Investigation of the Impact of Land Use Decisions on Local Government Finances

R4

LAFCO should commission a study of the available options for the political reorganization of the residential communities of the central county. An analysis of actions taken in similar regions should play a large role in this examination. Response: Santa Cruz County Board of Supervisors The County cannot respond to this recommendation because the County does not direct LAFCO activities. Response: City of Capitola This requires further analysis. Should LAFCO determine to undertake such a study, the City of Capitola will participate, and make comments and recommendations, based upon the results of such a study. Response: City of Santa Cruz Investigation of the Impact of Land -29 The recommendation will not be implemented because it is not warranted. It is not likely that the City would be an interested party to such a process. Response: City of Scotts Valley This recommendation has not been implemented, but should LAFCO begin such a study, the City of Scotts Valley would participate and provide data required by LAFCO. Response: LAFCO Will not be implemented because it is not warranted or is unreasonable, with an explanation. This recommendation is neither unwarranted nor unreasonable, but we chose that particular response category to be frank concerning the resources that LAFCO has available and the work program we anticipate for the next two years. LAFCO, with a full-time staff of two, is now completing its review of a proposal by the San Lorenzo Valley Water District to expand its sphere of influence to include Felton. The next project on the work program is the Countywide Service Review, which LAFCO is required by state law to complete by January 1, 2006. This review will evaluate all municipal services (fire, water, sewer, parks, etc.) in all communities of the county. It will quantitatively compare the services, and therefore would be a good baseline study from which a mid-county reorganization study could later be based if there is sufficient interest. Measure U, which was passed by the voters of Watsonville in November 2002, directs the City Council to revise its general plan and to apply to LAFCO for a series of annexations. This type of proposal is unprecedented in California, and LAFCO will need to work carefully on both its duty to conduct a fair hearing on the annexations, and to craft any approval that will cover a twenty year time period. Also, in advance of the next drought, LAFCO wants to review its water policies in an effort to adopt clearer public policy concerning municipal annexations, water agency annexations, and reorganization of water services. LAFCO is funded 1/3 by the County, 1/3 by the Cities, and 1/3 by the Independent Special Districts. Many of these agencies are finding it difficult to maintain services at levels that the community residents have become accustomed. LAFCO with its duties to regulate city and district boundaries is a good lead agency for intergovernmental reorganization studies. LAFCO would consider taking the lead in a central county reorganization study if sufficient interest were demonstrated by residents and affected governmental boards, and funding were identified.

R5

The Board of Supervisors, in conjunction with LAFCO and the cities of Capitola and Scotts Valley, should revisit the political organization of the central part of the county. While it is tempting to recommend the immediate incorporation of Live Oak into the City of Capitola for the beneficial effects it is likely to have on both jurisdictions, the issues -30 Investigation of the Impact of Land related to this step are truly and understandably daunting. However, this is an important issue impacting on the long-term development of the county and should be examined thoroughly. Specifically, the feasibility of the various options for reorganization should be committed to extensive study and fully presented for public discussion and input. Response: Santa Cruz County Board of Supervisors The County will not implement this recommendation because it is unreasonable. Until such time as the State of California provides a financial environment for local government where long range financial planning is possible, a thorough examination of this issue is very difficult. Response: City of Capitola This requires further analysis. If the county were to take the lead in such a study, the City of Capitola will participate, and make comments and recommendations. Response: City of Santa Cruz The recommendation will not be implemented. It is not likely that the City of Santa Cruz would be an interested party to such a process. Response: City of Scotts Valley This recommendation has not been implemented, but should such a study go forward, the City of Scotts Valley would participate and provide necessary data to the extent required by the lead agency doing the study. Response: LAFCO Will not be implemented because it is not warranted or is unreasonable, with an explanation. This recommendation is not unreasonable. As explained in our response to Recommendation 4 on -12, LAFCO is using its limited resources to accomplish the high-priority items on its work program. If many residents and the

R1

The Board of Supervisors of the County of Santa Cruz and the City Councils of each of the four cities located in the county should amend their general plans to include a strategic plan. These strategic plans should include goals for economic development calculated to meet the revenue demands necessary to provide the level of services expected by their citizens. Response: Santa Cruz County Board of Supervisors This recommendation requires further analysis. The Board of Supervisors may wish to consider the addition of such a plan to the General Plan or re-structuring the format and presentation of the existing General Plan at the time that the next update to the General Plan is initiated. However, until such time as the State of California provides a financial environment for local government where long range financial planning is possible, it is difficult to consider the expenditure of public funds on further plans. Response: City of Capitola MOSTLY DISAGREES In our opinion, decisions about whether this type of strategic plan would be desirable should be a decision of each local government, based on conditions, priorities, and communications with residents. There are a variety of ways of planning to ensure that revenues/resources are available to meet service demands, and reliance on planning for economic development to provide is an unnecessarily narrow approach. Response: City of Santa Cruz The recommendation will not be implemented because it is not warranted. The City’s General Plan will include an Economic Development Element that addresses these issues. -26 Investigation of the Impact of Land Response: City of Scotts Valley The City of Scotts Valley has implemented this recommendation, but in a different way than suggested by the Grand Jury and disagree that economic development alone can provide all of the revenues needed to provide the services demanded by the community. The Scotts Valley City Council adopted an Economic Development Plan in 1996. Although not a part of the General Plan, the Economic Development Plan focuses on balancing land uses and businesses to assist in providing needed services within the community. This Plan provides mechanisms to reduce sales tax leakages caused by residents shopping for certain retail items outside of our City. The ability of a City to achieve specific budgetary goals via economic development may not always be possible. Each city is greatly influenced by demographic factors which the City may or may not be able to control. The business and retail sector make choices about how and where they locate, these decisions are not easily influenced by local government. Without having the “right demographic profile” a jurisdiction cannot influence a needed business to locate there if the business knows that they cannot be financially viable. This has been a key struggle for Scotts Valley due to our current number of residents, the topography of the area, which limits development (and the number of persons within a geographic area) and, the proximity to other retail corridors such as 41st Avenue which is the desired location for most major retailers who choose to locate in the County of Santa Cruz. Response: City of Watsonville PARTIALLY AGREES The City of Watsonville has a separate Strategic Plan which the covers the need for economic development within the City. The City also continues to evaluate the current balance of Commercial, Industrial, Residential and Agriculturally zones land. This balance is somewhat of a moving target in that the activity in, and demand for, any of these uses is constantly changing and is difficult to predict. This balance of uses is a major consideration whenever requests for rezoning are received. We also believe that due to the changing nature of the economy that the strategic plan should not be adopted within the general plan, but as a separate document and subject to continual review and revision

R2

The Board of Supervisors of the County of Santa Cruz and the City Councils of each of the four cities located in the county should require relevant departments to identify, in their annual budget statements, the steps they are taking to implement the goals and policies outlined in their general plans. Response: Santa Cruz County Board of Supervisors This recommendation has been implemented. The County budget instructions direct each department to provide a brief overview of the major purposes and functions of the department and to list the major programs and services. These descriptions include workload statistics and narrative descriptions of the affected departments’ efforts to implement the General Plan. Investigation of the Impact of Land -27 Response: City of Capitola DISAGREES The City Council of the City of Capitola agrees that annual reporting of progress with implementation of General Plan goals and policies is a good idea. Presently, the Capitola Budget includes a section for each department for providing notes about recent and current projects of the departments. Further, the City’s Five Year Capital Improvement Plan is reviewed by the Planning Commission each year for consistency with the General Plan. A more elaborate reporting on all of the General Plan goals and policies is probably best done as a document separate from the budget, such as the Annual Report on the General Plan, which is required by section 65400(b)(1) of the state Planning, Zoning and Development Laws. Response: City of Santa Cruz The recommendation will not be implemented because it is not warranted. City departments do not make “annual budget statements.” Appropriate reports are issued on an as-needed and requested basis. Response: City of Scotts Valley The City of Scotts Valley has adopted a Mission Statement for the City which is part of the General Plan. Each year the City Council, prior to the budget process, adopts goals and objectives that facilitate the Mission Statement of the City. Once those are established, the resources are provided for during the budget process. In addition, the City of Scotts Valley annually reviews compliance with the General Plan Goals and Policies and this review is concluded at a City Council meeting, with adoption of a resolution. The progress is then reported to the State of California as required by law. This review is done in conjunction with the budget process. Response: City of Watsonville AGREES The City of Watsonville requires that each Capital Improvement Project item include a description of its relevance to meeting the general plan requirements. Jurisdiction Specific Recommendations