A new state commission is examining local govern issues and is expected to produce a proposed legislative overhaul of the Cortese-Knox by December. The 15-member Commission on Local Governance for the 21st Century was created last year as a by-product of legislation making it easier for the San Fernando Valley to pursue secession from the City of Los Angeles. The commission is officially charged with reviewing the Cortese-Knox Act, proposing methods to increase public participation in local government, and examining whether boundary practices in California do not cause racial discrimination. It is chaired by San Diego Mayor Susan Golding and staffed by Ben Williams, a veteran staffer from the Governor's Office of Planning & Research who last worked on military base closure issues. Other members include elected local government officials, professional planners and land-use lawyers, and former state legislators knowledgeable in the field. The commission was created by AB 1484, a 1997 bill carried by Assemblyman Bob Hertzberg, D-Van Nuys, whom most commission members acknowledge is the "godfather" of the new commission. The Local Governance Commission is one of several new efforts to examine local government organization and finance issues. Gov. Gray Davis has identified local government finance as a major issue for his administration (see accompanying story). In addition, the Senate Budget Committee scheduled six hearings around the state on local government finance in late January and early February. And Assembly Speaker Anthony Villaragoisa, D-Los Angeles, convened a meeting of a separate task force on local government finance in late January. There is little question that the commission will tackle well-known problems of government organization - especially issues associated with revenue distribution between cities and counties in annexations and new incorporations. "What we have on the books is a morass of contradictory provisions, a legal Winchester Mystery House," Hertzberg said in a statement. "I proposed the commission to give the issues the thoughtful examination they deserve. My intent is to work closely with the commission, and my goal is to use their work as a guide for future legislation." The bigger question is whether the commission will move beyond narrow issues to deal with state-local fiscal relations and the land-use implications of local government organization. On the one hand, many members of the commission appear to be eager to delve into broader issues, such as competition for sales-tax revenue and other attractive real estate development options. Commissioner Trish Clarke, a Shasta County supervisor, strongly stated in an interview that she hopes the commission will deal with land-use and revenue issues - even to the point of proposing that the commission take on the question of restoring property tax revenue that the state shifted from cities and counties to schools in 1992 and '93. On the other hand, commissioners appear wary of creating a set of recommendations that will wither on the shelf - as happened with the recent California Constitution Revision Commission, which dealt with similar issues. "We are painfully aware of the CCRC experience," said Michael Colantuano, a commissioner who works as a municipal lawyer for the Los Angeles firm of Richards, Watson & Gerson. He said he expected the commission to focus on "feasible and politically realistic" reform. Echoing the sentiments of several other commissioners, he indicated strong hope that Hertzberg, who has emerged as a leading legislator in the term-limited Sacramento environment, would aggressively seek to pass whatever legislative proposals the commission put forward. Clark agreed, stating that she hoped the commission's representatives will sit down soon with Gov. Gray Davis and his top-level staff: "The commission is made up of people that the governor might listen to and the Legislature might listen to." Whether or not the commission deals with broader issues, a proposal to overhaul the Cortese-Knox Act appears likely. The Cortese-Knox law, which last underwent major changes in 1985, governs boundary changes, annexations, incorporations, special districts, and all other actions of Local Agency Formation Commissions. City-county boundary relations have been somewhat strained in several parts of the state in recent years. Several counties have severed annexation negotiations with their cities in the last decade. In addition, the creation of new cities, such as Citrus Heights in Sacramento County, has been met with stiff opposition from counties fearing a loss of revenue. This problem led to the passage of the so-called "revenue neutrality" law in 1992, which requires that new cities - though they must be fiscally viable - cannot be created at the financial expense of counties. The result has been a dramatic slowdown in the creation of new cities. At present cityhood advocates in more than 20 communities around the state are awaiting action. The issue of apportioning revenues and service responsibilities between cities and counties is "a problem," said veteran land-use lawyer William Ross, who was appointed to the commission by the Democratic leadership in the Senate. "It needs to be fixed." At the same time, recent legislative amendments designed to deal with special district issues have been less than successful. A bill sponsored by then-Assemblyman Mike Gotch - who now represents the California Association of LAFCOs - expanded membership on most LAFCOs to include special districts and gave LAFCOs independent power to consolidate special districts. Advocates of special-district consolidation say the bill was one-sided - letting the special districts in on the one hand but giving LAFCOs little political incentive to consolidate them. In addition, in many cases, local advocates have taken special district issues directly to the Legislature, circumventing local LAFCOs. The commission has appointed a committee, chaired by Ross, to draft legislative amendments to the Cortese-Knox Act. The committee has split the law into five parts and is working on drafting proposals to amend each of the five areas. The commission met for the first time last August and has scheduled a total of 13 meetings around the state. Most recently, the commission met in Redding in January and February, hearing - among other things - a report from the City of Redding and Shasta County on the need for better city-county revenue cooperation. The commission's remaining scheduled meetings include March 5 in Burbank, March 25-26 in Monterey, April 30 in Oakland, June 4 in the Inland Empire, July 23 in Fresno, September 17 in Orange County, October 13 in Sacramento, and November 18-19 in Los Angeles. A complete list of commission members includes the following: Appointed by Gov. Pete Wilson: o Susan Golding, mayor of San Diego, who is chair of the commission. o Ruben Barrales, a former San Mateo County supervisor and now president of Joint Venture Silicon Valley, who is vice-chair of the commission. o Marian Bergeson, longtime chair of the Senate Local Government Commission, whom Gov. Gray Davis recently retained as Secretary of Child Development and Education. o Bert Boeckmann, a Northridge car dealer and financier of the Valley secession movement. o Trish Clarke, a Shasta County Supervisor and chair of the Shasta LAFCO. o Cody Cluff, president of the Entertainment Industry Development Corp. and formerly Wilson's appointee on the South Coast Air Quality Management District. o C. Timotby Raney, a member of the Citrus Heights City Council and a planner with EIP Associates in Sacramento. o Carolyn Ratto, a member of the Turlock City Council. o Larry Zarian, a former member of the Glendale City Council and board member of the Metropolitan Transportation Authority of Los Angeles. Appointed by the Senate Rules Committee: o Robert Hunt, an attorney with the Service Employees International Union in Los Angeles. o Nick Petris, an Alameda County attorney who served in the state legislature from 1959 until he was forced out of office by term limits in 1996. o Jacki Bacharach, former mayor of Rancho Palos Verdes and former board member of the L.A. County Transportation Commission. Appointed by the Assembly Rules Committee o Michael Colantuano, a partner with Richards, Watson & Gerson, a municipal law firm in Los Angeles. o William D. Ross, a prominent land-use lawyer in private practice in Palo Alto.. o John Shatz, general manager of the Santa Margarita Water District. The commission is being staffed out of the Governor's Office of Planning & Research by OPR veteran Ben Williams (916 322-9906). Web address: www.clg21.ca.gov.