local government finance is revised." A brief summary of select committee meetings follows: State Legislative Issues: State legislative issues dominated the conference, with the Legislative Committee; luncheon speaker Howard Wayne, Assembly Member from the 78" District; and Richard R. Terzanian, Chair of the Little Hoover Commission providing key information on local government financial reform efforts and the Little Hoover Commission. The Legislative Commission on State and Local Government Finance has released its final report and has four specific recommendations (see pages 1; and 2 of the attached Executive Director's Report). The commission report is to be incorporated into legislation (AB 1398 - Villaraigosa) that is pending before a Joint Legislative Conference Committee, which has not met yet. In addition, Budget Conference Committee Chair, Senator Steve Peace, is gearing up for a series of hearings on state and local finance. As an interesting footnote, Senator Peace is suggesting sales tax be reduced and some other tax be increased because sales tax is not federally tax deductible. The big, unanswered question is "will the Little Hoover Commission Report result in a reallocation of special district Ad Valorem taxes to other local and state governments." The CASA Legislative Committee voted to set up a task force to urge that special districts be able to keep their current Ad Valorem tax dollar allocation. Thus, the legislature is considering financial reform during a time of plenty, as state revenues are up $11 billion. This could bring the state close to the Gann limit and potentially require the state to have a tax rebate. S:tAdministrative\KELLY 12000\CASAMtg.Nts.wpd .Pr 0 C) Charles W. Batts Page 2 May 18, 2000 Assembly Member Howard Wayne echoed the same theme about reallocation of governmental income between state and local entities. One key area of realignment discussed was to allocate property tax back to the cities and distribute more of the sales tax to the counties. This reallocation could help local zoning decisions to be based on smart land use, not to be based on potential sales tax income from the land use. Richard R. Terzanian, Chairman of the Little Hoover Commission, gave some insight on the Little Hoover Commission Report. Mr. Terzanian was not intimately familiar with the report during the preparation, and in fact, did not display a detailed knowledge of the report in his presentation or addressing questions. He did state that the prime author of the report is a former Sacramento newspaper writer, which could explain some of the general tone to the report. Mr. Terzanian's summary advice to local districts was to ' let everyone know what you are doing, and (1) tell people what reserves you have, (2) tell the people what you are doing with the reserves, and (3) tell the people what you are going to do with the reserves." Mr. Terzanian indicated that reserves could become an issue when the State Legislature tries to sort out when bond funding might be authorized on a state-wide basis. The impression I got was that the Little Hoover Report could reduce the likelihood of a future state-wide water bond being proposed. CASA Mission Statement The attachment entitled "CASA Mission Statement" presents the proposed, revised CASA Mission Statement and CASA's proposed strategic goals. No action is planned to be taken on either of these until the annual conference in August. Air Resources Board Rule on Tetrachoroethylene (PERC) In Automotive cleaning Products The Air Resources Board (ARB) has recently approved a phase-out of PERC use for automobile cleaning products. In 1998 and 1997, the ARB mandated a decrease in volatile organic carbon (VOC) content of automobile cleaning products, and exempted PERC from being a VOC. The result of this was an increased use of PERC in automotive cleaning products, and a resultant increase of PERC in wastewater treatment plant influents and effluents. The increase of PERC in effluents would lead to most dischargers violating their limits if they discharged to a fresh water body. On April 27, 2000, ARB approved the five-year phase-out of PERC in automotive cleaning products in response to comments from TriTAC, Department of Toxic Substance Control, Integrated Waste Management Board, and the United States Environmental Protection Agency (USEPA), Region 9. The increased use of PERC that resulted due to a prohibition on use of VOC is an interesting case of unintended consequences; the ARB wanted to reduce VOC in the air, so it banned one product, which led to a substitute product, that caused significant water quality concerns. S:\AdministrativekKELLY\2000\CASAMtg.Nts.wpd � ae . s Charles W. Batts Page 3 May 18, 2000 Water Quality Committee In the last month, both the State Implementation Plan For Toxics and the California Toxics Rule have been approved. The State Implementation Plan will change what limits will go into NPDES Permits, change the limits, and also provide compliance schedules if the new limits cannot be met. In addition, the California Toxics Rule has established new limits for aquatic life criteria and human health. Since both of these rules are now in place, they will be the basis of our new NPDES Permit. It is unclear exactly how this will effect our permit, except that we do know that it will be more stringent than it would have been before the new limits were approved. Legal Affairs Update CASA's state and federal total maximum daily load (TMDL) lawsuits continue to move forward. In the state lawsuit, CASA has briefed the judge on the five remaining motions; a hearing on these motions is scheduled for July 21, 2400. Judge Connelly, who denied the two initial motions, will be hearing these motions. In the federal lawsuit, CASA filed suit against the USEPA, claiming the USEPA improperly added a number of water bodies to the 303(d) list, amongst other claims. The San Francisco Bay Keeper and other environmental groups have also sued the USEPA, asserting that the USEPA has failed to establish schedules and priorities for TMDL development state-wide. Because both of CASA's and Bay Keeper's cases are related, they have been assigned to the same judge, and some claims may be consolidated. It is important that CASA be a party to this litigation in order to influence what the final schedule for TMDLs will be. The first motions for these cases are scheduled to be heard on June 30, 2040. An important note is that there has been a great deal of activity in both the federal and state cases, and the pace is expected to continue through the summer. CASA's litigation fund to pay for these lawsuits is getting low, and I expect additional contributions will be requested in the near future. These cases are presented in greater detail in the attached Legal Affairs Update, along with other cases of interest. JM K:dk Attachments cc: Board of Directors Distribution List No. 2 S:lAdministrative\KELLY12GOOICASAMtg.Nts.wpd T 05/03/00 15:36:13 ACUA-> 949 453 IZZ0 Ir() Ranch UD Page 001 HL.Y►A iN ews Kem ase uu-iNEVVS F ELEASE r r ' R • Association of California Mater Agencies 910 K Street Suite 100 ■ Sacramento, California 95814-3512 916/441-454!i ■ FAx 9161441-7893 a http://www„acwanet.com May 3v 2000 Contact: Bob Reeb,ACWA State lAgislative Director Jennifer FersMe-Be ker, ACWA Director of Comone � 916-ML4545 ACWA Responds to the Lithe Hoover Co -mission's Report on SpecW Districts Commetk on Key Findings The Association of California water Agencies (ACWA)is deeply concerned by oversights and misr+epmaentations in the Little Hoover Commisdon's May 3 report titled"Special Districts Relics of the Fast or Resources for the Future?". ACWA r embers welcome the opportunity to highlight the Important work of local governments including special districts.However,it is clear from a brief review of the report's findings that the comnussion has fallen far short of fully understanding how special districts operate, and is blind to legislative changes afoot over the last decade-initiated by special districts themselves-to farther improve the services and public accountability of special distdcts Below is a short response to each of the Commission report's five findings. Response to Finding 1 Special districts already taro advantage of public meetings,customer mailings, web sites,public service announcements and many other methods to "make special districts more visible and accountable."Special districts work hard to have a presence in their cides,and a lack of public inyolvoment in the work of special districts is more likely a reflection of customer satisfaction than a need for improvement, Response to Finding 2 ACWA and its members strongly support moves to"provide LAF $with the direction and resources necessaxy to make them a catalyst for the effective and efficient evolution of indcl=dent special districts.”ACWA supported 1993's Gotch Bili to give LAFCOs the . authority to initiate consolidation. we participate in the Conudgsion on Local Governance for the 21''Century,helped write 1998's AB 270 to further empower the LAFCO structure,and this Year are supporting AB 2838--the same language as in AB 2700 Response to Fluding 3 ACWA members participate in the Special District Leadership Foundation to meliorate the very "lack [of]analytical tools"among policymakers who could, in the Commission's vier, `advocate effectively for change." (more) 949 453 85Z7. M ayce Wegner-Gw i Page HOZ Mes§&,e Points + The<insert water district>commends the Uthe Hoover Comxaission for producing a report that highlights the important role played by local governments including speciM districts. While the district has not yet reviewed the report in full, we welcome dialogue aimed at improving local government effectiveness,including the vitt services provided by special districts. +Ucal water and sewer districts have an excej lent record of investing in infrastructure to meet the needs of their customers and for operating and maintaining those facilities, Operations and maintenance practices must continually be improved to meet the requirements of new federal And state regulations. ■ Deserve funds are an important component in providing service at an affordable cost. Reserves function as a district's"savings accounE,"providing funds to meet iong-term capital and replacement needs. Reserves allow districts to respond to emergencies in a timely manner. Reserves Can also prevent "rate shocks" for customers by guarding against the financial catastrophe of drought--when water supplies are reduced but fixed casts must still be paid. ■There is no "cookie-cutter" formula for setting adequate reserves. Necessary reserves are a factor of each 'individual agency's mission to provide services to its customers. Capital improvements, scheduled replacements and main ten once all play a role in serving those needs. This is why water and sewer di sWcts have elected boards of directors--to make decisions based on the needs of the local community. ■During the recession in the early 1990's, the state government took$2.6 billion in property taxes from local governments, including special districts, and used it to balance the state budget. That money has never been repaid despite the resurgent economy and overflowing state coffers. If the Little Hoover Corrmaission study becomes a pretext for taking remaining special district property taxes, customers will pay higher water and sewer rates, districts could be forced to impose a hiring freeze, and needed facility investment will be delayed. The local economy and services will suffer. Special disrricts are a uniquely effective form of local government. They: ■ Are subject to the same "open meeting" lags as other governmental entities; + Are accountable to their customers through their elected hoards; + Typically focus on a particular service or group of services, allowing customers to more clearly judge their effectiveness; and ■ Have special expertise related to the service(s)they provide. # # ## t r r L (May 2000) A most effectiove fof local pecial districts are a unique--- Costs related to services:There is and uniquely effective form a clear correlation between the cost Same LawsGo-vem of local government that is of providing services and the pervasive throughout California. services provided which the public Special Distrieu Many of the most basic and desired can easily understand.This rein.. 4 •s •c ter overmen nits public services are performed by farces special d� � is acro untab�l� special districts, These include ity to the public. The same laws that govern water service, fire protection, flood the operations of other govern- control and waste disposal. Frequently, special districts mental entities apply to special The popularity of special perform services that are directly districts.This ensures that districts can be explained by a few related to protecting the public's special di saicts are Fully ac- eimple reasons: property or con=an areas, such as countable to the people they parks. Many special districts thus represent. Single service focus* Special rely on property tax revenues to Arany provisions regulate districts are organized around finance their operations. special district operations providing just one particular including: service or a group of closely related Bigger �i's��I algas �e tt�e r--� Canstitutional debt and services. This laser-like Focus spending limits apply to special increases their efficiency andparticularly withgoverament, districts the sari wa �ey y y avoids having to juggle priorities Speckl dbtriets provide apply to cities and counties. for multiples competing functions. specific serv�cee to e Special districts operate � under the same"'sunshine laws Local control and accountability; weu-domed serVlce areas and as otherg overnmental bodies, Locul citizens form special districts are IdgWy accountable for including the Brown Act and the to Provide specific services that Public Records Act. theirperfamance.they need at a price ce they axe willing Special districts are to pay. Special districts are directly subject to voter-enacted spend- accountable to these local voters, Subject to Intense Semfiny ing liDuka and regulations, such who elect the di rec tors that govern In recent years, special.districts as Propositions 13 and 218. the district. have come under intense scrutiny. e Special districts are also During the early 1990s, as Califon- subject to specific regulations Technical expertise: Since their ni a suffered through a severe that apply to the service they functions require specific technical recession, the state government provide, such as federal safe know ted ge and expertise, special took the local property tax revenues drinking water standards. districts attract highly skilled of many special districts as well as Formed by local voters or technical staffs with the know-how cities and counties in order to special statute, special districts to meet local needs. Many special balance the state budget.This can also be disbanded by these districts, such as wastewater recy- revenue shift totaled$3.9 billion voters or the Legislature. cling agencies and drinking water over two years and severely af- :3 pecial districts are required to treatment providers, are leaders in fected the ability of many special snake detailed financial reports technological developments in their districts to perforin their duties, to the state every year. Fields, (continued on next page) 0 A Speid Di*itctPdmer. apage 2 of 4 May 2000 In addition, a variety of special broadened the responsibilities of of the merger of four separate task forces have been established to LAFCCls, entities providing water services, look at overall govern m en tai The LAFCOs were to initiate flood control and groundwater organizafion in California.. Special such reorganizations and consoli- management services.'Today, the districts were a focal point of many dations if it could be demonstrated district is a countywide water of these investigations.Many that such actions would result in management agency, integrating all proposals were floated for restruc- cost savings or efficiency improve- previous functions into a more turing government, but the major metas. Special district customers' effective whole, change carne about at the Focal voice in consolidation decisions More recently, a series of water Agency Formation Corninissions was also preserved at the ballot district consolidations have oc- (LAFCOs). box.The reorganizations also had carred in Orange C=ounty,The Every county has a LAFCO, to promote greater public access largest of these combined the which represents local go verrm ents and accountability. Municipal wafer District of Orange within that county, Special districts However, history has shown County and Coastal Municipal were specifically given representa- that as community needs change, water District in 1998,The comhi- ti on on LAFCOs in the mi d-19309, special dis tri c is frequently corps of i- nation evade sense bac ause it and the agencies were charged with date or reorganize on their own consolidated two water wholesalers examining possible ble consolidations initiative in order to platter serve the into one new agency,providing and reorganizations of all govern- public, Many of today's special si rnilar expertise, economies of mental entities within their districts are themselves the prod- scale, and equal or greater cus- j urisdiction. ucts of past consolidations with tamer service levels.The new The Association of California other districts or water companies. agency will become effective with Water Agencies and other organi za- For example,the present-day Santa the March 2000 election, when A tions representing special districts Clara Valley water District in the new and smaller R oard of Di rec tars supported the legislation which greater San Jose area is the product is elected by voters. Spe c ial I rI oI1Flavors' here are a variety of tasks supervisors. Another 900 are joint (i.e.,Propositions 13 and 218, that are the specific respon- powers authorities and nonprofit etc.)as apply to other govern sibility of special districts in corporations created by cities, mental agencies. Califomi a. These services counties or special districts. Special districts can have include water service,flood There are essentially two types of oil terprise and I or non-enterprise control,fire protection, waste special districts; functions. Enterprise functions disposal, cemetery and park Dependent special districts are generally include servi ccs, such maintenance, and other special governed by county boards of as water an d sewe r, for which ized services. supervisor, city councils or special districts directly hill their cus- while there are an estimated boards appointed by cities or Somers. Ikon-enterprise functions 5,000 special districts in Califor- counties. inc=lude such services us ground ni a, less than half are truly In depen dent special districts water managemant and flood independent agencies with their are governed by irndependen tl y control for which customers are own elected board of directors, elected local boards responsible to nae directly billed. Instead, non- More than 1,800 of these special voters of the district.They have the enterprise districts typically rely districts, by the most recent authority to tax, spend and issue on property tax revenues to fund accounting,, are governed by a bonds to finance caps W improve- these services. city council or county board of meets, with the game limitations r Spetwi D Iffact PtMi---C-r w page 3 of 4 May Organizational Debate CorxL=ty; and It enables citizens better. The customers' voice must Too often the debate an goverment to hold public:officials accountable also be preserved, with the power orgaatzation seemed to be strictly to a specific community of interest." to ratify consolidation decisions at concerned with the number of Clearly, the issue is not the Elie ballot box. special purpose entities, as if there absolute number of governmental were some ideal---arid lower units, but their effectiveness and number. But locai government efficiency.'Where are no hard and Special & are often at diverSi ty promotes a variety of fast rules an govern men tai organs- , the forefront of toehnalts�.eal democratic values, such as eft- zation s potential consolidations ciency,equity,responsiveness, need to be considered on a case-by- innovation and deveJapment, accountability and self-governance. ease basis. For government i n Indeed,the Federal Advisory particular, bigger is not always Commission on Intergovernmental Special districts have proven Relations noted in T he 0jZanj Special6tricts evolvover they can perform a vari ety ofspe- tioij o Ural � s that cialiTe d,usually technical, tasks. 49xultiplrcity serves a number of kie, often instigating Vows and customers have placed useful purposes: it increases the co nsohdation with their conf deuce in these agencies sensitivity of local govemment to �r`Q ' ie8 u1 ex for very good reason.That con ri- -5a �a��raaelte diverse ctazen preferences; it t� provide eoat�efectt�e ani d:nce has oat been 7usplaceC, as increases ofriciency by matchingspecial districts continue to peayr de the distribution of benefits more effideut service. the services their constituents want closely to the economic demand of in a cost--effective manner. Reserves, Revenue Sources Ensure Rate Stabiuty pec i a l di stti cts often rely on services provided by sped al di s- tourers, diverse revenue streams to trio is are typica[ly property-related, Ilypi cal ly,spec:i ai di stri c is provide their custorners many districts rely on local property have adopted specific policies with vital services including fire tax revenues to partially fund the that govern the use of reserve Protection, drinking water,flood costs for investing in water infra- funds, whether generated by local contmi,sewer maintenance and stmcture and maintenance needs. property taxes or a portion of more.These funds must sustain Often, local customers have specifies scMce rates.These reserves can roud ne operations and be cal ly approved those revenues to bei used in to reduce the cost of available for necessary i tn_ provide for those needs. borrowing or improve the provements, Despite such local support, agency's credit rating if it does Water agencies,for ex- special districts discovered those need to borrow Funds for im- ample,not only have to cover property tax revenues can be provements.Reserves can also be the costs for providing safe vulnerable in times of economic willed to finance "pay-as-you--go" drinking and irrigation supplies distress.During the]ast recession, improvement programs. but also must place for future the state took$2.6 billion in local Where l s no "cookie-Curter" needs. Pi pel Ines, tmatmen t property tax revenues frorn special formula for what is an acceptable plants and other aspects of a districts,cities and counties and level of reserves.Instead,foresee- water delivery system not only used the=Qney to balance the state ablo capital improvements and need to be maintained, but will budget.That money has never been n€=essary maintenance programs eventually wear out and need to repaid to special districts. generally dictate a prudent]eve] be replaced or upgraded. Such tax shifts result in in- of reserves." Because many of the creased costs borne by local cus- A left 0 A ael primutP 4of�page 2000 Prop, n creases Special Distri'ets' oter-enacted Proposition?18, or fees on property that are re- provisions of Proposition 216 do not Passed in November 1996, quired due solely to ownership of apply to water charges or other has further increased the that property.Among its provi-- special district services.Rates are accountability of special districts sions, the measure prohibits typically based on actual or Pre- to the customers they serve. charges that exceed the amount sumed water consumption,for Customers pay for most required to provide a property- example,not on property ownership. special district serviCes, such as related service, disallows using however, some special districts water delivery,based on the revenues for purposes other than that provide broad public ben- actual cost of providing that that for which they were imposed, of i ts—such as regional flood service, Such charges are exempt and requires that the service being control--nay be subject to Propo- frorn the provisions of Proposi- charged for must be actually used sidon 218's cost-approval mecha-- tion 21.8. Nonmhel ess, the or immediately available to the W ams.7pi cal l y,property owners initiative has fostered greater property owner. within such a service area do not public scrutiny of special district Proposition 218 also required hiive the ability to opt out of the costs, and has encouraged property owners to be notified of program or refuse the protection. district leaders to take a closer proposed property fees or charges, Overall,Proposition 218 has look at how they compute and and instituted a customer protest provided customers with another assess their charges. procedure concerning such charges. tool to assess the performance of Essentially, Proposition 218 While the courts are still sorting their local districts and to hold them required landowner approval for out legal challenges to the measure, accountable in their rate-setting and any benefit assessments, charges it seems clear that many of the revenue-raising functions. Case Studies M Special Consolidadon he increasing urbanization Formed in 1927 to issae bonds to A buy-out of the Santa Anja of Califomia is putting construct a small dam, by the mid'- Heights Mutual Water Co. by the Pressure on water districts '90s Carpenter provided irrigation Irvine Manch water District; to re-examine their roles as water to 13 customers covering making the Laguna Beach County service providers across and approximately 70 acres. Water District a subsidiary district within the boundaries of new Carpenter was finally dissolved of the City of Laguna Beach; and cities.This pressure is evident in in 1998,with the Irvine Ranch Water the consolidation of Capistrano Orange County, which in the District agreeing to provide water to Brach Water District,Dana Poi n t past 25 years has almost doubled the 13 remaining irrigation custom- Sanitary District and South Coast in population and added eight ers, other consolidations approved Fater District. new cities. by the Local Agency Formation Several proposals are still In 1996, legislation was Commission([,AFCO)include: pending in Grange County,i nc l u d- i n traduced to consolidate The merger of the Capistrano ing the consolidation of Tri-Cities Carpenter Inigation with the Beach Sanitary District with the Municipa# water District with county's Other water districts. Capistrano Beach water District; Coastal Municipal Water District. ,prepared by the Association of CaWoruia Water Agencies ■ 910 K Street • SWte 104 ■ Sacramento, CA 95814-3512 916,"L 4,545 0 fax 916.325.2816 ■ www aLwaimeL.com 0 0 CASA EXECUTIVE DIRECTORS REPORT May 5, 2000 By Mike Dillon I. IT'S "WATCH AND WAIT" IN AN ELECTION YEAR Sacramento lobbyists and the Capitol press corps spent the first few months of the new millennium waiting for work to commence for the 2000 legislative session. A few measures were hold-overs from the previous session, which needed to adhere to legislative deadlines at the end of January. However, for the most part,the legislature grinded to a halt during the month of February, as the candidates prepared for a highly contentious March Primary, on March 7. Of note was a race in Senate District 21 where Assemblyman Jack Scott defeated Assemblyman Scott'Wildman for the Democratic nomination. Vying for the seat in Senate District 23, Assemblywoman Sheila Kuehl defeated Assemblyman wally Knox for the Democrat nomination. Lastly,Assemblyman Ed Vincent defeated Assemblyman Dick Floyd for the Senate District 25 seat. II. LEADERSHIP CHANGES IN THE ASSEMBLY AND SENATE With Assembly Speaker Antonio Villaraigosa(D-Los Angeles)termed out at the end of this year's session, the Assembly Democrats began grooming a new heir apparent in the fall to succeed Speaker Villaraigosa. On April 13, 2000 Assemblyman Robert Hertzberg (D-Van Luys)was officially sworn in as Speaker. Hertzberg,the former Chair of the powerful Assembly Rules Committee, immediately named a successor to his position on Assembly Rules, in Assemblyman Dennis Cardoza. The Speaker's office has confirmed that the rest of Speaker Hertzberg's new leadership team is still under negotiation. Meanwhile Senator Ross Johnson has stepped down as Senate Republican Leader, citing the poor health of his mother, wife, and his daughter, who is recovering from surgery. He noted that he was unable to commit the necessary time needed to the position, in light of these important family issues. His successor, Senator Jim Brulte will now assume the role of Republican Leader, effective immediately. III. LOCAL GOVERNMENT FINANCE REFORM EFFORTS CONTINUE In March,the Speaker's Commission on State and Local Government Finance released its final report, and recommendations identifying"appropriate and viable fiscal reform measures for California." In the overview of the report, entitled "Message from the Chair,"Commission Chairman, David Abel states, "In the unanimous opinion of the Commission, more than two I 40 C) 0 decades of neglect and band-aid responses to the unintended consequences of Proposition 13 need to end quickly. We must shift gears and return to our long held tradition of community independence and authority if the California we treasure is to be passed along to future generations..." Specifically, the Commission's Final Recommendations are as follows: i`1) Within each county, the county and each city would swap a portion of their locally levied .sales tax with the State for an equal amount of the property tax. The locally levied I%sales tax rate would be reduced to.S%and the State rate would be raised by.S%. An equal amount of property tax would be shifted from K-14 entities. The State, using the new revenue from the .5 of the sales tax, would backfill educational programs through the State Aid system. 2) Return $1 billion of property taxes to counties, cities and special districts front the Educational Revenue Augmentation Fund (ERAF) in each county or other State sources over time in annual installments of not less than $100 million, provided that the growth in any year of per capita non-proposition 98 general fund revenue exceeds the statewide consumer price index for the prior year. 3) Existing lazli requires the Stare to replace the reduced fee revenue with other State resources. Create a constitutional obligation on the part of the State to maintain the per capita subvention and replace the revenue lost due to the reduction in the Vehicle License Fee. 4) The existing .S% 'transactions and use'taxing au thori ty Would be moved t n to the Constitution so that voters, upon their approval of this proposal, 7vould have the assurance that rile resultant revenues could not be used to supplant State spending. Fixe allocation of those revenues would be based on local agreement." In the section entitled"Increased Accountability,"the Commission has recommended that the state adopt: 1) State and Local Performance Measures, 2) Adopt a State/County Service Compact spelling out roles,responsibilities,duties, etc. 3) Encourage counties to implement county budgets that distinguish the role of the county in providing countywide services from its "urban service" responsibilities for unincorporated areas of the county. and 4)"Requires the county auditor or appropriate State agency to report annually the amount and relative share of the property tax revenues for each agency in a manner that facilitates understanding and comparability among cities and counties about how the property tax funds municipal services. It should indicate the rates levied by special districts moviding services commonly provided b a full service city such as arks and recreation services, libram services fire services in a wa which compares them to those levied by a full service city and should RoqLay allocations for redevelopment county, and educational_Jun'sdictions." The report will now be incorporated into legislation that is pending before a joint legislative Conference Committee on the issue: AB 1396-Villaraigosa. The Conference Committee has not yet held a meeting on the issue. 2 0 0 Meanwhile, the legislature is also gearing up for an intensive series of hearings on state and local government financing, led by Budget Conference Committee Chair, Senator Steve Peace. The additional Conferees include Senator Chuck Poochigian, Senator Don Perata, Assemblyman John Longville(Chair,Assembly Local Government), Assemblymember Dion Aroner, and Assemblyman George Runner. The hearings will commence on Tuesday,May 2 and will continue for several weeks. Senate President pro Tem,John Burton, has assigned his Chief of Staff,Diane Cummins,to organize and direct the Conference Committee. Ms Cummins has divided the first hearing to allow cities, counties, and special districts to testify in proportionate segments. CASA, ACWA, and CSDA have been asked to testify within the segment on special districts. We will keep you posted as to the developments of this group as well as the former Speaker's Conference Committee. IV. LITTLE HOOVER COMMISSION REPORT On Wednesday, May .3, the Little Hoover Commission released its report on special districts. While the report contains some positive comments, i.e. special districts '64provide important services to virtually every community in the State," it will also present us with a number of challenges in the months to come. The report, which was based on a survey of more than Soo special districts, makes five significant recommendations. They are: I. The Governor and the Legislature should enact legislation that makes special districts more visible and accountable. 2. LAFCOs, by not being aggressive, have failed to promote the effective evolution of special districts—the State should provide LAFCG with direction and resources. 3. Equip policy makers with tools to guide organization of independent special districts—the Governor and the Legislature should establish a program at the California Policy Research Center or similar institute. 4. Hundreds of independent special districts have banked multi-million dollar reserves that are not well publicized and often not considered in regional or statewide infrastructure planning—the Governor and the Legislature should enact policies that will ensure prudent management of special district's reserve funds and incorporate these resources into regional and statewide infrastructure planning. 5. Policy makers should scrutinize the appropriateness of maintaining property tax allocations to enterprise special districts. The State Auditor should examine enterprise districts that receive property taxes and also have the highest reserves. The Legislature could then reduce or eliminate the property taxes with the possibility of counties reclaiming and reallocating the property tax revenues. 3 a The report notes that"some reserves appear to be unreasonably large"and lists in chart form, the "top 25"districts with large reserves as a percentage of gross to retained earnings. Benefits and compensation to elected officials is also covered in the report with the notation that the majority of the special district elected officials receive less than $5,000 annually, with 78%of sanitary districts being in this category. On a positive note,the Commission report, in the section dealing with reserves, states, "Enterprise special districts play an important role in providing infrastructure to their communities. The issue is, given their financial resources, they could play an even larger role and whether they should ever turn to the State for financial help." Regarding special districts, the report notes "the vast majority are successful,"and ``bigger is not always better.'? We will keep you informed as future developments occur. V. COMMISSION ON REORGANIZATION FOR 21s' CENTURY As we reported at the August Conference and then again in January,the Commission on Governance for the 21"Century, known as the"Hertzberg Commission,"was formed to complete a"study of potential revisions to the laws that govern city,county and special district boundary changes (the local agency formation section of the Government Code, also known as the"Cortese Knox Act"). CASA monitored the activity of the Commission and had the opportunity to present testimony during one hearing in Fresno. The provisions of the study have now been incorporated in AB 2838 by Assemblyman Hertzberg,the new Speaker of the Assembly. white much of the bill deals with the areas of annexations, land use, and LAFCG independence, it does not appear to pose any major threats to special districts. In fact, one provision of the bill deals with"the reinforcement of the legitimacy of special districts, including representation on LAFCO"s." The one concern of a few of our CASA agencies related to the"conducting authority"of special districts. Thanks to the efforts of Bob Reeb, AC`lVA lobbyist and former Assembly consultant,we were able to get a favorable compromise on this issue. In essence, if all goes well, language will be incorporated in the bili that provides when a petition for district annexation is filed with LAFCO, LAFCG will notify the affected agency's governing board, which will have a certain amount of time, e.g. 30 days, to adopt a resolution opposing the action, in effect, stopping it. If the agency does not exercise this authority, later in the process the agency can still adopt a resolution to which LAFCG has to give"great weight." VI. SENATOR POLANCO REQUESTS AN INTERIM HEARING ON BIOSOLIDS As an alternative to proceeding with his SB 1956, Senator Richard Polanco has requested that the Senate Environmental Quality Committee hold an interim hearing on biosolids land application. In a letter to Senator Byron Sher, Chair of the Committee, Senator Polanco noted that"the issue of proper management of biosolids is extremely important for the environment and for the infrastructure of the state" and"cannot be ignored or dismissed lightly." 4 Senator Polanco had introduced SB 1956 on behalf of the City of Los Angeles and the Los Angeles County Sanitation Districts. The legislation was prompted by concern over the number of counties that have adopted, or are considering, bans or severe restrictions on land application. SB 1955 would have allowed local agencies to adopt ordinances regulating biosolids land application that are more stringent than federal and state requirements only where supported by sound science, and would have allowed interested parties to appeal local ordinances to the State water Resources Control Board. CASA and the League of California Cities were in strong support of the measure. Opponents included the Sierra Club, ACWA, the agricultural community and a number of individual counties, all of which raised concerns about restricting local control. Given the controversy surrounding the bill, Senator Polanco and the sponsors decided not to proceed with SB 1956 this year. VII. MANDATORY PENALTY CLEAN--UP BILL STILL IN DEVELOPMENT Discussions with interested parties continue in an effort to draft clean-up legislation to ease the mandatory penalty burden on small communities and small business. SB 709, signed by the Governor last summer, imposes mandatory minimum penalties of$3,000 for specified violations of an NPDES permit. Many of the implementation issues have been resolved by interpretive guidance issued by the State water Resources Control Board's Office of General Counsel. The legislation will focus on providing an exemption from mandatory penalties for entities discharging pursuant to a Cease and Desist Order or Time Schedule Order. The vehicle for the clean-up language will be SB 2165 by Senator Byron Sher, which is still in preliminary form pending the outcome of the working group discussions. VIII. BILL TO BAN LINDANE PASSES FIRST HURDLE AB 2318 by Assemblymember Alan Lowenthal would prohibit the use of lindane for the treatment of head lice and scabies, effective January 1, 2002. CASA is supporting the bill and working closely with the author. The bill was approved by the Assembly Committee on Environmental Safety and Toxic Materials and now moves to the Appropriations Committee. Lindane shampoos and creams are rinsed off after use in the sink or shower,and make their way to the sewers. Lindane is not removed well in the wastewater treatment process,and passes through to downstream creeks, rivers and the ocean. Since a single treatment of lindane pollutes 6 million gallons of water, it is very difficult for POTWs to meet the freshwater standard of 19 parts per trillion. Not only is lindane highly toxic, but safer and more effective substitutes are widely available. At this time, AB 2318 is supported by POTWs, health organizations and the Sierra Club. There is no opposition to the bill. 5 IX. PUBLIC RECORDS ACT AB 2799 by Assemblyman Kevin Shelley would allow, among other things, a court to order disclosure of documents without regard to whether the documents are protected from disclosure by a privilege. Current lave recognizes that there are valid reasons to withhold documents, such as employee privacy, attorney-client privilege or deliberative process privilege. AB 2794 would allow a court to override these considerations and order disclosure. This would effectively nullify the public's right to claim these privileges. Moreover, because the payment of attorney's fees is mandatory under the Public Records Act, a public entity would be obligated to pay a plaintiff's attorney's fees even where a record was properly withheld, if the judge decides to override that decision pursuant to the bill. Ruthann Ziegler, one of our CASA attorneys on the Legislative Committee, volunteered to attend a meeting of the sponsors,the California Newspaper Publishers Association, and the First Amendment Coalition, and other opponents to the measures, and was effective in making key arguments as to why this would negatively impact local governmental agencies. Ultimately, before the policy committee, Assemblyman Shelley acknowledged problems with the bill, particularly the so-called "reverse balancing test" which he agreed to remove at the committee's request. In the end,the bill still did not have sufficient votes for passage and was granted reconsideration. Special thanks to Ruthann Ziegler for her assistance. X. DIRECTORS COMPENSATION Senator Dave Kelley, at the request of CASA, agreed to author legislation to increase directors compensation in an amount not to exceed 5%per year, since the last adjustment P n 1986. Senator Kelley's measure, SB 1559, has passed the Senate and i s awaiting hearing in the Assembly. XI, CLUCK CARRY ANNOUNCES RETIREMENT AS CHIEF ENGINEER AND GENERAL MANAGER OF COUNTY SANITATION DISTRICTS OF LOS ANGELES COUNTY Charles "Chuck"Carry has been with the County Sanitation Districts of Los Angeles County for 39 years, having served as a Chief Engineer and General Manager for the last 16 years. He will be succeeded by Jim Stahl, who most of you know has been Assistant Chief Engineer and Assistant General Manager since 1984. 0 0 Chuck graduated from Loyola University(which is now Loyola Marymount)with a Bachelor's Degree in Civil Engineering, and in 1961 received his Masters in Sanitary Engineering from the California Institute of Technology (Cal Tech). He has received many awards over the years,and last fall was inducted into the Loyola Marymount School of Engineering"Alumni wall of Fame" for his professional achievements. Chuck has been active in CASA for many, many years, having served as Chair of the Legislative Committee, a member of the Executive Board, and he served as CASA"s President in 1987. while Chuck's golf handicap may have been suspect at times, his hard work and dedication on behalf of CASA and the Sanitation Districts has never been questioned. You may recall that the Executive Board at the January meeting granted Chuck Carry honorary membership. we hope that he and Ginger will come back and visit us often. XII. 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Cia .. 4._ v :y "s-J 00 Cs � W QC75 ccWu cn � w Q oW d Q Q = Q CQ Q C) � N Nson N N ` C IT .�., a a d � = N p N � 00 so V � � C ts? vC� SO QU ""� aV o, aU u)C) V Cc vu n cz to .•• 4n O C %0 No N !V iV N M Q f. 0 0 CALIFORNIA ASSOCIATION of SANITATION AGENCIES a 925 L Street,Suite 1400 Sacramento,CA 95814 TEL:(91.6)445-0388—FAX:(916)448-4808 DATE: May 4, 200O TO: CASA Member Agencies Spring Conference Delegates FROM: Steven T. Majoewsky, President SUBJECT: CASA MISSION STATEMENT As you will recall,the CASA Executive Board is engaged in a Strategic Planning effort aimed at clarifying the association's mission, goals and core strategies. As I reported at the January conference, four task forces have been formed to assist the Board in the planning process. The task forces will provide recommendations in the following areas: ■ Membership Categories and Relationships ■ Committee Effectiveness and Communication ■ Proactive Legislative and Regulatory Efforts ■ Litigation Support The Executive Board held a special meeting in February to review CASA's mission statement and goals. One outcome of the meeting was the development of a proposed revised mission statement and goals. The mission statement and goals are attached for your review and comment. No action will be taken on the mission statement at the Spring Conference; the Executive Board will seek approval of the revised mission statement and goals at the Annual Conference in August. If you have any questions or comments regarding the proposed mission statement and goals,please feel free to contact me or any member of the Executive Board. cc: CASA Executive Board Mike Dillon, Executive Director a 0 o �a a P OPOS D NEW S MISSION S MENT TheMissionof the Calio Ynia Association of Sanitation Agencies is to provide proactive leadership, innovative solutions, and timely education and information to our members, legislators, and the public,, and to promote partnerships on wastewater issues with other organizations, so that sound public health and environmental goals may be achieved. CLI RENT CASA. MISSION NATE MEDT The mission of the Association is to further the common interests of publicly owned wastewater collection and treatment agencies located within the State of California in their effort to provide cost-effective treatment of wastewater so that sound public health and environmental goals may be achieved. CAS A'S STRATEGIC COALS DRAFT-- April 21, 2000 Through a coordinated and comprehensive advocacy and education effort, increase understanding and awareness among state and federal lawmakers and regulatory agencies regarding all issues facing the wastewater industry to ensure that laws and regulations advance the wastewater treatment, collection, disposal and reclamation mission of our members. Become the most effective, respected and influential association dedicated to wastewater issues and the leading legislative and regulatory advocate for California's public wastewater agencies by providing proactive leadership, innovative solutions, and sound scientific and technical information on wastewater-related issues to lawmakers, regulators, CASA members, and the public. C� Develop and strengthen partnerships with other associations and organizations working on all issues facing the wastewater industry in order to increase our leadership and influence and to provide timely education and information to CASA members, the public,the Legislature and regulatory agencies. Expand our membership base in order to increase our influence with state and federal decision-makers, as well as to enhance CASA's ability to provide a broad range of high quality services to our members Strive to become a high-performing organization providing effective and efficient services to our members, and optimize leadership practices, staffing, organizational structures and systems in order to achieve CASA's mission. �r LEGAL AFFAIRS UPDATE May, 2000 Roberta L. Larson Director of Legal and Regulatory Affairs CASA's State and Federal TMDL Lawsuits are Moving Forward Two lawsuits filed by CASA and SCAP challenging various aspects of the 303(d) listing and total maximum daily load (TMDL) processes in California are progressing in state and federal court. A final decision in the state lawsuit is expected this summer. The federal lawsuit, filed in early February 2000, is in the early stages, but key motions will be heard in late June. A brief summary of the status of each case follows. 1. The State Lawsuit (Sacramento Regional County Sanitation District, et al. v. State Water Resources Control Board (Sacramento Superior Court Case No. 98- CS01702).) In December, 19983 CASA and the Southern California Alliance of PO11Ns (SCAP) intervened in the suit filed by Sacramento Regional County Sanitation District, challenging the validity of the list of impaired waters developed by the state pursuant to section 303(d) of the Clean Water Act. The lawsuit claims that, in adopting its 1998 list, the SWRCB failed to comply with the Administrative Procedures Act, the Porter-Cologne Water Quality Act and the California Environmental Quality Act. In addition, the suit alleges that the SWRCB failed to comply with express statutory requirements in preparing its 1996 water quality assessment as required under CWA section 305(b) ("the 305(b) Report'). Because the 1996 Report was the basis for the 1998 303(d) List, the suit alleges that the deficiencies in the 305(b) Report render the 303(d) List invalid as well. In November of 1999, Judge Lloyd Connelly denied two motions for summary adjudication brought by Sacramento and CASA/SCAP. The judge rejected the argument that the 1996 305(b) Report was invalid on mootness grounds, because a 1998 305(b) Report had been subsequently adopted. In the alternative, the judge held that the U.S. EPA had waived the state's obligation to comply with the express terms of the statute. On the APA claim, the judge held that informal guidelines used to compile the 303(d) List were not regulations, and in the alternative, that the guidelines were merely a restatement of formally adopted standards. In April, CASA/SCAP filed a Motion for Reconsideration on the 305(b) Claim. 1 r Sacramento and CASAISCAP have now briefed the remaining claims in the state lawsuit. These include a claim that the 1996 305(b) Report provided the foundation for the 1998 303(4) List and that the infirmities in the Report render the 303(d) List invalid; claims that the SWRCB failed to comply with the requirements of Porter-Cologne and CEQA in adopting new water quality standards used to compile the list; claims that waters were listed based on incomplete and insufficient data; and a claim that waters were improperly listed using narrative water quality objectives. A hearing on these claims, along with the Motion for Reconsideration, is scheduled for July 21, 2000 before Judge Connelly. 11. The Federal Lawsuit (California Association of Sanitation Agencies v. Browner, Case No. Coo 0424 VRW.) On February 4, 2000, CASAISCAP filed suit against the U.S. EPA in Federal District Court in San Francisco. Among other claims, the suit alleges that EPA improperly added a number of water bodies to California's 1998 303(d) List; that EPA failed to ensure timely adoption of TMDLs; and that EPA failed to comply with CWA section 303(e) in approving California's Continuing Planning Process. In late January, the San Francisco BayKeeper, the San Diego BayKeeper and Cal-PIRG sued U.S. EPA to establish schedules and priorities for TMDL development statewide. EPA has filed a motion for judgment on the pleadings on two of the BayKeeper's claims. Because the two cases are related, both have been assigned to Judge Charles Legge. The parties have stipulated to consolidation of certain claims and CASAISCAP have filed a motion to consolidate the remaining cases. The Industrial Environmental Association, the California Building Industry Association, and the Western States Petroleum Association have moved to intervene as plaintiffs in both cases. On June 30, 2000, Judge Legge will consider several motions brought by the parties. These include (1) CASAISCAP's motion to consolidate our case with the BayKeeper's; (2) EPA's motion for judgment on the pleadings; and (3) a motion for summary adjudication that the BayKeeper intends to file on its claim that EPA failed to establish TMDLs for California. There have been no settlement discussions among the parties since the filing of the complaints. 4. A Aak 2 Contributions to the Litigation Fund Are Still Needed The last few months have seen a great deal of activity on both the federal and state cases, and the pace is expected to continue well into summer. CASA has established a Litigation Fund to cover the expenses of the federal and state lawsuits, and additional contributions to the fund are needed. Many thanks to those member agencies that have already pledged funding; for those agencies that have not yet contributed, we urge you to consider doing so now. Past President Jim Bewley, who is heading up the fundraising effort on behalf of the Litigation Task Force, and ! are happy to respond to questions and provide you with a suggested pledge level. Federal Court Rules that EPA May Develop TMDLs for Waters Impaired by Nonpoint Sources In a decision that has received national attention, a federal district court judge in San Francisco has ruled that the U.S. EPA may include those waters impaired by nonpoint sources on a 303(d) List, and may establish TMDLs for those waters. (Pronsofino.. et al. v. Marcus, et a/. (Case No. C99-01828).) Judge William Alsup issued his decision on March 30, 2000, just a week after hearing over four hours of oral argument from lawyers representing EPA, the environmental community, the Farm Bureau and the Association of Metropolitan Sewerage Agencies (AMSA). The suit was brought on behalf of Guido and Betty Pronsolino, owners of timberlands along the Garcia River in the North Coast of California. The Pronsolinos, and the Farm Bureau, argued that EPA's authority to list waters pursuant to 303(d) was limited to waters impaired by point sources of pollution. The judge disagreed. Following a discussion of the structure of the CWA, Judge Alsup rejected the Pronsolino's argument, noting that TMDLs are to be set at levels that implement applicable water quality standards. It would be impossible, the judge concluded, to do so without taking nonpoint sources into account. Once EPA establishes a TMDL, however, the judge noted that the state is free to select the means of achieving the necessary reductions, and may even refuse to implement the TMDLs at all. As of this writing, it was not known whether the Pronsolinos plan to appeal the decision to the Ninth Circuit Court of Appeals. 3 Multiple Parties, Venue Issues and Cross-Complaints Complicate Challenge to Kern County Biosolids Ordinance CASA is among the petitioners in a lawsuit challenging the Kern County ordinance banning land application of Class B biosolids. (County Sanitation District No. 2 of Los Angeles County, et al v. County of Kern, Tulare County Case No. CV-PT-00-189564.) The petitioners have challenged the ordinance on several grounds, including failure to comply with the California Environmental Quality Act (CEQA) and constitutional issues. The case has been bi-furcated, with the CEQA claims to be considered first. The suit alleges that Kern County was required to prepare an environmental impact report on its ordinance, based upon substantial evidence in the record of potential adverse environmental impacts resulting from the ban on land application. Kern County has cross-complained, contending that the Los Angeles County Sanitation Districts, the Orange County Sanitation Districts and the City of Los Angeles have failed to comply with CEQA in entering into contracts for land application within Kern County. The petitioners have moved for a change of venue on the cross-petition, arguing that Tulare County is not the proper venue. (The initial petition was filed in Kern County and later removed to Tulare County under the statute providing that cases between public entities may be tried in a neutral county.) Kem County has also demurred to the CEQA claim, arguing that the petitioners lack a "beneficial interest" in potential environmental impacts in Kern County. Both the motion for change of venue and the demurrer are scheduled for hearing on May 4, 2000. A hearing on the CEQA challenge to the Kern County ordinance is set for June 8, 2000. EBMUD Successfully Defends Against Belated Challenge to its Utility Rates The First Appellate District has affirmed the trial court's determination that a claim for a refund of water and wastewater fees paid to the East Bay Municipal Utility District was barred by the statute of limitations. (Utility Cost Management v. East Bay Municipal Utility District, Case No. A087191 (April 17, 2000.) The Court held that the 120 day statute of limitations set forth in Government Code section 66022 applies to an action seeking a refund under the San Marcos statute, which limits the amount a utility can charge a school district for capital improvements. (Government Code section 54999.4.) The Berkeley Unified School District assigned its claims for refund to Utility Cost Management (UCM), a company that specializes in seeking refunds of utility fees from water and wastewater agencies. UCM sued EBMUD, seeking a refund of payments going back to 1986. The trial court granted EBMUD's motion for 4 summary judgment, holding that the claim was barred by the statutes of limitation set forth in the Government Code and the Public Utilities Code. The court of Appeal agreed with regard to section 60022 of the Government Code. The Court noted that "it is critical that these types of refund actions be subject to a short statute of limitation so that local agencies can make spending decisions confident in the knowledge that they are spending funds that are, in fact, available." Given the implications for its member agencies, which could be subject to numerous similar claims, CASA filed an amicus brief supporting EMBUD. CASA argued that the 120-day statute of limitations set forth in Government Code section 66022 applies to claims for refunds based on the San Marcos legislation. CASA's brief also stressed the public policy interest in protecting public agencies and their ratepayers from belated attacks on their revenues. Many thanks to Bill Esselstein, who filed the amicus brief on behalf of CASA, and to Joan Arneson and Jeff Scott, who assisted in the drafting. CASA Will Lend Amicus Support to UC Davis Permit Appeal CASA's Attorneys Committee will file an amicus brief in support of the appeal of its NPDES permit filed by the University of California at Davis. (Regents of the University of California v. State Water Resources Control Board, Yolo County Superior Court Case No. PT98--1540.)..UC Davis is appealing the permit issued by the Central Valley Regional Water Quality Control Board, alleging that the regional board adopted numeric effluent limits for metals and other pollutants without complying with state law. CASA's amicus brief will focus on the regional board's use of its narrative toxicity objective to impose informal federal criteria--- that have not been approved through a public regulatory process--as end-of- pipe requirements. The issue of the appropriate application of numeric toxicity objectives has been raised in a number of permit appeals, but the UC Davis suit is the first to litigate this issue.