TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
Placentia City Council
AGENDA REPORT
FROM: DEPUTY CITY ADMINISTRATOR / PUBLIC SERVICES AND INFRASTRUCTURE DATE: FEBRUARY 15, 2022
SUBJECT: RESOLUTION OF INTENT TO COMMENCE ANNEXATION PROCEEDINGS AND
APPLICATION SUBMITTAL REGARDING COUNTY UNINCORPORATED
"HAMER ISLAND" WITHIN THE MUNICIPAL BOUNDARIES OF THE CITY OF
PLACENTIA
FISCAL
IMPACT: There is no immediate or direct fiscal impact associated the recommended actions.
Should the City elect to annex Hamer Island the City will incur long-term costs to provide services to the Island but will also receive corresponding tax revenues from the Island to help offset said service costs.
SUMMARY:
An unincorporated island is a pocket of County -managed territory that is surrounded by or adjacent to incorporated cities. Unincorporated islands were inadvertently created many decades ago as the County's primarily agricultural communities developed into modern cities, and because of the haphazard way counties and local cities annexed territories and approved new residential and commercial developments. The County of Orange is responsible for providing most public services to unincorporated islands and citizens of those islands. The County's main function is to provide regional services such as the criminal and civil justice system, flood control, social services, public health services, and management of regional parks and public harbors but the County is still required to provide routine daily municipal services to unincorporated islands such as public safety, land use planning, code enforcement, and road maintenance. The law suggests that cities are more effective providers of local municipal services (such as libraries, public safety, recreation, and public works services) than counties.
Hamer Island ("Island") is an unincorporated island within the sphere of influence of the City of Placentia. Residents within the Island already enjoy services provided by the City as many utilize local City parks and recreation programs. In addition, the Placentia Police Department has traditionally provided emergency responses to the Island via mutual aid. The City previously entered into a separate Out of Area Service Agreement with the County of Orange in 2020 to provide daily fire protection and Emergency Medical Services ("EMS") to Island residents upon the commissioning of the Placentia Fire and Life Safety Department, and the City's emergency medical services program on July 1, 2020. In addition, Hamer Island already shares the same zip code with the rest of Placentia, its residents attend Placentia schools, and 3, a.
Feb. '15, 2022
City Council Agenda
February 15, 2022
the physical features of the Island itself are indistinguishable from surrounding Placentia homes and neighborhoods. Refuse collection and recycling, and utility services such as water and sewer collection are also provided by the same service providers. As a part of the County's larger efforts to transition County islands to Cities with islands within their sphere of influences, the County reached out to Placentia staff to inquire and encourage the City to annex the Island. If approved by the City Council, the recommended actions authorize Staff to begin the process of annexing Hamer Island to the City of Placentia which will require close coordination with the County and the Orange County Local Agency Formation Commission ("OC LAFCO") and continued outreach with the Hamer Island community.
For the City to make an application to OC LAFCO under the small island provisions, the City must provide an approved resolution to OC LAFCO initiating the proceedings for the annexation of the Island. Later, the City Council will consider the adoption of a property tax agreement with the County. All these items must be provided to OC LAFCO before OC LAFCO may approve the annexation. Once approved by OC LAFCO, the annexation of the small island is not subject to protests by the community or an election.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
Adopt Resolution No. R-2022-07, a Resolution of the City Council of the City of Placentia, California, making application to and requesting the Local Agency Formation Commission of Orange County take proceedings pursuant to the Cortese -Knox -Hertzberg Local Government Reorganization Act of 2000 for the City of Placentia for the annexation of County Island designated as "Hamer Island" consisting of approximately 76 acres of property within its sphere of influence; and
2. Authorize the City Administrator and/or his designee to execute all necessary documents, in a form approved by the City Attorney for the Annexation Proceedings with the County of Orange and the Orange County Local Agency Formation Commission; and
3. Direct Staff and the City Attorney's Office to prepare an amendment to the City's Recreational Vehicle Parking Ordinance to provide grandfathering provisions to the benefit of Hamer Island residents; and
4. Direct Staff to work with Republic Services and the County of Orange to re -assign or transfer the existing waste hauling agreement between the County and Republic Services servicing Hamer Island under the same terms, conditions, and rates to the benefit of Island residents.
DISCUSSION:
An unincorporated island is a pocket of County -managed territory that is surrounded by or adjacent to incorporated cities. The City of Placentia has one (1) unincorporated island surrounded by the municipal boundaries of the City. This area is commonly referred to as "Hamer
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February 15, 2022
Island" and is comprised of 76 acres, 346 single family homes, and approximately 1,045 County residents (Attachment 1). Unincorporated islands were inadvertently created many decades ago as the County's primarily agricultural communities were developing into modern Cities, and because of the haphazard approach counties and local cities took when annexing new territories and approving new residential and commercial developments. In 1963, the State Legislature created LAFCOs in each California county to create a more uniform and logical approach to expanding or establishing new cities and districts to avoid overlapping boundaries and responsibilities for local government services.
The County of Orange is responsible for providing most civic services to unincorporated territories and citizens of those territories. Regulations and code requirements applicable to unincorporated islands are based upon county, not local law. Given the fact that local governments are more effective at providing day-to-day services to local communities, the County of Orange is committed to assisting local cities in annexing adjacent unincorporated islands and the OC LAFCO's primary mission is to assist cities and counties in that endeavor. However, annexations can become contentious and resisted by residents within unincorporated islands. In response to local resistance to island annexations, the California Legislature enacted legislation in 2000 (Government Code Section 56375.3) allowing County's to work with cities to annex small urban pockets within their jurisdictions of 75 acres or less through a streamlined process that does not require protest proceedings or elections. This legislation was subsequently amended in 2005 to include islands that are 150 acres or less.
State law (the Cortese -Knox -Hertzberg Local Government Reorganization Act of 2000 ["the Act"] [Government Code Section 56000 et seq.]) governs the way cities, counties, and special districts address boundary issues like incorporations, annexations, detachments, changes in statistics of income ("SOls"), and mergers and consolidations. The Act describes the membership and role of LAFCO in each county. OC LAFCO is a seven -member body comprised of local elected officials that meet monthly and address local government boundary changes for Placentia's region.
LAFCO law suggests that cities should ultimately annex territories within spheres of influence, and it also suggests that cities are generally more effective providers of routine daily municipal services than counties. A county's main function is to provide regional government services such as the criminal and civil justice system, flood control, social services, health care services, and management of regional parks and public harbors, but counties are still required to provide basic municipal services to unincorporated islands, such as public safety, land use planning, code enforcement, and road maintenance. Annexing an unincorporated island to a city can improve the quality of and access to services forthat community and in a more cost-effective manner. Attached are letters from the County Chief Executive Officer and the Executive Director of OC LAFCO outlining their support for the annexation of Hamer Island (Attachments 1 & 2).
Hamer Island residents currently enjoy services provided by the City, as many utilize local City parks and recreation programs, and Island property owners are already assessed an annual fee to fund the Placentia Library District located two (2) miles from the Island. The Placentia Police Department has traditionally provided mutual aid emergency responses to the Island and the City previously entered into a separate Out of Area Service Agreement with the County to provide daily fire protection and EMS to the Island upon the commissioning of the Placentia Fire and Life Safety Department and the City's emergency medical services program on July 1, 2020. In addition,
City Council Agenda
February 15, 2022
Hamer Island already shares the same zip code as the rest of Placentia, its residents already attend Placentia schools, and the physical features of the Island itself are indistinguishable from surrounding Placentia homes and neighborhoods. Utility services such as water and sewer collection services are also provided by the same providers as to Placentia residents. Annexation also provides Island residents with greater local representation through a local City Council Member rather than representation by a County Supervisor based in Santa Ana who represents nearly one (1) million County residents. Accordingly, it continues to be the mission of the County to strongly encourage cities to annex unincorporated islands into their communities. Since the year 2000, over 75 islands have been successfully annexed to cities within Orange County.
Public Outreach Process
On July 6, 2021, the City Council directed Staff to conduct community outreach to the Hamer Island residents to discuss the proposed annexation, the benefits of annexation, and the process to complete annexation to the City of Placentia. The community meetings were held on August 18, 2021, and on August 25, 2021. Notice of the community meetings were sent to property owners within the Island ahead of the meeting during the week of August 4. In addition, door hangers were delivered to every home in Hamer Island on August 13. The notices included an email and a direct phone number to Director of Development Services Joseph Lambert as the City's main point of contact to Island residents. The City also advertised a dedicated webpage, www.i)lacentia_.org/hamerisland for the public to view additional information about the potential annexation process, frequently asked questions, an interactive map, and the presentation from the July 6, 2021 City Council meeting.
During this time, Director Lambert received two (2) phone calls regarding the annexation process.
One (1) person provided additional information about the City's Utility User Tax and asked if the City knew how many Island residents were in support of the annexation process. The second caller expressed concern about the placement of the door hanger upon his front door.
At the community meetings, there were approximately 25 Hamer Island residents present at each respective meeting. In addition, City staff and representatives from OC LAFCO and the County of Orange were in attendance to answer questions. County staff provided a presentation regarding California annexation law and the annexation process. The City Administrator provided a comprehensive analysis on the benefits of annexation and the process to complete annexation to the City of Placentia. A question -and -answer session was also conducted at the meeting.
Below is a summary of comments/questions provided by the Hamer Island residents during the community meetings:
• Will the Mello Roos, Public Safety Tax, TOD tax, Landscape and Lighting District tax apply to the residents of Hamer Island?
• How does the Measure U sales tax affect the residents of Hamer Island? • Requesting clarification if County residents are able to vote upon the annexation process. • Clarify if Utility User Tax (UUT) would be imposed upon all utility bills? Are there any other City assessments?
■ Will there be Section 8 Housing in or around Hamer Island? • City streets are in poor shape compared to Hamer Island streets.
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• Street sweeper signs in Hamer Island are ignored. Will the City start issuing citations for this violation? Can Hamer Island residents obtain a permit that would allow them to park during street sweeping days?
® Will RV Parking be allowed? Can we be grandfathered in? • Can we continue to block the street to have a 4t" of July parade? s What will the zoning be for this area?
Can care homes be allowed to operate when incorporated into the City? As discussed in the presentation at the community meeting, Hamer Island residents will benefit from having improved and locally controlled services, local access to their elected and appointed officials, and property tax dollars spent upon local services Island residents' benefit from currently.
Island residents will also receive other value-added benefits not available to County residents such as a citywide fiber optic network providing high speed broadband Internet access to every home. Placentia residents will benefit by no longer having to subsidize the cost of some services to the Island as the City would collect additional General Fund property and utility user taxes from Island property owners to offset the City's added municipal service costs for the Island. In addition, the County has agreed in principle to provide the City with one-time funds for infrastructure repairs and improvements negotiated as part of the City/County property tax and annexation agreement.
The County benefits by reducing the administrative burden and cost to provide local services to a distant island that are best provided by the adjacent municipality.
For the City to submit an annexation application to OC LAFCO under the small island provisions, the City must provide an approved resolution (Attachment 3) that requests OC LAFCO to initiate proceedings for the annexation of Hamer Island. At a future date, the City Council will consider adoption of pre -zoning for the annexation, approval of an annexation agreement with the County, and adoption a property tax resolution. All these items must be provided to OC LAFCO before the Commission may consider and approve the annexation. The annexation of the small island is not subject to protests by the community or election pursuant to State law.
CEQA Compliance
In accordance with the California Environmental Quality Act (CEQA) and the State CEQA Guidelines, a Categorical Exemption will be filed for this project pursuant to section 15319. This Class 19 exemption applies to projects involving annexation of existing facilities and lots for exempt facilities such as public and private structures developed to the density allowed by the pre -zoning of the City. The proposed annexation area is developed to the density allowed by the current zoning or pre -zoning, with the extension of utility services having the capacity to serve only the existing facilities. The City Council has, because of its consideration and the evidence presented at the hearings upon this matter, determined that, as required pursuant to CEQA, a categorical exemption adequately addresses the expected environmental impacts of this project.
Based upon this review, the City Council finds that there is no evidence from which it can be fairly argued that the project will have a significant adverse effect upon the environment; therefore, it is categorically exempt from the requirement for the preparation of environmental documents.
The following table outlines the proposed island annexation process per State Government Code Section 56375.3:
City Council Agenda
February 15, 2022
Description
City Council Consideration of Adoption of
Resolution Authorizing Application Submittal
to OCLAFCO
OC LAFCO Application Submission and
Review Period
City Council Review and Consideration of
Approval of Annexation Agreement with
County and Property Tax Resolution
County Board of Supervisors Review and
Consideration of Approval of Annexation
Agreement and Property Tax Resolution
OC LAFCO Annexation Public Hearing
Annexation Effective
Date
February 15, 2022
February 2022 - June 2022
March 1, 2022
April 2022
June 2022
July 2022
Annexation of Hamer Island will require a modification to the City Council voting districts. Should the annexation move forward and be finalized, the City will need to task its demographer with updating district boundaries to include the registered voters who live in the Island. Based upon the annexation timeline noted above and the timeline established by the Orange County Registrar of Voters to update voting district boundaries for the 2022 election, the annexation process will not be finalized in time for Island residents to vote in the City's 2022 municipal election and will have to wait until the 2024 election to cast their ballots in Placentia's municipal election for the first time as official Placentia residents. Island residents will still be able to vote in 2022 for County, Statewide and National elections, and propositions.
FISCAL IMPACT:
There is no immediate or direct fiscal impact associated the recommended actions. Should the City elect to annex Hamer Island the City will incur long-term costs to provide services to the Island but will also receive tax revenues from the Island to help offset those service costs.
Prepared by:
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Ass�stant tot a City Administrator/
Economic Development Manager
Reviewed and approved:
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J ph WLamb4rt
Director of Development Services
City Council Agenda
February 15, 2022
Reviewed and approved:
Luis Estevez _a
Deputy City Administrator
Reviewed and approved:
D rula
City Administrator
Attachments:
1. Letter from Orange County CEO
2. Letter from Executive Director of OC LAFCO
3. Resolution No. R-2022-07 - OC LAFCO Application
4. Presentation — Hamer Island Annexation