This Board Order does not have any fiscal impacts. However, if the decision is made to pursue detachment, there will be costs associated with that decision, including application fees, preparation of a map and legal description, fees for
recording documents, State Board of Equalization fees, environmental review, staff costs, and other miscellaneous expenses that can be detailed as part of this Board’s approval of a resolution of application for detachment.
There are six overlapping tax rate areas between BBID and DBCSD. If the six tax rate areas were to be detached from BBID, the ad valorem tax currently allocated to BBID ($684,246 in FY 14/15) potentially could be reallocated to one or more of the other affected taxing agencies, which include: the County, County library, County Service Areas )-6 and L-100, Flood Control, East Contra Costa Fire Protection District, Contra Costa Resource Conservation District, Contra Costa Mosquito and Vector Control District, Byron, Brentwood, Knightsen Union Cemetery District, Bay Area Rapid Transit District, Bay Area Air Quality Management District.
| TRA |
FUND |
DESCRIPTION |
INCREMENT |
BASE TAX $ (FY 14-15) |
| 60043 |
418100 |
BBID |
13.03049 |
$ 128,838.24 |
| 60047 |
418100 |
BBID |
13.02890 |
$ 39,568.79 |
| 60048 |
418100 |
BBID |
13.03049 |
$ 3,036.49 |
| 60050 |
418100 |
BBID |
14.97784 |
$ 597.81 |
| 60055 |
418100 |
BBID |
14.97784 |
$ 253,863.14 |
| 60056 |
418100 |
BBID |
14.97784 |
$ 258,341.43 |
| |
|
|
|
$ 684,245.90 |
The Byron-Bethany Irrigation District (BBID) is a 90-year old tri-county district providing agricultural water service to portions of Alameda, Contra Costa and San Joaquin counties. In addition, BBID provides raw untreated water to the Mountain House community and the City of Tracy. BBID’s service area is approximately 30,000 acres. The current population within BBID service area and sphere of influence (SOI) is approximately 13,000. Little or no anticipated growth is projected at this time. San Joaquin is the principal county for BBID and related Local Agency Formation Commission (LAFCO) proceedings. By statute, the “principal” LAFCO is that LAFCO in the county that has the greatest portion of the entire assessed value based on the last equalized assessment roll.
The Town of Discovery Bay Community Services District (DBCSD) service area encompasses the developed and developing unincorporated community of Discovery Bay, composed of approximately 5,760 acres. Discovery Bay was originally established in the 1970s as a weekend and summer resort community. Today, Discovery Bay has evolved into a year-round home for over 13,500 residents. DBCSD provides a variety of services including water and wastewater for the community of nine square miles.
There are several areas where the DBCSD and BBID boundaries overlap. Both BBID and DBCSD are paid to provide water service to the properties in the overlap areas, either through a property tax allocation or fees. The 2014 Contra Costa LAFCO Second Round Water/Wastewater Municipal Service Review (MSR) noted that, because the two water systems have different infrastructure requirements and operate in different ways, it seems unlikely Discovery Bay residents will use BBID water. The MSR recommended that consideration be given to detaching the overlap areas from BBID’s SOI/boundary. The MSR also noted that further study is needed to fully analyze the service and fiscal implications of such a detachment to both the residents and BBID.
Process for Detachment
A detachment is a change of organization governed by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Government Code section 56000 et seq., (“CKH”). The CKH permits any “affected local agency” to apply to LAFCO for a change of organization, in this case, a detachment (§56654(a)). Contra Costa County is an “affected county” because it contains part of the district for which a change of organization is proposed (§56012). Section 56654(c) suggests giving a 21 day notice describing the proposal and the affected territory to LAFCO and to the interested agencies before a resolution of application is adopted.
Attachment A is a sample Inhabited District Detachment Flowchart. If this Board decides to pursue detachment, the process would begin with the Board adopting a resolution of application for detachment (§§ 56652, 56654 and 56756). A sample Resolution of Application is attached as Attachment B. The CKH requires that the application be filed with San Joaquin LAFCO as the “principal” county LAFCO for BBID (§§56066, 56658(a) and 56387). Attachment C is a portion of the San Joaquin LAFCO application form. The third page of the San Joaquin LAFCO form includes a list of 17 items that would have to be submitted as part of the application. The CKH governs the form and content of the application (§56652).
An application for detachment can be submitted alone or with an application to amend the BBID SOI to remove the overlap area from the BBID SOI. The CKH would also allow the County to include in its application a request that jurisdiction over the detachment proceedings be transferred to the Contra Costa LAFCO (§§56124 and 56388); however, San Joaquin LAFCO would not have to agree to this change of venue. A copy of the Contra Costa LAFCO’s application form is attached as Attachment D to indicate the type of information Contra Costa LAFCO may require if jurisdiction is transferred to this County. Due to statutory time requirements it is anticipated that a detachment would take no less than six months to complete, and likely more if a request is made to transfer the matter to Contra Costa LAFCO.
Fiscal Consequences of Detachment
Revenue and Taxation Code section 99 is the law that applies to the allocation of property tax revenues where there is a jurisdictional change (other than a city incorporation or a district formation) for local agencies “whose service area or service responsibility are altered by the jurisdictional change.” A detachment from BBID is clearly a jurisdictional change and an alteration of BBID’s service area. However, at this point, we don’t have enough information to know whether a detachment would result in alteration of BBID’s or DBCSD’s service responsibilities; for example, whether BBID in fact does supply back up water resources to DBCSD or whether there are agreements between the two agencies on this issue. That is something that would have to be explored further if the Board decides to proceed with a resolution of application for detachment.
Rev. & Tax §99(b)(5) authorizes the “county or counties” in which a special district service area is located to negotiate the allocation of property taxes following a jurisdictional change that would affect a service area. The statute provides, in pertinent part:
In the event that a jurisdictional change would affect the service area or service responsibility of one or more special districts, the board of supervisors of the county or counties in which the districts are located shall, on behalf of the district or districts, negotiate any exchange of property tax revenues. Prior to entering into negotiation on behalf of a district for the exchange of property tax revenue, the board shall consult with the affected district. The consultation shall include, at a minimum, notification to each member and executive officer of the district board of the pending consultation and provision of adequate opportunity to comment on the negotiation.
Rev. & Tax §99 (b)(5) does not specifically address whether the “principal county” (San Joaquin County), the “affected county” (Contra Costa County), or both counties would be the negotiating parties for a tax exchange agreement. The statute also does not specifically address whether a county board of supervisors could adopt a resolution that allocates the taxes to a single affected taxing entity (e.g., ECCFPD) rather than proportionately to all affected taxing entities, as was done in the case of a detachment from the Mt. Diablo Health Care District, discussed below. Presumably, these are matters that would be resolved through discussions with the LAFCO that takes jurisdiction of the matter and the Auditor’s Office.
In 2012, when the City of Concord applied to take over the Mt. Diablo Health Care District as a subsidiary district, certain portions of the district were detached, leaving only the cities of Concord and Pleasant Hill as the jurisdiction of the subsidiary district. At that time, this Board approved a resolution that determined the tax exchange for the proposed Mt. Diablo Health Care District reorganization should be allocated proportionately to each remaining taxing agency in the detached area according to the proportion of base tax each such taxing entity received for the tax rate area. In effect, the Mt. Diablo Health Care District’s base and increment in the detached area was “absorbed” proportionately by the remaining taxing entities. Attachment E is a copy of the June 5, 2012, Board Order and Resolution taking this action.
Pursuant to Rev. & Tax §99 (b)(6), the LAFCO executive officer may not issue a certificate to complete the detachment process without an appropriate tax exchange agreement.
Finally, it should be noted that the law does not require LAFCO to approve a detachment. In evaluating whether to do so, the LAFCO with jurisdiction would evaluate the factors described in Government Code section 56668, including the effect of the proposed action on BBID, and any information or comments from landowners, voters or other local agencies.
Should the Board elect not to pursue the detachment, then the status quo, i.e. areas of overlap between BBID and the DBCSD, would continue.