1. Fresno LAFCo Special District Performance Standards Workshop
December 12, 2018

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

3. 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!)   

4. 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 year planning horizon?
Should the staff change the way it is working with special districts on timeframes and planning horizon?

5. 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

6. 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.

7. 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.

8. 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.

9. 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

10. 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

11. 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

12. 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

13. 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.

14. 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

15. 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

16. 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

17. 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.

18. 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.

19. 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 year planning horizon?
Should the staff change the way it is working with special districts on timeframes and planning horizon?