PULL QUOTE: What will it cost me? The ins and outs of Senate Bill 1405

Apr 2, 2023 | Communities

By Mary-Justine Lanyon

This article was published in 2022

On a Zoom call between members of Senator Rosilicie Ochoa Bogh’s staff and members of the Lake Arrowhead chamber’s Government Affairs committee, background was given on how Senate Bill 1405 came to be and questions were raised about the language in the bill.

The bill would pave the way for the Lake Arrowhead Community Services District (LACSD) to take over enforcement of the covenants, conditions and restrictions (CCRs) currently under the purview of the Arrowhead Woods Architectural Committee (AWAC). Both Catherine Cerri, the LACSD general manager, and Stacey Lippert, the AWAC executive director, were on the call.

Scott Terrell, the senator’s legislative director, said the senator was approached by Cerri and Lippert about sponsoring the bill.

Community service districts, Terrell noted, are not allowed to enforce CCRs unless authorized by a statute. The bill that was introduced and passed by the Senate was “modeled after the last CSD given authority,” he said. “The senator decided to take the bill on as she wanted to make sure local control was maintained. The bill, however, doesn’t put the merger in place. It gives the community an option. It would allow an elected public entity to enforce the CCRs. It would allow LACSD enforcement authority if the voters so wish.”

A majority of property owners in Arrowhead Woods would have to sign a petition requesting LACSD to enforce the CCRs. Then a public hearing would have to be conducted. An application would have to be submitted to the local agency formation commission (LAFCO) and approved.

Finally, an ordinance would have to be adopted. That ordinance would require property owners to finance the enforcement of the CCRs and the duties of AWAC through fees and regular or special assessments. In addition, it would require AWAC to indemnify LACSD for the costs of any litigation, settlements, injuries, damages or judgments arising from enforcement of the CCRs.

On the Zoom call, Cerri noted that some of the CCRs are expiring in 2025. “AWAC doesn’t have a good database of homeowners; LACSD does. It seemed like maybe it was time to think about a partnership. Stacey approached me and I went to the board. We weren’t necessarily thinking of doing this.”

Cerri explained that LAFCO has tasked LACSD with finding more ways to serve the community as they are a CSD, not a water agency. “We have been asked to take on roads and lights. So far we are only doing water and sewer but we do have authority to do other things.

“We shouldn’t be the ones to make the decision. It should be in the community’s hands,” Cerri said.

Lippert noted that her husband, Marc, had worked for LACSD for 33 years. “We have talked about a lot of overlapping problems and felt there were things we could do in partnership with LACSD.” She pointed to people trying to build over a sewer line as one example.

“I’m trying to retire so I was looking for a partner company to make sure the CCRs stay enforced,” she added. “It’s important to have a succession plan, make sure the CCRs don’t go away. It’s all up to the owners of the properties.”

There would still be an architectural committee, Lippert stressed. “The LACSD directors won’t get involved in your paint colors.” And Cerri noted that “AWAC would be a committee under LACSD.” But, she said, “I’m not sure how the structure would work. And we don’t know if people will want this. They have to vote on it.”

Lippert agreed, saying that AWAC would most likely be a subcommittee of LACSD.

The fees would be determined by the LACSD board at a meeting. And it hasn’t been determined “if AWAC would continue as a legal entity.”

“Is there a reason these things haven’t been worked out?” asked Corina Colan, a member of the Government Affairs committee. “It has created confusion.”

Committee member Scott Rindenow reminded Cerri he has spoken out in favor of the merger. “When I first heard about it, I thought it was a perfect fit. Everything made sense – until I read the bill.”

What Rindenow and the other members of the committee agreed on is that the bill’s language is too vague.

“If this was a bill on a ballot before me,” said Laura Dyberg, chair of the committee, “I wouldn’t vote for it, even if I support the concept. A survey should have been done.

“The biggest question,” Dyberg noted, “is: What will it cost me? How will LACSD fund management of this. It will incur staffing and management expenses.”

Terrell said the reason the senator had moved forward with the bill is that “conversations can’t start without this bill because LACSD doesn’t have the authority (without it). In her perspective, she gave the community the option to consider it.”

The bill had been on the consent calendar in the Assembly but it was pulled.

When committee member Jenny Hueter asked Terrell if the bill can be amended, the answer was yes. “The bill is vague to leave it up to the community on how they want it to look,” he said.

Rindenow noted that, “if the bill is specific on how the structure would be formed, that would be helpful. If the concept of the bill is to allow LACSD to take in AWAC, that’s one issue. I don’t think a lot of people would disagree with that.”

They want input, Rindenow said, on whether they are voting to get monthly or yearly assessments.

And is the intent, he asked, for this to be “cost neutral” to LACSD? “Will you absorb the costs or share them with the community?” Cerri answered that LACSD is “not allowed to use water or sewer rates to pay for anything else.”

In a conversation after the Zoom call, Lippert noted that the money to pay her salary and that of AWAC’s inspectors comes from the permit fees homeowners pay to do such things as paint the exterior of their homes, trim trees or add fencing or decks. “AWAC has the funds now to enforce the CCRs,” she said.

Because AWAC’s database is what Lippert calls “rudimentary,” she is hoping for a partnership so they can take advantage of LACSD’s bigger and better database.

The last time CCRs renewed, in 2010, Lippert started the process five years in advance to get it done. Those CCRs will be up for renewal again in 2025.

“A lot of homes changed ownership during the pandemic,” Lippert said. “Many of those people don’t understand the importance of CCRs.”

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