MINUTES
Special Meeting July 22, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 2:00 pm at the Redding City Council Chambers, at 777 Cypress Avenue, in Redding. Commissioners Baugh, Day, Haynes, Jones, Morgan and Russell were present. Attorney Jim Underwood was present as staff. Alternate Commissioner Fust was present as a member of the audience. Commissioner Kehoe was absent.

CALL TO ORDER/ROLL CALL
Commissioner Baugh led the Pledge of Allegiance.

PUBLIC COMMENT
Irwin Fust, speaking as a member of the public, provided a copy of Government Code Section 56325, and addressed comments the Commission concerning fees and charges by the Commission for services rendered, and addressed related existing Shasta LAFCO fee policies.

CLOSED SESSION
The Commission conducted a closed session pursuant to Government Code Section 54956.9(d) (threatened litigation) and Government Code Section 54957 (evaluation of performance and potential discipline of Executive Officer).

CLOSED SESSION REPORT
A. There was no reportable action with regard to Item 4.a (Threatened Litigation);

B. It was reported by LAFCO Counsel Jim Underwood that there was no reportable action concerning evaluation of performance and potential discipline of the LAFCO Executive Officer, but it was reported that by mutual agreement of Amy Mickelson and the Commission, effective today, Ms. Mickelson’s employment with Shasta LAFCO is discontinued.

Concerning Agenda No. 6a, the Commission was provided and considered a Memorandum from LAFCO Counsel Jim Underwood addressing issues and options relating to potential Commission recruitment to fill the vacant Shasta LAFCO Executive Officer position. Following related discussion, and public comments from Gary Cadd, Dick Fyten, and Jan Lopez, Commissioner Haynes moved and Commissioner Morgan seconded a Motion:

(1) Authorizing Mr. Underwood to provide interim administrative support and direction to LAFCO staff, and to support the Commission and its subcommittees, as necessary on an interim basis;

(2) Authorizing Mr. Underwood to prepare and circulate a Request for Proposals (RFP) addressing LAFCO Executive Officer functions, and a notice of Executive Officer position vacancy and invitation for applications, in consultation with an Ad Hoc Commission Committee appointed to assist in that process; and

(3) The appointment of Commissioners Baugh, Jones, and Haynes to a newly created Ad Hoc Committee formed to review and make recommendations to the Commission concerning recruiting and hiring for the purpose of meeting Executive Officer needs for Shasta LAFCO.

Agenda Item No. 6b, concerning Potential Internal Financial Contract Policy and Procedures, was deferred to a future Commission Meeting for changes, consideration.

Upon discussing Agenda Item No. 6c, by consensus of the Commission, it was asked that a future agenda provide for potential Commission action to appoint Alternate Public Member Larry Russell as the permanent Public Member on the Commission, and to recruit for an Alternate Public Member.

Concerning Agenda Item No. 6d, following a discussion by Commissioners of related issues, and with no public comments made following the Chairman’s request, on Motion of Commissioner Haynes, and as seconded by Commissioner Day, the Commission approved a Motion to establish an Ad Hoc Committee to meet and confer with the Fall River Mills Community Services District regarding financial issues, and appointed Commissioners Haynes, Morgan, and Jones to that Committee.

COMMISSIONER ANNOUNCEMENTS
None.

STAFF ANNOUNCEMENTS
Legal Counsel Jim Underwood reminded Commissioners of their ability to contact staff with questions concerning the Cal-LAFCO Conference to be held on August 28, 2013 through August 30, 2013.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at approximately 3:45 p.m.

ATTEST:

James M. Underwood, Legal Counsel

MINUTES
Special Meeting July 17, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 9:00 am at the Anderson City Council Chambers at 1887 Howard Street in Anderson. Commissioners Day, Giacomini, Haynes, Jones, Morgan and Russell were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Alternate Commissioner Fust was present as a member of the audience. Commissioner Kehoe was absent.

PLEDGE OF ALLEGIANCE
Commissioner Day led the Pledge of Allegiance.

PUBLIC COMMENT
Jan Lopez requested items 4a Correspondence Received, 4b Minutes of June 13, 2013 and 6b South County Fire Districts SOI/MSR be pulled from the agenda. Terry Briggs spoke about Fall River Valley CSD’s parks paperwork. Gary Cadd stated that the last meeting violated the Brown Act.

CONSENT CALENDAR
Commissioner Baugh pulled items 4a Correspondence Received and 4b Minutes of June 13, 2013 from the consent calendar. Commissioner Russell moved to approve the remainder of the consent calendar, the motion was seconded and passed. After discussion regarding the content of emails from Jan Lopez and the accuracy of the June 13, 2013 Minutes, a motion to adopt items 4a and 4b was made (Giacomini), seconded and passed with one dissenting vote (Jones).

OPERATIONS AND ADMINISTRATION
Don Reynolds, CPA, gave a report regarding the Fiscal Year 2012-13 audit and answered Commission questions. Barbara Briggs from Fall River Mills stated there was a lack of internal controls. Commissioner Jones suggested agendizing future controls. A motion to accept the Fiscal Year 2012-13 Audit as presented was made (Haynes) and seconded.

The Executive Officer reported that no applications for Alternate Public Member had been received. Commissioner Morgan suggested advertising the position again after reviewing or generating policy.

Ms. Mickelson presented an updated Municipal Services Review policy pursuant to Commission direction. LAFCO Legal Counsel Underwood outlined to the Commission a two-step approach to MSR/SOI updates work, with the first level to meet basic statutory requirements as determined necessary to result in more expedited and summary process, and with more detailed MSR and SOI updated to correspond with more complicated agency applications. There was then extensive discussion about the wording of proposed item #3, with several Commissioners suggesting that it should state that initial studies would be paid for by LAFCO and that only those districts proposing changes to their sphere of influence would be required to pay for a more detailed MSR/SOI update.

Terry Briggs stated that the Commission continues to pass the buck. David Coxey from Bella Vista Water District advised that he was unclear on who would prepare and pay for their MSR. Jerry Monath, Fall River Valley CSD Chair says there needs to be latitude regarding necessity. Alternate Commissioner Fust speaking as a Clear Creek CSD Director, stated that the policy should be adopted and that his agency does not want to pay additional fees. Jan Lopez stated that districts cannot do anything without an SOI or MSR.

A motion was ultimately made (Giacomini) and seconded to adopt the policies as presented by staff, consistent with the two-step approach outlined by LAFCO Counsel, with the changes proposed to item #3 and the addition of GC 56430(a)(7). Commissioners Jones and Haynes dissented and the motion passed.

Ms. Mickelson presented additional Executive Committee policy for clarification purposes pursuant to the Commission’s direction at a previous meeting. After discussion, a motion was made (Giacomini) to adopt the policy with the following changes: include agenda review in item #3 and adding an item #4 which would specify a standing committee. The motion passed unanimously.

Ms. Mickelson advised that the Executive Committee seat held by Commissioner Haynes should be reconsidered since she and the newly elected Vice Chair both represent special districts. After discussion, Commissioner Baugh submitted John Day for consideration, which he accepted. A motion was made (Russell) and seconded to nominate Commissioner Day to the Executive Committee and passed unanimously.

A break was taken from 11:22 until 11:34.

SPECIAL STUDIES AND REPORTS
The Executive Officer provided a draft schedule for MSR and SOI studies, both first round and additional studies, pursuant to the Commission’s direction at the June meeting. After conversation as to the necessity of consultants, it was determined that the schedule should reflect ‘LAFCO Staff’ rather than ‘Consultant’ for all agencies on proposed MSR/SOI work the schedule.

Jerry Monath advised that he would still like to meet regarding his district’s bill and complete the MSR process. David Coxey stated that his district was previously exempted. Commissioner Fust speaking as a Clear Creek Community Services District board member questioned who would pay for consultants. Jan Lopez stated that LAFCO could complete the studies. Terry Briggs reminded the Commission that Fall River Valley CSD’s MSR was 95% complete.

After further discussion, a motion was made (Giacomini) and seconded to adopt the MSR/SOI Plan of Work with changes as directed.

Jim Underwood advised the Commission that it could proceed with the South County Fire Districts MSR/SOI as agendized. Jan Lopez stated that public notice was not given. It was subsequently determined that the issue would be added to the next agenda and re-noticed.

COMMISSIONER ANNOUNCEMENTS
Commissioner Baugh announced that there would be a water forum on September 18th at 6:00 pm at the Cottonwood Community Center.

STAFF ANNOUNCEMENTS
There were no staff announcements.

CLOSED SESSION
Pursuant to Government Code Section 54957, the Commission went into closed session at 12:42 pm and returned at 1:29 pm. A recess was taken from 1:35 pm until 1:40 pm at which time they reconvened to closed session. At 2:05 they came back and recessed again briefly before resuming and concluding the closed session at approximately 2:10 p.m.

Jim Underwood reported that there were no reportable actions taken.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 2:15 pm.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES
Special Meeting July 11, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 9:00 am at the Anderson City Council Chambers at 1887 Howard Street in Anderson. Commissioners Farr, Giacomini, Haynes, Jones, Morgan and Russell were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Alternate Commissioner Fust was present as a member of the audience. Commissioners Kehoe and Day were absent.

Commissioner Baugh asked for clarification prior to proceeding with the noticed matters on the agenda and legal counsel was asked to discuss the agenda notice and related issues. Commission discussion followed and an invitation was issued to members of the public to comment if desired. Gary Cadd spoke about the Brown Act.

The Commission determined to direct staff to notice a special meeting on Wednesday, July 17th, at 9 a.m., at the Anderson City Council Chambers, to conduct the business that had been noticed for the meeting of July 11th, without conducting any further business. The motion was made (Giacomini), seconded and passed unanimously.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 9:24 am.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES
Special Meeting June 13, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 9:00 am at the Redding City Council Chambers at 777 Cypress Avenue in Redding. Commissioners Giacomini, Haynes, Jones, Morgan and Russell were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Alternate Commissioner Fust was present as a member of the audience. Commissioners Day and Kehoe were absent.

PLEDGE OF ALLEGIANCE
Commissioner Haynes led the Pledge of Allegiance.

PUBLIC COMMENT
Jerry Monath, Fall River Valley CSD Board Chair requested that the District’s previously declined SOI be accepted by default. Terry Briggs submitted public comment regarding legal issues. Barbara Briggs, Fall River Valley CSD Board member, spoke regarding the District’s outstanding bill. Jan Lopez advised the Commission she is sharing her knowledge and informing them of the correct way to oversee things.

NOTICED PUBLIC HEARINGS
Fiscal Year 2013-14 Final Budget Hearing
Ms. Mickelson presented the proposed Final Budget. A copy of the proposed budget was circulated to all Cost-of-Share participants, including a statement of the potential additional cost for consultants, as well as noticed on the website and in the newspaper. She noted that a Draft Budget had been approved April 4, 2013. Within the discussion at that meeting, staff advised that it was her opinion that some additional funds would be necessary to meet statutory MSR requirements. The Final Budget that was circulated was identical to the draft budget previously approved. Staff recommended augmenting the proposed Final Budget with a line item for potential consultant costs of $30,000. Staff reported that one letter was received and included in the agenda packet under Correspondence Received, as were as a few phone calls, concerned with additional costs.

At that time, Mr. Underwood presented an outline to streamline MSR studies, which staff noted was the assumed procedure when considering the budget recommendation.

The public hearing was opened at 9:50 am. Barbara Briggs suggested converting employees to contractors. Commissioner Irwin Fust, speaking as a Director of Clear Creek Community Services District, opposed the line item as his district is in the process of updating their MSR. Jan Lopez stated that she presented a budget in April and that it can be amended before it is finalized. Jerry Monath and Terry Briggs also opposed the $30,000 line item.

The public hearing was closed at 10:03 am. After much discussion, a motion was made (Jones) and seconded to accept the Draft Budget as previously presented. Commissioners Giacomini and Russell dissented. Following discussion, a second motion was then made (Jones) to reconsider the previous vote and it passed unanimously. A third motion was made (Jones) to adopt the Draft Budget from April without the additional $30,000 line item for MSRs, the motion was seconded and passed with one dissenting vote (Giacomini). For clarity, staff noted that the budget adopted was the same as the proposed Final Budget that had been circulated.

Gore/Steiner Annexation to ACID
The Executive Officer reported that ACID had submitted a proposal to annex 17 parcels (2,286 acres) and concurrently amend their SOI to include the affected area. The project area, located in southeast Redding, is primarily undeveloped. The McConnell Foundation and John Steiner are requesting annexation for irrigation of approximately 317 acres lost due to the construction of Saeltzer Dam. No further development is planned for the area. As lead agency, ACID adopted a Negative Declaration for the proposal. It is an uninhabited, 100% consent application. Staff recommended approval as presented. A letter of support was received from Rivers of Recovery. Duane Miller, Engineer for ACID, agreed with staff’s analysis and responded to a question regarding the size and boundaries of the project.

Staff noted that at the time of application ACID had been exempted from MSRs, and although the Commission recently overturned that ruling, recommended adopting this proposal without one. Commissioner Jones asked counsel if the annexation could proceed with no MSR. Mr. Underwood advised that statutory language states ‘as necessary’ and also does not recommend one at this time given the facts of the proposal, however he did recommend adding language to the resolution.

The public hearing was opened at 10:26 am. Keith Hamblin, Consultant, offered to answer questions. Michael Caranci from the Fly Shop spoke in favor of the proposal. Jan Lopez said the acreage was not pre-zoned by the City and that a CEQA determination cannot be made. The public hearing was closed at 10:33.

Ms. Mickelson advised that CEQA had been done by ACID as the lead agency and neither the City nor the County submitted comment. Attorney Underwood verified that everything was in order and that property use is not determined by LAFCO. After some discussion, a motion was made (Russell) to accept the proposal as presented along with the language suggested by counsel regarding the MSR. The motion passed unanimously.

CONSENT CALENDAR
Commissioner Baugh asked for individual discussion regarding April 4, 2013 Minutes. As to the balance of the Consent Calendar, an approval motion was made (Haynes), seconded and passed unanimously.

Regarding the April minutes, Commissioner Baugh asked for the latter half of the first sentence under Budget and Fiscal Affairs to be stricken from the record as it appeared to be an opinion offered by the Executive Officer, not fact. He also questioned if a mistake had been made and a vote had not been recorded on page two, in the first paragraph. Staff advised that they had listened to the recording again to find the vote in question and instead, apparently a second motion was accepted while the preceding motion was still under discussion. Commissioner Baugh also requested that his ‘no’ vote on the legal contract be added which was due to the fact that an RFP had not been circulated. Commissioner Giacomini moved to approve the changes to the April 4, 2013 Minutes, the motion was seconded and passed.

SPECIAL STUDIES AND REPORTS
The Executive Officer provided a proposed schedule for MSR and SOI studies, pursuant to the Commission’s direction at the April meeting. She advised that much research was needed to make accurate findings and that there were notice requirements and mapping requirements involved, in addition to regular LAFCO duties. The schedule was drafted assuming that information would be readily provided by the districts and that Mr. Underwood’s previously discussed plan for expedited studies was also assumed.

Barbara Briggs questioned when Fall River Valley CSD would be included on the schedule. The Commission that at the November 2012 meeting, the Commission directed staff to abandon any further work on the FRVCSD MSR/SOI until the District took action to rectify their Latent Powers/Parks and Recreation discrepancy. Jan Lopez stated that the policy does not allow for CEQA.

After an extensive discussion, a motion was made (Haynes) not to accept the plan of work. The motion was seconded and more debate followed. A second motion was made (Haynes) to reject the plan presented and request a new plan with an expedited time frame and policy for creating an MSR with information provided. Eventually, a third motion was made (Haynes) to reject the plan presented and request a new plan with an expedited time frame at the next meeting, in addition to drafting policy for MSRs. The motion was seconded and passed with two opposing votes (Morgan, Russell).

OPERATIONS AND ADMINISTRATION
These items on were continued to the next meeting date.

COMMISSIONER ANNOUNCEMENTS
Commissioner Haynes indicated that her husband was captive at home with irrigation water. Commissioner Morgan advised that Shasta Lake’s Friday Night at Park Concert Series would be held at Clare Engel Park through August. Commissioner Russell announced a celebration for the Hill Country Clinic in Round Mountain on June 19th. Commissioner Haynes requested a closed session at the next meeting to discuss employee performance.

STAFF ANNOUNCEMENTS
Ms. Mickelson reminded the Commission that the next LAFCO Meeting would be held on Thursday, July 11, 2013 at 9:00 am at Anderson City Council Chambers.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 11:56 am.

ATTEST:

Marissa Jackson 
Clerk to the Commission

MINUTES
Special Meeting May 23, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 9:00 am at the Shasta Lake City Council Chambers at 4488 Red Bluff Street in Shasta Lake. Commissioners Day, Haynes, Jones, Kehoe, Morgan and Russell were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Alternate Commissioners Farr, Fust and Giacomini were present as members of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Russell led the Pledge of Allegiance.

PUBLIC COMMENT
Jan Lopez and Terry Briggs submitted public comment.

OPERATIONS AND ADMINISTRATION
Commissioner Kehoe nominated Commissioner Morgan for the position of Vice Chairman. The motion was seconded and passed unanimously. Commissioner Morgan stated that he would accept the nomination.

The Executive Officer stated that LAFCO policy does not outline the purpose of the Executive Committee. After much discussion, Commissioner Kehoe made a motion directing staff to draft recommendations with counsel and bring them before the Commission. The motion was seconded and passed unanimously.

COMMISSIONER ANNOUNCEMENTS
Commissioner Morgan advised that the 75th annual celebration honoring the workers who built Shasta Dam will be September 15 – 21, 2013.

STAFF ANNOUNCEMENTS
Ms. Mickelson reminded the Commission that the next LAFCO Meeting will be held on Thursday, June 13, 2013 at 9:00 am at Redding City Council Chambers.

CLOSED SESSION
At 9:51 am the Commission adjourned to closed session, pursuant to Government Code Section 54956.9(b), regarding potential litigation (2 Cases) and pursuant to Government Code Section 54956.9 regarding performance evaluation of LAFCO Executive Officer.

At 12:30 Attorney Underwood stated that the Commission took action to accept and then deny the Fall River Valley CSD claim. He further stated that the performance evaluation of the Executive Officer would be considered at the August meeting and there were no other reportable actions.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 12:32 pm.

ATTEST:

Marissa Jackson
Clerk to the Commission

MINUTES
Regular Meeting April 4, 2013

(These minutes are not intended to be a verbatim transcription of the proceedings and discussion associated with the business on the Commission’s agenda; rather, what follows is a summary of the order of business and general nature of testimony, Commission deliberation, and action taken.)

CALL TO ORDER/ROLL CALL
Chairman Baugh called the meeting to order at 9:00 am at the Anderson City Council Chambers in Anderson, California. Commissioners Farr, Haynes, Jones, Kehoe, Mathena and Morgan were present. Executive Officer Amy Mickelson, Attorney Jim Underwood and Clerk/Analyst Marissa Jackson were present as staff. Commissioner Day was absent. Alternate Commissioners Fust and Russell were present as members of the audience.

PLEDGE OF ALLEGIANCE
Commissioner Haynes led the Pledge of Allegiance.

PUBLIC COMMENT
Public comment was opened at 9:02 am. Jan Lopez, Consultant to Fall River Mills CSD, presented and read a letter regarding the sphere of influence (SOI) hearing for Fall River Valley CSD and their draft municipal services review. Terry Briggs, Fall River Mills resident, also spoke about the municipal service review. Public comment was closed at 9:10 am.

CONSENT CALENDAR
By motion made (Haynes) and seconded, the consent calendar was approved. Commissioner Farr abstained from voting on the minutes due to his absence at the previous meeting.

BUDGET AND FISCAL AFFAIRS
Ms. Mickelson reported that pursuant to the Commission’s direction the draft budget was referred back to the Budget Committee to cut line-item costs and maintain the current revenues from participating agencies. A copy of that proposed budget was circulated to all Cost-of-Share participants and agenda recipients, but no comments were received.

Diana Rogers, Fall River Mills Cemetery District Board member, said that she had not received a copy of the budget, likely due to District staffing changes. Jan Lopez, Consultant to Fall River Mills CSD, presented and read a letter regarding the draft budget.
Commissioner Baugh acknowledged the need to complete studies and realizes they must be funded. Commissioner Morgan believes LAFCO is putting itself at risk by not increasing the budget for studies and projects by at least 2-3%. Commissioner Mathena pointed out that budgets can be increased and contractors can be hired, but district cooperation is still necessary. Commissioner Mathena moved to approve the budget due to time restraints, Morgan seconded. Commissioner Jones noted that he would not vote in favor of the motion due to his concerns regarding studies. Discussion followed.

Commissioner Kehoe moved to refer it back to the Budget Committee, the motion was seconded by Commissioner Farr, who pointed out that budgets have never reflected costs of MSRs. Commissioner Farr asked how other LAFCOs budget for studies. Ms. Mickelson reported that other LAFCO budgets reveal that the large majority of LAFCO’s who have completed this mandate have used consultants, although simpler MSRs are generally done in-house. She added that LAFCO should have been budgeting $50-60,000 per year for consultants to complete the first round, but did not. Utilizing staff and consultants, she believes that the studies can be completed with approximately $70,000 per year. Ms. Mickelson reminded the Commission that they could adopt the draft budget with direction to staff to explore actual costs of specific studies and bring back and additional proposal with the final budget.

Barbara Briggs, Fall River Valley CSD Vice Chair, questioned why Yuba can accomplish more work with the same budget. Terry Briggs, Fall River Valley resident, also commented.

In response, Executive Officer Mickelson clarified that the Yuba LAFCO budget was $281,000 which is approximately $80,000, or one-third, more than Shasta LAFCO’s budget. Their salaries and benefits are higher, additionally, they paid $45,000 to consultants and $25,000 annually in legal costs. In 2008, their budget was over $300,000. Each of the last five years they have paid at least $45,000 to consultants and at least $25,000 and sometimes $40,000 in legal fees.

Ms. Mickelson reported that Fall River Valley CSD had submitted a letter which was received one day prior to the meeting. The letter offered to pay an additional $1,250 on top of the $2,750 already submitted for a total of $4,000 towards their unpaid balance of $12,440.35. No meeting has occurred with the District regarding the outstanding invoices nor have they been presented to the District’s Board for payment. They have also not provided an itemization of charges they believe are owed, as reported by Mr. Hall, although the District has met three times since LAFCO’s last meeting.

By motion made (Kehoe) and seconded the matter was referred to the Budget Committee for analysis and an equitable resolution. Commissioners Jones and Mathena opposed the motion. Commissioner Jones stated that he would prefer to handle the issue now since it has been ongoing and would support the compromise. Commissioner Mathena states that the Budget Committee would not have anything more to contribute since he requested to meet with Mr. Hall, but that not occurred. He added that the bill does need to be reviewed line by line and that the settlement offer is not acceptable. Attorney Underwood stated that a motion for reconsideration must occur. Commissioner Kehoe made a motion for reconsideration agenda item 5a, the motion was seconded by Commissioner Haynes, and passed.

Commissioner Haynes questioned whether or not the amount could be negotiated and could she have some assurance that the District would recognize LAFCO’s effort and not proceed with litigation. Attorney Underwood advised that any action by the Commission could not impose any direction on behalf of FRVCSD and as such the options are to approve the offer, to modify the conditions or review other options. Commissioner Mathena stated that LAFCO has an obligation to all districts to justify what is charged and why and pointed out that it would be setting a standard. He again offered to sit down with Mr. Hall and go over the charges line by line.

Mr. Hall, interim volunteer Fall River Valley CSD General Manager, stated that he was not the author of the letter, it was written by the Board. He added that he was not authorized to sit down and discuss the bill without Board approval, but would take messages back to the Board. He was unclear on when the Board drafted the letter since there was no Board vote on the matter.

Commissioner Jones stated that this item is not contingent upon any future dealings. Commissioner Morgan requested to see the charges from LAFCO and would like to go over each line item. Commissioner Kehoe states that he was not prepared to move forward on the letter as he is interested in seeing an analysis on the fixed costs of what actions were taken by LAFCO versus variable costs. He is troubled by the observation that the letter may not be reflective of an official action by the District and that an equitable settlement requires further study.

Barbara Briggs, Fall River Valley CSD Vice Chair, stated that she was on the committee and that the letter was sent by email on March 28th, specifically to Commissioner Haynes and Farr, and has not been before their Board. She disputes charges on the bill. Commissioner Kehoe again moved to refer the matter to the Budget Committee for a comprehensive and objective review of each line item on the bill, bilaterally.
Terry Briggs suggested counsel be present for the meeting or record it for potential litigation.

David Hall said FRVCSD spent more than $25,000 for attorneys and consultants and now are adding a $15,000 bill for nothing. Commissioner Mathena pointed out that we have attempted to work with them and have been rejected, LAFCO did not hire the consultants and attorneys – FRVCSD did. The motion was seconded, passing unanimously. A break was taken from 10:25 to 10:33 am.

OPERATIONS AND ADMINISTRATION
Ms. Mickelson reported that in 2002, Shasta LAFCO made a policy decision regarding what agencies would be subject to a Municipal Service Review (MSR). The following is the adopted policy regarding this issue:

2.1.2 Agencies Subject to Review: Shasta LAFCO has concluded that the following agencies in Shasta County provide
         services which are municipal in nature, and as such, are subject to the services review requirement:
         County Community Services Districts
         County Service Areas Water Districts
         Cities Fire Protection Districts

Conversely, Shasta LAFCO has concluded that while the cemetery districts, health care districts, irrigation districts, mosquito abatement districts, and resource conservation districts in Shasta County are subject to a sphere of influence determination, these types of districts do not provide services that are classified as municipal services. Therefore, it is the position of Shasta LAFCO that these districts and the services they provide are not subject to municipal services reviews.

Ms. Mickelson advised that MSRs are essential for making determinations in an SOI and/or a reorganization proposal. In proposals, like Mayer’s Memorial Healthcare District Reorganization, it is difficult to make recommendations without the information provided in an MSR. Current draft legislation (AB 678) being proposed would require health care districts to undergo an assessment every five years, part of which would be an MSR. The Executive Officer recommended changing policy to require health care districts to be subjected to MSRs.

Additionally, Ms. Mickelson recommended the following statement be adopted to policy: Therefore, it is the position of Shasta LAFCO that these districts and the services they provide are not may not be subject to municipal services reviews, unless (a) deemed necessary in the course of completing a Sphere of Influence or (b) when a Reorganization and/or Sphere of Influence Amendment is proposed by the district. In such cases as noted in (b), the applicant will bear the cost of completing the Municipal Services Review as outlined in the Commission’s MSR Consultant policy.

She reminded the Commission that in February 2007, Commissioner Kehoe questioned the legitimacy of the exemption and in June 2007, Attorney Liz Johnson provided a legal opinion advising the Commission to revisit the issue at a later date. The matter was brought before the Commission again in 2009 and 2010, although no action was taken either time. In February 2013, staff asked for the decision to be considered in light of the Mayers Memorial Hospital proposal as it conflicted with Lassen and Modoc County policies.

Commissioner Baugh asked whether the EO or Legal Counsel had an opinion as to whether the exemptions should exist. Ms. Mickelson stated she had not ever, nor did she now believe the exemptions should exist at all, but that there might be a policy which could assign levels of studies for districts and that determinations still need to be made. Attorney Underwood stated that he agreed with Attorney Johnson’s opinion that Cortese-Knox is ambiguous and the matter does merit a case by case review.

Members of the audience added their comments to the discussion.

After much discussion, a motion was made to remove exemptions (Mathena) and seconded, passing unanimously. Commissioner Jones made a motion that the cost of routine MSRs required every five years be borne by LAFCO, the exception would be when a district brings a complex proposal which requires significant reorganization. The motion was seconded and passed. It was then determined that the item should be included on the next agenda to allow districts an opportunity to speak to the issue. Commissioner Jones amended his motion to place the item on the June 13th agenda, the motion was seconded and passed unanimously. Matt Rees asked whether his district would have to bear the entire cost of their MSR since LAFCO has now amended policy.

The Executive Officer reported that while LAFCO is charged with doing MSR, it was not granted power to compel the cooperation of the districts to be studied. Historically, LAFCO has not considered proposals until information is provided, which has not effective. She requested policy to allow Shasta LAFCO to adopt minimal MSRs for those agencies that have not provided requested information. The policy would also specify that if the agency seeks LAFCO action, the MSR and SOI will be updated at that time, with costs borne by the applicant. Ms. Mickelson added that the Commission could also consider adopting a “zero sphere” for non-responding agencies. After discussion, it was requested that staff provide and counsel draft policy to be brought back to the Commission for consideration. A motion was made (Mathena) to adopt staff’s recommendation for additional policy consideration. It was seconded and passed. Commissioner Baugh voted no since no RFP was circulated.

Ms. Mickelson reported that the legal services contract had expired. She presented the draft contract as provided by Mr. Jim Underwood. The only changes were the firm name and tax ID number, the rate for services is unchanged. She advised that an RFP could also be circulated. A motion was made (Haynes) and seconded to approve the contract.

Ms. Mickelson presented the SDRMA Board of Directors Notification of Nominations. No nomination was made.

Ms. Mickelson gave an update as to proposals currently being reviewed and heard, as well as expected proposals. Commissioner Baugh thanked Ms. Mickelson for her achievements with the South County Fire Districts.

COMMISSIONER ANNOUNCEMENTS
Commissioner Farr will be unable to attend the June 13th meeting.

STAFF ANNOUNCEMENTS
The next meeting will be Thursday, June 13, 2013 at 9:00 am at City of Redding Council Chambers.

CLOSED SESSION
The Commission adjourned to Closed Session, pursuant to Government Code Section 54956.9(b), regarding Potential Litigation (1 Case).

REPORT FROM CLOSED SESSION
Attorney Underwood stated that there were no reportable actions.

ADJOURNMENT
There being no further business, Chairman Baugh adjourned the meeting at 12:50 pm.

ATTEST:

Marissa Jackson
Clerk to the Commission