Local Agency Formation Commissions or LAFCOs are regional service planning agencies of the State of California. LAFCOs are located in all 58 counties and exercise regulatory and planning powers in step with their prescribed directive to oversee the establishment, expansion, governance, and dissolution of local government agencies and their municipal service areas to meet current and future community needs. LAFCOs were established in 1963 and administer a section of California planning law now known as the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2001.
LAFCOs' regulatory powers are outlined in California Government Code Sections 56375 and 56133. This include approving, establishing, expanding, reorganizing, and, in limited circumstances, dissolving cities and special districts. LAFCOs are also responsible for approving all outside service extensions by contract or agreement beginning in 2001. LAFCOs' regulatory powers are generally exercised in response to applications filed by other local agencies, landowners, or registered voters. LAFCOs' are also allowed to initiate certain proposals if consistent with a recommendation from its own planning studies, such as establishing, consolidating, or dissolving special districts.
LAFCOs' planning responsibilities are explicit to informing their regulatory powers and highlighted by establishing spheres of influence for all cities and special districts. Spheres of influence represent the State of California's version of municipal growth boundaries and demark the territory that the LAFCO independently believes represents the appropriate and probable future jurisdictional boundary and service area of the subject agency. All jurisdictional boundary changes and outside service extensions, notably, must be consistent with the subject agencies' spheres of influence, with limited exceptions.
State law requires all 58 LAFCOs appoint their own executive officer who serves as the agency administrator and responsible for making recommendations on all jurisdictional changes within the county. Larger LAFCOs - typically in the San Francisco Bay Area and Southern California - are staffed with three to ten employees plus outside consultants. The largest LAFCO in California in terms of both staff and budget is San Diego with 10 staff members and an operating budget of over $2.0 million.