CSDA e-News - December 8, 2015
BB&K Partner Paula C.P. de Sousa Mills discusses a new law that will require LAFCo approval for certain fire protection contracts.
This article leads off a three week e-News series focusing on new laws that will impact special districts in 2016. Senate Bill 239 (Hertzberg), which establishes new procedures for contract approvals, begins the series. CSDA thanks Paula C. P. de Sousa Mills, a partner with Best Best & Krieger LLP, for authoring this article.
Starting on January 1, 2016, certain fire protection contracts will require Local Agency Formation Commission (“LAFCo”) approval. SB 239 (Hertzberg) adds Government Code section 56134 to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, (Government Code section 56000 et seq.) establishing new procedures for the approval of these contracts entered into by both local and state agencies. While such contracts are not ordinarily subject to LAFCo approval under current law, SB 239 imposes a process for review and approval of fire protection contracts that mirrors, in part, the comprehensive process applicable to city incorporations.
SB 239 applies to contracts for the exercise of new or extended fire protection services outside a public agency’s jurisdictional boundaries that meet either of these threshold conditions: (1) transfers responsibility for providing services in more than 25 percent of a receiving agency’s jurisdictional area; or (2) changes the employment status of more than 25 percent of the employees of any public agency affected by the contract. LAFCo’s oversight also applies to instances where a combination of contracts results in the above threshold conditions. SB 239, however, expressly excludes from its requirements mutual aid agreements, including those entered into under the California Emergency Services Act (Gov. Code § 8550 et seq.), or Fire Protection District Law of 1987 (Health & Safety Code § 13800 et seq.). SB 239 is also not intended to change or affect existing LAFCo jurisdiction over proceedings that involve the provision of prehospital emergency medical services. By its terms, SB 239 does not appear to apply to an extension of a fire protection contract unless one of the above threshold conditions is triggered. Arguably, modifications to existing contracts merely extending the term of the contract would not likely trigger the SB 239 requirements.
To initiate the process, an agency must adopt a resolution of application after a noticed public hearing, and either obtain the consent of all applicable recognized employee organizations representing firefighters, or provide the recognized employee organizations, and each affected public agency, at least 30 days advanced notice of the public hearing together with a copy of the fire protection contract. For contracts between a state and local agency, the application must also be approved by the Director of the Department of Finance. The application must be submitted with a plan for services, which must include information delineated in Government Code section 56134, and an independent comprehensive fiscal analysis. This analysis must review the plan for services, include a cost analysis with cost comparisons with other like providers with similar service areas, populations and geographic size, a determination of the costs to the agency providing the new or extended fire protection services, and a determination that the affected territory will receive revenues sufficient to provide the services and provide for a reasonable reserve during the first three fiscal years of the contract.
Once an application is complete, LAFCo must consider the contract at a public hearing at which oral or written testimony and the application documents will be considered. LAFCo may not approve the contract unless it either determines, among other things, that the agency providing the services will have sufficient revenue to provide the services and provide for a reasonable reserve for three years following the effective date of the contract, or it conditions approval on the concurrent approval of sufficient revenue sources.
Whether a fire protection contract will be subject to the new LAFCo approval requirements imposed by SB 239 will require a case-by-case review. If a fire protection contract is subject to the new requirements, the process will be much more complex and time consuming to be sure.
*This article first appeared in the CSDA e-News on Dec. 8, 2015. Republished with permission.
