2016-2017 Santa Clara County Civil Grand Jury Report Lafco Denials:

Conclusions 20

• CL1 Page 9
  The Local Agency Formation Commission staff developed criteria to evaluate the Morgan Hill 2016 Urban Service Area amendment, including the South County Catholic High School, that were not specified in the agency's adopted Urban Service Area Policies. These staff-written criteria include the definition of "vacant land," "premature conversion of agricultural lands," and "adequacy of urban services."
• CL2 Page 9
  The Local Agency Formation Commission staff interpreted the Commission’s Island Annexation Policies to be mandatory rather than advisory in the staff’s evaluation of the Morgan Hill 2016 Urban Service Area Amendment that includes the South County Catholic High School.
• CL3 Page 10
  The Morgan Hill Agricultural Preservation Program requires more funding for the purchase of agricultural easements than is generated from the mitigation fees collected through new development.
• CL4 Page 11
  Individuals are concerned about retribution by Local Agency Commission staff if they complain about the treatment they receive.
• CL5 Page 11
  The relationship between the staff of the Local Agency Formation Commission and the staff of the City of Morgan Hill appears to be strained.
• CL6 Page 11
  The same individual has held a seat on the Local Agency Formation Commission for 20 consecutive years.
• CL7 Page 12
  The City of Morgan Hill's update of the 2016 General Plan, which dealt separately with the Southeast Quadrant, gave the appearance of special consideration for the property owners.
• CL8 Page 8
  LAFCO’s denials of the proposals to expand Morgan Hill’s USA and to allow a new high school are complicated issues. Adding to the complexity is the strained relationship between LAFCO and Morgan Hill. While there is strong support for building a Catholic high school in Morgan Hill, LAFCO insists it be built within the city’s USA. Morgan Hill says that’s impossible: No site is large enough, except for one parcel reserved for industrial use. LAFCO commissioners adopt policies in the public forum, not behind closed doors; stakeholders and members of the public participate in the process. However, the administrative staff, acting outside the public eye, interprets these policies in ways that blur the lines between setting policy and executing policy. LAFCO staff provided incorrect information about the 2003 attempt to build a Catholic high school that misled commissioners when they voted in 2016. The City of Morgan Hill utilized a bifurcated General Plan update process that created concerns about the objectivity of the plan for the Southeast Quadrant, including the South County Catholic High School.
• CL9 Page 9
  Findings and Recommendations Finding 1 The Local Agency Formation Commission staff developed criteria to evaluate the Morgan Hill 2016 Urban Service Area amendment, including the South County Catholic High School, that were not specified in the agency's adopted Urban Service Area Policies. These staff-written criteria include the definition of "vacant land," "premature conversion of agricultural lands," and "adequacy of urban services." Recommendation 1a The Local Agency Formation Commission should amend its Urban Service Area Policies to define "vacant land," "premature conversion of agricultural lands," and "adequacy of urban services." The amendment process should provide the opportunity for all affected stakeholders to participate. Recommendation 1b The Local Agency Formation Commission should consider a project’s specific requirements, such as the size of the parcel needed and proximity to incompatible uses, in determining whether parcels in the Urban Service Area are “vacant land.” Finding 2 The Local Agency Formation Commission staff interpreted the Commission’s Island Annexation Policies to be mandatory rather than advisory in the staff’s evaluation of the Morgan Hill 2016 Urban Service Area Amendment that includes the South County Catholic High School. Recommendation 2 The Local Agency Formation Commission should amend its Island Annexation Policies to clarify whether the annexation of all unincorporated urban islands is a prerequisite for Urban Service Area amendments. The amendment process should provide the opportunity for all affected stakeholders to participate. Finding 3 The Local Agency Formation Commission staff deviated from the Commission’s Agricultural Mitigation Policies in the staff’s evaluation of the Morgan Hill 2016 Urban Service Area Amendment that includes the South County Catholic High
• CL10 Page 10
  School. The staff interpreted the policies to be mandatory rather than advisory and established its own criteria for a satisfactory agriculture mitigation program. Recommendation 3a The Local Agency Formation Commission should amend its Agricultural Mitigation Policies to clarify whether the policies are advisory or mandatory. The amendment process should provide the opportunity for all affected stakeholders to participate. Recommendation 3b The Local Agency Formation Commission should amend its Agricultural Mitigation Policies to define a satisfactory agricultural mitigation program. The amendment process should provide the opportunity for all affected stakeholders to participate. Recommendation 3c The Local Agency Formation Commission should amend its Agricultural Mitigation Policies to describe the relationship of a city’s agricultural mitigation program to Santa Clara County’s agricultural mitigation programs. The amendment process should provide the opportunity for all affected stakeholders to participate. Finding 4 The Morgan Hill Agricultural Preservation Program requires more funding for the purchase of agricultural easements than is generated from the mitigation fees collected through new development. Recommendation 4 The County of Santa Clara, the City of Morgan Hill, and the Local Agency Formation Commission should work together to develop a funding mechanism to cover the acquisition and on-going cost of agricultural easements in the Morgan Hill area. Finding 5 Erroneous information provided through reports and comments by the Local Agency Formation Commission staff cast the Catholic Diocese of San Jose as untrustworthy. Although the erroneous information was corrected through media and other sources, the report to the commissioners was not changed, resulting in the appearance of bias.
• CL11 Page 11
  Recommendation 5 The Local Agency Formation Commission should investigate and take appropriate action to address the potential of bias by LAFCO staff. Finding 6 Individuals are concerned about retribution by Local Agency Commission staff if they complain about the treatment they receive. Recommendation 6 The Local Agency Formation Commission should develop procedures to investigate complaints confidentially and ensure complainants do not face retaliation. Finding 7 The relationship between the staff of the Local Agency Formation Commission and the staff of the City of Morgan Hill appears to be strained. Recommendation 7 The Local Agency Formation Commission and the City of Morgan Hill should take steps to improve the working relationships of the staff of the two agencies. Finding 8 The same individual has held a seat on the Local Agency Formation Commission for 20 consecutive years. Recommendation 8 The Local Agency Formation Commission should establish by policy that a commissioner can serve in a specified position for a set number of years. Finding 9 The Local Agency Formation Commission's goal of protecting agricultural land directly impacts only three cities – Gilroy, San Jose and Morgan Hill – which have all of the agricultural land in the urban areas of Santa Clara County. Currently only two LAFCO commissioners, the representative for San Jose and the County Supervisor for District 1, out of seven commission positions represent these cities.
• CL12 Page 12
  Recommendation 9 The Local Agency Formation Commission should ensure that cities with agricultural land are represented fairly on the commission. Finding 10 The City of Morgan Hill's update of the 2016 General Plan, which dealt separately with the Southeast Quadrant, gave the appearance of special consideration for the property owners. Recommendation 10 The City of Morgan Hill should adopt a single, open, transparent process in future updates of its General Plan.
• CL13 Page 13
  Appendix A Map: South County Catholic High School and the Southeast Quadrant
• CL14 Page 14
  Appendix B Map: Unincorporated Urban Islands
• CL15 Page 15
  Appendix C Comparison of Agricultural Mitigation Programs
• CL16 Page 16
  Appendix D Disposition of LAFCO Urban Service Area Proposals: 2000-2016 # Amendment Proposals Commission Actions Morgan Hill Other Cities Morgan Other Year Total Commissioners Admin. Commissioners Admin. Hill Cities Approved Denied Deny Approved Denied Deny 2000 6 1 7 6 0 2 1 0 0 2001 0 2 2 0 0 0 2 0 0 2002 4 4 8 3 1 1 4 0 0 2003 3 0 3 3 0 0 0 0 0 2004 0 1 1 0 0 0 1 0 0 2005 2 1 3 2 0 0 1 0 0 2006 0 2 2 0 0 0 2 0 0 2007 1 0 1 1 0 1 0 0 0 2008 0 1 1 0 0 0 1 0 0 2009 0 1 1 0 0 0 1 0 0 2010 0 0 0 0 0 0 0 0 0 2011 0 1 1 0 0 0 1 0 0 2012 0 2 2 0 0 0 2 0 0 2013 3 3 6 1 2 2 3 0 0 2014 0 1 1 0 0 0 1 0 1 2015 0 0 0 0 0 0 0 0 0 2016 2 0 2 0 2 2 0 0 0 Total 21 20 41 16 5 8 20 0 1 Based on information provided by LAFCO in March 2017.
• CL17 Page 17
  References Bibliography California Senate Bill #375. (2008). Sustainable Communities Act. Retrieved from http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_0351- 0400/sb_375_bill_20080930_chaptered.pdf City of Davis (2008). City of Davis Municipal Code, Section 40A.03.0 Farmland Preservation. Retrieved from http://www.farmlandinfo.org/sites/default/files/Davis_CA_Ag. Mitigation_1.pdf City of Morgan Hill (2016). Morgan Hill commercial and industrial vacant inventory by parcels. Retrieved from https://www.morgan- hill.ca.gov/DocumentCenter/View/16910 City of Morgan Hill. (2016). Morgan Hill residential vacant land inventory by parcels. Retrieved from https://www.morgan- hill.ca.gov/DocumentCenter/View/16847 Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. California Government Code, Title 5, Division 3. Sections 56000-57550. Retrieved from http://alcl.assembly.ca.gov/sites/alcl.assembly.ca.gov/files/publications/2009LAF COGuide.pdf County of Santa Clara. (2016). Sustainable agricultural lands policy framework - planning commission: PowerPoint. Retrieved from https://www.sccgov.org/sites/dpd/DocsForms/Documents/SAL_PC_201604_Gra ntPresentation.pdf County of Santa Clara and Local Agency Formation Commission of Santa Clara. (2013). Memorandum of understanding between County and LAFCO, approved November 5, 2013. Retrieved from http://sccgov.iqm2.com/Citizens/Detail_LegiFile.aspx?Frame=SplitView&MeetingI D=4635&MediaPosition=&ID=69377&CssClass= County of Santa Clara and Open Space Authority. (2016). Climate and Agricultural Preservation Plan - Webinar for Advisors: PowerPoint. Retrieved from https://www.sccgov.org/sites/dpd/DocsForms/Documents/SAL_CAPP_AdvisorW ebinar_20160819.pdf
• CL18 Page 17
  County of Santa Clara and Open Space Authority. (2017). Climate and Agricultural Preservation Plan - Initial Findings: PowerPoint. Retrieved from https://www.sccgov.org/sites/dpd/DocsForms/Documents/CAPP_TechPanel_Initi alFindings_201702.pdf Crabtree, A. (2015). Request for Morgan Hill Urban Service Area Amendment: Local Agency Formation Commission Application. City of Morgan Hill. Retrieved from https://www.morgan-hill.ca.gov/DocumentCenter/View/16977 Crabtree, A. (2015). Agricultural Lands Preservation Program and Southeast Quadrant Land Use Plan. City of Morgan Hill. Retrieved from https://www.morgan-hill.ca.gov/965/Southeast-Quadrant Crabtree, A. (2016). City of Morgan Hill Urban service amendment, supplemental information. City of Morgan Hill. Retrieved from http://santaclaralafco.org/pdf/MH2015/letters/Letter_MorganHill.pdf Deviney, J. (2015). Office of the Agricultural Commissioner, Santa Clara County 2014 crop report. Retrieved from https://www.sccgov.org/sites/ag/news/Documents/2014%20Crop%20Report_We b.pdf Deviney, J. (2016). Office of the Agricultural Commissioner, Santa Clara County 2015 crop report. Retrieved from https://www.sccgov.org/sites/ag/news/Documents/CropReport2015_FinalWEB.p df Eulo, A. (2017). Progress update on city agricultural preservation activities. City of Morgan Hill. Retrieved from https://morgan- hill.legistar.com/LegislationDetail.aspx?ID=2959661&GUID=5910F2C3-0C2E- 4D0D-8A0A-E7CD3840E840 Gallegos, S. (2014). Agricultural lands preservation program and Southeast Quadrant Land Use Plan. County of Santa Clara. Retrieved from http://www.morganhill.ca.gov/DocumentCenter/View/12894 Girard, K. (2016). Morgan Hill Urban Service Area Amendment 2015. County of Santa Clara. Retrieved from http://santaclaralafco.org/pdf/MH2015/letters/Letter_CountyPlanning.pdf Local Agency Formation Commission of Santa Clara County. (2003). Urban service area polices -- effective January 1, 2003. Retrieved from https://www.morgan-hill.ca.gov/DocumentCenter/View/11862
• CL19 Page 18
  Local Agency Formation Commission of Santa Clara County. (2007). Meeting minutes, February 14, 2007 Retrieved from http://lalafco.org/Agendas/2007/Final%2002-28-07.pdf Local Agency Formation Commission of Santa Clara County. (2009). Service review policies -- amended October 14, 2009. Retrieved from http://santaclaralafco.org/images/pdf_files/policies&procedures1/Service%20Revi ew%20Policies.pdf Local Agency Formation Commission of Santa Clara County. (2009). Island annexation policies -- amended October 14, 2009. Retrieved from http://santaclaralafco.org/images/pdf_files/policies&procedures1/Island%20Anne xation%20Policies.pdf Local Agency Formation Commission of Santa Clara County. (2011). Fixing and avoiding mistakes: PowerPoint. Retrieved from http://calafco.org/sites/default/files/resources/Fixing%20and%20Avoiding%20Mis takes%20-%20Pkg.pdf Local Agency Formation Commission of Santa Clara County. (2007). Agricultural Mitigation Polices -- effective April 4, 2007. Retrieved from http://morganhill.ca.gov/DocumentCenter/Home/View/297 Local Agency Formation Commission of Santa Clara County. (2015). 2015-16 Annual Report. Retrieved from http://santaclaralafco.org/file/Budget/FY2017WorkPlan.pdf Local Agency Formation Commission of Santa Clara County. (2015). Cities service review final report. Retrieved from http://santaclaralafco.org/file/ServiceReviews/CitiesSR2015/FullFinalReport_CS RR.pdf Local Agency Formation Commission of Santa Clara County. (2016). Local agency formation commission bylaws - Revised October 5, 2016. Retrieved from http://santaclaralafco.org/file/Policies/By- Laws%20Revised%20October%202016.pdf Local Agency Formation Commission of Santa Clara County. (2017). Proposed work plan for FY 2017. Retrieved from http://santaclaralafco.org/file/Budget/FY2017WorkPlan.pdf Local Agency Formation Commission of Santa Clara County Special Meeting Minutes, March 11, 2016. Retrieved from http://www.santaclaralafco.org/images/resumes/agenda_packet/StaffReport_201 60215.pdf
• CL20 Page 18
  Local Agency Formation Commission of Santa Clara County Meeting Agenda and Reports, June 1, 2016. Retrieved from http://www.santaclaralafco.org/images/resumes/agenda_packet/June%201%202 016%20Agenda.pdf Local Agency Formation Commission of Santa Clara County Meeting Minutes, June 1, 2016. Retrieved from http://www.santaclaralafco.org/images/resumes/minutes/Jun2016Minutes.pdf Morgan Hill land grab has to be stopped (March 9, 2016). San Jose Mercury News editorial. Retrieved from http://www.mercurynews.com/2016/03/09/mercury-news-editorial-morgan-hill- land-grab-has-to-be-stopped/ Palacherla, N. (2017). MHUSD's potential plans to purchase lands in Southeast Quadrant for future school sites and facilities. Local Agency Formation Commission of Santa Clara County. Retrieved from http://www.morganhilltimes.com/news/lafco-no-on-se-quad/article_631f2906- d5eb-11e5-aaa3-83f1447333fd.html Palacherla, N. (2017). Urban service area amendment proposals. Local Agency Formation Commission of Santa Clara County. Retrieved from http://www.santaclaralafco.org Rymer, S. (October 2, 2015). City of Morgan Hill urban service area Amendment, supplemental information). City of Morgan Hill. Retrieved from http://sanjose.granicus.com/MetaViewer.php?meta_id=538419 Setting the Record Straight: Morgan Hill land grab has to be stopped (March 11, 2016). San Jose Mercury News. Retrieved from http://www.mercurynews.com/2016/03/09/mercury-news-editorial-morgan-hill- land-grab-has-to-be-stopped. Interviews The Grand Jury conducted seven interviews between February 22 and March 29, 2017. Four interviewees work in public agencies and three were members of the general public.

No Responses Found 3

Government entities assigned to respond to this report. No response documents have been linked in our database.