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Oak Valley Hospital Board Hears Special Districts Threat

POSTED August 3, 2011 2:59 a.m.

The Oak Valley Hospital District governing board was painted a gloomy picture as they were informed of a joint meeting of the California Assembly’s Committee on Accountability and Administrative Review and the Local Government Committee that discussed “California’s Special Districts: Efficiency and Alternatives.”
Tom Petersen, executive director of the Association of California Healthcare Districts, informed the board of a potential proposal by the committee that would threaten local control of some “special districts.” One of the proposals is to reallocate special district property taxes, giving them back to the counties and the state.
Special districts are units of local government established by the residents of an area to provide some service not provided by the county or city. Within California there are 58 counties, 468 cities, and over 3,400 special districts, not including school districts.
Petersen pointed out that California special districts currently have more than $41 billion in their coffers, which is over two times the current state budget deficit.
“If the California legislature can gets their hands on that money, a majority of their headaches would go away,” Petersen said. “I guarantee you a spending spree would also start.”
In an obtained memo to State Legislative Analyst Mac Taylor, State Assemblyman Roger Dickinson of Sacramento, who chairs the Committee on Accountability and Administrative Review, wrote there might be a need to examine “the transparency, accountability, and efficiency with respect to California special districts.” He questioned if the “abundance of special districts” creates an overlap that results in a more expensive delivery of services, suggesting the need for the reorganization of special districts for more flexibility and control.
“Independent enterprise (special) districts’ property taxes should flow to general purpose cities and counties rather than remain with the special districts, which should be fee based,” said Dickinson in the joint meeting.
Opponents of the plan have stated that if the funds from property tax assessments were taken, they would have to be replaced, and ratepayers would have to pick up the cost.
Special districts, such as Oak Valley Hospital District and Oakdale Irrigation District, are limited in activity, in their ability to raise revenue, and in their power to regulate planning and land use. The districts are financed by issuing bonds that are attached to property taxes and also by fees for their services to cover costs.
The size of the area served by a special district can vary tremendously. Some special districts, for instance, can be as small as a few square blocks similar to Oakdale’s Landscape and Lighting Maintenance Districts, while some water districts in the state encompass several counties. Numerous special districts serve residents of many unincorporated areas; each with its own set of boundaries and tax assessments.
In 1968, voters in eastern Stanislaus County formed the Oak Valley Hospital District to serve residents of Oakdale, Knights Ferry, Valley Home, Waterford, Riverbank and the surrounding areas. Property owners within the designated area are assessed a certain percentage on their property taxes for the Oak Valley Hospital District.
Oak Valley Hospital District is one of the 46 district hospitals that make up more than 450 hospitals statewide.
According to Petersen, California Treasurer Bill Lockyer has gone on record stating if the special districts can’t explain how their money is used they would be at risk of losing their funds.
Petersen gave the Oak Valley board several suggestions to protect the proposal from going through including building relationships with legislators and staff and engaging in lobbying.
“It’s redevelopment déjà vu,” said Petersen comparing the proposal to the loss of city redevelopment funds earlier this year.

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