LAFCO FILE 4-R-14: Dissolution of County Service Area No. 17 (California Valley).

LAFCO FILE 4-R-14: Dissolution of County Service Area No. 17 (California Valley). DATE: November 20, 2014 RECOMMENDATION 1. Recommended Action on the Environmental Determination for the Dissolution: It is respectfully recommended that the Commission find the dissolution categorically exempt from CEQA pursuant to CEQA Guideline Section 15320 (Class 20). The proposal is a change of organization that does not change the geographical area in which previously existing powers are exercised. (Attachment A). 2. Recommended Action on the Dissolution: It is respectfully recommended that the Commission Approve LAFCO Resolution 2014-XX Dissolution of County Service Area No. 17 subject to the following terms and conditions: a. The effective date of the dissolution shall be the date of recordation of the Certificate of Completion. b. The County of San Luis Obispo shall be designated as the successor agency to the District for the purpose of winding up the affairs of the dissolved District pursuant to GC section 57450 57463, and Attachment F. c. The funds, money, or property shall be used for the benefit of the lands, inhabitants, and taxpayers within the territory of the dissolved district. Specifically, the County has indicated it will use any remaining funds to help repair the Simmler Community Building located within the District s service area. Attachment A: CEQA Exemption Attachment E: Draft Resolution Attachment B: County Resolution of Application for Dissolution Attachment F: Effect of Dissolution Attachment C: County Board of Supervisors Agenda Item Staff Report Attachment G: LAFCO Factors 56668 Attachment D: CSA17 Map & Legal Proponent: County of San Luis Obispo Certificate of Filing: October 23, 2014 Purpose: This change of organization is a County initiated proposal to dissolve County Service Area No.17 California Valley. The District has not provided services in many years, has fully re-paid all debt financing, and is no longer needed for the provision of services. Acreage and Location: The territory proposed for dissolution is comprised of 24,820± acres located in California Valley, Carissa Plains and Simmler area lying along Highway 1

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 2 58 in the eastern part of the unincorporated County. Population of the Area: California Valley is a relatively undeveloped subdivision located in the eastern portion of San Luis Obispo County. The developer requested formation of CSA 17 in anticipation of future growth. California Valley has never fully developed due to remoteness, poor soils, lack of potable water, and poor drainage. The area has maintained a limited stable population of approximately 450 persons. Background: San Luis Obispo County Service Area No. 17 (CSA17) was formed on May 12, 1969 for the purpose of financing the installation of electrical lines and poles by contract with Pacific Gas and Electric Company in California Valley. The installation of electrical lines and poles was completed in 1972 and the debt financing was fully repaid in 1991. LAFCO has recommended dissolution of this District since 1981. The most recent Sphere of Influence/ Municipal Service Review continues to recommend dissolution as well. Proposals for dissolution can be initiated by an affected agency, affected landowners, or affected registered voters with some actions initiated by the Commission. In May 1981 LAFCO adopted a zero sphere of influence for CSA No.17. This indicates that the services provided by CSA No.17 will no longer be necessary and that the CSA should be dissolved. In October of 2007, the Commission adopted the same determinations for a zero Sphere of Influence for CSA No.17 and considered a Municipal Service Review. LAFCO Policies for Sphere of Influence states LAFCO may adopt a zero Sphere of Influence encompassing no territory for an agency. This occurs if LAFCO determines that the public service functions of the agency are either nonexistent, no longer needed, or should be reallocated to some other agency of government. The local agency which has been assigned a zero Sphere of Influence should ultimately be dissolved. Included within those determinations was a future Commission consideration for the dissolution of CSA 17. Determinations: The Commission makes the following determinations which are referenced in the Resolution for the Dissolution of CSA 17: There is a reasonable probability that those powers for CSA 17 will not be used in the future. The proposed dissolution is consistent with the Spheres of Influence of all affected agencies. The proposed dissolution is legally inhabited. The public service costs of the dissolution are likely to be less than or substantially similar to the costs of alternative means of providing the service. 2

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 3 3

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 4 Effect of Dissolution/Successor Agency: Attachment F, Effect of Dissolution, provides the code sections from Cortese-Knox-Hertzberg Act that may apply to this dissolution. Each code section is analyzed for its applicability based on the local conditions for dissolving CSA 17. Section 57450 states that upon the effective date the district shall be dissolved, disincorporated, and extinguished, its existence shall be terminated, and all of its corporate powers shall cease, except as the commission may otherwise provide pursuant to Section 56886 or for the purpose of winding up the affairs of the district and as otherwise provided in this chapter. The Commission is responsible for designating a successor agency that will wind up the affairs of the district consistent with terms and conditions established by the Commission. Section 57451 states if the territory of a dissolved district is located entirely within the unincorporated territory of a single county, the county is the successor. Terms and conditions are recommended to address the assets or liabilities of the district. The remaining funds in the CSA 17 fund are approximately $115,000, and vary slightly because of interest earned and Public Works staff time charged to the funds. Staff time for Public Works to process the dissolution of CSA 17 is estimated at $10,000, leaving a remaining balance in the CSA 17 Fund estimated at approximately $105,000. After the remaining fund balance from the dissolution of CSA17 is known, the County s General Services Administration Office will coordinate with the Auditor Controller Treasurer Tax Collector s Office to finalize the amount of the budget adjustment. This transfer will only occur if the dissolution is approved by LAFCO. Approval by the Board and LAFCO to dissolve CSA17 will enable staff to transfer funds to Maintenance, Fund Center 200 for repairs to the Simmler Community Building. Use of Funds: CSA 17 is funded by special district appropriations and interest earnings and not by any special tax of property owners. As such, the appropriation is based on a population formula over the base year as part of the State/County estimates. A portion of the County s collected general taxes are proportional to the estimated population and allocated to the CSA. Since the purpose of CSA17 has been accomplished, the County is initiating proceedings to dissolve the service area and use the remaining funds for public facilities located within the service area of CSA17. The Simmler Community Building is such a public facility and is in need of repairs (see photo below) and is located in the service area of CSA 17. 4

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 5 The Simmler Community Building is a 3,270 square foot facility which was originally built in 1891 as a school house. It was moved to the current location in 1910, and has been used as a community building since 1955. The facility serves as a public meeting place and is used by the community for a variety of events. A Historical Resources Evaluation completed in January 2014 stated that the building is significant to the development of the Carissa Plain/Simmler area and serves as a good example of a rare architectural type for school buildings in San Luis Obispo County. The report further states that the building has retained its integrity, therefore it is worthy of rehabilitation. Environmental Determination-Dissolution of CSA 17: The proposal is exempt from CEQA pursuant to CEQA Guidelines Section 15320 (Class 20 Categorical Exemption). The proposed dissolution is a change of organization that does not change the geographical area in which previously existing powers are exercised. Property Tax Exchange: No property taxes accrue to the District, so no property tax agreement is required. Protest Process: The area proposed for dissolution is legally inhabited (more than 12 registered voters). An inhabited dissolution is subject to the conducting authority hearing process (Protest Process) which allows registered voters as well as property owners to protest the dissolution. If the dissolution is approved by LAFCO, registered voters and landowners in the area would be notified regarding LAFCO s decision and when a Conducting Authority Hearing would be held by the Executive Officer. Section 57075 states if the protests are between 25% and less than 50% of the registered voters the dissolution will be subject to a vote of the registered voters within the area. If 50% or more of the registered voters file a written protest the dissolution is terminated. If at least 25% of the property owners who own at least 25% of the assessed value of land protest the dissolution, then LAFCO s action shall be subject to a vote of the registered voters. The dissolution shall be approved if less than 25% of the registered voters or property owners file written protests. The Cortese-Knox-Hertzberg Act provides specific guidance regarding noticing and 5

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 6 holding the protest hearing. The San Luis Obispo LAFCO procedures, as allowed under CKH Act, delegates to the Executive Officer the authority to initiate Protest Proceedings pursuant to Government Code Section 57000 et seq. and authorize the dissolution without election pursuant to Section 57102. County General Plan: No changes in land use plans are associated with this proposal. Comments From Affected Agencies/Interested Parties: No comments have been received to date. The application was referred to California Valley Community Services District as an affected agency, County Public Works, Planning and Building, and Agricultural Commissions Officer for comments. Public Notification: The Cortese-Knox-Hertzberg Act requires notification to property owners and registered voters within the dissolution area. When the number of registered voters and property owners is greater than 1,000 people, then notice may instead be provided by publishing a 1/8 page display advertisement in a newspaper at least 21 days in advance of the hearing. An ad was placed in the Tribune (on October 29, 2014) at least 21 days in advance of today s hearing as required by the Cortese- Knox-Hertzberg Act. Analysis of the Proposal-Dissolution of CSA 17: In 1970 the electorate incurred $350,000 in bonded indebtedness to finance the installation of electrical power lines. Only $225,000 in bonds were actually issued. Electrical service began in 1972 and power lines were installed, during this time. CSA No. 17 provided a mechanism for retirement of debt service. Lines and equipment are operated and maintained by Pacific Gas and Electric Company. In 2007 LAFCO re-adopted the zero sphere of influence for CSA No. 17 and the County has decided the CSA is no longer needed or required and should be dissolved at this time. RECOMMENDATIONS: Based on the factors outlined above, It is Recommended that the Commission: 1. Recommended Action on the Environmental Determination for the Dissolution: It is respectfully recommended that the Commission find the dissolution categorically exempt from CEQA pursuant to CEQA Guideline Section 15320 (Class 20). The proposal is a change of organization that does not change the geographical area in which previously existing powers are exercised. (Attachment A). 2. Recommended Action on the Dissolution: It is respectfully recommended that the Commission Approve LAFCO Resolution 2014-XX Dissolution of County Service Area No. 17 subject to the following terms and conditions: a. The effective date of the dissolution shall be the date of recordation of the Certificate of Completion. 6

Local Agency Formation Commission November 20, 2014 Dissolution-CSA No.17 P a g e 7 b. The County of San Luis Obispo shall be designated as the successor agency to the District for the purpose of winding up the affairs of the dissolved District pursuant to GC section 57450 57463, and Attachment F. c. The funds, money, or property shall be used for the benefit of the lands, inhabitants, and taxpayers within the territory of the dissolved district. Specifically, the County has indicated it will use any remaining funds to help repair the Simmler Community Building located within the District s service area. Respectfully submitted, DAVID CHURCH, AICP Executive Officer San Luis Obispo Local Agency Formation Commission 7

Attachment A: CEQA Exemption 8

NOTICE OF EXEMPTION TO: Office of Planning and Research FROM: San Luis Obispo LAFCO 1400 Tenth Street, Room 121 1042 Pacific Street Sacramento, CA 95814 San Luis Obispo, CA 93401 Julie Rodewald, County Clerk CONTACT: David Church, AICP, EO County of San Luis Obispo (805) 781-5795 County Government Center San Luis Obispo, CA 93401 PROJECT TITLE: Dissolution of County Service Area No. 17 (California Valley), LAFCO File No: 4-R-14 Project Location and Description. The territory proposed for dissolution is comprised of 24,820± acres located in California Valley, Carissa Plains and Simmler area lying along Highway 58 in the unincorporated County. The San Luis Obispo Local Agency Formation Commission (LAFCO) will consider a County initiated proposal to dissolve County Service Area No.17. The District has not provided services since 1991, has fully re-paid all debt financing, and is no longer needed to provided services. Public Agency Approving Project. The Local Agency Formation Commission (LAFCO) of San Luis Obispo County conducted a public hearing on this item on November 20, 2014 at 9:00 a.m. in the Board of Supervisors Chambers in San Luis Obispo at the County Government Center. Environmental Determination. The purpose of the environmental review process is to provide information about the environmental effects of the actions and decisions made by LAFCO and to comply with the California Environmental Quality Act (CEQA). In this case, it has been determined the proposal is exempt from CEQA pursuant to CEQA Guidelines Section 15320 (Class 20 Categorical Exemption). The proposal consists of a change of organization (a dissolution) and does not change the geographical area in which previously existing powers are exercised because those powers are no longer functioning. The Local Agency Formation Commission will file this Notice of Exemption upon approval of the dissolution. Reasons for Exemption. San Luis Obispo County Service Area No. 17 (CSA17) was formed on May 12, 1969 for the purpose of financing the installation of electrical lines and poles by contract with Pacific Gas and Electric Company in California Valley. The installation of electrical lines and poles were completed in 1972 and the debt financing was fully re-paid in 1991. Since the purpose of CSA17 has been accomplished, the County is initiating proceedings to dissolve the service area. Also LAFCO studies have recommended that this District be dissolved as it is no longer needed to provide services. David Church, AICP, Executive Officer Date 9

Attachment B: County Resolution of Application for Dissolution 10

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Attachment C: County Board of Supervisors Agenda Item Staff Report 16

COUNTY OF SAN LUIS OBISPO BOARD OF SUPERVISORS AGENDA ITEM TRANSMITTAL (1) DEPARTMENT General Services Agency Public Works Department (2) MEETING DATE 5/20/2014 (3) CONTACT/PHONE Machelle Vieux, Deputy Director General Services 781-5200 Dave Flynn, Deputy Director Public Works (4) SUBJECT Submittal of a resolution to initiate proceedings for the dissolution of San Luis Obispo County Service Area No. 17 in California Valley and to designate the remaining fund balance be used for public facilities in or within 10 miles of the service area; and authorize a budget adjustment of approximately $105,000 for repairs to the Simmler Community Building located at 10750 Carrisa Highway in Simmler. District 5. (5) RECOMMENDED ACTION It is recommended that the Board: 1.) Approve the resolution to initiate proceedings for the dissolution of San Luis Obispo County Service Area No. 17 in California Valley and designate the remaining fund balance be used for public facilities in or within 10 miles of the service area. 2.) Authorize a budget adjustment in an amount of approximately $105,000 for repairs to the Simmler Community Building from all remaining County Service Area No. 17 funds in Fund Center 502 and 503 to Maintenance, Fund Center 200, by 4/5 vote, contingent on Local Agency Formation Commission (LAFCO) approval of the dissolution. (6) FUNDING SOURCE(S) CSA 17 Fund Center 502 and 503 (7) CURRENT YEAR FINANCIAL IMPACT $105,000 (8) ANNUAL FINANCIAL IMPACT $0.00 (9) BUDGETED? No (10) AGENDA PLACEMENT { x } Consent { } Presentation { } Hearing (Time Est. ) { } Board Business (Time Est. ) (11) EXECUTED DOCUMENTS { x } Resolutions { } Contracts { } Ordinances { } N/A (12) OUTLINE AGREEMENT REQUISITION NUMBER (OAR) N/A (13) BUDGET ADJUSTMENT REQUIRED? BAR ID Number: 1314143 { x } 4/5 Vote Required { } N/A (14) LOCATION MAP Attached (15) BUSINESS IMPACT STATEMENT? No (16) AGENDA ITEM HISTORY { } N/A Date: 05/12/1969 (17) ADMINISTRATIVE OFFICE REVIEW Emily Jackson (18) SUPERVISOR DISTRICT(S) District 5 Page 1 of 3 17

County of San Luis Obispo TO: FROM: Board of Supervisors General Services Agency / Machelle Vieux, Deputy Director General Services 781-5200 Public Works Department/Dave Flynn, Deputy Public Works Director DATE: 5/20/2014 SUBJECT: Submittal of a resolution to initiate proceedings for the dissolution of San Luis Obispo County Service Area No. 17 in California Valley and to designate the remaining fund balance be used for public facilities in or within 10 miles of the service area; and authorize a budget adjustment of approximately $105,000 for repairs to the Simmler Community Building located at 10750 Carrisa Highway in Simmler. District 5. RECOMMENDATION It is recommended that the Board: 1.) Approve the resolution to initiate proceedings for the dissolution of San Luis Obispo County Service Area No. 17 in California Valley and designating the remaining fund balance to be used for public facilities in or within 10 m iles of the service area; and 2.) Authorize a budget adjustment in an amount of approximately $105,000 for repairs to the Simmler Community Building from all remaining County Service Area No. 17 funds in Fund Center 502 and 503 to Maintenance, Fund Center 200, by 4/5 vote, contingent on Local Agency Formation Commission (LAFCO) approval of the dissolution. DISCUSSION San Luis Obispo County Service Area No. 17 (CSA17) was formed on May 12, 1969 for the purpose of financing the installation of electrical lines and poles by contract with Pacific Gas and Electric Company in California Valley. The installation of electrical lines and poles was completed in 1972 and the debt financing was fully re-paid in 1991. Since the purpose of CSA17 has been accomplished, the County is initiating proceedings to dissolve the service area and use the remaining funds for public facilities located within the service area or within a 10 mile area surrounding CSA17. The Simmler Community Building is such a public facility and is in need of repairs (see Attachment 1- Location Map). The Simmler Community Building is a 3,270 square foot facility which was originally built in 1891 as a school house. It was moved to the current location in 1910, and has been used as a community building since 1955. The facility serves as a public meeting place and is used by the community for a variety of events. A Historical Resources Evaluation completed in January 2014 stated that the building is significant to the development of the Carrisa Plain/Simmler area and serves as a good example of a rare architectural type for school buildings in San Luis Obispo County. The report further states that the building has retained its integrity, therefore it is worthy of rehabilitation. An inspection of the building confirmed that numerous repairs are needed. The foundation system, roof, electrical, plumbing, windows, subfloor venting, walls, furnace, and front porch require repair. The foundation of the Community Building is failing and is the most urgent repair needed. The Carrissa Plain Heritage Association, a non-profit 501-(c)(3) corporation, that manages the building has been consulted and has confirmed the foundation repair should be the first priority. Maintenance funds in the amount of $150,000 were initially used in an attempt to fund repairs. However, the severe degradation of the foundation, the extensive repair work needed, and the need for a historic evaluation made the project Page 2 of 3 18

unaffordable. Initial estimates to fully repair the facility were approximately $300,000. Options such as demolition, replacement, and rebuilding were considered. However, the costs for the alternatives exceeded the budgeted amount and the recently completed historic evaluation stated that the rare architecture of the Simmler Building was worthy of retaining. After funding from the project was used for the Historic Resources Evaluation, other structural inspections, and staff time, approximately $140,000 currently remains in the project. Using the remaining funds in CSA17 for repair of the Simmler Community Building is consistent with intent to use the funding for projects in the areas which generated the funds. In order to dissolve CSA17, a resolution declaring the Board s intention and the purpose for the remaining funds must be presented to the LAFCO, whose approval is required to dissolve the district. If approved, Public Works staff will present the resolution (Attachment 2), to LAFCO. These actions would begin the steps to allow the County to preserve the historic facility, which is supported by the local community. OTHER AGENCY INVOLVEMENT/IMPACT The Department of Public Works prepared the resolution. County Counsel has approved the resolution as to form and legal effect. Once approved by the Board, the resolution will be presented to the Local Agency Formation Commission to proceed with the processing of the dissolution of CSA17. FINANCIAL CONSIDERATIONS The remaining residual funds for CSA17 are approximately $115,000, and vary slightly because of interest earned and Public Works staff time charged to the funds. Staff time for Public Works to process the dissolution of CSA17 is estimated at $10,000, leaving a remaining balance in CSA17 Fund Centers 502 and 503 estimated at approximately $105,000. After the remaining fund balance from the dissolution of CSA17 is known, GSA will coordinate with the Auditor Controller Treasurer Tax Collector s Office to finalize the amount of the budget adjustment. This transfer will only occur if the dissolution is approved by LAFCO. Approval by the Board and LAFCO to dissolve CSA17 will enable staff to transfer funds to Maintenance, Fund Center 200 for repairs to the Simmler Community Building. Funding of the project will address the most critical and high priority deficiencies such as repair of the foundation and structural issues. Initial estimates for the full repair were approximately $300,000. Staff, in partnership with the Carrissa Plain Heritage Association, continues to pursue other sources of funding to complete the full repairs. RESULTS Approval of the resolution and authorizing the budget adjustment will allow staff to proceed with dissolution of CSA17, and enable funding of repairs for the Simmler Community Building. This action contributes to the Communitywide Results of a livable community by enabling community gatherings. ATTACHMENTS 1. Location Map 2. Resolution for CSA17 Page 3 of 3 19

Attachment D: CSA17 Boundary Map & Legal Description 20

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Attachment E: Draft LAFCO Resolution of Approval for Dissolution 23

IN THE LOCAL AGENCY FORMATION COMMISSION COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA Thursday, November 20, 2014 PRESENT: ABSENT: RESOLUTION NO. 2014-XX RESOLUTION MAKING DETERMINATIONS APPROVING THE DISSOLUTION OF SAN LUIS OBISPO COUNTY SERVICE AREA NO. 17 (CALIFORNIA VALLEY) The following resolution is now offered and read: WHEREAS, on October 23, 2014 the Executive Officer filed a Certificate of Filing regarding a request to dissolve County Service Area No. 17 (California Valley); and WHEREAS, the Board of Supervisors voted unanimously to dissolve County Service Area No. 17 knowing the District has not used its corporate powers and there is a reasonable probability that those powers will not be used in the future; and WHEREAS, the Executive Officer has given the notices required by law and forwarded copies of his report to officers, persons and public agencies prescribed by law; and WHEREAS, the matter was set for public hearing at 9:00 a.m. on November 20, 2014, and the public hearing was duly conducted and determined and a decision was made on November 20, 2014; and WHEREAS, at said hearing this Commission heard and received all oral and written protests, objections and evidence, which were made, presented or filed, and all persons present were given the opportunity to hear and be heard in respect to any matter relating to the proposal and report; and WHEREAS the Commission determined that the Notice of Exemption is adequate as the documentation to comply with the California Environmental Quality Act (CEQA) for this 24

Resolution No. 2014-XX Page 2 of 3 dissolution; and WHEREAS, the Commission has duly considered the proposal and finds that County Service Area No. 17 was formed for the purpose of financing the installation of electrical lines and poles by contract with Pacific Gas and Electric Company in California Valley; that said financing has been fully re-paid and there is no longer any need for County Service Area No. 17 to provide such services in the future; and WHEREAS, the Commission has duly considered and made the following determinations: 1. That there is a reasonable probability that those powers for CSA 17 will not be used in the future. 2. The proposed dissolution is consistent with the spheres of influence of all affected agencies. 3. The proposed dissolution is legally inhabited. 4. The public service costs of the dissolution are likely to be less than or substantially similar to the costs of alternative means of providing the service. WHEREAS, the Commission duly considered the proposal and finds that the dissolution should be approved with the following conditions: a. The effective date of the dissolution shall be the date of recordation of the Certificate of Completion. b. The County of San Luis Obispo shall be designated as the successor agency to the District for the purpose of winding up the affairs of the dissolved District pursuant to GC section 57450 57463, and Attachment F. c. The funds, money, or property shall be used for the benefit of the lands, inhabitants, and taxpayers within the territory of the dissolved district. Specifically, the County has indicated it will use any remaining funds to help repair the Simmler Community Building located within the District s service area. NOW, THEREFORE, BE IT RESOLVED AND ORDERED by the Local Agency Formation Commission of the County of San Luis Obispo, State of California, as follows: 1. That the recitals set forth hereinabove are true, correct, and valid. 2. That the Categorical Exemption prepared for this project is hereby approved as complete and adequate and as having been prepared in accordance with the provisions of the California Environmental Quality Act. 25

Resolution No. 2014-XX Page 3 of 3 3. That the Commission has authorized the dissolution without election pursuant to Section 57102 and the limitations of Government Code Section 57113. 4. That the Executive Officer of this Commission is authorized and directed to mail copies of this resolution in the manner provided by law. 5. That Dissolution of County Service Area No. 17 is hereby conditionally approved. Upon a motion of Commissioner, seconded by Commissioner, and on the following voice vote: AYES: NAYS: ABSTAINING: The foregoing resolution is hereby adopted. Roberta Fonzi, Chair Date Local Agency Formation Commission ATTEST: David Church LAFCO Executive Officer Date APPROVED AS TO FORM AND LEGAL EFFECT: Raymond A. Biering LAFCO Legal Counsel Date 26

Attachment F: Effect of Dissolution 27

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Attachment G: LAFCO Factors 56668 32

Attachment G LAFCO Proposal Review Factors - Government Code 56668 Dissolution of CSA 17 4-R-14 Factor (a) Population and population density; land area and land use; per capita assessed valuation; topography, natural boundaries, and drainage basins; proximity to other populated areas; the likelihood of significant growth in the area, and in adjacent incorporated and unincorporated areas, during the next 10 years. Response. California Valley is a relatively undeveloped subdivision located in the eastern portion of San Luis Obispo County. The developer requested formation of CSA 17 in anticipation of future growth. California Valley has never fully developed due to remoteness, poor soils, lack of potable water, and poor drainage. The area has maintained a limited stable population of approximately 450 persons. Factor (b) The need for organized community services, the present cost and adequacy of governmental services and controls in the area, probable future needs for those services and controls, probable effect of the proposed incorporation, formation, annexation, or exclusion and alternative courses of action on the cost and adequacy of services and controls in the area and adjacent areas. Response. The present cost and adequacy of governmental services and controls in the area is technically the County s responsibility. CSA No. 17 provided a mechanism for retirement of debt service. Lines and equipment are operated and maintained by Pacific Gas and Electric Company. In 2007 LAFCO re-adopted the zero sphere of influence for CSA No. 17 and the County has decided the CSA is no longer needed or required and should be dissolved at this time. Factor (c) The effect of the proposed action and of alternative actions, on adjacent areas, on mutual social and economic interests, and on the local governmental structure of the county. Response. Attachment F, Effect of Dissolution, provides the code sections from Cortese-Knox-Hertzberg Act that may apply to this dissolution. Each code section is analyzed for its applicability based on the local conditions for dissolving CSA 17. Approval by the Board and LAFCO to dissolve CSA17 will enable staff to transfer funds to Maintenance, Fund Center 200 for repairs to the Simmler Community Building. Factor (d) The conformity of both the proposal and its anticipated effects with both the adopted commission policies on providing planned, 33

Local Agency Formation Commission Dissolution-CSA 17 GC 56668 Factors File No. 4-R-14 orderly, efficient patterns of urban development, and the policies and priorities set forth in Section 56377. Response. No changes in land use plans are associated with this proposal. The San Luis Obispo LAFCO does not have specific Policies for Dissolutions however; the following are the San Luis Obispo LAFCO general Policies for providing planned orderly development: Policy 1. The Commission shall endeavor to balance the need to efficiently provide public services with the sometimes-competing interests of discouraging urban sprawl, preserving prime agriculture land and open space (CKH Act 56001 and 56301).. Analysis. The proposed dissolution is a change of organization that does not change the geographical area in which previously existing powers are exercised.. Policy 7. The Commission prefers urban development within Cities as opposed to development in the unincorporated area (CKH 56001). Analysis. The territory proposed for dissolution is comprised of 24,820± acres located in California Valley, Carissa Plains and Simmler area lying along Highway 58 in the eastern part of the unincorporated County. The District has not provided services in many years, has fully re-paid all debt financing, and is no longer in needed for the provision of services. Factor (e) The effect of the proposal on maintaining the physical and economic integrity of agricultural lands, as defined by Section 56016. Response. The District has not provided services in many years, has fully repaid all debt financing, and is no longer in needed for the provision of services. Since May 1981 LAFCO adopted a zero sphere of influence for CSA No.17. This indicates that the services provided by CSA No.17 will no longer be necessary and that the CSA should be dissolved. Factor (f) The definiteness and certainty of the boundaries of the territory, the nonconformance of proposed boundaries with lines of assessment or ownership, the creation of islands or corridors of unincorporated territory, and other similar matters affecting the proposed boundaries. Response. The dissolution boundary follows lines of assessment and does not create an island or corridor of unincorporated territory. 34

Local Agency Formation Commission Dissolution-CSA 17 GC 56668 Factors File No. 4-R-14 Factor (g) Consistency with City or County General and Specific Plans. Response. The dissolution is consistent with the County s General Plan and Policies. No changes in land use plans are associated with this proposal. Factor (h) The Sphere of Influence of any local agency which may be applicable to the proposal being reviewed. Response. In May 1981 LAFCO adopted a zero sphere of influence for CSA No.17. This indicates that the services provided by CSA No.17 will no longer be necessary and that the CSA should be dissolved. In October of 2007, the Commission adopted the same determinations for a zero Sphere of Influence for CSA No.17 and considered a Municipal Service Review. Factor (i) The comments of any affected local agency or other public agency. Response. No comments have been received to date. Factor (j) The ability of the newly formed or receiving entity to provide the services which are the subject of the application to the area, including the sufficiency of revenues for those services following the proposed boundary change. Response. The District has not provided services in many years, has fully repaid all debt financing, and is no longer in needed for the provision of services. San Luis Obispo County Service Area No. 17 (CSA17) was formed on May 12, 1969 for the purpose of financing the installation of electrical lines and poles by contract with Pacific Gas and Electric Company in California Valley. The installation of electrical lines and poles was completed in 1972 and the debt financing was fully re-paid in 1991. LAFCO has recommended dissolution of this District since 1981. The most recent Sphere of Influence/ Municipal Service Review continues to recommend dissolution as well. Factor (k) Timely availability of water supplies adequate for projected needs as specified in Section 65352.5. Response. This factor does not apply to this proposal. Factor (l) The extent to which the proposal will affect a city or cities and the county in achieving their respective fair shares of the regional housing needs as determined by the appropriate council of governments consistent with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7. 35

Local Agency Formation Commission Dissolution-CSA 17 GC 56668 Factors File No. 4-R-14 Response. The dissolution of CSA 17 does not affect any city or county progress towards achieving their share of the regional housing needs as established in the latest Regional Housing Needs Plan. Factor (m) Any information or comments from the landowner or owners. Response. This change of organization is a County initiated proposal to dissolve County Service Area No.17 California Valley. No comments have been received from landowners or owners within the District. Factor (n) Any information relating to existing land use designations. Response. No changes in land use plans are associated with this proposal. Factor (o) Environmental Justice. The extent to which the proposal will promote environmental justice. As used in this subdivision, "environmental justice" means the fair treatment of people of all races, cultures, and incomes with respect to the location of public facilities and the provision of public services. Response. The County has initiating proceedings to dissolve the service area and use the remaining funds for public facilities located within the service area of CSA17. The Simmler Community Building is such a public facility and is in need of repairs and is located in the service area of CSA 17. The facility serves as a public meeting place and is used by the community for a variety of events. 36