Fresno LAFCo Special District Performance Standards Workshop December 12, 2018

Agenda Objectives/discussion points LAFCo’s MSR experiences (determinations and recommendations) Refresher: 2014 MSR policy Refresher: Special districts Discussion and direction

and direction by the Commission Workshop objective Facilitate early discussion about MSR recommendations to solicit discussion and direction by the Commission in advance of an update of the 2014 MSR policy Why update the MSR policy? Staff strives continuously to optimize our system. The MSR policy was adopted in 2014 and the commission has approved 41 MSR 2.0 under the 2014 policy (3 cities and 38 special districts).   The average “operational type” of MSR recommendation average for special districts is 2.  The commission has updated 10 MSRs for special districts with no issues – no operational improvement recommendations.    Raisin City Water District and Tranquillity PUD top the list of MSR recommendations, each got 5 operational recs.      Aside for the standard MSR/SOI recommendations, the Commission has made a total of 55 recommendations that address local agency operational issues, lack of planning, or the MSR determined that the agency needs to comply to its principal act or the PRA.  Out of the 55 rec., only 9 MSR recommendation have been addressed.       Coalinga-Huron Cemetery (1) Raisin City (5) Oak Grove Cemetery District (3) Riverdale Memorial District is on track to meet 3 MSR recommendations.  (This would put us at 12 accomplished recommendations!)   

Discussion points Should the Commission revise or refine its MSR goals by adopting special district performance standards? Should the Commission establish a timeframe for action on its recommendations? How should the Commission manage its 20-25 year planning horizon? Should the staff change the way it is working with special districts on timeframes and planning horizon?

Fresno LAFCo’s local agencies and activities 15 cities 88 independent special districts 25 dependent special districts General activities: Establish spheres of influence Process reorganization (annexation and detachment) requests Miscellaneous support to local agencies Municipal service reviews

Fresno LAFCo 2014 MSR Policy MSR necessary to update a SOI MSR is a comprehensive study of a local agency’s municipal services Goals: to provide local agencies with an assessment of their services, make recommendations regarding areas of improvement, and determine whether or not an agency is equipped to effectively provide services within its existing or expanded SOI. build and maintain effective relationships between LAFCo and local agencies.

Pursuant to the 2014 MSR policy, a MSR evaluates… Services delivered by the agency, The agency’s compliance with its principal act, Activities of its board of directors, including compliance with the Brown Act The agency’s managerial practices, Sufficiency of its annual budget, Presence of an agency’s long-range plan for services, and Opportunities for public participation with district board meetings, Within a 20- to 25-year SOI planning horizon.

Special Districts have 4 distinguishing characteristics: Are a form of government Have governing boards Provide services and facilities Have defined boundaries According to State Auditor Elaine Howle, Provide specific services Serve certain areas May understand their constituents needs better than a full service government entity May be able to customize services and provide more tailored services to their customers May have less resources or staff than a city, county, or state entity Sometimes difficult to implement management controls and proper oversight that mitigate errors, irregularities, or mismanagement.

Brown Act open meetings Public Records Act Special districts are required by statutes to perform to enumerated standards Brown Act open meetings Public Records Act Annual financial report to County Auditor Cooperate with Registrar of Voters, Clerk to the Board

MSR 2.0 Determinations No budget No plan (optimal, but not required) No by-laws (principal act) No projects Recurring budget deficits Lack of board quorum Unauthorized extensions of service Lack of responsiveness to citizen concerns Lack of transparency (Brown Act) No budget (principal act?) No plan (optimal, not required) Riverdale VMD Clovis VMD No by-laws (cemetery district principal act) X CD, Y, CD, Z CD Recurring budget deficits (?) Oak Grove CD Lack of responsiveness to citizen concerns Parlier CD, Oak Grove CD Lack of transparency (Brown Act) Raisin City WD Lack of quorum Unauthorized extension of service Tranquillity PUD Lack of participation in MSR process (not tolerated with 2.0) Inactive per SB 448 (January 2019) Lack of compliance with one or more statutory requirements Principal act Other statute Lack of long range plan (change over time) Lack of budget, reserves

MSR 2.0 Recommendations Adopt an annual budget Adopt a plan for growth of services Adopt by-laws Address budget deficits Address the perception of a lack of responsiveness to citizen concerns Address the perception of a lack of transparency Encourage board membership Apply to LAFCo to authorize extensions of service

Types of MSR Recommendations Developmental (friendly advice) Suggestions how to improve Avoid if not of some value to the District, process, public Important (addresses operational efficiencies) Compliance with principal act Reduce SOI for district with no plan to grow Exigent (addresses an urgent matter) Brown Act, public records management, transparency

MSR 2.0 Recommendation Success Rate Recommendations with a time frame have 100% rate of completion. Recommendations without a time frame have a 0% completion rate. All types of recommendations, but the exigent recommendations, for sure.

It’s time to add them all up… Overview of LAFCo’s responsibilities (order, logic, efficiency) List of local agencies (cities and special districts) LAFCo’s MSR policy (comprehensive study, three main goals) Defined what a special district is Noted what a special district does Discussed special districts’ strengths and weaknesses

Special District Performance What should LAFCo expect to find when it performs a MSR? Scope is within LAFCo’s broad responsibilities as presented in CKH Broad authority provided by CKH Local policies to reflect local conditions Performs a MSR or conducts a special study or makes inquiry with LA, or when it requests public documents What should LAFCo expect to find when it performs a MSR? Scope is within LAFCo’s broad responsibilities as presented in CKH Broad authority provided by CKH Local policies to reflect local conditions Minimum expectations Special districts comply with statutes Respective principal act Brown Act Reporting requirements to County, State Controller

Special District Performance Minimum expectations Special districts comply with statutes Additional expectations: Adopt an annual budget “put a ring on it” if a SD wants a SOI, it must demonstrate a plan Planning process should include public participation Performs a MSR or conducts a special study or makes inquiry with LA, or when it requests public documents

Conclusions Local agencies cover every square foot of Fresno County “The rising tide lifts all boats” The public at large benefits from each improvement of special district performance Staff continuously strives to optimize the MSR process LAFCo’s exclusive responsibility and broad authority makes it unique among government agencies LAFCo is not an enforcement agency and must learn to exercise its power in a manner that is persuasive, not compulsive.

Conclusions Nearly every MSR has revealed a need for improvement MSR goals, in addition to being necessary to amend an SOI,: provide local agencies with an assessment of their services, make recommendations regarding areas of improvement, and determine whether or not an agency is equipped to effectively provide services within its existing or expanded SOI. Staff continuously strives to optimize the MSR process LAFCo’s exclusive responsibility and broad authority makes it unique among government agencies LAFCo is not an enforcement agency and must learn to exercise its power in a manner that is persuasive, not compulsive.

Discussion points Should the Commission revise or refine its MSR goals by adopting special district performance standards? Should the Commission establish a timeframe for action on its recommendations? How should the Commission manage its 20-25 year planning horizon? Should the staff change the way it is working with special districts on timeframes and planning horizon?