LAFCOs, New and Improved

What are Local Agency Formation Commissions (LAFCOs) and what do they do? These questions led the League of Women Voters of the Bay Area (LWVBA) to interview LAFCO directors in the nine Bay Area counties in the mid-1990s, finding that:

• LAFCOs were created in each county by the Cortese-Knox Local Government Reform Act of 1963. Their charge was to encourage orderly and efficient local governmental agencies, discourage urban sprawl, and preserve prime agricultural land through controlling the boundaries of cities and most special districts.
• In carrying out their charge, LAFCOs adopt a Sphere of Influence (SOI) or ultimate growth boundary for every city and special district. Commissions review and make final decisions on proposed boundaries and whole jurisdictions by approving their formation, or requiring enlargement, detachment, dissolution, consolidation, merger, or reorganization. Later legislation permitted LAFCOs to initiate actions, not just respond to applications for change.
• LAFCOs have regulatory and planning powers. While they may not make direct land use decisions, by approving or denying boundary changes to local agencies that do have land use authority and provide services for development, they influence land use decisions indirectly.

In the 1996-97 report, LWVBA noted that some LAFCOs were making decisions affecting urban growth and open space protection within their own counties without regard to critical impacts on neighboring counties or the region as a whole—and these decisions were being made without the light of public scrutiny or public input in the process. Further interviews found that many of these decisions, rather than being based upon standards for evaluation, were often vulnerable to influential development interests and local needs for revenues, and were being made without coordination with countywide comprehensive planning.

Enactment of the Cortese-Knox-Hertzberg Local Government Reorganization Act (AB2838_2000) brought the most significant reform to local government reorganization law since the creation of LAFCOs in 1963.

• State guidelines were established to clarify and strengthen LAFCO powers to prevent sprawl and ensure the orderly extension of government services.
• LAFCOs, no longer county-staffed and -funded, are now independent, balanced in representation for county, cities and special districts, and have a uniform membership selection scheme, an independent executive officer and counsel. Operating costs are shared equally by the county, cities and special districts.
• Routine updating of Spheres of Influence is required and a major new responsibility is preparation of Municipal Service Reviews (MSRs) at least every five years according to state guidelines and standards for evaluation. The reviews serve to determine local agency needs and service adequacy as a basis for decisions on boundary changes and reorganizations.
• For each proposal for change, a LAFCO must consider existing data on timely availability of water supplies, and whether the proposal will help achieve the jurisdiction's fair share of regional housing needs as determined by the Association of Bay Area Government (ABAG). They are allowed, but not required, to consider ABAG's regional growth goals and policies.
• The legislation calls for enhanced communication and coordination procedures between LAFCOs and local governments. It strengthens notification, coordination and boundary setting procedures between local governments and school districts and for multi-county service reviews.
• Finally, by requiring establishment of a web site and other specific procedures for public and local agency notification, the legislation enhances opportunities for public involvement, active participation, and information regarding government decision making.

Because new provisions responded to many of the weaknesses of the earlier legislation, the LWVBA undertook a second update in 2003, resulting in four major findings:

• Progress in the municipal services review process is slow; local agencies hesitate to initiate organizational changes
  Midway through the third year of implementation of the new and/or clarified requirements of AB 2838, LAFCOs find themselves largely preoccupied with meeting the deadlines of the MSR process. Only a handful of the nearly 400 service reviews due by January 1, 2006, have been completed.
  In several counties, commissioners continue to question how intensive reviews should be, i.e., how far the Commission should go in implementing determinations calling for reorganization.
  LAFCOs have had the authority to initiate changes of organization for many years, but political pressure from cities and districts has led most LAFCOs to act only on proposals for change submitted by local agencies. Now most observe that the MSR process only requires LAFCOs to make determinations regarding adequacy of public services; it does not require them to initiate changes based on those determinations nor to extend service to previously unserved areas.
  However, a LAFCO, local agencies, and the public may subsequently use the determinations to pursue changes to services, local jurisdictions, or spheres of influence.
  
  
• Housing responsibility is too undefined
  AB 2838 calls on LAFCOs, in reviewing annexation proposals, to determine the extent to which the proposal will assist the city or county in achieving its fair share of the regional housing needs.
  However, the Act does not give clear direction to LAFCOs. It permits a LAFCO to consider regionally adopted housing policy. The LAFCO responses, with a few exceptions, indicate little attention being paid to fair housing issues. Legislation to clarify the role of LAFCOs in achieving housing targets is anticipated.
  
  
• Intergovernmental coordination has not yet blossomed
  State guidelines for MSRs promote the benefits of early LAFCO involvement in local and regional planning programs. For most LAFCOs there is little early participation in local plan development or engagement in ABAG's Housing Needs Determination or Smart Growth processes.
  
  
• Public information has hit the web—will public participation follow?
  Websites, established by all nine Bay Area LAFCOs, do not yet, across the board, provide full public access to LAFCO processes. Sites that provide application forms to download are used frequently, but meeting attendance in response to notices of public meetings and agendas, for the most part, still consists only of parties affected by a particular proposal before the Commission. As public hearings are held on draft MSRs, public involvement is expected to increase.

LAFCOs have been a relatively invisible part of government for the past 40 years. As MSRs are completed, LAFCOs may find that their greater visibility will draw them into taking a stronger role in other local and regional planning issues.