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California State Auditor Logo COMMITMENT • INTEGRITY • LEADERSHIP

Fallen Leaf Lake Community Services District
Its Billing Practices and Small Electorate Jeopardize Its Ability to Provide Services

Report Number: 2018-133

Introduction

Background

State law allows the creation of special districts, which are local governments that deliver specific services within their geographic boundaries. Community services districts, a type of special district, can provide up to 32 different services. Other types of special districts include fire protection districts and water districts. The Fallen Leaf Lake Community Services District (district) covers a small geographic area—6 square miles—in El Dorado County south of Lake Tahoe. Figure 1 shows the district’s location and its boundaries. A five‑member board of directors (board), whose members serve four‑year, staggered terms, governs the district. Since 2014 board members have met four to six times per year to conduct the district’s business.

Figure 1
The District’s Boundaries

Figure 1.

Source: Analysis of data from the El Dorado County Assessor and El Dorado County Elections Department, parcel map from the county assessor,
auditor observation, Google Maps, the El Dorado LAFCO, the district, the Forest Service, and state law..


Land parcels in the district can be publicly or privately owned. Many parcels have homes or cabins that community members occupy only seasonally; the district experiences road closures in the winter because of snow. The district’s community members include 172 private landowners who own 192 parcels of land and the improvements on that land, such as houses or cabins.

A landowner can be either an individual or an entity, such as a trust. Some district landowners own more than one parcel.

 They also include 96 holders of permits that the U.S. Forest Service (Forest Service) has issued for cabins or other improvements on 97 federal land parcels.

A Forest Service permit holder can be either an individual or an entity, such as a trust. One person currently holds permits for two parcels in the district.

 A residence on Forest Service land requires a permit from the federal government, and the permit holder may use the parcel only for recreation purposes, not as a primary residence. The Forest Service issues these special‑use permits for 20‑year periods.

The District’s Services and Funding

The district was established in 1982 to provide fire protection services to the area. Besides basic fire protection, these services currently include emergency medical services, inspections to help community members comply with a state law that requires the maintenance of 100 feet of cleared space around structures to help protect those structures from wildfires, and responses to hazardous material incidents. To operate the fire department and conduct the district’s day‑to‑day business, the district contracts with an individual who serves as both its fire chief and general manager. According to this individual, the district has six paid firefighters other than himself and an assistant fire chief, four volunteer firefighters who have been with the fire department for many years, and 16 unpaid resident recruit firefighters (recruits).

A September 2018 report to the board stated that the fire chief recruits graduates of the local Tahoe Basin Fire Academy to staff the district’s station along with the district’s paid personnel. The district provides the recruits with training and opportunities to gain hours of experience toward receiving their Fire Fighter 1 certification.

 

To fund fire protection, the district’s board annually sets a fire special tax that is levied in units. The maximum tax that the board can levy is $660; in 2018 a unit was $613. Owners and permit holders of parcels with improvements, such as cabins, pay a full unit, while owners of unimproved parcels pay one‑half unit, or $306 in 2018. Stanford Sierra, a conference center in the district, pays 40 units, or $24,520 in 2018.

The district also provides park and recreation services. In 1993 the district accepted title to land at the south end of  Fallen Leaf Lake. The title contained a covenant guaranteeing public access to the lake. The district’s current park and recreation services include the operation of a marina, a general store, a community building, a boat launch and rental service, a swim beach, and parking areas, as well as inspection of watercraft to prevent invasive aquatic species from contaminating the lake. The district contracts with a vendor to provide these services. The vendor charges customers fees to cover the expenses for park and recreation services, and it pays the district an annual fee.

Eligibility Requirements for Community Services District Board Members

Stated simply, to qualify to be a board member of a community services district, a person must be a registered voter who resides in the district.

– Be registered to vote in accordance with the State’s Elections Code.

– Be a U.S. citizen 18 years of age or older.

– Be a resident of an election precinct in California. State law defines residence for voting purposes as a person’s domicile. It defines a person’s domicile as “that place in which the person’s habitation is fixed, wherein the person has the intention of remaining, and to which, whenever the person is absent, the person has the intention of returning”.*

Source: Elections Code and Government Code.

* State law also says that at a given time, a person may have more than one residence but only one domicile.

The Governance of Special Districts

Generally, each special district elects a board of directors that oversees its activities, although county boards of supervisors can govern certain types of special districts within their county boundaries. The type of special district determines who is eligible to vote in its elections, known as a district’s electorate. For instance, for individuals to be eligible to vote in a community services district, fire protection district, or park and recreation district, state law generally requires that they be domiciled—have their primary, fixed residence—in the district and be registered to vote in the district. However, state law defines the electorate for certain types of water districts as consisting of the individuals who own land within those districts. These distinctions become important in districts such as Fallen Leaf Lake, where many community members live for only part of the year and are likely domiciled elsewhere.

State law requires a five‑member board to govern community services districts, such as Fallen Leaf Lake. To conduct business, a community services district’s board must have a quorum—a majority or at least three of the board members—present at a given meeting. To be a candidate for a community services district’s board, a person must be a registered voter of the district, as we describe in the text box.

Entities With Key Responsibilities Related to Special Districts

In each county, two entities can play key roles related to special districts: the local agency formation commission (LAFCO) and the county board of supervisors. State laws govern the creation of and certain modifications to special districts, both of which LAFCOs must approve. For example, LAFCOs review applications to form new special districts. An application can come in the form of a petition, which individuals must sign in accordance with any legal requirements under which the district will be formed. Alternatively, an application can consist of a resolution either by a local agency that contains or would contain territory for the proposed district or by the LAFCO itself. An application must include a statement regarding the nature of the proposed special district, a map and description of its boundaries, and a plan for providing services. The plan must include a description of the services currently provided to the affected territory, an indication of when the special district can feasibly provide the proposed services, and information regarding how the special district will finance those services.

The LAFCO’s executive officer reviews the application and, if applicable, schedules and holds public hearings. At the hearings, LAFCO can receive written protests of the proposed special district. If 50 percent of the voters in the affected territory sign written protests, it will stop the application; similarly, if 25 percent or more of the voters or landowners sign written protests, the affected territory must hold an election regarding the special district. If the LAFCO approves the application and the public does not impede the application through such written protests, the special district can be formed.

LAFCOs also have other responsibilities regarding special districts. For instance, they must approve changes to existing special districts, such as the consolidation of two or more special districts or the dissolution of a special district. These changes can be initiated from various sources, including LAFCOs, voters, or landowners. State law also requires LAFCOs to conduct periodic municipal service reviews of special districts. These reviews must evaluate the services provided in the special district's area and determine the districts’ financial ability to provide the services, and their accountability for the services, including their governmental structure and operational efficiencies. LAFCOs can use these reviews when proposing modifications to special districts. State law requires that LAFCOs conduct these reviews generally every five years. The El Dorado LAFCO’s most recent review of the district is dated October 2013. According to its executive officer, the El Dorado LAFCO originally scheduled the district’s next review for 2019, but it then moved other special districts ahead of the district because of the other districts’ upcoming projects, including three possible reorganizations.

In certain cases, a county can also fulfill key responsibilities for special districts within its jurisdiction. For instance, under state law, a county’s board of supervisors governs certain types of special districts. Furthermore, a county’s board of supervisors can help fill vacant special district board seats. Specifically, if the membership of a special district’s board falls below the number required for a quorum, the county’s board of supervisors—at the request of the special district’s secretary or a remaining board member—can either appoint a person to fill the vacancy or call an election to fill the vacancy. State law allows the county’s board of supervisors to fill only enough vacancies to provide the special district with a quorum. Additionally, if a special district dissolves and if it was located entirely within the unincorporated territory of a single county, that county serves as a successor to wind up the dissolved special district’s affairs.

Forms and Authorizations Required for Reimbursement Under the Fire Agreement

Annual Salary Form: A local fire agency seeking reimbursement for its personnel must complete and sign an annual salary form and file it with Cal OES. The local fire agency may claim either of the following rates:

Emergency Activity Record: After responding to an incident, a local fire agency fills out this form to record and substantiate the personnel and equipment it used for the response. The local fire agency notes the start and stop dates and times for its staff on the form from which Cal OES can calculate the number of hours assigned.

Reimbursement Invoice: Cal OES uses the local fire agency’s information to calculate the reimbursement amount for each individual incident.

Cal OES forwards the reimbursement invoice to the local fire agency for verification and signature. Once the local fire agency returns it, Cal OES submits it to the appropriate federal, state, or local agency for payment.

Source: Analysis of the fire agreement, Cal OES’s instructions, and Cal OES’s reimbursement forms.

* This applies to certain personnel, such as firefighters, apparatus operators, and captains.

The California Fire Assistance Agreement

Under an agreement between federal and state agencies, local fire agencies—such as the district’s—can provide personnel and equipment to federal, state, and other local agencies during severe wildfire conditions or other emergencies. This agreement, called the California Fire Assistance Agreement (fire agreement), describes the process by which the State or other participating entities (paying agencies) can reimburse local fire agencies for the cost of providing such assistance. When local fire agencies provide firefighting assistance—for example, in the form of strike teams—to fight wildfires under the fire agreement, the agreement authorizes reimbursement for personnel on an hourly basis, for vehicles and equipment on an hourly or daily basis depending on the type, and for an administrative fee. The current fire agreement expires in December 2019.

The California Fire Assistance Agreement Committee (Agreement Committee) is responsible for negotiating the terms of the fire agreement and for the agreement’s maintenance. The fire and rescue chief of the California Governor’s Office of Emergency Services (Cal OES) or the chief’s designee chairs the Agreement Committee, which consists of representatives from Cal OES, the California Department of Forestry and Fire Protection (CAL FIRE), the federal fire agencies who sign the fire agreement (Forest Service, the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service, and the Bureau of Indian Affairs), and three advisory representatives from local government fire agencies in California. The Agreement Committee meets as necessary to make changes to the fire agreement, and it also meets annually to establish reimbursement rates, establish new methods of reporting or invoicing under the fire agreement, and to negotiate procedural changes to the fire agreement.

Regardless of whether a federal, state, or local agency requested firefighting assistance, Cal OES is responsible for processing reimbursements for that assistance. To receive reimbursement under the fire agreement, local agencies must submit to Cal OES a number of documents, which we describe in the text box. First, on the annual salary form, local agencies must submit salary rates: the agencies can claim reimbursement for personnel rates either at a base rate ($20.69 per hour in 2018) or at an enhanced rate if their average actual salary rates are greater than the base rate. Cal OES publishes instructions for calculating enhanced rates on its website and references those instructions on the annual salary form. It expects local fire agencies to compensate their personnel at the rates the agencies include on their annual salary forms. Second, on the emergency activity record, local agencies must submit information regarding the length of time their personnel worked on an incident. Cal OES uses these two forms to calculate the reimbursement amounts for the local agencies for each incident.




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