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CITY COUNCIL AGENDA ITEM NO. 9

Meeting Date: April 13, 2004

Subject/Title: Consideration of a resolution of support for Senate Bill 1266, regarding LAFCO approval of annexations.

Prepared by: Mitch Oshinsky, Community Development Director

Submitted by: Mitch Oshinsky, Community Development Director

RECOMMENDATION
Adopt the attached resolution in support of Sentate Bill 1266

PREVIOUS ACTION
None

BACKGROUND
Senate Bill (SB) 1266 would expand the provision of existing law that requires Local Agency Formation Commissions (LAFCOs) to approve city annexations that meet specific criteria.

State law currently requires LAFCOs to approve city annexations if the unincorporated territory meets certain conditions, including being “substantially surrounded” by the annexing city, the annexing city and a county boundary, or the annexing city and the ocean. Current law has two problems:
(1) The mandatory city annexation provision doesn’t apply to a similar situation where the unincorporated territory is substantially surrounded by the annexing city and another city.
(2) Current law does not define “substantially surrounded.”

Senate Bill 1266 changes the mandatory city annexation provisions in five ways:
(1) Recognizes the situation where unincorporated territory is surrounded by the annexing city and another city.
(2) Requires that at least 51% of the exterior boundary of the unincorporated territory must be surrounded by the annexing city, other cities, county boundaries, or the ocean.
(3) Replaces the current, unspecific requirement that the territory be “developed or developing” with the specific requirement that the territory must be developed or designated for urban growth by the city’s general plan.
(4) Requires that sewers, fire protection, streets, and domestic water must be available from either the city or special districts.
(5) Imposes a 1,000-acre limit.

The existing Cortese-Knox-Hertzberg Local Government Reorganization Act spells out the powers of LAFCOs and the procedures for changing the boundaries of cities and special districts (Government Code §56000).

In 1977, the Legislature created an expedited procedure for cities to annex “islands” of unincorporated territory that were surrounded or “substantially surrounded” by the annexing city (Government Code §56375 [a] and §56375.3). These unincorporated islands are expensive for county governments and special districts to serve. Further, after Proposition 13, there is no significant difference in property tax rates on incorporated and unincorporated territory although utility user taxes and business license taxes may be higher inside cities.

If a city proposes to annex an unincorporated island, LAFCO must approve the boundary change if the island meets five statutory conditions. The property must:
• Be surrounded or substantially surrounded by (1) the annexing city, (2) the annexing city and a county boundary, or (3) the annexing city and the ocean.
• Be substantially developed or developing.
• Not be prime agricultural land.
• Be designated for urban growth in the annexing city’s general plan.
• Not be in another city’s sphere of influence.

At least six appellate court decisions have upheld the island annexation statute. None of the decisions defined the term “substantially surrounded,” leaving it to the LAFCOs to apply that statutory standard in light of local conditions and circumstances. However, one decision noted that the three affected parcels were 79.8%, 82.4%, and 89.13% surrounded (Scuri v. Board of Supervisors [1982]).

A specific situation in Contra Costa County focused attention on this provision of the city annexation statutes. A LAFCO cannot deny a proposed city annexation of unincorporated territory that is substantially surrounded by a city, a city and a county boundary, or a city and the ocean. However, this statutory rule does not apply if the unincorporated territory is substantially surrounded by two cities. In that case, a LAFCO can deny the proposed city annexation. There is no policy reason for this difference.

Further, existing law does not define “substantially surrounded.” This lack of precision has spawned litigation, resulting in at least three reported appellate decisions.

Finally, existing law requires the unincorporated territory to be “developed or developing” but again fails to define those terms. The lack of a definition means that a LAFCO has little guidance in applying the statute, resulting in more uncertainty and threats of litigation.

There is at least one situation in which SB 1266 might affect future annexations in Brentwood, and a case where it could have made a difference in a prior annexation. A landowner and the City of Brentwood have discussed annexation of about 800 acres of unincorporated territory to the City. Although the property has been farmed in the past, it is not prime agricultural land. The property is between the cities of Antioch and Brentwood. The property is outside the Urban Limit Line (ULL), not within the sphere of influence of either city, but is included in Brentwood’s planning area. It was studied during our recent General Plan Update. The property is also a missing link for the improvement of roads that would help commuters access the regional road network.

In 1999, the Contra Costa County LAFCO adopted a policy that it generally would deny annexations of territory outside of the ULL. In 2000, the county supervisors amended the ULL and one of those changes placed the 800 acres outside of the ULL.

The Contra Costa County LAFCO continues to honor the ULL. LAFCO recently permitted Brentwood to annex the high school site that was outside the ULL. The Commission’s action went against its staff’s recommendation by excluding adjacent land from the annexation, thereby creating an irregular protrusion of the Brentwood city limits.

Had SB 1266 been in existence, the high school annexation would have had a better chance of being approved as originally proposed without the deletion of adjacent lands.

FISCAL IMPACT
Adoption of this resolution itself will not have any fiscal impact. However, if SB 1266 is adopted, it could help lead to future annexations that would benefit the City fiscally, as well as help provide necessary road improvements.

Attachment:
Resolution

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD IN SUPPORT OF SENATE BILL 1266

WHEREAS, the purposes of the Cortese-Knox-Hertzberg Local Government Reorganization Act include encouraging orderly growth and development, and

WHEREAS, the Cortese-Knox-Hertzberg Act’s purposes also include discouraging urban sprawl and preserving open-space and prime agricultural lands, and efficiently extending government services, and

WHEREAS, the City of Brentwood supports a joint City/County Urban Limit Line to promote logical growth and preserve open-space and prime agricultural lands, and

WHEREAS, the Contra Costa County Local Agency Formation Commission generally follows the County’s Urban Limit Line when adopting spheres of influence and approving boundary changes, and

WHEREAS, the City of Brentwood may want to annex adjacent properties to accommodate contiguous logical growth and employment opportunities, and

WHEREAS, the Cortese-Knox-Hertzberg Act provides special procedures to expedite the annexation of islands of unincorporated territory that are substantially surrounded by the annexing city, and

WHEREAS, State Senator Tom Torlakson has introduced Senate Bill 1266 to extend the Act’s special procedures to include more territory that is substantially surrounded by the annexing city and another city,

BE IT THEREFORE RESOLVED that the City Council of the City of Brentwood:

1. Endorses Senate Bill 1266, and

2. Directs the City Clerk to communicate the City’s support of SB 1266 to Senator Torlakson and Assembly Member Canciamilla, and

3. Directs the City Manager to urge other cities and organizations (including, but not limited to, the League of California Cities and the California Association of Local Agency Formation Commissions) to join in supporting SB 1266.

PASSED, APPROVED AND ADOPTED this 13th day of April 2004 by the following vote:

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