SENATE THIRD READING

STR Bill Id:SB 387

Author:(Wilk)

As Amended Ver:May 1, 2019

Majority vote

SUMMARY:

Revises the procedures and circumstances under which the Santa Clarita Valley Water Agency (SCVWA) board will transition from the current 15-member board to a nine-member directly elected board.

Major Provisions

Under current law, if any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members. This bill allows the SCVWA board to elect not to fill one of the seats for an initial elected member if the seat becomes vacant as long as the electoral division in which the vacancy occurs will have at least three members. If a seat does not become vacant and is not eliminated or filled as specified in this bill, the board must randomly select the seat of one director to be shortened to two years for the term following the 2024 general election.

COMMENTS:

Santa Clarita Valley Water Agency. There is an extensive history of litigation over water in the Santa Clarita Valley, particularly between the former NCWD and CLWA. In December 2016, the boards of both districts voted to adopt a settlement agreement for outstanding litigation. The settlement agreement provided the two districts would jointly seek legislation to create a single new successor entity to build on and lead to greater success in water conservation, groundwater management, and recycled water provision across the Santa Clarita Valley. The settlement agreement provided for the following:

1. The structure of the new district's board;
2. Powers to be exercised by the district;
3. Establishment of an independent ratepayer advocate;
4. Creation of retail districts to ensure that ratepayers of the dissolved district continue to bear their own legacy indebtedness;
5. Supermajority vote requirements for certain actions;
6. The transfer of all assets, liabilities, contracts, and employees of the existing districts to the new agency; and,
7. Termination of the settlement agreement if legislation is not chaptered in 2017.

To honor the settlement agreement, the Legislature enacted SB 634 (Wilk), Chapter 833, Statutes of 2017, to create the new SCVWA.

According to the Author:

"SB 387 is a clean-up of SB 634 (Wilk) which created the SCVWA as a consolidation of the former Newhall County Water District and the Castaic Lake Water Agency. One of the provisions in SB 634 requires the Agency's Board of Directors to reduce its membership total from the original 15 members to 9. This bill authorizes the Agency's Board of Directors to eliminate a board position if there is a vacancy prior to the next election. This is needed to avoid either an election or appointment process for a seat that is required to be eliminated by SB 634 at one of the next 2 elections.

It creates a methodology to fairly establish which seats get 2 and 4 year terms if this authority is exercised, using a lot to make the determination. The Agency has been organized for over a year, has successfully met the requirements of SB 634 and is actively providing water as a consolidated agency. In the first year of operations, cost savings exceeded $5 million. The board adopted a rate setting process that also includes a role of an independent ratepayer advocate. This measure simply provides one more step towards complete implementation of SB 634."

Arguments in Support:

According to the sponsors, "SCVWA has been organized for over a year, has successfully met the requirements of SB 634, and is actively providing water as a consolidated agency. This measure will provide one more step towards complete implementation of SB 634 by allowing vacant director seats to be eliminated and not subject to appointment or costly elections."

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, there are "no state costs. Any costs incurred by SCVWA as a result of this bill are not reimbursable by the state because the provisions of the bill were requested by SCVWA (local request disclaimer)."

VOTES:

SENATE FLOOR: 38-0-0

YES: Allen, Archuleta, Atkins, Bates, Beall, Borgeas, Bradford, Caballero, Chang, Dodd, Durazo, Galgiani, Glazer, Grove, Hertzberg, Hill, Hueso, Hurtado, Jackson, Jones, Leyva, McGuire, Mitchell, Monning, Moorlach, Morrell, Nielsen, Pan, Portantino, Roth, Rubio, Skinner, Stern, Stone, Umberg, Wieckowski, Wiener, Wilk

ASM LOCAL GOVERNMENT: 8-0-0

YES: Aguiar-Curry, Lackey, Bloom, Boerner Horvath, Ramos, Luz Rivas, Robert Rivas, Voepel

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: May 1, 2019

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0001320

Date of Hearing: August 14, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 387

Author:(Wilk) – As Amended Ver:May 1, 2019

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill revises the procedures and circumstances under which the Santa Clarita Valley Water Agency (SCVWA) board will transition from the current 15-member board to a nine-member directly elected board.

FISCAL EFFECT:

No state costs. Any costs incurred by SCVWA as a result of this bill are not reimbursable by the state because the provisions of the bill were requested by SCVWA (local request disclaimer).

COMMENTS:

1. Purpose. This bill seeks to smooth the transition of the board of SCVWA from a 15-member board to a nine-member board, as required under current law. According to the author:

[This bill] is a clean-up of SB 634 (Wilk) which created the SCVWA as a consolidation of the former Newhall County Water District [NCWD] and the Castaic Lake Water Agency [CLWA]. One of the provisions in SB 634 requires the Agency’s Board of Directors to reduce its membership total from the original 15 members to 9. This bill authorizes the Agency’s Board of Directors to eliminate a board position if there is a vacancy prior to the next election. This is needed to avoid either an election or appointment process for a seat that is required to be eliminated by SB 634 at one of the next 2 elections.

1. Background. There is an extensive history of litigation over water in the Santa Clarita Valley, particularly between the former NCWD and CLWA. In December 2016, the boards of both districts voted to adopt a settlement agreement for outstanding litigation. The settlement agreement provided the two districts would jointly seek legislation to create a single new successor entity to build on and lead to greater success in water conservation, groundwater management and recycled water provision across the Santa Clarita Valley. The settlement agreement provided for among other things, the new district’s board structure and powers, the creation of retail districts, supermajority vote requirements and the transfer of all assets, liabilities, contracts and employees of the existing districts to the new agency.

To effectuate the settlement agreement, the Legislature enacted SB 634 (Wilk), Chapter 833, Statutes of 2017, known as the Santa Clarita Valley Water Agency Act (the Act), to create the new SCVWA. Among other provisions, the Act establishes an initial board of directors that consists of the 15 members who held office for NCWD and CLWA on December 31, 2017, and provides for the transition to a new nine-member elected board of directors.

In 2017, one director unexpectedly retired in the middle of their term. Under current law, the board may leave that seat vacant but must then either appoint a new director or hold an election, even though a seat will be eliminated as the board transitions from 15 members to nine members. The SCVWA wants to instead create a process for eliminating vacant board seats.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: July 3, 2019

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

SBPCA Bill Id:SB 387

Author:(Wilk) – As Amended Ver:May 1, 2019

SENATE VOTE: 38-0

SUBJECT: Santa Clarita Valley Water Agency: board of directors.

SUMMARY: Revises the procedures and circumstances under which the Santa Clarita Valley Water Agency (SCVWA) board will transition from the current 15-member board to a nine-member directly elected board. Specifically, this bill:

1. Allows the SCVWA board to elect not to fill one of the seats for an initial elected member
   if the seat becomes vacant as long as the electoral division in which the vacancy occurs will have at least three members.
   
2. Provides that if this elimination results in only one director whose term expires following the 2020 general election, then a director must be determined as follows:
   
   1. One director must be elected for that electoral division at the 2020 general election and at every election on that four-year election cycle thereafter; and,
      
   2. Two directors must be elected for that electoral division at the 2022 general election, and at every election on that four-year election cycle thereafter.
      
3. Requires the board to randomly select the seat of one director to be shortened to two years for the term following the 2024 general election if a seat does not become vacant and is not eliminated or filled, as specified in this bill. Requires subsequent elections for the seat of the director chosen by lot to serve a two-year term to be conducted at the 2026 general election, and on that four-year election cycle thereafter.
   
4. Declares that no reimbursement is required by this act because the only costs that may be incurred by a local agency are the result of a program for which legislative authority was requested by that local agency.

EXISTING LAW:

1. Establishes SCVWA by merging Newhall County Water District (NCWD) and Castaic Lake Water Agency (CLWA)
2. Establishes an initial board of directors that consists of the 15 members who held office for NCWD and CLWA on December 31, 2017, specifically:
   1. Five elected directors of NCWD;
   2. Nine elected directors of CLWA; and,
   3. One appointed director of CLWA representing Los Angeles Waterworks District No. 36 (District 36), which received water from CLWA and now receives it from SCVWA.
3. Extends the terms of these directors by two years from when they would have otherwise expired, to 2020 and 2022, respectively.
4. Abolishes the appointed director position as of January 1, 2023, and allows the position to be abolished earlier if District 36 is incorporated into the new district, or upon a majority vote of the Los Angeles County Board of Supervisors.
5. Creates electoral divisions for SCVWA, each of which will be represented by members on the board as new directors are elected. Specifies that, as the terms of the initial directors expire, their successors are elected by electoral division, with three directors elected from each of the three divisions for the following staggered terms:
   1. Two board members for each electoral division in 2020; and,
   2. One director for each division in 2022.
6. Provides that, after all the initial terms expire in 2022 and the appointed director position is abolished on January 1, 2023, the district’s board will comprise nine-elected directors.
7. Establishes procedures for filling vacancies on the board and if any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS:

1. Santa Clarita Valley Water Agency. There is an extensive history of litigation over water in the Santa Clarita Valley, particularly between the former NCWD and CLWA. In December 2016, the boards of both districts voted to adopt a settlement agreement for outstanding litigation. The settlement agreement provided the two districts would jointly seek legislation to create a single new successor entity to build on and lead to greater success in water conservation, groundwater management, and recycled water provision across the Santa Clarita Valley. The settlement agreement provided for the following:
   
   1. The structure of the new district’s board;
      
   2. Powers to be exercised by the district;
      
   3. Establishment of an independent ratepayer advocate;
      
   4. Creation of retail districts to ensure that ratepayers of the dissolved district continue to bear their own legacy indebtedness;
      
   5. Supermajority vote requirements for certain actions;
      
   6. The transfer of all assets, liabilities, contracts, and employees of the existing districts to the new agency; and,
      
   7. Termination of the settlement agreement if legislation is not chaptered in 2017.

To honor the settlement agreement, the Legislature enacted SB 634 (Wilk), Chapter 833, Statutes of 2017, to create the new SCVWA.

1. Bill Summary. Under current law, if any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members. This bill allows the SCVWA board to elect not to fill one of the seats for an initial elected member if the seat becomes vacant as long as the electoral division in which the vacancy occurs will have at least three members. If a seat does not become vacant and is not eliminated or filled as specified in this bill, the board must randomly select the seat of one director to be shortened to two years for the term following the 2024 general election. The SCVWA is the sponsor of this bill.
2. Author’s Statement. According to the author, “SB 387 is a clean-up of SB 634 (Wilk) which created the SCVWA as a consolidation of the former Newhall County Water District and the Castaic Lake Water Agency. One of the provisions in SB 634 requires the Agency’s Board of Directors to reduce its membership total from the original 15 members to 9. This bill authorizes the Agency’s Board of Directors to eliminate a board position if there is a vacancy prior to the next election. This is needed to avoid either an election or appointment process for a seat that is required to be eliminated by SB 634 at one of the next 2 elections.
   It creates a methodology to fairly establish which seats get 2 and 4 year terms if this authority is exercised, using a lot to make the determination. The Agency has been organized for over a year, has successfully met the requirements of SB 634 and is actively providing water as a consolidated agency. In the first year of operations, cost savings exceeded $5 million.
   The board adopted a rate setting process that also includes a role of an independent ratepayer advocate. This measure simply provides one more step towards complete implementation
   of SB 634.”
3. Arguments in Support. According to the sponsors, “SCVWA has been organized for over a year, has successfully met the requirements of SB 634, and is actively providing water as a consolidated agency. This measure will provide one more step towards complete implementation of SB 634 by allowing vacant director seats to be eliminated and not subject to appointment or costly elections.”
4. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

Santa Clarita Valley Water Agency [SPONSOR]

Opposition

None on file

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958

 THIRD READING  

Bill No: SB 387

Author: Wilk (R)

Amended: 5/1/19

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/24/19

AYES: McGuire, Moorlach, Beall, Hertzberg, Hurtado, Nielsen, Wiener

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Santa Clarita Valley Water Agency: board of directors

SOURCE: Santa Clarita Valley Water Agency

DIGEST:

This bill establishes a process for eliminating vacant seats on the Santa Clarita Valley Water Agency board of directors.

ANALYSIS:

Existing law:

1. Creates the Santa Clarita Valley Water Agency (SCVWA) by merging Newhall County Water District (NCWD) and Castaic Lake Water Agency (CLWA) (SB 634, Wilk, Chapter 833, Statutes of 2017).
2. Establishes an initial board of directors that consists of the 15 members who held office for NCWD and CLWA on December 31, 2017, specifically:
   1. Five elected directors of NCWD;
   2. Nine elected directors of CLWA; and
   3. One appointed director of CLWA representing Los Angeles Waterworks District No. 36 (District 36), which received water from CLWA and now receives it from SCVWA.
3. Extends the terms of these directors by two years from when they would have otherwise expired, to 2020 and 2022, respectively. However, pursuant to the Act, the term of the appointed director expired on January 1, 2019.
4. Abolishes the appointed director position as of January 1, 2023, and allows the position to be abolished earlier if District 36 is incorporated into the new district, or upon a majority vote of the Los Angeles County Board of Supervisors.
5. Creates electoral divisions for SCVWA, each of which will be represented by members on the board as new directors are elected. Specifically, as the terms of the initial directors—who were not elected by district—expire, their successors are elected by electoral division, with three directors elected from each of the three divisions for staggered terms:
   1. Two board members for each electoral division in 2020, and
   2. One director for each division in 2022.
6. Provides that, after all the initial terms expire in 2022 and the appointed director position is abolished on January 1, 2023, the district’s board will comprise nine elected directors.
7. Establishes procedures for filling vacancies on the board. If any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members.

This bill:

1. Revises the procedures and circumstances under which the board transitions from the current 15-member board to a nine-member directly elected board, as described below.
2. Allows the SCVWA board to elect not to fill one of the seats for an initial elected member if the seat becomes vacant. The board may also eliminate the seat, so long as the electoral division in which the vacancy occurs will have at least three members.
3. Provides that if this elimination results in only one director whose term expires following the 2020 general election, then a director must be determined as follows:
   1. One director must be elected for that electoral division at the 2020 general election and at every election on that four-year election cycle thereafter.
   2. Two directors must be elected for that electoral division at the 2022 general election, and at every election on that four-year election cycle thereafter.
4. Requires, if a seat does not become vacant and is not eliminated or filled as provided in SB 387, the board to randomly select the seat of one director to be shortened to two years for the term following the 2024 general election. This drawing must occur at the first regular meeting of the board following the 2020 general election.
5. Requires subsequent elections for the seat of the director chosen by lot to serve a two-year term to be conducted at the 2026 general election, and on that four-year election cycle thereafter.

Background

In 2017, one director unexpectedly retired in the middle of her term. Under current law, the board may leave that seat vacant but must then either appoint a new director or hold an election, even though a seat will be eliminated as the board transitions from 15 members to nine members. The SCVWA wants to instead create a process for eliminating vacant board seats.

Comments

Purpose of the bill. According to the author, “existing law requires the recently formed Santa Clarita Valley Water Agency Board of Directors to reduce its membership total from 15 to 9 board members and requires consolidation of districts at the next election. SB 387 would allow the Board of Directors to eliminate a board position if there is a vacancy prior to the next election and establish a methodology to fairly decide which seats get 2 and 4 year terms if this authority is exercised. This bill is needed to avoid either an election or appointment process for a seat that will be eliminated by statute at one of the next 2 elections.”

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 5/15/19)

Santa Clarita Valley Water Agency (source)

OPPOSITION: (Verified 5/15/19)

None received

Prepared by: Anton Favorini-Csorba / GOV. & F. / (916) 651-4119

5/15/19 15:21:19

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2019 - 2020 Regular

Santa Clarita Valley Water Agency: board of directors

Establishes a process for eliminating seats on the Santa Clarita Valley Water Agency board of directors.

Background

There is an extensive history of litigation over water in the Santa Clarita Valley—particularly between the Newhall County Water District (NCWD) and the Castaic Lake Water Agency (CLWA). However, in December 2016, the boards of both districts voted to adopt a settlement agreement for outstanding litigation. The settlement agreement provided the two districts would jointly seek legislation to create a single new successor entity to build on and lead to greater success in water conservation, groundwater management, and recycled water provision across the Santa Clarita Valley. The settlement agreement provided for, among other things:

• The structure of the new district’s board;
• Powers to be exercised by the district;
• Establishment of an independent ratepayer advocate;
• Creation of retail districts to ensure that ratepayers of the dissolved district continue to bear their own legacy indebtedness;
• Supermajority vote requirements for certain actions;
• The transfer of all assets, liabilities, contracts, and employees of the existing districts to the new agency; and
• Termination of the settlement agreement if legislation isn’t chaptered in 2017.

Santa Clarita Valley Water Agency (SCVWA). To effectuate the settlement agreement, in 2017 the Legislature enacted SB 634 (Wilk), known as the Santa Clarita Valley Water Agency Act (the Act), to create the new Santa Clarita Valley Water Agency (SCVWA). Among other provisions, the Act establishes an initial board of directors that consists of the 15 members who held office for NCWD and CLWA on December 31, 2017, specifically:

• Five elected directors of NCWD;
• Nine elected directors of CLWA, and
• One appointed director of CLWA representing Los Angeles Waterworks District No. 36 (District 36), which received water from CLWA and now receives it from SCVWA.

The Act also extends the terms of these directors by two years from when they would have otherwise expired, to 2020 and 2022, respectively. However, pursuant to the Act, the term of the appointed director expired on January 1, 2019. The Act abolishes the appointed director position as of January 1, 2023, and allows the position to be abolished earlier if District 36 is incorporated into the new district, or upon a majority vote of the Los Angeles County Board of Supervisors.

The Act also creates electoral divisions for SCVWA, each of which will be represented by members on the board as new directors are elected. Specifically, as the terms of the initial directors—who were not elected by district—expire, their successors are elected by electoral division, with three directors elected from each of the three divisions for staggered terms:

• Two board members for each electoral division in 2020, and
• One director for each division in 2022.

Elections must be held pursuant to general elections laws in the state, such that elections for the district board occur along with the general election held in November of even-numbered years. Accordingly, after all the initial terms expire in 2022 and the appointed director position is abolished on January 1, 2023, the district’s board will comprise nine elected directors.

The Act also establishes procedures for filling vacancies on the board. If any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members. The SCVWA board must follow generally applicable procedures for filling vacancies in state law for any subsequently elected board members.

In 2017, one director unexpectedly retired in the middle of her term. Under current law, the board may leave that seat vacant but must then either appoint a new director or hold an election, even though a seat will be eliminated as the board transitions from 15 members to nine members. The SCVWA wants to instead create a process for eliminating vacant board seats.

Proposed Law

Senate Bill 387 revises the procedures and circumstances under which the board transitions from the current 15-member board to a nine-member directly elected board.

Under current law, if any of the elected initial members of the board vacates office, the board can choose to appoint a successor but may leave the seat vacant so long as the electoral division in which the vacancy occurs will still have at least four members. SB 387 allows the SCVWA board to elect not to fill one of the seats for an initial elected member if the seat becomes vacant. The board may also eliminate the seat, so long as the electoral division in which the vacancy occurs will have at least three members. SB 387 provides that if this elimination results in only one director whose term expires following the 2020 general election, then a director must be determined as follows:

• One director must be elected for that electoral division at the 2020 general election and at every election on that four-year election cycle thereafter.
• Two directors must be elected for that electoral division at the 2022 general election, and at every election on that four-year election cycle thereafter.

If a seat does not become vacant and is not eliminated or filled as provided in SB 387, the bill requires the board to randomly select the seat of one director to be shortened to two years for the term following the 2024 general election. This drawing must occur at the first regular meeting of the board following the 2020 general election. SB 387 requires subsequent elections for the seat of the director chosen by lot to serve a two-year term to be conducted at the 2026 general election, and on that four-year election cycle thereafter.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “existing law requires the recently formed Santa Clarita Valley Water Agency Board of Directors to reduce its membership total from 15 to 9 board members and requires consolidation of districts at the next election. SB 387 would allow the Board of Directors to eliminate a board position if there is a vacancy prior to the next election and establish a methodology to fairly decide which seats get 2 and 4 year terms if this authority is exercised. This bill is needed to avoid either an election or appointment process for a seat that will be eliminated by statute at one of the next 2 elections.”

2. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because SB 387 imposes additional duties on the SCVWA board of directors, Legislative Counsel says that it imposes a new state mandate. SB 387 says that if the Commission on State Mandates determines that it creates a state-mandated local program, the state must reimburse local agencies by following the existing statutory process for mandate claims. However, the California Constitution provides that the state doesn’t have to reimburse local agencies that ask for the new duties. Because SCVWA is requesting the bill’s changes, the Committee may wish to consider amending SB 387 to disclaim the state’s responsibility for reimbursement.

Support and Opposition (4/19/19/)

Support: Santa Clarita Valley Water Agency (sponsor)

Opposition: Unknown.

-- END --