Little Hoover Commission Special Districts Review – Status Report Debby Cherney, Deputy General Manager Danielle Coats, Senior Legislative Program Manager May 3, 2017

Discussion Overview Little Hoover Commission Overview Special District Study Update Next Steps

Little Hoover Commission Overview

Little Hoover Commission Formally called the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy Created in 1962 as an independent oversight agency Bipartisan and comprised of 13 commissioners outlined in statute: 5 citizens appointed by the Governor 4 citizens appointed by the Legislature Members of the Legislature – 2 Assembly Members/2 Senators Mission of the Little Hoover Commission: To investigate state government operations and - through reports, recommendations, and legislative proposals – promote efficiency, economy, and improved service. Explores how programs could or should function. Reports often serve as a spring-board for legislation. Commission staff follows through as technical support until the issue is addressed legislatively or administratively.

Commissioners Pedro Nava Iveta Brigis Sebastian Ridley-Thomas Chair Legislative Appointee Iveta Brigis Governor Appointee Sebastian Ridley-Thomas State Assembly Member Sean Varner* Vice-Chair Governor Appointee Anthony Cannella State Senator Richard Roth* State Senator Scott Barnett Legislative Appointee Chad Mayes* State Assembly Member Janna Sidley Governor Appointee David Beier Governor Appointee Don Perata Legislative Appointee Helen Iris Torres Governor Appointee * From Riverside County ** Note: 1 vacancy remains on the Commission

Special Districts Study Update

Little Hoover Commission In 2000 the Little Hoover Commission released its initial report on California’s special districts 2016 hearings on special districts have explored the following: August 25, 2016 – Initial hearing focused on special district reserves and property taxes October 27, 2016 – Examined how special districts plan to address climate change November 16, 2016 – Narrowly focused on healthcare districts February 23, 2017 – Interest renewed in exploring consolidation and elimination of special districts

Issues Raised at the February 2017 Business Meeting The following includes some of the concerning comments raised during the February 23, 2017, Little Hoover Commission Business Meeting: Comment: Implement a ten-year sunset for all special districts, referred to as a “death-sentence” or “sunset model” EMWD/Special District Concerns: Disruption of core services Unable to pursue bond funding What entity would assume the debts, liability, infrastructure, continuation of services? Comment: Introduce a Base Realignment and Closure (BRAC)-type commission to evaluate and dissolve underperforming special districts LAFCOs have the ability and powers to evaluate special districts and recommend dissolution, elimination, or consolidation Similar to the concerns above, maintaining a bond ratings would be challenging and risky What problem are we trying to solve?

Addressing New Issues Raised Special districts conducted extensive outreach to commissioners EMWD actively pursued discussions with Riverside County connected Commissioners Associations and special districts volunteered information and assistance to Commissioners and Commission staff Commissioners surveyed to determine how to proceed Responses were generally positive

Next Steps

Next Steps for the Report Development Commissioners have elected to hold a smaller “roundtable” meeting in late June Developing recommendations based on the initial report circulated in February Areas of additional conversation include: Encouraging greater participation by the public in special district and LAFCO related activities More transparency in special district property tax collection and distribution, and Encourage LAFCOs to conduct more consistent, thorough municipal service reviews, with more substantive recommendations

Report Conclusion It is feasible that a report could be adopted in late summer following the June “roundtable” meeting EMWD has established a highly visible presence at the hearings/business meetings and we will continue to participate and engage Riverside County members of the LHC have been briefed by EMWD and others and will continue to be on an as-needed basis.

Contact Information Danielle Coats Senior Legislative Program Manager (951) 928-377 Ext. 4526 Email: coatsd@emwd.org