LAFCO approves new fee structure

Courtesy Photo.

San Diego County’s Local Agency Formation Commission approved an update of processing fees for applications submitted to LAFCO.

LAFCO’s 7-1 vote Feb. 4, with County Supervisor Jim Desmond opposed, approved the new fees effective May 5.  Any proposals submitted prior to May 5 will not be subject to the new fee structure.

I believe that this is a good path,” said LAFCO executive officer Keene Simonds.

LAFCO has had sporadic updates to its application fees themselves with the most recent being a 10 percent increase in 2007, but the fee structure has not changed since 1972.

“Certainly, a lot has changed,” Simonds said.

City incorporations, special district formations, and consolidations had flat fees regardless of the geographic size of the territories involved, but the fees for annexations, detachments, and latent powers expansions were based on the affected territory’s acreage. The charge for a jurisdictional change involving half an acre or less had been $2,660 and seven other specific fee amounts applied for applications from 0.51 to 199.9 acres while the charge for a change involving at least 200 acres had been $9,060 plus $90 per 100 acres exceeding 200 acres.

“The factors that you’re required to consider are really not affected by that dynamic,” Simonds said.  “It really didn’t examine our cost of doing services.”

Under the new structure annexations, detachments, latent powers establishments, and service power divestitures will have costs based on the level of environmental review and whether a protest hearing is required.

If full consent occurs, which is the case when a property owner wishes to annex to a jurisdiction (including when approval for a development is conditioned upon annexing to a jurisdiction or when a well or septic system failure warrants annexation of a property), the fee for a single jurisdictional change will be $6,405 if the change itself qualifies for a California Environmental Quality Act exemption, $7,045 if an initial CEQA study is required, and $7,686 if an Environmental Impact Report is required.  If there is not full consent a protest hearing will be held in which case the fee will be $8,326 for a CEQA exemption, $8,967 if an initial study is involved, and $9,607.50 if an EIR is needed.  For each additional jurisdictional change (for example, a detachment from an existing agency or annexation to multiple agencies), the fees with full consent will be $4,163.25 for a CEQA exemption, $4,579.58 for an initial study, and $4,995.90 for an EIR while without full consent the fees for each additional change will be $5,412.23 for an exemption, $5,828.55 for an initial study, and $6,244.88 for an EIR.

The new fees are based on staff time costs, and the revisions to the structure also include estimates of staff time along with hourly salary, benefit, and overhead costs for staff members involved.  The staff costs are new to LAFCO for proposals.

“We now have an hourly staff rate,” Simonds said.

Special district formations and consolidations (which would include the dissolution of one or more agencies) or city incorporations would involve deposits with actual billing based on time and material. The deposit for a special district formation would be $9,150, which would cover the first 75 hours of staff time. The consolidation deposit of $12,200 would cover the first 100 hours. An incorporation proposal would include a deposit of $24,400 to cover the first 200 hours.

The jurisdictional boundary change fees are non-refundable but may be augmented by one or more deposits if additional staff time is needed while the deposits to cover staff time for formations, consolidations, and incorporations are refundable if the actual staff time is less than the estimate.

Simonds noted that the number of hours for each type of proposal is based on LAFCO’s experience with such proposals.

“The numbers we assign are very good estimates of how long it’s going to take to do these proposals,” he said.

LAFCO’s executive officer had been able to waive fees, which in some cases is for financial hardship and in other cases induces support for changes which provide logical readjusted boundaries. Fee waivers now require LAFCO board approval, providing a check to ensure that fee waivers are not granted solely for projects favored by LAFCO staff.

Three pre-authorized reductions will not need LAFCO board approval for the specified reduction amount while additional reductions or a full waiver could occur by a LAFCO board majority vote. A city annexation of an entire “island,”or unincorporated area completed surrounded by a city, has a pre-authorized 50 percent fee reduction as does a city annexation of a disadvantaged unincorporated community. A jurisdictional change (including a latent powers expansion) initiated in response to an existing or pending well or septic system failure will receive a 75 percent reduction if the proposal has 100 percent consent ofthe affected landowners and confirmation of the pending or existing failure from the county’s Department of Environmental Health.

A municipal service review evaluates services and anticipated needs.

A sphere of influence study determines the boundaries best served by a particular agency.  Municipal service review and sphere of influence updates are prerequisites to a jurisdictional change other than annexation of land within the sphere of influence, and LAFCO also periodically conducts sphere of influence updates for all cities and special districts.

The fee to prepare a municipal service review and sphere of influence update for a proposed jurisdictional change has been $11,000, and that was changed to a municipal service review maintenance fee equal to 5 percent of the baseline applicant fee.  Certain exemptions apply including jurisdictional proposals which necessitate their own municipal service review and sphere of influence updates.

“The fees are going to go up about 20 percent,” Simonds said.

Simonds noted that some fees would increase by more than 20 percent while others would increase by less than 20 percent.  “Overall it’s a 20 percent change,” he said.

“What I’m afraid of is hurting the little guy, the little person,” Desmond said.

“Those who are coming to LAFCO with basic or small proposals are going to bear the brunt,” Simonds said.

The 90-day implementation period was a compromise from the initially proposed 60-day effective date, which is the minimum required by state law.  Desmond proposed a longer implementation time due to the high increases.

“That’s kind of a big pill to swallow,” he said.

Desmond favors the hourly rate.

“I think that’s good because there’s some certainty,” he said.

“This will give them as much certainty as we can.  I think it’s a good change,” said Supervisor Dianne Jacob.

If a landowner or public agency consults with LAFCO staff prior to submitting an application, the LAFCO staff time involved prior to the submittal of the application is not added to the staff time involved in processing the application. If a member of the public requests that LAFCO staff perform general research there is no cost if the research involves no more than four hours of staff time while any research beyond four hours would result in a charge based on the hourly staff rates for LAFCO staff members utilized.

LAFCO did not take a vote on the proposed fee adjustments Dec. 3 but released the proposed fee structure for public review after discussion at that meeting.  Potentially affected agencies and other stakeholders were able to review the proposed changes and provide input between the two meetings.

“The update you’re looking at returns to the commission virtually intact from the draft,” Simonds said.

The draft adjustments would have charged for public requests involving more than two hours of staff time; LAFCO’s Special Districts Advisory Committee recommended the increase to four hours at no charge since many affected property owners need some time to understand LAFCO’s purview and processes.