Are Small, Special Purpose Districts an Endangered Species?

By Cori Badgley

In San Bernardino Valley Water Conservation District v. San Bernardino Local Agency Formation Commission (2009) 173 Cal.App.4th 190, the Court of Appeal, Second Appellate District addressed the statutory interpretation of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Gov. Code, §§ 56000 et seq., 57000 et seq.) (“CKH Act”) as it relates to water districts.  Specifically, San Bernardino Valley Water Conservation District (“SBVWCD”) argued that the repeal of certain sections in the Water Code relating to consolidation meant that LAFCo had no authority over the consolidation of water districts.  The appellate court disagreed.

This case involves the long and technical history of the origins of the CKH Act.  Prior to 1965, the Water Code contained the procedures for the consolidation of water districts.  In 1965, the legislature enacted the District Reorganization Act of 1965 and, at the same time, repealed the Water Code sections relating to consolidation.  The 1965 Act was repealed in 1985 to be replaced by the Cortese Local Government Reorganization Act of 1985, which was ultimately replaced by the CKH Act.  SBVWCD asserted that the repealing of the Water Code sections and the lack of a specific statutory reference meant that there was no mechanism whereby LAFCo could consolidate water districts.

The appellate court disagreed.  The court found that the Water Code sections were specifically repealed in 1965 so that all consolidations would be done in accordance with the 1965 Act.  Even if the 1965 Act was repealed, its successors, the 1985 Act and ultimately the CKH Act, replaced it completely and were meant to encompass the consolidation of water districts as the legislature intended with the 1965 Act.  Therefore, LAFCo has the authority to order the consolidation of water districts.

In one last attempt to stop the consolidation, SBVWCD argued that the actions involved in this case were not consolidation but the dissolution of a water district, namely SBVWCD.  Because SBVWCD and Metropolitan Water District covered portions of the same area, LAFCo ordered consolidation of the districts under the Metropolitan Water District.  The court found no merit in SBVWCD’s argument that this was not a consolidation.  Consolidation includes merging one district into another.  Therefore, LAFCo’s actions were lawful.

The reform movement in eliminating small, special purpose districts has been a long time in the making. As this case illustrates, LAFCo’s possess extensive legal authority to make controversial decisions consolidating service providers, and are now flexing their muscles.

Cori M. Badgley is an associate at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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