CSA Formation

The outline below lists the steps involved in the formation process. All fees are approximate and will vary with the size and complexity of the CSA.

Formation Step 1

An organized group, such as a road association, submits a completed application and petition to the Local Agency Formation Commission (LAFCO) along with a required deposit to cover various charges and fees involved in the formation process. The application and petition can be obtained from LAFCO at: 701 Ocean Street, Room 318‐D; 831-454‐2055. Applicants must also sign an agreement to indemnify, defend, and hold harmless the County, its employees and agents from and against any and all claims, demands, costs, liability, and actions related to the formation and operation of the service area.

Formation Step 2

The map, description, application, and an initial deposit of $5,000 are submitted to LAFCO, which will review the proposed CSA boundaries to determine that all parcels that will benefit from the CSA are included and any that won't benefit are excluded. LAFCO will advertise and hold a public hearing to determine the final CSA boundary. LAFCO costs are based on actual staff time and expense charges. Email info@santacruzlafco.org for petition and application details.

Formation Step 3

Once the LAFCO governing board approves the CSA application, Public Works submits the CSA request to the Santa Cruz County Board of Supervisors. The Board will advertise and set a date for a public hearing on the formation of the CSA. After the hearing, either the CSA is approved or the process terminated, depending on the protests at the public hearing. Concurrent with the CSA formation, Public Works will request the Board of Supervisors to initiate the benefit assessment rate proceedings in accordance with Proposition 218 ballot measure.

In November 1996, California voters approved Proposition 218, “The Right to Vote on Taxes Act.” This measure states that a County Service Area must conduct a mailed ballot procedure and public hearing in order to set the initial fee and any proposed rate increases. The mailed ballot procedure is conducted by the County, with the associated costs billed to the CSA, including staff time for preparation of ballots and an engineer’s report, mailing, advertising and tallying of ballots. Costs for an election vary, depending on the size of the service area, but would be a minimum of $500.

Formation Step 4

If the benefit assessment is approved by over 50% of the voters, the CSA funding source is approved. Once approved, Public Works submits the map and description as approved by the County Board of Supervisors to LAFCO to submit to the State Board of Equalization (cost $300‐$1,500 based on acreage). LAFCO records the CSA and forwards the necessary information and the filing fee to the State Board of Equalization (SBE). After filing with the SBE, the formation process is complete.