LWV League of Women Voters of California
Smart Voter
Alameda County, CA November 5, 2002 Election
Measure Q
Incorporation of Castro Valley
Proposed City of Castro Valley

Adoption of LAFCo Resolution - Majority Approval Required

5357 / 27.9% Yes votes ...... 13819 / 72.1% No votes

See Also: Index of all Measures

Results as of Nov 15 4:54pm, 100.0% of Precincts Reporting (63/63)
Information shown below: Impartial Analysis | Arguments | Full Text

Shall the resolution adopted on May 9, 2002 by the Alameda Local Agency Formation Commission ordering the incorporation of the territory described in the resolution and designated as the Incorporation of the City of Castro Valley, subject to terms and conditions specified in the resolution, including authorizing the City to levy a Transient Occupancy Tax of 10% and extending the existing Utility Users Tax beyond its current sunset date of June 2009, be approved?

Impartial Analysis
This measure proposes the creation of the new City of Castro Valley. California law requires that voters of a proposed city approve an incorporation by a simple majority vote. If approved by the voters, the city will exist as of July 1, 2003 and be governed by a five-member council elected by registered voters within the city. The proposed incorporation is subject to the terms and conditions in the LAFCo Resolution of approval (hereafter, "the LAFCo Resolution"), a copy of which is enclosed with the ballot materials. These terms and conditions include the imposition of a Transient Occupancy Tax (TOT) - commonly referred to as a hotel tax - and an extension of the Utility Users Tax (UUT) that is proposed to be transferred from the County to the new city.

The Alameda County Board of Supervisors initiated this incorporation process by submitting an application to LAFCo. After a year of analysis of the proposal, and numerous public hearings, LAFCo approved the proposed incorporation, and based on the independent fiscal analysis conducted, found that the new city will be financially feasible. It is projected that the new city will receive sufficient revenue to provide an adequate level of service and maintain a reserve if the proposed city imposes a TOT and extends the UUT beyond its current expiration date of June 2009.

If this measure passes, the City will assume the service responsibilities and the associated revenues, assets and liabilities of the County as they relate to the specific municipal services that the city will provide. These service responsibilities include, for example, law enforcement, land use planning, public works, and general municipal services. As set forth in the LAFCo Resolution, special districts and County Service Areas currently in place will continue to provide fire protection, parks and recreation, water and sewer services, and other services, whether or not the incorporation is approved. The roads, streets and other public assets will be transferred from the County to the new city. The new city council will govern all matters regarding city operations, levels of service, and land use regulations. All County ordinances will remain in effect until the city council enacts ordinances superseding them. The County will continue to provide various countywide services, such as health care, social services and court administration.

The proposed City boundaries are shown on the enclosed map, and contain 11.5 square miles with an estimated population of 58,000 residents and 30,600 registered voters. The boundaries are generally described as East of the City of San Leandro and the unincorporated community of Ashland; South, southwest, and east of the rural hill areas separating the area from the Cities of Moraga, Danville, San Ramon, and Dublin; and North of the City of Hayward and the unincorporated community of Fairview. The proposed city boundaries generally coincide with the current Alameda County urban growth boundary as approved by the Alameda County voters in November 2000.

s/LOU ANN TEXEIRA, Executive Officer
Alameda Local Agency Formation Commission

  News and Analysis

San Francisco Chronicle

Oakland Tribune Contra Costa Times Tri-Valley Herald Partisan Information

Yes on Q

No on Q

Citizens for Castro Valley
The Citizens for Castro Valley (C4CV) was formed in 1985. It was formed by Castro Valley Citizens to explore the feasibility and desirability of self government.

Castro Valley Democratic Club - California
Suggest a link related to Measure Q
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Arguments For Measure Q Arguments Against Measure Q
Castro Valley is a great place to live. Most of us chose to make our homes in this community and raise our families here because we liked the quality of life and people.

Now we need to take proper steps to protect Castro Valley's great quality of life by approving Measure Q.

Measure Q will keep local tax dollars in Castro Valley where they belong. YES on Q means we will control the tax decisions that affect our community. All local taxes raised from Castro Valley will stay in Castro Valley to benefit our local citizens.

Measure Q will protect us from future county tax increases that are not supported by a majority of Castro Valley voters. YES on Q means our local taxes could not be raised in the future without the majority consent of Castro Valley voters. We will get to keep the Utility Users Tax money that would otherwise go to the County.

Measure Q will ensure vital services are kept close to home - like police, fire, and other public safety services. YES on Q means we will be able to count on these essential services - located in our community, dedicated solely to serving our community - so we can be certain residents receive the essential services they deserve.

Measure Q will ensure Castro Valley citizens get to set the priorities for our community. Setting priorities as important as safety, streets and road maintenance, parks and open space, should not be left to anyone other than citizens from our own community.

Join the Castro Valley Chamber of Commerce, the League of Women Voters - Eden Area, public safety professionals, and citizens throughout our community in taking a proactive step to ensure Castro Valley endures as a quality community for years to come.

Please vote YES on Q.

s/EDWIN K. REULING, Former Castro Valley School Board Member
s/JOHAN KLEHS, Vice-Chair, California State Board of Equalization
s/STEPHANIE CARTWRIGHT, Former President, League of Women Voters - Eden Area
s/ROBERTA RIVEL, Vice President, R.T. Nahas Company CV Mac Councilman
s/SUZANNE BARBA, Member, Eden Township Healthcare District

Rebuttal to Arguments For
MEASURE Q WILL IMMEDIATELY RAISE TAXES, adding a new motel tax and making the utility tax permanent. The proponents say that incorporation will protect you from tax increases. CITIES ROUTINELY SIDESTEP the requirements for VOTER APPROVAL OF NEW TAXES. Service fees, assessments, and revenue bonds DON'T require voter approval. And if revenues don't materialize as projected, we will be FORCED to choose between HIGHER PROPERTY TAXES or MORE SERVICE CUTS to make up the shortfall.

All local taxes WON'T stay in CV. Taxes go to the county or state, and portions are returned to cities as specified by law.

County provided SERVICES will be CUT. Some office staff will be REDUCED MORE THAN HALF from recommended levels. POLICE will be SIGNIFICANTLY REDUCED. Presently, we have 24 CHP officers and 64 Sheriff's deputies. If Q passes, we will have NO CHP and 65 deputies TOTAL. A 26% REDUCTION IN POLICE. The proposed city budget does not even provide for a police station.

Incorporation will REMOVE CURRENT ENVIRONMENTAL PROTECTION of our hills and canyons. SPRAWLING DEVELOPMENTS, HEAVIER TRAFFIC AND OVERCROWDED SCHOOLS will follow.

A city of Castro Valley, with a NEW $3.2 MILLION LAYER OF BUREAUCRATS and top employees making $142,000 - $175,000/year, would be the POOREST in the East Bay. We have no space for new commercial development, so the pressure will be on to replace SMALL businesses with BIGGER ones that generate more taxes.

Castro Valley IS a great place to live. Let's keep it that way.

PLEASE VOTE NO ON Q.

s/ARTHUR B. GEEN Executive Vice President,
Alameda County Taxpayers Association
s/KEITH BOYER Commander,
Alameda County Sheriff's Dept. (RETIRED)
s/ROYCE DILLINGHAM Captain,
Oakland Fire Dept. (Ret.), C.V. Resident
s/MARY L. BONETTI Castro Valley Business Owner
s/ARTHUR L. VARGAS
s/GLENN R. CARLSON
s/TOM HOUCHINS

Castro Valley Incorporation means MORE TAXES, REDUCED SERVICES, and ENVIRONMENTALLY HARMFUL DEVELOPMENT.

We cannot afford incorporation. Castro Valley will be Alameda County's POOREST city. Our sales tax revenue of $42 per person compares to $295 for San Leandro, $244 for Hayward and $440 for Dublin. A prosperous city needs major commercial enterprises to generate sales and property taxes. We don't have space for these. Our city budget per resident would average only 1/3 that of neighboring cities, which translates into reduced services.

The financial feasibility study is seriously flawed. It relies on overly optimistic projections of revenues and unacceptably low levels of services. If revenues don't materialize, significantly higher property taxes will be required.

Young families should vote NO because incorporation means higher taxes, rapid urban development, more traffic, overcrowding, and a lower quality of life. Our excellent schools will be strained by increased enrollments.

Homeowners should vote NO because incorporation means more apartments, subsidies for low income housing, excessive commercial development and more traffic.

Seniors should vote NO because taxes will continue to grow to support more bureaucrats and ambitious politicians. Do we really need a $175,000 city manager to babysit County employees who will continue to provide services we already get?

Business owners should vote NO because business assessments and fees can be raised by the City Council without voter approval.

Environmentally concerned residents should vote NO because incorporation will allow sprawling development in our hills and canyons without a vote of the people, bypassing current protections.

Incorporation is a RISKY PROPOSAL which will forever end Castro Valley's small-town atmosphere. We favor our current way of life which makes Castro Valley more pleasant than surrounding cities. We must avoid creating a woefully underfunded city and being stuck paying higher taxes for reduced services.

VOTE NO on INCORPORATION. VOTE NO on Q.

s/TOM HOUCHINS, Sheriff (ret.) Alameda County
s/ARTHUR B. GEEN, Executive Vice President
Alameda County Taxpayers Association
s/DONNA L. SIRE, Vice Chair Castro Valley,
Incorporation Study Group
s/GLENN R. CARLSON, President of Truth,
The Residents Understand The Hype (of Incorporation)
s/ARTHUR L. (ART) VARGAS, Director/President
Castro Valley Sanitary District (Retired)
California Local Agency Investment Board (former Board Member)

Rebuttal to Arguments Against
Opponents of Measure Q deliberately mislead voters with inaccurate, untruthful statements. Don't be fooled by their scare tactics.

Here are the facts: There is nothing protecting Castro Valley from tax grabs that take our money and give it to others. Because we pay taxes to the County, the County decides where our taxes go.

We aren't protected from future tax increases. Currently voters from surrounding cities can raise our taxes # without impacting themselves or their communities, and without consent of a majority of Castro Valley voters.

We don't have the authority to control our future. Castro Valley is governed by outsiders who don't live here and don't understand our needs. None are accountable solely to us. They make decisions based on their values and priorities, not Castro Valley's.

Measure Q will:
Keep Utility User Tax money in Castro Valley that would otherwise go the the County
Redirect our tax dollars back to Castro Valley to benefit our local community
Protect us from future tax increases without majority consent of Castro Valley voters
Ensure our Castro Valley community reflects Castro Valley priorities

The County's extensive analysis found that Measure Q provides a sound, fiscally responsible future, including adequate resources and reserves to meet community needs.

Measure Q ensures spending and services that reflect local priorities - like police, fire, roads and parks. Voting YES supports Castro Valley decisions based on Castro Valley priorities.

Don't be persuaded by irrational people with irrational arguments.

Protect Castro Valley from unwanted tax grabs. Keep taxes local and working for you.

Please vote YES.

s/RONALD L. MEISSNER Past President and current Board Member of Chamber of Commerce
s/ELEANOR NOLEROTH 60 year Castro Valley Resident & League of Women Voters Member
s/DONNA M. RUSSELL Senior Citizen & C.V.H.S. Teacher-Retired
s/HEIDI DENZLER-HALSEY Castro Valley Schools Parent Volunteer
s/DARRELL S. LAVIN, DC Castro Valley Rotary, Past President, Chiropractor

Full Text of Measure Q
FULL TEXT OF MEASURE Q

INCORPORATION OF THE CITY OF CASTRO VALLEY AND APPROVAL OF TRANSIENT OCCUPANCY TAX AND EXTENDING UTILITY USERS TAX

Shall the resolution adopted on May 9, 2002 by the Alameda Local Agency Formation Commission ordering the incorporation of the territory described in the resolution and designated as the Incorporation of the City of Castro Valley, subject to terms and conditions specified in the resolution, including authorizing the City to levy a Transient Occupancy Tax of 10% and extending the existing Utility Users Tax beyond its current sunset date of June 2009, be approved? The City of Castro Valley will implement the 10% Transient Occupancy Tax to the extent permitted by California Revenue and Taxation Code Section 7280.
Pursuant to the May 9, 2002 LAFCo Resolution, the County's existing Utility Users Tax, Alameda County Ordinance Code Chapter 2.12, will become a City of Castro Valley ordinance.

LAFCO RESOLUTION NO. 2002-11
RESOLUTION OF THE ALAMEDA LOCALAGENCY FORMATION COMMISSION MAKING DETERMINATIONS AND APPROVING THE INCORPORATION OF THE CITY OF CASTRO VALLEY SUBJECT TO SPECIFIC TERMS AND CONDITIONS


WHEREAS, a proposal to incorporate the City of Castro Valley was filed with the Executive Officer of the Alameda Local Agency Formation Commission pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (Section 56000 et seq. of the Government Code); and
WHEREAS, in September 2001, the Commission appointed a 15-member Study Group, and initiated a series of public meetings of the Study Group to provide a community forum for considering the proposal and obtaining public comment; and
WHEREAS, the Study Group has served as a valuable sounding board to the fiscal consultants and LAFCo staff on various issues such as boundaries and municipal services, and has provided valuable input to the Commission, to the consultants and to LAFCo staff; and
WHEREAS, at the times and in the manner required by law, the Executive Officer has given notice of the Commission's consideration of the proposal; and
WHEREAS, the Executive Officer, pursuant to Government Code Section 56800 prepared or caused to be prepared a Comprehensive Fiscal Analysis of the proposed incorporation and has furnished a copy of this report to each person entitled to a copy; and
WHEREAS, the Executive Officer, pursuant to Government Code Section 56665 reviewed the proposed incorporation and prepared a report including recommendations, and has furnished a copy of this report to each person entitled to a copy; and
WHEREAS, the Commission on May 9, 2002 considered the proposed incorporation and the report of the Executive Officer, and considered the factors determined by the Commission to be relevant to this incorporation, including, but not limited to, the factors specified in Government Code Section 56668; and
WHEREAS, the Commission heard, discussed and considered all oral and written testimony related to the proposal, including, but not limited to, the Executive Officer's report and recommendation, the Comprehensive Fiscal Analysis, the environmental document, spheres of influence and applicable general and specific plans; and
WHEREAS, the Commission heard and received all oral and written protests, objections and evidence which we, and all persons present were given an opportunity to hear and be heard with respect to the proposed incorporation and the report of the Executive Officer; and
WHEREAS, the Local Agency Formation Commission finds the proposal to be in the best interests of the affected area and the total organization of local governmental agencies within Alameda County; and
WHEREAS, this resolution includes as Exhibit A, attached hereto and made a part hereof, the "Revenue Neutrality Resolution No. R-2002-504 as approved by the Alameda County Board of Supervisors on April 9, 2002 and specific provisions of that resolution in the text of this resolution are denoted by parenthetical references.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED by the Alameda Local Agency Formation Commission as follows:

Incorporation of the City of Castro Valley
1. The formation of the City of Castro Valley is hereby approved subject to the terms and conditions of this resolution and by subsequent approval by the voters of Castro Valley.
Compliance with CEQA
2. The Commission certifies that pursuant to the California Environmental Quality Act, the Commission revised the project description to reflect the boundaries selected for the proposed City of Castro Valley and considered the Negative Declaration for the proposed incorporation together with comments received during the public review process.

3. The Commission adopts the Negative Declaration as revised to reflect the boundaries selected for the proposed City of Castro Valley as attached as Exhibit B. The Commission finds on the basis of the whole record before it, including the Initial Study and comments received, that there is no substantial evidence that the project will have a significant effect on the environment, that the Negative Declaration reflects the Commission's independent judgment and analysis, and that it is adequate for this proposal. No written comments of opposition to the adoption of a Negative Declaration for this application, or comments recommending significant amendment to the Negative Declaration, were received.

4. The Negative Declaration and other documents and materials that constitute the record of proceedings upon which the Commission's decision is based are located in the office of the Alameda LAFCo, 1221 Oak Street, Room 555, Oakland, CA 94612. The custodian of these documents is the LAFCo Executive Officer.
Findings for Incorporation
5. The Commission determines pursuant to Government Code sections 56720 and 56800 that:
A. The proposed city is expected to receive revenues sufficient to provide public services and facilities and a reasonable reserve during the first three fiscal years following incorporation; and
B. The incorporation of the proposed city is consistent with the intent of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Government Code sections 56001, 56300, 56301 and 56377 and the adopted policies and procedures of the Alameda LAFCo; and
C. The Comprehensive Fiscal Analysis has been prepared and reviewed pursuant to Government Code Section 56800.
D. Having reviewed the spheres of influence of affected local agencies, the incorporation is consistent with those spheres.
E. The Commission has reviewed the Executive Officer's report and recommendations prepared pursuant to section 56665, and the testimony presented at its public hearing.
Incorporation Boundaries
6. City Boundaries - The Commission approves, subject to the terms and conditions herein, the proposed incorporation of the City of Castro Valley with boundaries as described on the map attached hereto as Exhibit C and subject to the terms and conditions as contained in this resolution.
Organization of the City Government
7. Name of the City: The new city shall be the City of Castro Valley

8. Election of the City Council: The city shall be governed by a five-member city council elected at large. Subject to the limitations of Government Code Section 56724, the election of the first City Council shall be on November 5, 2002.

9. Terms of Office: The terms of office of the City Council shall be four years. Of the first elected legislative body, the terms of the two members of the city council with the largest popular votes shall be four years. Of the first elected legislative body, the terms of the three members of the city council with the least popular votes shall be two years (Government Code section 57377).

10. Selection of Mayor: Pursuant to Government Code section 36801, at the first City Council meeting, the city council shall chose one of its number as mayor, and one of its number as mayor pro tempore.

11. Appointment of City Staff: Upon and after the effective date of incorporation, the City Manager, City Clerk, and City Treasurer shall be appointed by the City Council pursuant to Government Code section 36511.
Effective Date of Incorporation
12. Effective Date: The effective date of the incorporation is July 1, 2003, subject to the vote and approval of the voters of Castro Valley on November 5, 2002.
Extension of Services
13. Service Provision: The County will continue to provide existing services, including but not limited to, police protection services, to the City from the date of the election through June 30, 2003 at or above the current level of service pursuant to Section 57384.

14. Long-Term Contracts for Services: The County will extend services from June 30, 2004 and/or provide an enhanced level of services on terms mutually agreed upon by the City and the County. The City will contract with the County for law enforcement and Library services for an initial term of at least five years.

15. Transition Year Costs: The County shall continue to provide existing municipal services to the City from July 1, 2003, the effective date of incorporation, through June 30, 2004. The City will repay the County for these services. The estimated cost of these services is $12,000,000. The County will receive payment in FY 2003-04 of first year expenses, unless an alternative payment schedule is arranged subject to agreement by the City and County, pursuant to Government Code Section 57384.
City Base Year Property Tax
16. The Commission determines that the amount of base property tax transferred to the new city pursuant to Government Code section 56375(q) and section 56810 shall be $5,673,716. This amount is independent of the transfer of any other funds, and has been adjusted in accordance with Commission action (e.g., modification of boundaries), pursuant to the CKH Act.
Revenue Transfers
17. Set-Aside Funds: The County will provide accounting for the purposes of distributing funds set aside in the proposed incorporation area, including but not limited to Quimby and park fees, Measure B, any transportation of other impact fees, State and federal grant amounts, and fees paid to the County for services not yet delivered.

18. Mitigation Obligation: To make revenue neutrality findings under Government Code Section 56845(c), the terms and conditions as set forth in the revenue neutrality resolution (Exhibit A) adopted by the County, set forth below, are hereby imposed as a condition of approval of the incorporation:
A. Mitigation Period Obligations - During the 10-year mitigation period, the City shall pay to the County $610,510 per year. This amount has been adjusted in accordance with Commission action (e.g., boundary modifications).
B. Transition Year Payment During the transition year, the City shall pay to the County approximately $12,000,000, to be increased by the change in cost-of-living.
19. Treasurer-Tax Collector and Administrative Services: The Tax Collector will continue to collect all taxes currently collected by the County but transferred to the City, for the remainder of the initial year; future services (not currently provided to all cities) will need to be negotiated with the new city.

20. Streets and Roads: Pursuant to Government Code Section 57385, all roads and highways or portions of road (s) and highway(s), which had been accepted into the County road system pursuant to Section 941 of the Street & Highway Code, shall become City streets on the effective date of the incorporation. The City of Castro Valley shall enter into a joint maintenance agreement with Alameda County for the maintenance of any public streets that define common boundaries.

21. Transfer of Real Property: The transfer of public facilities will occur pursuant to a future agreement between the City and County.

22. HOME, McKinney and Community Development Block Grant (CDBG): The City will participate in the HOME, McKinney and CDBG consortia at least through completion of the programs' current contracts.

23. County Service Areas: There are currently three County Service Areas (CSAs) that provide services within the proposed Castro Valley incorporation boundaries. The Commission finds that the application of Government Code section 25210.09 (automatically removing territory from a CSA upon incorporation) would deprive the areas within the proposed city boundaries that are encompassed by County Service Areas SL-1970-1 (street lighting) and PW-1994-1 (Five Canyons services) of services needed to ensure the health, safety and welfare of the residents of the proposed city that receive services from the CSAs. In addition, waiving the provision of section 25210.09 does not affect the ability of the City of Castro Valley to provide services. County Service Areas SL-1970-1 and PW-1994-1 for street lighting and road maintenance shall continue to serve their respective areas within the new city. At a future point in time, the County and City can negotiate regarding a transfer of revenue and services for the affected CSAs, and bring proposals to LAFCo, as appropriate.
Sheriff services are primarily funded through General Fund contributions, including discretionary property tax appropriations to the CSA PP-1991-1. The portion of the CSA PP-1991-1 within the Castro Valley boundaries will be detached from the CSA, and police protection within the City will become the sole responsibility of the new city pursuant to Government Code section 25210.09.

24. Redevelopment Agency: The County will transfer jurisdiction of that portion of the County Redevelopment Agency (RDA) project area included wholly within the boundaries of the City, designated as the Castro Valley Sub-Area, to a City RDA upon organization of a City RDA, pursuant to Health and Safety Code, Section 33215. The City RDA will have as its projects the projects approved by the County RDA and other projects the City RDA identifies.

25. Equalizing Payment:
A. Payment to Count - Should the calculation of property taxes prepared pursuant to Government Code Section 56810 be modified as a result of a court action brought pursuant to Government Code Subsection 56810(h), or as a result of legislative action with retroactive application, to provide that a larger share be retained by the County and a smaller share transferred to the City than that specified by LAFCo pursuant to Government Code Section 56810, in approving the Incorporation, the County shall transfer the amount of annual property tax resulting from such difference to the City for the purpose of maintaining revenue neutrality pursuant to Government Code Section 56815, and this Agreement ("equalizing payment").
B. Payment to City - Should the calculation prepared pursuant to Government Code Section 56810, be modified as a result of a court action brought pursuant to Government Code Subsection 56810(h), or as a result of legislative action with retroactive application, to provide that a smaller share be retained by the County and a larger share transferred to the City than that specified by LAFCo pursuant to Government Code Section 56810, in approving the Incorporation, the City shall make an equalizing payment to the County.
Revenue Neutrality Findings
26. Pursuant to Government Code Section 56845, the Commission finds that:
A. Revenues currently received by the County of Alameda for the incorporation area and the expenditures for service responsibilities to be transferred to the new city are not equal;
B. In approving the proposed incorporation, the Commission finds pursuant to Government Code Section 56815 as follows:
1) That the County of Alameda has agreed to the incorporation of the City of Castro Valley on the terms and conditions set forth in the Revenue Neutrality Resolution;
2) That the approval of the Revenue Neutrality Resolution by the County and other terms and conditions set forth herein adequately mitigate the negative fiscal effect of the incorporation on the County;
3) That but for the conditions contained herein incorporating all of the provisions of the Revenue Neutrality Resolution, the Commission would be unable to make the required findings under Section 56815 and approve the incorporation;
4) That the terms and conditions contained herein are integral to the approval of the incorporation under Government Code sections 56880, 56881, 56375, and 56720; and
5) That the terms and conditions relating to revenue neutrality imposed by this resolution are independent legislative enactments of the Commission.
Provisional Appropriations Limit
27. Pursuant to Government Code Section 56812, the provisional appropriations limit submitted for voter approval shall be $18.98 million.
Continuation of General Taxes
28. The City of Castro Valley shall be authorized to levy as taxes of the City those general taxes presently levied by Alameda County. The types, rates and method of collection of general taxes to be so continued are as follows:
A. A sales and use tax at the maximum rate of one percent (1%) of the retail sale or use of tangible personal property within the City of Castro Valley to be collected under contract with the State Board of Equalization and returned to the City of Castro Valley pursuant to local ordinance.
B. A real property transfer tax at the rate imposed by Alameda County upon the sales of real property within the City of Castro Valley to be collected by Alameda County and returned to the City of Castro Valley pursuant to local ordinance.
C. The County of Alameda currently levies a utility users tax in unincorporated Alameda County. Unless re-authorized, this tax will sunset on June 30, 2009. As a condition of incorporation, the Commission, pursuant to Government Code section 56886(t), conditions incorporation on the continuation of the existing Utility Users Tax. Moreover, as an additional condition of incorporation, the Commission requires that the Utility Users Tax sunset provision be removed so that the tax will be ongoing. (Government Code section 56886(s)). These conditions are imposed solely to ensure financial feasibility of the proposed City during the initial years after incorporation. The new City may modify, alter or rescind this tax in its discretion so long as its financial obligations to the County are satisfied.
D. As a condition of incorporation, the City of Castro Valley will impose and levy a transient occupancy tax in the territory proposed for incorporation. The initial rate shall be set at 10%. This condition is imposed solely to ensure financial feasibility of the proposed City during the initial years after incorporation. The new City may modify, alter or rescind this tax in its discretion so long as its financial obligations to the County are satisfied.
E. All other general taxes presently imposed by Alameda County at the same rate and in the same manner as they are imposed and collected by Alameda County.
F. All taxes generally authorized for incorporated cities, including, but not limited to:
.Property taxes
.Sales taxes
.Real property transfer taxes
.Franchise fees
Fees and Charges
29. Pursuant to Government Code section 56886(t), the City of Castro Valley shall be authorized to levy any other fees, charges and assessments, such as the Clean Water Program fees (Alameda County Ordinance Code, Chapter 13.24 at the same rate and manner as they are imposed and collected by Alameda County, for such fees, charges and assessments that fund services that will be provided by the new city.
Sphere of Influence for the City of Castro Valley
30. The Commission shall adopt a sphere of influence for the City of Castro Valley that is coterminous with the City boundary, pursuant to Government Code section 56426.5.
Assessed Value Within the Proposed City
30. The assessed value for property tax calculation purposes within the area of the proposed incorporation is as shown in the Comprehensive Fiscal Analysis.
Registered Voters Within the Proposed City
31. Pursuant to Government Code section 56375, the number of registered voters within the proposed incorporation area is as shown in the Comprehensive Fiscal Analysis.
Consistency With Spheres of Influence
32. The proposed incorporation is consistent with the spheres of influence of all affected local agencies.
Subsequent Proceedings
33. All subsequent proceedings in connection with this reorganization shall be conducted only in compliance with the approved boundaries set forth in the attachments and any terms and conditions specified in this resolution.
Acceptance of Findings and Recommendations
34. Pursuant to Government Code Section 56803 the Commission hereby accepts the findings and recommendations made in the Executive Officer's Report prepared pursuant to Government Code Section 56665 and the fiscal analysis prepared pursuant to Section 56800, together with any desired changes.
Distribution of this Resolution
35. The Executive Officer is hereby authorized and directed to mail certified copies of this resolution as provided in Section 56882 of the Government Code.
This Resolution was approved and adopted by the Alameda Local Agency Formation Commission at a regular meeting held on May 9, 2002 at 5150 Recreation Road, Castro Valley, California on the motion made by Commissioner Crowle, seconded by Commissioner Miley, and duly carried.
Ayes: 7 (Commissioners Butler, Combs, Crowle, Lockhart, Miley, Pico and Steele) Noes: 0 Abstentions: 0 Approved as to Form:
s/BRIAN WASHINGTON
LAFCo Legal Counsel

RESOLUTION NO. 2002-16
RESOLUTION OF ALAMEDA LOCALAGENCY FORMATION COMMISSION ORDERING INCORPORATION OF THE CITY OF CASTRO VALLEY SUBJECT TO SPECIFIED CONDITIONS OF APPROVAL, REQUESTING THAT THE ALAMEDA COUNTY BOARD OF SUPERVISORS CALL AN ELECTION UPON THE QUESTION OF APPROVING INCORPORATION OF THE CITY AND AUTHORIZING THE CITY TO IMPOSE AND LEVY A TRANSIENT OCCUPANCY TAX AND UTILITY USERS TAX, AND CONSOLIDATING THE ELECTION WITH ANY OTHER ELECTION HELD ON THE SAME DATE IN TERRITORY THAT IS THE SAME OR IN PART THE SAME

RESOLVED,
that the Alameda Local Agency Formation Commission ("Commission") hereby certifies and finds as follows:
SECTION I
PROCEDURAL HISTORY
1.1 A resolution application was filed with the Commission requesting incorporation of the City of Castro Valley ("city"). The application was filed pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 ("CKH Act"), commencing with Section 56000 of the Government Code.

1.2 After conducting required proceedings on the incorporation proposal, the Commission adopted Resolution No. 2002-11, a copy of which is attached hereto as Appendix "A" and incorporated herein by this reference, approving incorporation and establishing a boundary and coterminous sphere of influence for the proposed city. Resolution No. 2002-11 directed that protest proceedings for incorporation of the proposed city be undertaken by the Commission in compliance with Resolution No. 2002-11 and the provisions of the Government Code, as appropriate.

1.3 The Commission conducted a duly noticed public hearing on July 11, 2002 regarding incorporation of the proposed city, establishment of boundaries and a coterminous sphere of influence, establishment of an appropriations limit for the proposed city, the proposed imposition and levy of a transient occupancy tax and a utility users tax, and various terms and conditions on behalf of the proposed city. At the hearing, all interested persons were given the opportunity to hear and be heard, and all oral and written testimony and evidence presented or filed, including written protests against incorporation of the proposed city and written requests for exclusion of land from or inclusion of land in the proposed city, were received by the Commission. After the close of the hearing, the Commission considered the value of written protests against incorporation of the City of Castro Valley filed and not withdrawn and the other information provided through public testimony at the hearing, and took the actions hereinafter set forth.

1.4 The Commission has reviewed and considered this resolution and hereby finds that it accurately sets forth the intentions of the Commission with respect to the incorporation of the proposed city, establishment of boundaries and a coterminous sphere of influence, establishment of an appropriations limit for the proposed city, the proposed imposition and levy of a transient occupancy tax and a utility users tax, and various terms and conditions on behalf of the proposed city.

SECTION II
CEQA COMPLIANCE
2.1 On May 9, 2002, the Commission adopted a Negative Declaration, finding on the basis of the whole record before the Commission, including the initial study and comments received, that there is no substantial evidence that the project will have a significant effect on the environment, that the Negative Declaration reflects the Commission's independent judgment and analysis, and that it is adequate for this proposal.

SECTION III
INCORPORATION OF PROPOSED CITY OF CASTRO VALLEY
3.1 The actions taken by the Commission herein with respect to the incorporation of the proposed city are done pursuant to the CKH Act and other applicable California law.

3.2 The value of the written protests against incorporation of the proposed city filed with and not withdrawn is less than one-half of the total number of registered voters in the proposed city. Therefore, no majority protest exists under the applicable law.

3.3 No existing land was excluded from and no new land was included in the proposed city.

3.4 The purpose for the incorporation of the proposed city includes increasing local control and accountability for decisions affecting the community through a locally elected City Council; retaining local tax revenues for use in the community to support municipal programs and services; promoting cost-effective services tailored to the needs of local residents and landowners; increasing opportunities for participation in civic and governmental activities; and promoting orderly governmental boundaries.

3.5 Incorporation of the proposed city shall be contingent upon voter approval, at the same election as incorporation, of a transient occupancy tax and a utility users tax to assist the proposed city in meeting the costs of providing services to the proposed city.

3.6 Based on the findings in Sections 3.1 through 3.5 above, and the record of these proceedings, the Commission finds that it is appropriate to order incorporation of the proposed city, subject to concurrent approval by the voters in the proposed city and approval of the two tax measures.

SECTION IV
IMPOSITION AND LEVY OF TAXES
4.1 As a condition of incorporation, the City of Castro Valley will impose and levy a transient occupancy tax in the territory proposed for incorporation. The initial rate shall be set at 10%. This condition is imposed solely to ensure financial feasibility of the proposed City during the initial years after incorporation. The new City may modify, alter or rescind this tax in its discretion so long as its financial obligations to the County are satisfied.

4.2 As a condition of incorporation, the Commission, pursuant to Government Code Section 56886(t), conditions incorporation on the continuation of the existing Utility Users Tax. Moreover, as an additional condition of incorporation, the Commission requires that the Utility Users Tax sunset provision be removed so that the tax will be extended. (Government Code Section 56886(s)). These conditions are imposed solely to ensure financial feasibility of the proposed City during the initial years after incorporation. The new City may modify, alter or rescind this tax in its discretion so long as its financial obligations to the County are satisfied.

4.3 Based on the findings in Sections 4.1 and 4.2 above, the record of these proceedings, the Commission finds that it is appropriate for the Commission to propose adoption of the transient occupancy tax and the utility users tax on behalf of the proposed city and to request the Alameda County Board of Supervisors call for an election within the proposed city on the question of whether these taxes shall be imposed and levied by the proposed city for the purposes set forth herein.

SECTION V
CITY BASE YEAR PROPERTY TAX
5.1 The Commission determines that the amount of base property tax transferred to the new city pursuant to Government Code Section 56375(q) and Section 56810 shall be $5,673,716. This amount is independent of the transfer of any other funds, and has been adjusted in accordance with Commission action (e.g., modification of boundaries), pursuant to the CKH Act.
SECTION VI
REVENUE TRANSFERS
6.1 In accordance with Resolution No. 2002-11 (Exhibit A) adopted by the Commission on May 9, 2002, to make revenue neutrality findings under Government Code Section 56845(c), the terms and conditions as set forth in the revenue neutrality resolution adopted by the County, are hereby imposed as a condition of approval of the incorporation: Mitigation Period Obligations # During the 10-year mitigation period, the City shall pay to the County $610,510 per year based on 2000-01 costs and revenues. This amount has been adjusted in accordance with Commission action (e.g., boundary modifications) as reflected in the Final Comprehensive Fiscal Analysis.
NOW, THEREFORE, based on the foregoing certifications and findings and the record of these proceedings, the Commission hereby determines and orders as follows:

1. The foregoing certifications and findings are true and correct, and are supported by substantial evidence in the record.

2. That the incorporation of the proposed City of Castro Valley is hereby ordered, subject to the approval at the same election by the voters in the proposed city.

3. The incorporation of the proposed city shall include the establishment of the boundaries and coterminous sphere of influence for the proposed city as specified in Resolution No. 2002-11 and as modified by the Commission on May 9, 2002.

4. The terms and conditions of the incorporation of the City of Castro Valley shall be the terms and conditions specified in Resolution No. 2002-11, which are summarized below:
(a) The name of the proposed city shall be the City of Castro Valley.
(b) The boundaries of the proposed city shall be as described in Exhibit A of Resolution No. 2002-11.
(c) The city shall be governed by a five-member city council elected at large. Subject to the limitations of Government Code Section 56724, the election of the first City Council shall be on November 5, 2002. The terms of office of the City Council shall be four years. Of the first elected legislative body, the terms of the two members of the city council with the largest popular votes shall be four years. Of the first elected legislative body, the terms of the three members of the city council with the least popular votes shall be two years (Government Code Section 57377). Pursuant to Government Code Section 36801, at the first City Council meeting, the city council shall choose one of its number as mayor, and one of its number as mayor pro tempore.
(d) Upon and after the effective date of incorporation, the City Manager, City Clerk, and City Treasurer shall be appointed by the City Council pursuant to Government Code Section 36511.
(e) Incorporation of the City of Castro Valley shall be contingent upon voter approval, at the same election as incorporation, of a transient occupancy tax of 10%, and a utility users tax of 5.5%. The purpose of these taxes shall be to assist the proposed city in meeting the costs of providing municipal services to the proposed city. The question submitted at the election with respect to incorporation of the proposed city shall include, with matters set forth in Government Code Sections 57133(a), 57134 and 57135, a statement of this condition on incorporation.
(f) The appropriations limit for the proposed city shall be $18.98 million.
(g) The proposed city shall utilize the regular assessment roll of the County.
(h) The effective date for incorporation of the City of Castro Valley shall be July 1, 2003.
5. The Commission proposes the imposition and levy of the transient occupancy tax and utility users tax (as required by the May 9, 2002 resolution); the full text of the ballot measure is set forth in Exhibit B. These taxes would take effect as of July 1, 2003.

6. LAFCo shall request that the Alameda County Board of Supervisors call for the election on November 5, 2002 in the territory included within the proposed city. At the election, the question of whether the order of incorporation and the imposition and levy of the transient occupancy tax and utility users tax shall be approved, shall be submitted to the voters of the proposed city in the following manner:
(a) There shall be included on the ballot to be marked by the voters of the proposed city, in addition to any other matters required by law, ballot language in the following form:

"Shall the resolution adopted on May 9, 2002 by the Alameda Local Agency Formation Commission ordering the incorporation of the territory described in the order and designated as the Incorporation of the City of Castro Valley, subject to terms and conditions specified in the resolution, including authorizing the City to levy a Transient Occupancy Tax of 10% and extending the existing Utility Users Tax beyond its current sunset date of June 2009, be approved?"

(b) The ballot to be used at the election shall be both as to form and matters contained therein such as may be required by law. On the ballot, in addition to any other printed matter required by law, opposite the question to be voted upon and to its right, the words "yes" and "no" shall be printed on a separate line with voting squares.
(c) The full text of the ballot measure shall read as set forth in Appendix "B". The Commission requests that the full text of the ballot measure be printed in the ballot pamphlet.
(d) LAFCo will request that the Alameda County Board of Supervisors authorize, instruct, and direct the Registrar of Voters to provide and furnish any and all official ballots, notices, printed matter, and all supplies, equipment and paraphernalia that may be necessary to properly and lawfully conduct the election.
(e) LAFCo will request that the Registrar of Voters take the necessary and appropriate actions to provide the necessary election officers, polling places, and voting precincts for the election.
(f) LAFCo will request that the polls for the election be open during the hours required by law, and the election shall be held and conducted as provided by law.
(g) LAFCo will request that notice of time and place of holding the election, together with any other notices required by law, shall be given by the Registrar of Voters.
(h) Arguments for and against the question may be, and other analyses provided for by law shall be, submitted in accordance with the law.
(i) The election shall be consolidated with any other election held on the same date in territory that is the same or in part the same.
(j) The canvass of ballots cast at the election shall be conducted in accordance with the law.
7. If a simple majority of votes cast upon the question set forth in subparagraph (a) of paragraph 6 are in favor of incorporation of the proposed city, and of the Transient Occupancy Tax and Utility Users Tax, the Commission shall adopt a resolution confirming the order of incorporation contained in this resolution.

8. If a majority of votes cast upon the question set forth in subparagraph (a) of paragraph 6 are against incorporation of the proposed city, the Commission shall adopt a resolution terminating the proceedings.

9. The Executive Officer and her designees are hereby authorized and directed to execute and deliver any documents and to perform all acts necessary to place the measures set forth in paragraph 6 on the ballot, including making any revisions, corrections, or alterations to the language of the ballot measures to comply with requirements of law and election officials.

10. The Executive Officer of the Commission is directed to transmit certified copies of this resolution to the Alameda County Registrar of Voters and the Clerk of the Alameda County Board of Supervisors.

11. The Executive Officer is designated as custodian of the documents and other materials that constitute the record of the proceedings upon which the Commission's decision is herein levied. These documents may be found at the Alameda County LAFCo Office, 1221 Oak Street, Room 555, Oakland, CA 94612.
THE FOREGOING RESOLUTION was introduced at a regular meeting of the Commission on July 11, 2002, at the Castro Valley School Board District Board Room, located at 4400 Alma Avenue, Castro Valley, California on the motion made by Commissioner Foulkes, seconded by Commissioner Miley, and duly carried.
Ayes: 7 (Commissioners Combs, Foulkes, Lockhart, Miley, Pico, Sheehan and Steele)
Noes: 0
Abstentions: 0
s/GAIL STEELE, Chair
Alameda Local Agency Formation Commission

CASTRO VALLEY INCORPORATION
REVENUE NEUTRALITY RESOLUTION R-2002-504
Whereas, on May 25, 2001, the County of Alameda ("County") submitted by Resolution 2001-458, an application proposing the Incorporation of the City of Castro Valley (the "Incorporation"); and,
Whereas, California Government Code Section 56815 expresses the intent of the State Legislature that any Incorporation should result in a smiliar exchange of both revenue and responsibility for service delivery between the affected county and the proposed City of Castro Valley ("City"); and,
Whereas, under Section 56815, LAFCo may not approve the Incorporation unless it finds that (1) pursuant to Government Code Subsection 56815(b), that revenues currently received by the County which would accrue to the City are substantially equal to the expenditures currently made by the County for those services which will be assumed by the proposed city, (2) pursuant to Government Code Subsection 56815(c)(1), that the County agrees to a transfer of revenues without regard to the transfer of service responsibilities, or (3) pursuant to Government Code Subsection 56815(c)(2), that the County agrees to an alternative transfer of revenues and service responsibility; and,
Whereas, pursuant to Government Code Section 56800, LAFCo caused to be prepared a Comprehensive Fiscal Analysis (the "CFA") of the Proposed Incorporation of the City of Castro Valley to serve as the basis for determining fiscal feasibility of the proposed city and to analyze the issue of revenue neutrality pursuant to the requirements of Government Code Section 56815; and,
Whereas, based upon a careful review of the draft CFA, which includes revenue projections for the area included in the Incorporation, the present and projected costs of law enforcement, road maintenance, and other County services transferred to the City, the County has agreed upon the terms herein that it would request that LAFCo impose as a condition of incorporation of the City, and that would mitigate the fiscal impacts of the Incorporation on the County to a level acceptable to the County; and,
Whereas, it is in the interest of the City and the County to maintain the stability and the continuity of police protection and library services provided to the City; and,
Whereas, the draft CFA relies upon five (5) year contracts for their services in calculating the City's projected revenues and expenses; and,
Whereas, the Alameda County Board of Supervisors agrees to the transfer of funds and responsibilities set forth in this resolution and to the submission of these terms to LAFCo as part of the Incorporation process as provided by law; and,
Whereas, the County will request that LAFCo condition the formation of the City of Castro Valley on the new city, pursuant to Government Code Section 56815, obligating itself to comply with the terms of this resolution;
Whereas, this resolution primarily addresses the issue of revenue neutrality, and does not seek to address all County issues related to the Incorporation, and the County will make future determinations on such issues, including, but not limited to, the transfer of County real and personal property;
NOW, THEREFORE, BE IT RESOLVED that
SERVICES
1.0 Cost for First Year Services. The County will continue to provide all existing municipal services to the City, including, but not limited to, law enforcement services, for the first fiscal year (July 1 through June 30) of City operation after incorporation, fiscal year 2003-04. Except as provided in Section 3.5 below, services may be extended or truncated by the agreement between the County and the City during this period of time. The County will extend these services from June 30, 2004, and/or provide an enhanced level of services on terms mutually agreed upon by contract between the City and County.

2.0 Reimbursement for First Year Services. The County will request that LAFCo condition the Incorporation upon the City agreeing to provisions of this Resolution with regard to the County providing services.
2.1 Pursuant to Government Code Section 57384, the amount of the repayment of approximately $12,000,716 will be increased by the change in cost-of-living in the immediate San Francisco Bay Area (CPI-U for the San Francisco - Oakland - San Jose, CA, All Items, 1982-84=100, NSA). The change in CPI shall be determined by calculating the difference between the July 2001 reported monthly amount and the July 2003 reported monthly amount.
2.2 The amount of the repayment to the County will be reduced by the amount of FY 2002-2003 fourth quarter sales tax generated within the area included within the Incorporation that would have been paid to County in FY 2003-2004.
2.3 The County will receive repayment in FY 2003-2004 of its first year's expenses to provide these services. If the City does not plan to provide repayment in FY 2003-2004, it must notify the County, in writing, no later than April 1, 2004.
2.4 Alternately, the City and the County may agree to repay the County for its first year's expenses over a five (5) year period beginning with FY 2003-2004. Each payment will include principal and interest calculated on the unpaid balance owed the County at the County's investment rate for pooled funds.
REVENUE TRANSFERS
3.0 Mitigation Obligation. In order for LAFCo to make the revenue neutrality findings under Government Code Subsection 56815(c), the County requests that LAFCo condition the Incorporation upon mitigation (pursuant to Government Code Section 56815) containing the following provisions:
3.1 Commencing with the effective date of the Incorporation (July 1, 2003), the City will pay the County a mitigation payment of approximately $557,931 each Fiscal Year for a ten (10) year period.
3.2 The amount of the mitigation payment will be increased annually following FY 2003-2004 based on the change in cost-of-living in the immediate San Francisco Bay Area (CPI-U for the San Francisco - Oakland - San Jose, CA, All Items, 1982-84=100, NSA). The change in CPI shall be determined by calculating the difference between the July 2004 reported monthly amount, and the July 2003 reported monthly amount. The same methodology will be used to calculate subsequent year adjustments using each year's change in July reported amounts to calculate the subsequent year CPI change.
3.3 The payment by the City to the County will be paid each year from property tax revenues collected by the County prior to distribution of these revenues to the City.
3.4 Should the calculation of property taxes prepared pursuant to Government Code Section 56810, be modified as a result of a court action brought pursuant to Government Code Subsection 56810(h), or as a result of legislative action with retroactive application, to provide that a larger share be retained by the County and a smaller share transferred to the City than that specified by LAFCo pursuant to Government Code Section 56810, in approving the Incorporation, the County shall transfer the amount of annual property tax resulting from such difference to the City for the purpose of maintaining revenue neutrality pursuant to Government Code Section 56815, and this Agreement ("equalizing payment"). Should the calculation prepared pursuant to Government Code Section 56810, be modified as a result of a court action brought pursuant to Government Code Subsection 56810(h), or as a result of legislative action with retroactive application, to provide that a smaller share be retained by the County and a larger share transferred to the City than that specified by LAFCo, pursuant to Government Code Section 56810, in approving the Incorporation, the City shall make an equalizing payment to the County.
3.5 The City will contract with the County for Police Protection and Library services for an initial term of at least five years.
4.0 TRANSFER OF OBLIGATIONS/PUBLIC FACILITIES
4.1 Home, McKinney and Community Development Block Grant
"CDBG"). The County currently contracts for housing funds with the Home, McKinney and CDBG programs. The County shall request that LAFCo condition the Incorporation on the City participating in the Home, McKinney and CDBG consortia at least through completion of the programs' current contracts through June 30, 2005.
4.2 Redevelopment agencies ("RDA's"). It is the County Board of Supervisors' intent, acting as the governing body of the County RDA, to transfer jurisdiction of that portion of the County RDA project area included wholly within the boundaries of the City, designated as the Castro Valley Sub-Area, to a City RDA upon organization of a City RDA, pursuant to Health and Safety Code, Section 33215. The City RDA will have as its projects the projects approved by the County RDA and other projects the City RDA identifies.
4.3 All dedicated County roads will be conveyed to the new city. The transfer of other public facilities will occur pursuant to Terms and Conditions imposed by LAFCo.
THE FOREGOING was PASSED and ADOPTED by the following vote of the Alameda County Board of Supervisors this 9th day of April, 2002, to wit:
AYES: Supervisors Carson, Lai-Bitker, Miley, Steele & President Haggerty - 5
NOES: None
EXCUSED: None
s/SCOTT HAGGERTY
President, Board of Supervisors


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