Plumas LAFCO

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					        Chairman:
   Robert Meacher




                                                     LAFCo
  Commissioners:



                       plumas
   Rose Comstock
        Jim Krantz
  William Kennedy
        Mike Rush

 Executive Officer:
 John M. Gullixson                                              The Local Agency Formation Commission
Commission Clerk:                                               Serving Plumas County
 Melissa L. Duenas
                                                                                        AGENDA ITEM:
                                                                               6.a CONSENT CALENDAR
                                                                                APPROVAL OF MINUTES

                      PLUMAS LOCAL AGENCY FORMATION COMMISSION
                             COMMISSION MEETING MINUTES
                                   December 11, 2006

     1.       CALL TO ORDER

              The scheduled and noticed meeting of the Plumas Local Agency Formation
              Commission was called to order by Chairman Meacher at 10:03 a.m. on November 13,
              2006, in the Board of Supervisors Room of the Plumas County Courthouse, located in
              Quincy, California.

     2.       ROLL CALL

              Chairman Meacher, noting that a quorum was present, asked the Clerk to call the roll
              and Mr. Gullixson recorded the following:

                      PRESENT: Commissioners: Linda Blum (Public Member Alternate) Rose
                               Comstock, William Kennedy, Robert Meacher and Mike Rush.

                       ABSENT: Jim Krantz

              ALSO PRESENT: Executive Officer: John M. Gullixson, Clerk: Melissa Duenas

     3.      CLOSED SESSION

              None

     4.       INTRODUCTIONS AND PRESENTATIONS

              None

     5.       PUBLIC COMMENTS

     Members of the public are invited to address the Commission on any matter of interest to the
     public that is not on the agenda for a period of time not exceeding 5 minutes. Pursuant to the
     Brown Act, the Commission cannot take any action on items not listed on the posted agenda
     but may add to a future agenda matters brought up under public comments for appropriate
     action at a future meeting.
     AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                        PAGE -2-



6.       CONSENT CALENDAR

         6.a         Consideration of the Minutes of the 11-13-2006 regular meeting of Plumas
                     LAFCo.

MSC: Kennedy/Comstock (5-0): To approve the minutes for the Plumas LAFCo meeting held
on November 13, 2006, with changes made to reflect Linda Blum, where reference is made to
“Judy Blum”.

7.       MATTERS PRESENTED BY COMMISSIONERS

Chairman Meacher introduced the Commission and audience in attendance to Linda Blum, the
new Commission Public Member Alternate. Mr. Gullixson reported that Public Member,
Commissioner Krantz was absent for only the third time in over five years, due to recovery
from knee replacement surgery.

8.        PUBLIC HEARINGS

None

9.        ADMINISTRATIVE REPORTS BY EXECUTIVE OFFICER

         9.a     Annexation Proceedings Re: Plumas LAFCo File No. 2005-ANNX-009, Feather
                 River Partners to Chester Fire Protection District.

The Executive Officer presented the following staff report and staff recommendations for
Plumas LAFCo File No. 2005-ANNX-009, Feather River Partners to Chester Fire Protection
District:
Staff has received and processed Plumas LAFCo File No. 2005-ANNX-009, an application to initiate proceedings
for change of organization from Feather River Partners (Successor of Vandenburghe Properties Inc.), applicant,
on behalf of Ray and Maxine Keefer, property owners, who seek annexation into the Chester Fire Protection
District.

The annexation application from the applicant involves one identified 14.92 acre parcel, APN 001-140-009,
proposed for use as 49 single-family residential parcels contiguous by extension of a road to the subject parcels
from the present western jurisdictional boundaries of the Chester Fire Protection District.

The application was subsequently supplemented with a resolution prepared by the District Staff and adopted by
the District Board of Directors wherein the District requests the boundary changes and agrees to exercise
jurisdiction over the territory to be annexed and provide Fire Protection and Emergency Medical services. The
District has also included terms and conditions of annexation per the attached District Resolution.

PROJECT SITE: The territory to be annexed consists of the 14.92 acre parcel reference above and
approximately 1.0 acre of roadway over three parcels including parcels, APN 001-140-009 owned by the Keefers
and the Chester Church of Christ, and APN 001-140-019, APN 114-002-200 and APN 001-140-043 which are
owned by COLLINS PINES and SIERRA PACIFIC INDUSTRIES.

On the map attached and marked Exhibit “A”, the Commission will find the project area set forth in yellow with the
present District boundaries shown in red. Contiguity is achieved by annexing the road territory. The territory is
presently uninhabited.

The territory included in the primary territory to be annexed (APN 001-140-009) recently sought and was granted,
upon application of Vandenburghe Properties Inc., a change in the general plan designation and zoning of 11.94
   AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                               PAGE -3-

acres of the 14.92 acre parcel to Single Family Residential (7-R) within a Prime Opportunity Area. Therefore,
there is no change in “land use” anticipated by this change of organization.

PURPOSE: The purpose of this annexation is to promote the orderly and logical expansion of the jurisdictional
boundaries of the Chester Fire Protection District over territories to which it may efficiently provide Fire Protection
and Emergency Medical services.

California Government Code §56668 spells out the factors to be considered by the Commission when making its
determinations on applications. It provides as follows:

§56668. Factors to be considered in the review of a proposal shall include, but not be limited to, all of the
following: (a) Population and population density; land area and land use; per capital assessed valuation;
topography, natural boundaries, and drainage basins; proximity to other populated areas; the likelihood of
significant growth in the area, and in adjacent incorporated and unincorporated areas, during the next 10 years.
(b) Need for organized community services; the present cost and adequacy of governmental services and
controls in the area; probable future needs for those services and controls; probable effect of the proposed
incorporation, formation, annexation, or exclusion and of alternative courses of action on the cost and adequacy
of services and controls in the area and adjacent areas. "Services," as used in this subdivision, refers to
governmental services whether or not the services are services which would be provided by local agencies
subject to this division, and includes the public facilities necessary to provide those services. (c) The effect of the
proposed action and of alternative actions, on adjacent areas, on mutual social and economic interests, and on
the local governmental structure of the county. (d) The conformity of both the proposal and its anticipated effects
with both the adopted commission policies on providing planned, orderly, efficient patterns of urban development,
and the policies and priorities set forth in Section 56377. (e) The effect of the proposal on maintaining the
physical and economic integrity of agricultural lands, as defined by Section 56016. (f) The definiteness and
certainty of the boundaries of the territory, the nonconformance of proposed boundaries with lines of assessment
or ownership, the creation of islands or corridors of unincorporated territory, and other similar matters affecting the
proposed boundaries. (g) Consistency with city or county general and specific plans. (h) The sphere of influence
of any local agency which may be applicable to the proposal being reviewed (i) The comments of any affected
local agency. (j) The ability of the newly formed or receiving entity to provide the services which are the subject of
the application to the area, including the sufficiency of revenues for those services following the proposed
boundary change. (k) Timely availability of water supplies adequate for projected needs as specified in Section
65352.5.      (l) The extent to which the proposal will affect a city or cities and the county in achieving their
respective fair shares of the regional housing needs as determined by the appropriate council of governments
consistent with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7. (m) Any
information or comments from the landowner or owners. (n) Any information relating to existing land use
designations.

ANALYSIS: The Executive Officer has reviewed the Application of Feather River Partners (Successor of
Vandenburghe Properties Inc.), applicant, on behalf of Ray and Maxine Keefer, property owners, who seek
annexation into the Chester Fire Protection District and Resolution No. 2005-05 from the District. Staff has
visited the site to be annexed and has reviewed the maps and description of the territory to be annexed.
Resolution No. 2005-05 of Chester Fire Protection District is attached hereto and is incorporated herein by
reference.

The District agrees to annex the Feather River Partners (Successor of Vandenburghe Properties Inc.), applicant,
on behalf of Ray and Maxine Keefer, property owners into the Chester Fire Protection District subject to terms
and conditions set forth therein and the applicant has agreed to the terms and conditions. The terms and
conditions call for the payment of annexation fees to the District and the payment of user fees thereafter.

The Executive Officer finds that the fiscal transaction between the applicant and the District is not “revenue
neutral”. Revenue Neutrality is included as part of the Plumas LAFCo Policies and Procedures and it is a
necessary part of the review process the Commission has previously adopted to protect constituents. The
Following letter was submitted to the District to justify and explain Plumas LAFCo’s Staff evaluation of revenue
neutrality for this annexation:

November 14, 2006
To:    Bill Turner, Fire Chief
       Chester Fire Protection District
     P.O. Box 177
     Chester, CA 96020
   AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                                        PAGE -4-

Subject: Plumas LAFCo File No. 2005-ANNX-009, Feather River Partners to Chester Fire Protection District (formerly
known as Vandenburghe Properties to Chester FPD)

After reviewing all of the information forwarded to our office from your District regarding the above noted application,
including data relating to District assets and the “Terms and Conditions” of this annexation, I can only conclude that
the fiscal transaction between the applicant and the District is not “revenue neutral”. Revenue Neutrality is included as
part of the Plumas LAFCo Policies and Procedures and it is a necessary part of the review process the Commission has
previously adopted to protect constituents. In a letter to the Chester PUD by District Engineer, Ed Anderson, Mr.
Anderson states in pertinent part…… “most Special Districts rely on Annexation Fees to insure that newly annexed land
into the District will pay their fair share to “buy in” to the existing system(s) and contribute to the impact the additional
growth and development will have on existing facilities and infrastructure owned and operated by the District.” . The
concept Mr. Anderson refers to as “fair share” and “buy in” is very close to the Plumas LAFCo concept of revenue
neutrality.

As one example of several possible approaches, I provide the following brief analysis: According to
information provided to my office, the District presently provides emergency fire and medical services to
approximately 1386 parcels. Your District Staff has reported that the estimated cost for replacement of
your district assets is $2,631,200. By dividing the infrastructure value of the District by the number of
individual parcels served by the District, we find that each parcel has contributed value equal to the
amount of $1,898.41 per parcel. The 49 units to be attached to the District system(s) are normally required
to pay a fair share and “buy in” to the system, otherwise it might be said that present constituents are
subsidizing the developer project. Each new constituent parcel should be required to pay an amount equal
to the existing contributed per lot charge of $1,898.41 to provide a fair share buy in. If the new
continuants paid this amount over a 25 year period of time, a fair assessment per lot would be an
additional* $75.94 per year per parcel (*additional to the current assessment per lot charge, which covers
fee for actual service costs). Your Board could also still assess the developer the proposed “annexation
fee” up front of $29,413.96 or $588.28 per lot. By using this fee to adjust down the $1,898.41 fair share
“buy in” fee, the additional assessment of $52.40 per each of the proposed 49 new lots for twenty-five
years plus the annual service charges for a total of approximately $144 per parcel annually. An annual
assessment of $144 is more in line with the charges other fire districts in Plumas County have made over
the last three years in completing their annexations.

Plumas LAFCo staff has communicated this information to the developer in question and the developer has
no opposition to these factual points of reference. This is consistent with the fact that there is no increase
of costs to the developer as a result of following this formula in that the new property owners will be paying
the annual assessments.

However, I will prepare my report with my conclusions and your Boards conclusions for Commission review and
approval if the District Directors will provide LAFCo with a resolution that makes determinations as follows:
         1.                  that the District has sufficient funds for operations and capital improvement projects;
         2.                  that the District does not have a need for further funding; and
         3.                  that the District’s need to promote growth and expand it’s constituent user base for the
                             purpose of spreading future District costs among more users in the future, is a more
                             important policy than requiring new users to share actual cost in becoming part of the
                             District;
If we receive your District resolution within a reasonable time before the next Plumas LAFCo meeting date on December
11, 2006, I will attempt to place this item on our agenda for consideration by the Commission at that time. Should you
have any questions or concerns please do not hesitate to call our office. If your Board would like to discuss this issue
with the LAFCo Executive Officer in a personal presentation, I would be willing to address your Board in the future.

A District can determine that it has sufficient funds and does not need to collect a “buy in” if it determines that
other issues are more important to the District and if the District Board has determined that the need to promote
annexation to the District gains the benefits of an expanded user base that will act to spread costs in the future, is
a more important policy to adopt. Here, Mr. Turner and Board President Nashlund has provided such a
communication dated 11-21-2006, as attached.

In another letter dated 10-26-2006, District Fire Chief, Bill has supplied the Staff with an explanation (see
attached) of the District’s approach to determining a “buy-in” or annexation fee for this project. This letter states
that the Board is, (…comfortable in the methodology used for the determination of the annexation fees…. (and
that) this figure is derived from a depreciated cost of property and equipment, consumer price index and a risk
factor.” The letter also notes that the Board is open to new suggestions and methodology for future annexations.
   AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                            PAGE -5-

Government Code §56653:

    (a) Whenever a local agency or school district submits a resolution of application for a change of
        organization or reorganization pursuant to this part the local agency shall submit with the resolution of
        application a plan for providing services within the affected territory.

    (b) The plan for providing services shall include all of the following information and any additional
        information required by the commission or the executive officer:

            (1)   An enumeration and description of the services to be extended to the affected territory.
            (2)   The level and range of those services.
            (3)   An indication of when those services can feasibly be extended to the affected territory.
            (4)   An indication of any improvement or upgrading of structures, roads, sewers or water facilities,
                  or other conditions the local agency would impose or require within the affected territory if the
                  change of organization or reorganization is completed.
            (5)   Information with respect to how those services will be financed.

Staff has reviewed the list of conditions and the plan for providing services and determines that the requirements
of Government Code §56653 have been met.

The terms and conditions for annexation include a plan for providing services by the District to the Feather River
Partners (Successor of Vandenburghe Properties Inc.) parcel, and are attached for Commission review. Such
plan requires the property owners bear all annexation costs; the property owners will pay a one time fee of
$29,413.96 and a yearly assessment of $95.00 per improved parcel and $75.00 per unimproved parcels.
Staff has visited the site to be annexed and has reviewed the maps and will prepare a legal description of the
territory to be annexed through our ArcView software for submission to the SBE.

Approval of an Application for Annexation is a “project” under the California Environmental Quality Act and
therefore the Commission is required to make its determinations with CEQA as part of its consideration. The
County of Plumas prepared an environmental review of this project when the County allowed the zone change on
the property. This Commission approved the environmental review of Plumas County during its study session of
the review on January 20, 2006 wherein the Commission approved Resolution No. 2006-001, which approved the
environmental review as adequate and complete. The review concludes and determines that the project does not
present any significant environmental impact. This determination was based upon the expectation that this
annexation is for territory to which the District should logically provide services and that while it may alter the
social or economic interests of the property owners in question it will not substantially alter interests of other
nearby landowners. The existing Plumas County zoning designates the territory for uses consistent with the
applicant proposal.

The territory is presently within the Sphere of Influence of the Chester Fire Protection District and the annexation
of this property into the District is a logical expansion of the boundaries of the District. The proposed new
boundaries are definite and certain. The territory to be annexed is presently uninhabited.

The Executive Officer sent notices to all other local government agencies that might be affected by this
annexation for purposes of securing public and agency comment. The Staff received comments in favor of the
project only.

The territory is recently included within the Sphere of Influence of the Chester Public Utility District and the
annexation of this property into the District is a logical expansion of the boundaries of the District. The proposed
new boundaries are definite and certain.

The District has entered into tax exchange agreements with the County of Plumas and the Plumas County Flood
Control and Water Conservation District, Resolution No. 2006-7252, the Seneca Health Care District, Resolution
No. 341, the Chester Public Utility District, Resolution No. 216, and the Chester Cemetery District, Resolution No.
05-02.

Expanding or limiting the breadth of this annexation is within the discretion of the Commission. Pursuant to
Government Code §56375 the Commission has the power and authority to approve, modify or disapprove
proposals for change of organization.

Government Code §56663 (a) allows the Commission to process the annexation without notice, hearing or an
election. The Executive Officer has determined that Conducting Authority may be waived based upon 100%
   AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                           PAGE -6-

landowner signature participation in agreement to the annexation of the territory. Staff has not presently received
written agreement to annex from all of the owners of record of these parcels at this time. All of the landowners
have agreed to the annexation.

RECOMMENDATION: Staff recommends that the Commission review and discuss the Executive Officer Report
with the attached documentation. Further, Staff recommends that the Commission:
                    1) Take the Staff Report
                    2) Take Public Testimony.
                    3) Certify that the environmental review was completed and approved as adequate and
                       complete.
                    4) Make determination that the property is uninhabited, pursuant to the Cortese-Knox-
                       Hertzberg Local Government Reorganization Act of 2000 under Government Code
                       §56046 and assign the following distinctive short form designation: Annexation of
                       “Feather River Partner Parcels” to the Chester Fire Protection District.
                    5) Approve the Feather River Partners Reorganization as presented in Resolution 2005-05
                       adopted by the Chester Fire Protection District Board of Directors subject to any terms
                       and conditions the Commission may, in its discretion require approval to be based upon.
                    6) Waive the Conduction Authority proceedings pursuant to Government Code §56663.
                    7) Find that the terms and conditions of annexation provide for revenue neutrality or such is
                       waived by the District with notice.
                    8) Adopt Plumas LAFCo Resolution # 2006-017, A Resolution of the Plumas Local Agency
                       Formation Commission Making Determinations and Approving the Annexation of the
                       “Feather River Partner Parcels” to the Chester Public Utility District, Plumas LAFCo File
                       No. 2005-ANNX-009.
                    9) Make Determinations to approve the Annexation as proposed, modify the terms of
                       Annexation or deny the proposed Annexation.

Chairman Meacher thanked Mr. Gullixson for the staff report and noted that he had no
additional comments and asked for Commission discussion. Commissioner Blum had
questions pertaining to the District boundaries. Commissioner Comstock had questions relating
to finding revenue neutrality on this annexation. Chairman Meacher gave an overview of the
District boundaries and Mr. Gullixson explained that he does not recommend that the District
use depreciated value to determine replacement cost and referred the Commission to a copy of
the letter staff sent to the District contained in the staff report. Mr. Gullixson also noted that
there are many methodologies that can be used to determine a “fair share buy-in” and noted
that Plumas LAFCo’s intent is to make sure annexations remain revenue neutral and that
existing constituents are not subsidizing developer projects.

Bill Turner, Fire Chief for the Chester Fire Protection District and Dan Mountsier, representative
for the project applicant, were in the audience and available to answer any questions the
Commission had. Mr. Turner reported that it was the view of the Chester FPD Board that the
fees proposed were fair and did constitute a fair buy-in. Further, the District did not want to
change the annexation fees “mid-stream” and would be open to considering a different fee
schedule for annexations in the future.

Commissioner Comstock reported that she supports this project, but would like to see
consistency in how Plumas LAFCo applies the “rules” to annexations proceedings, so that
applicants have an idea about what to expect when a project comes before the Commission.
Commission Blum also made comments pertaining to the importance of revenue neutrality and
consequences that may occur to the District budget if this is not sufficiently addressed.

MSC: Comstock/Rush (5-0): Adopting Resolution No. 2006-017: A Resolution of the Plumas
Local Agency Formation Commission Approving Plumas LAFCo File No. 2005-ANNX-009,
Feather River Partners to Chester Fire Protection District an Annexation of Property to the
Chester Fire Protection District.
  AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                             PAGE -7-



       9.b    Action/Study Session Re: “Willow Creek” Project, & Adoption of LAFCo policies
              on District control of domestic water and sanitation sewer treatment plants.

Mr. Gullixson reported that a proposed subdivision is currently being planned west of Delleker
by the name of “Willow Creek”. The “Willow Creek” project is being discussed as a 211 single
family residence subdivision with a new technology sewer treatment plant included as part of
its infrastructure. Mr. Gullixson reported that he has had numerous, lengthy conversations with
the owners of this project and with representatives from Shaw Engineering regarding this
project. Mr. Gullixson further reported that the Commission has for several years adopted an
informal policy that provides that when a new subdivision is proposed that needs fire
protection, sanitation sewer and/or domestic water services, Staff will first attempt to
encourage annexation of the new project into an existing agency. The purpose of annexation
is to obtain economic benefit by spreading the costs of administration over more constituents
and to otherwise build better funded regional sanitation agencies that can provide services at a
higher level with a lower cost through Staffing that is trained and funded at a higher level.

It appears that the Engineer has suggested to the builder that they seek permission from the
Plumas County Planning Department to build their systems with provision for operations
through a Home Owners Association or through a Mutual Water Company instead of through a
local governmental agency.

The Executive Officer reported that Domestic Water and Sanitation Sewer Treatment Plant
Operations seriously impact the future growth and planning of Plumas County. As our
communities evolve over time, the small agencies providing these services now could slowly
merge into regional Sanitation, Water and Fire Agencies because of the continuing legislation
coming out of Sacramento and because of the need to develop strategies and staffing that can
meet the needs of the future with a skill base that can adequately address funding and
economies of scale to be gained by expanded regional responsibilities. However, the gradual
evolution toward regional sanitation providers will be forever hindered if the County Planning
Department doesn’t join ranks with Plumas County Health and Plumas LAFCo in aggressively
making our informal policy referenced above, into a County policy. The privatization of
sanitation and water systems insures no uniformity of operations and when the future arrives,
bringing private sanitation operations into the fold will be fraught with problems that may not be
easily resolved.
Chairman Meacher thanked the Executive Officer for the staff report and began a discussion
regarding the implication of developing a formal policy. The Commission also discussed how
Districts can set up “Enterprise Zones”. Following further discussion, David Keller from Plumas
County Community Development reported that he is currently coordinating a meeting between
interested parties and county departments regarding this topic and encourages the
Commission to delay the establishment of a formal policy until after such meeting has occurred.
The Commission agreed with this approach.


MSC: Kennedy/Comstock (5-0): Directing Staff to return to the Commission a Draft Policy on
this issue, after such time as Staff has had an opportunity to meet with other interested parties,
County Planning Department and Health Department representatives.
  AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                PAGE -8-



       9.c    Study Session Re: Plumas LAFCo File No. 2006-ANNX-002, Dayton Property
              to the City of Portola.

Commissioner Kennedy noted that he had spoken to Manager Murphy who had not checked
the LAFCo Agenda available via the Plumas LAFCo website, regarding this agenda item.
Commissioner Kennedy wanted to know if staff had informed the City that this item is on the
Plumas LAFCo agenda. Mr. Gullixson noted that the Commission meets the 2 nd Monday of
every month and that since its agenda’s are posted, as required by law, on the Plumas LAFCo
website the City Staff is duly and legally informed of the LAFCo agenda items.
The Executive Officer reported that LAFCo Staff sent out notice to the City of Portola on
October 25, 2006, after receiving the DAYTON annexation application referenced above from
the landowner. The Executive Officer received a telephone call thereafter from City Planner,
Karen Downs, requesting a meeting to go over the steps involved in processing an annexation.
The Executive Officer received a letter from the City Planner on November 20, 2006 setting
forth discussion points for the meeting set for November 22, 2006. Please see attached letter
marked as Exhibit “A”. That meeting occurred with the Executive Officer, Clerk Duenas,
Planner Downs and City Council Member William Weaver being present.
The point of this Study Session is to present to the Commission a “Policy” issue that gives rise
from the points Ms. Downs has addressed in her letter to Staff, which was provided for the
Commission review.
Mr. Gullixson reported that the territory to be annexed is located within the district boundaries of
the Eastern Plumas Rural Fire Protection District (hereafter EPRFPD) and that District currently
collects property taxes for the provision of the services the District provides. The City of Portola
has taken a position that it wants the territory to be removed from the boundaries of the
EPRFPD as a condition of annexation. The City is almost entirely surrounded by this fire
protection district as depicted in the Exhibit “B” map attached hereto.
Further, Mr. Gullixson reported It is very common for Special Districts to provide a myriad of
services within the boundaries of a City. It is wrong to assume that all governmentally provided
services to the public within a City must come only from the City itself.
It is also impractical to assume that the Special District providing fire protection services to a
territory larger than the City it surrounds, can remain fiscally sound if its financial base is slowly
eroded by annexations to the City. This is especially true when the property tax the District
receives constitutes the vast majority of the District funding base. The District does not have to
agree to have the property leave its jurisdiction. However, the landowner can make this
request if he chooses subject to the discretion of the Commission. The property taxes collected
by the District also do not have to be given up if the District is relying on the taxes collected as
a substantial part of its budget. The number one issue for the Commission is to insure the
continuation of service and the avoidance of harm to a viable agency. The Commission has
the discretionary power to make a decision either way, but does not have jurisdiction over the
property tax exchange.
The City of Portola annexed 12 previous lots under these circumstances and the taxes were
not exchanged between the agencies, the Fire District retaining its tax base even though the
lots were removed from the boundaries of the Fire District.
The Executive Officer told the City Planner and Councilmember Weaver that the City does not
have to cause the property to be removed from the Fire District to be able to annex the property
in question. He asked the City representatives to take this information back to the City for the
   AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                      PAGE -9-


purpose of asking the City Council to determine a “City Policy” on annexations of territory
presently served by other Special Districts.
It was suggested to Councilman Weaver that the City Council should consider appointing an Ad
Hoc Committee of two City Council members to have a meeting with the Fire District to discuss
an accommodation between the two agencies since it logically appears that this issue will arise
again based upon the geographical relationship of the boundaries.
The Commission may also have to consider its own “policy” on this issue in the long run.
However, the Executive Officer believes that such should be looked at on a case by case basis
in the near term.
During discussion of this item, Commissioner Kennedy responded that the City of Portola could
not afford to provide fire protection services to new lots unless the City gained the property tax
share of EPRFPD. The Executive Officer pointed out to the Commission that that argument
was based upon a fallacy because of the fact that the City of Portola has a Master Tax
Exchange Agreement with the County of Plumas that gives the City a 49% tax share with the
County. Based on the City ability to gain 49% of the tax share, it would appear that the only
purpose of insisting on obtaining the Fire District tax share would be to penalize the District.

MSC: Kennedy/Comstock (5-0): To Receive and File this report.


       9.d     Staff Report Re: Proposed Contract Re Plumas County GIS.

Dennis Miller, Plumas County GIS coordinator, gave a presentation to the Commission
regarding the new county GIS site and proposed subscription contract. He reported that such
contract would allow the maintenance of the site and county GIS data to be optimally
maintained and would cost approximately $40.00 per month for a subscription. Subscribers
would be given a password that would allow them access to information that is not available for
public review via the internet. Mr. Miller also introduced the Commission to the website itself
and displayed some of its capabilities and the information contained therein. Following his
presentation staff noted that they would return this issue to the Commission for review when
an actual subscription cost is presented to staff.

MSC: Kennedy/Comstock (5-0): To Receive and File this report.


       9.e     Action Item Re: Consideration of Resolution making determinations of
               Commissioner’s as Independent Contractors or Employees.

Staff presented the following staff report and recommendation to the Commission:

At the Commission meeting of November 13, 2006, Staff presented the Commission with information pertaining to
the classification of Commissioners as Employee’s vs. Independent Contractors. Staff also presented the
Commission with a draft copy of a report by William Morgan, CPA, of Diehl, Evans and Company, LLP, provided
to the County of Plumas. This report concluded that Commissioners should be classified as Employees for tax
purposes. Since that meeting staff has received an amended final version of the report done by William Morgan
with some minor word changes on page 3, and a revised tax opinion on page 5.

The Commission has several options regarding this issue. Some of these options are:
    Maintain the Status Quo and continue to treat the Commissioners as Independent Contractors by
      adopting a formal resolution.
  AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                                        PAGE -10-

      Classify the Commissioners as Employee’s as of January 1, 2007 and through a formal resolution direct
       the County Auditor and Human Resources of this change. Also, adopt an Amendment to the Plumas
       LAFCo Employee Compensation and Benefit Policy making findings that Commissioners are Part-
       Time/Non-Permanent Employees and therefore not entitled to benefits.
      The Commission may want to consider lowering the per diem to Commissioners to an amount that is less
       than $600.00 per year (an amount not subjected to taxes), or to an amount that recoups the excess
       expenses of cost to LAFCo to pay the extra costs of Social Security & Medicare that have not been
       budgeted for.

Should the Commission choose to make Commissioners employees the LAFCo would be subject to the payment
of Social Security, Unemployment and SDI obligations. This would add additional impact to the LAFCo budget
that would need to be addressed. Further, should the Commission choose to make Commissioners employees,
staff recommends that the following amendments be made to the Plumas LAFCo Employee Compensation and
Benefit Policy:

      Changes will be made to entirety of the document when reference is made to Commission Employees to
       read Salaried Management/Supervisory and General Hourly Commission employees
      Addition to the Employee Compensation and Benefit Policy will consist of the following, should the
       Commission classify the Commissioner’s and Commission alternates as employees:

                            2.00 COMPENSATION AS EMPLOYEE
                            2.01 (a)_Classification and Compensation for acting Commissioner’s
                            Commencing January 1, 2007:

                            Acting Commissioners appointed by the Board of Supervisors, the City or Cities, the
                            Special Districts, and the Commission, as well as their alternates, are hereby
                            classified as Part-Time/Non-Permanent Employees.

                            Part-Time/Non-Permanent Employees are not eligible for the benefits prescribed in
                            this document for Salaried Management/Supervisory and General Hourly
                            Commission employees. As Part-Time/Temporary Employees Commissioner per
                            diem, mileage, and reimbursement shall be taxed and paid pursuant to the terms of
                            the County Plumas and federal and state government.

                            Commissioners are eligible for per diem, as set by the Commission, for each day
                            that they are acting on Commission business. Commissioners are also eligible for
                            reimbursement of mileage in an amount pursuant to the terms of the Plumas County
                            Employee rate. Further, Commissioners are eligible for reimbursement of room,
                            actual meals, and transportation for attendance to and from Commission approved
                            LAFCo events.

                            2.01 (b)_Provisions for a Contract Executive Officer

                            If the Executive Officer is a contract employee, the Executive Officer shall be
                            entitled to all benefits to which other Salaried Management/Supervisory and
                            General Hourly Commission employees are entitled. However, the Commission
                            approved contract benefits for the Executive Officer shall be cumulative to and
                            supersede the Plumas LAFCo Employee Compensation and Benefit Policy.

Direct staff to make the above amendments to the Employee Compensation and Benefit Policy and approve
Resolution No. 2006-016: A Resolution of the Plumas Local Agency Formation Commission Making
Determination that Commissioners of Plumas LAFCo are Employees. Make determinations regarding payment of
per diem rates for Commissioners and direct Staff to bring back a resolution adopting amendments to the Plumas
LAFCo Employee Compensation and Benefit Policy.

The Commission discussed the staff report, the use of the County Tax ID number and the
possibility of removing funds from the County Auditor for management independently by the
Commission.
  AGENDA OF THE DECEMBER 12th, 2006 MEETING OF PLUMAS LAFCo                            PAGE -11-


MSC: Kennedy/Meacher (5-0): Adopting Resolution No. 2006-016: A Resolution of the
Plumas Local Agency Formation Commission Making Determinations that Commissioner’s of
Plumas LAFCo are Employees and directing Staff to begin this status as of January 1, 2007.


10.    OTHER BUSINESS

None


11.    RESOLUTIONS

                                11a.                              Resolution No. 2006-016:     A
                                                              Resolution of the Plumas Local
                                                              Agency                  Formation
                                                              Commission Making Determinations
                                                              that Commissioner’s of Plumas
                                                              LAFCo are Independent Employees.

Approved under item 9e.

       11b.   Resolution No. 2006-017:        A Resolution of the Plumas Local Agency
              Formation Commission Approving Plumas LAFCo File No. 2005-ANNX-009,
              Feather River Partners to Chester Fire Protection District an Annexation of
              Property to the Chester Fire Protection District.

Approved under item 9a.


12.    ADJOURNMENT

Finding no further business on the agenda, Chairman Meacher called the meeting back to
order and adjourned the meeting at 12:10 p.m. to a special meeting of Plumas LAFCo
scheduled and noticed to be held at 10:00 a.m. on Monday, January 8, 2007 in the Board of
Supervisors Room, Plumas County Courthouse, Quincy, California.

				
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