LAFCO is empowered by State law to apply a broad range of "conditions" to proposals that it considers and approves. As indicated in Section 56886 of the Government Code, these include: 

• The payment of a determinable amount for the acquisition of existing property.
• The levying or fixing and the collection of special or extraordinary taxes, assessments or service charges for payment for acquired property.
• Disposition of responsibility for outstanding bonds or contractual obligations as well as the amount of responsibility.
• The formation of new improvement district(s).
• The annexation to or detachment from existing improvement district(s).
• The incurring of liability or bonded indebtedness on behalf of the territory annexed or the Agency as a whole.
• The issuance and sale of bonds.
• The acquisition, improvement, disposition, sale, transfer, or division of property.
• The fixing of use or right-of-use in any public improvement, facility, or property.
• The disposition of any office, department, or board within the affected agency or agencies.
• The disposition of employees affected by a proposal.
• The designation of a successor agency to any agency extinguished by actions taken. Determination of the method for selection and the number of members for an agency formed or reorganized.
• Determinations for the initiation, conduct, or completion of proceedings.
• The fixing of the effective date for any change of organization.
• The continuation or provision of any service provided or authorized by the Agency.
• The levying of an assessment or the calling of an election to decide a special tax.

BOUNDARY CHANGES

LAFCOs regulate, through approval or denial, the boundary changes proposed by other public agencies or individuals, such as annexations, detachments and incorporations.

SPHERE OF INFLUENCE STUDIES

A "Sphere of Influence" is the physical boundary and service area that a local governmental agency is expected to serve. Establishment of this boundary is necessary to determine which governmental agencies can provide services in the most efficient way to the people and property in any given area.

SPECIAL STUDIES

Through special studies, LAFCO encourages governments to evaluate their current operations and options for reorganization. Local agencies often overlap and have the potential of duplicating services. LAFCOs conduct service studies and consolidation feasibility studies to present alternatives for improving services and reducing operational costs.

INITIATION OF SPECIAL DISTRICT CONSOLIDATIONS

As of July 1, 1994, LAFCOs have the authority to initiate proposals that include the dissolution or consolidation of special districts, or the merging of an existing subsidiary district.

OUT OF AGENCY SERVICE AGREEMENTS

Cities and districts are required to obtain LAFCO’s approval prior to entering into contracts with private individuals or organizations to provide services outside of the agency's boundaries.

The end of World War II saw California experiencing a tremendous population increase, which resulted in the sporadic formation of cities and special service districts. The results of this development boom became evident as more of California's agricultural land was converted to urban uses. Premature and unplanned development created inefficient, expensive systems of delivering public services using various small units of local government. The State Legislature reacted to this pressing problem in 1963 by creating a Local Agency Formation Commission, or "LAFCO" operating in each California county.