Riverside MSR Adopted 5 18 2022

Riverside Community Services District Municipal Services Review and Sphere of Influence Update Adopted May 18, 2022 www.humboldtlafco.org HUMBOLDT LOCAL AGENCY FORMATION COMMISSION Commissioners: Virginia Bass, District 4 Supervisor Michelle Bushnell, District 2 Supervisor Stephen Avis, City of Ferndale Mike Losey, City of Fortuna Troy Nicolini, Peninsula Community Services District Debra Lake, Fruitland Ridge Fire Protection District Ali Lee, Public Member Alternate Members: Mike Wilson, District 3 Supervisor Gordon Johnson, City of Rio Dell Dave Couch, McKinleyville Community Services District Skip Jorgensen, Public Member Staff: Colette Santsche, AICP, Executive Officer Krystle Heaney, AICP, LAFCo Analyst/Clerk Jason Barnes, GIS Analyst Ryan Plotz, Legal Council Acknowledgements: LAFCo would like to thank the staff and Board members at Riverside CSD for their assistance during the preparation of this MSR and SOI update. TABLE OF CONTENTS 1.0 MSR/SOI Background ..............................................................................................................1 1.1 Role and Responsibility of LAFCo ...................................................................................................... 1 1.2 Purpose of Municipal Service Reviews ............................................................................................. 1 1.3 Purpose of Spheres of Influence ....................................................................................................... 2 1.4 Disadvantaged Unincorporated Communities.................................................................................. 3 2.0 Riverside Community Services District .....................................................................................4 2.1 Agency Overview .............................................................................................................................. 4 2.2 Principal Act for Community Services Districts ................................................................................. 4 2.3 Formation and Development ............................................................................................................ 4 2.4 Boundary and Sphere of Influence ................................................................................................... 5 2.5 Land Use and Zoning ......................................................................................................................... 7 2.6 Growth and Population ..................................................................................................................... 9 2.7 Hazards ............................................................................................................................................ 10 2.8 Disadvantaged Unincorporated Communities................................................................................ 12 2.9 Municipal Services .......................................................................................................................... 12 2.10 Organizational Structure ................................................................................................................. 15 2.11 Accountability and Transparency.................................................................................................... 15 2.12 Financial Overview .......................................................................................................................... 16 3.0 Riverside CSD MSR Determinations ....................................................................................... 20 4.0 Riverside CSD SOI Determinations ......................................................................................... 22 List of Figures Figure 1: Riverside CSD Boundary and SOI (to be updated) ............................................... 6 Figure 2: Riverside CSD FEMA Flood Zones and Tsunami Inundation Areas .......................11 List of Tables Table 1: Eel River Groundwater Basin Annual Water Use ..................................................... 9 Table 2: Riverside CSD Board of Directors .............................................................................15 Table 3: Riverside CSD Fees for Services ...............................................................................16 Table 4: Riverside CSD Reported Revenues .........................................................................17 Table 5: Riverside CSD Net Position .......................................................................................18 Table 6: Riverside CSD Revenues and Expenses ..................................................................18 1.0 MSR/SOI BACKGROUND 1.1 Role and Responsibility of LAFCo Local Agency Formation Commissions (LAFCos) are independent regulatory commissions that were established by the State legislature in 1963 to encourage the orderly growth and development of local governmental agencies including cities and special districts. Today, there is a LAFCo in each of California’s 58 counties. Humboldt LAFCo is a seven- member commission comprised of two members of the Humboldt County Board of Supervisors, two City Council members, two Special District representatives, and one Public Member-At-Large. The Commission also includes one alternate member for each represented category. LAFCo is responsible for implementing the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (“CKH Act”) (California Government Code Section 56000 et seq.) for purposes of facilitating changes in local governmental structure and boundaries that fosters orderly growth and development, promotes the efficient delivery of services, and encourages the preservation of open space and agricultural lands. Some of LAFCo’s duties include regulating jurisdictional boundary changes and the extension of municipal services. This includes city and special district annexations, incorporations/formations, consolidations, and other changes of organization. LAFCo seeks to be proactive in raising awareness and building partnerships to accomplish this through its special studies, programs, and actions. The CKH Act outlines requirements for preparing Municipal Service Reviews (MSRs) for periodic Sphere of Influence (SOI) updates. MSRs and SOIs are tools created to empower LAFCo to satisfy its legislative charge of “discouraging urban sprawl, preserving open space and prime agricultural lands, efficiently providing government services, and encouraging the orderly formation and development of local agencies based upon local conditions and circumstances” (§56301). CKH Act Section 56301 further establishes that “one of the objects of the commission is to make studies and to obtain and furnish information which will contribute to the logical and reasonable development of local agencies in each county and to shape the development of local agencies so as to advantageously provide for the present and future needs of each county and its communities.” SOIs therefore guide both the near-term and long-term physical and economic growth and development of local agencies, and MSRs provide the relevant data to inform LAFCo’s SOI determinations. 1.2 Purpose of Municipal Service Reviews As described above, MSRs are designed to equip LAFCo with relevant information and data necessary for the Commission to make informed decisions on SOIs. The CKH Act, however, gives LAFCo broad discretion in deciding how to conduct MSRs, including geographic focus, scope of study, and the identification of alternatives for improving the efficiency, cost-effectiveness, accountability, and reliability of public services. The Riverside CSD 2022 MSR & SOI Update [1] purpose of a MSR in general is to provide a comprehensive inventory and analysis of the services provided by local municipalities, service areas, and special districts. A MSR evaluates the structure and operation of the local municipalities, service areas, and special districts and discusses possible areas for improvement and coordination. While LAFCos have no direct regulatory authority over cities and special districts, MSR’s provide information concerning the governance structures and efficiencies of service providers – and may also serve as the basis for subsequent LAFCo decisions. The MSR is intended to provide information and analysis to support a sphere of influence update. A written statement of the study’s determinations must be made in the following areas: (1) Growth and population projections for the affected area (2) Location and characteristics of any disadvantaged unincorporated communities within or continuous to the sphere of influence (3) Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies (4) Financial ability of the agency to provide services (5) Status of and opportunities for shared facilities (6) Accountability for community service needs, including governmental structure and operational efficiencies (7) Any other matter related to effective or efficient service delivery, as required by Commission policy This MSR is organized according to these determinations listed above. Information regarding each of the above issue areas is provided in this document. 1.3 Purpose of Spheres of Influence In 1972, LAFCos were given the power to establish SOIs for all local agencies under their jurisdiction. As defined by the CKH Act, “‘sphere of influence’ means a plan for the probable physical boundaries and service area of a local agency, as determined by the commission” (§56076). All boundary changes, such as annexations, must be consistent with an agency’s sphere of influence with limited exceptions. Pursuant to Humboldt LAFCo policy, a MSR is conducted prior to or in conjunction with its mandate to review and update each local agency’s sphere of influence every five years or as necessary. The municipal service review process is intended to inform the Commission as to the availability, capacity, and efficiency of local governmental services prior to making sphere of influence determinations. LAFCo is required to make five written determinations when establishing, amending, or updating an SOI for any local agency that address the following (§56425(c)): (1) The present and planned land uses in the area, including agricultural and open space lands. Riverside CSD 2022 MSR & SOI Update [2] (2) The present and probable need for public facilities and services in the area. (3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. (4) The existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. (5) For an update of an SOI of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere of influence. Service reviews may also contain recommendations for sphere of influence or government structure changes needed to implement positive service changes. Where more detailed analysis of service options is necessary, service reviews may contain recommendations for special studies where there is the potential to reduce service gaps and improve service levels. 1.4 Disadvantaged Unincorporated Communities SB 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged unincorporated communities,” including the addition of SOI determination number 5 listed above. Disadvantaged unincorporated communities, or “DUCs,” are inhabited territories (containing 12 or more registered voters) where the annual median household income is less than 80 percent of the statewide annual median household income. CKH Act Section 56375(a)(8)(A) prohibits LAFCo from approving a city annexation of more than 10 acres if a DUC is contiguous to the annexation territory but not included in the proposal, unless an application to annex the DUC has been filed with LAFCo. The legislative intent is to prohibit selective annexations by cities of tax-generating land uses while leaving out under-served, inhabited areas with infrastructure deficiencies and lack of access to reliable potable water and wastewater services. DUCs are recognized as social and economic communities of interest for purposes of recommending SOI determinations pursuant to Section 56425(c). Riverside CSD 2022 MSR & SOI Update [3] 2.0 RIVERSIDE COMMUNITY SERVICES DISTRICT 2.1 Agency Overview The Riverside Community Services District (Riverside CSD or District) provides water services to the rural area along a portion of Centerville Road, Meridian and Port Kenyon Roads and the Salt River area northwest of the City of Ferndale. Primary Contact Riverside Community Services District E-mail riversidecomservdist@gmail.com Address PO Box 857, 790 Centerville Road Phone (707) 786-9772 Website www.riversidecommuityservicesdistrict.com 2.2 Principal Act for Community Services Districts The CSD principal act is the Community Services District Law (Government Code §61000, et seq.) which authorizes CSDs to provide up to 31 types of governmental services within their boundaries. Services, facilities, functions or powers enumerated in the District’s principal act but not identified in the formation resolution or later activated, are considered “latent,” meaning that they are authorized by the principal act under which the District is formed but are not being exercised. Latent powers and services activation require LAFCo authorization in accordance with Government Code §56824.10 et seq. 2.3 Formation and Development The Riverside CSD formation was approved by Humboldt LAFCo on April 24, 1991 (LAFCo Resolution No. 91-02) and confirmed without an election by the Humboldt County Board of Supervisors on June 25, 1991 (County Board Resolution No. 91-64)1. More than 80 percent of registered voters submitted petitions in support of the formation. The District was formed to supply the inhabitants of the District with water for domestic, irrigation, sanitation, industrial, fire protection, and recreation uses. A Certificate of Completion for the district formation was recorded with the Humboldt County Recorder’s Office on July 16, 1991 (#1991-15821-7). Prior to the formation, a boil water notice for all domestic water use was ordered by the State Department of Health due to a failing water supply system that had been previously operated by the Riverside Water Company. The private company had been providing water service to the area since the 1890s. Parts of the water system dated back to the company’s beginnings and had fallen into severe disrepair. The CSD formation allowed the District to become eligible for Safe Drinking Water Bond funds obtained from the State 1Humboldt LAFCo Resolution No. 91-02, adopted April 24, 1991, and Humboldt County Board of Supervisors Resolution No. 91-64, adopted June 25, 1991. Riverside CSD 2022 MSR & SOI Update [4] Department of Water Resources2. In addition to improving the water distribution system, funds were used to improve the water source transmission and storage facilities located south of Centerville Road. Additional Community Development Block Grant funding was used to replace service connections for low and very low-income households within the District. 2.4 Boundary and Sphere of Influence The District’s boundary includes properties along Oeschger, Centerville, Meridian, and Port Kenyon Roads, and Riverside Road to the west and northwest of the City of Ferndale. The boundary encompasses 3 square miles (1,920 acres) and the Sphere of influence (SOI) is coterminous. A sphere of influence expansion is proposed to include properties served outside the district’s boundary, including two connections along Camp Weott Road and two connections along Damon Lane. 2 In 1992, the Riverside CSD received a $70,000 loan and $400,000 grant under the Safe Drinking Water Bond Law of 1988 to assist the community in meeting safe drinking water standards for the domestic water supply. Riverside CSD 2022 MSR & SOI Update [5] Figure 1: Riverside CSD Boundary and SOI Riverside CSD 2022 MSR & SOI Update [6] 2.5 Land Use and Zoning Land use within the District is subject to the Eel River Area Plan of the Humboldt County Local Coastal Program within the designated coastal zone, the Humboldt County General Plan outside of the coastal zone, and Humboldt County Zoning Regulations. Designations are primarily Agriculture Exclusive (AE) along with Rural Exurban (RX) within the coastal zone of the District. Land use designations outside of the coastal zone boundary within the District are Agricultural Grazing (AG) and Residential Agriculture (RA5-20). Areas surrounding the District are predominantly AE3, which is a growth limiting and low density designation. To the east of the District is the City of Ferndale which has higher density and is regulated by the Ferndale General Plan. Zoning within the District is predominantly Agriculture Exclusive (AE-60 acre minimum) with combining zones Coastal Wetlands, Flood Hazard Areas, Streams and Riparian Corridor Protection, and Transitional Agricultural Lands (W,F,R,T). Remaining zoning designations in the coastal zone boundary are Natural Resources with combing zone Streams and Riparian Corridor Protection (NR/R) and Rural Residential Agriculture (RA) and Residential Single Family (RS) with combining zones (X)-No further subdivision allowed and (M/F)- Manufactured Home and Flood Hazard Area. Unclassified (U), indicating the area has not been precisely zoned, is the primary inland zoning designation. Zoning designations surrounding the District are predominantly AE and U4. The County has initiated a process to zone areas classified as “U” in a manner consistent with the General Plan land use map as approved in 2017. Tribal Lands Riverside CSD is located within the ancestral tribal lands of the Wiyot. These lands extend from Trinidad to Bear River Ridge. Historically the people worked with the natural bounty of the bay, ocean, forests, and rivers to provide sustenance and materials for themselves5. However, in 1848 the discovery of gold inland halted much of the Wiyot’s way of life. A new era of extermination and assimilation were forced onto the Wiyot people, along with other tribes in the region. While the tribe has never been able to fully recover from this devastating era, they are now 600 members strong and growing. Recent efforts by the tribe have led to the return of sacred lands on Tuluwat Island in Humboldt Bay to the Wiyot people. They continue to work with other local governments and tribes to increase awareness of tribal peoples and lands through education, return of sacred lands, and revising place names. 3 Humboldt County Web GIS, Jurisdiction Boundaries & Land Use, Planning Layers, Current General Plan Land Use. Accessed August 20, 2020. 4 Humboldt County Web GIS, Jurisdiction Boundaries & Land Use, Planning Layers, Zoning. Accessed August 20, 2020. 5 Wiyot Tribe, History. Accessed on August 5, 2021from https://www.wiyot.us/148/Cultural. Riverside CSD 2022 MSR & SOI Update [7] Salt River Restoration In the late 1800s, the Salt River that winds through the Eel River basin was deep and large enough to accommodate small ocean steamers. At Port Kenyon, the Salt River was approximately 200 feet wide and 15 feet deep. Over time, due to construction of levees and dikes constructed to protect the productive agricultural lands of the Salt River floodplain, naturally high influent sediment loads from the surrounding hills were not flushed through the tributaries and were deposited into the Salt River channel. Lack of vegetation and sediment management have reduced channel dimensions, blocking fish passage and increasing flooding on surrounding agricultural lands, roads, and residences. The Salt River Ecosystem Restoration Project is a multi-phase ecosystem restoration project in the Salt River watershed to improve salmonid habitat, decrease flooding and improve agricultural benefits along seven miles of the Salt River and 330 acres of tidal marsh. The project is comprised of four main components: 1) Salt River channel and riparian floodplain restoration, 2) tidal marsh restoration at Riverside Ranch, 3) sediment management in the channel and riparian floodplain, and 4) upslope sediment reduction. Currently the project is estimated to be on hold for five to 10 years because the Humboldt County Resource Conservation District’s grant funds to pursue the project will close before the district estimates a deal can be reached with local landowners for the final 1.2 mile stretch of the river, which would reconnect 57% of the watershed. The constructed portions of the Salt River channel will continue to have maintenance performed but will not be expanded in the coming years. The Humboldt County Resource Conservation District (HCRCD) will continue to explore long term management and maintenance structures to support the Salt River Ecosystem Restoration Project in perpetuity. The HCRCD Board of Directors is interested in partnering with Humboldt County Public Works to explore the feasibility of establishing a Flood Control District sub- zone to help out with the maintenance of the project as it continues to be on hold. Groundwater Management As part of the Sustainable Groundwater Management Act of 2014 (SGMA), the California Department of Water Resources (DWR) designated the Eel River Valley groundwater basin as a medium-priority basin, which went into effect on January 1, 2015, and most recently renewed in 2018. SGMA requires that all medium-priority basins have an adopted Groundwater Sustainability Plan (GSP) no later than January 31, 2022, with plan implementation to maintain or achieve basin sustainability by 2042. The Humboldt County Groundwater Sustainability Agency, governed by the Humboldt County Board of Supervisors, was formed for the Eel River Valley groundwater basin in May 2020. Also in 2020, Humboldt County received a planning grant from DWR to perform additional field work, develop an integrated groundwater-surface water computer model, and prepare a GSP in collaboration with water suppliers, water users, the Humboldt County Resource Conservation District, and the U.S. Geological Survey. Based on this effort, the average annual groundwater use within the Basin from water year 2011 through 2020 was estimated at 14,837 acre-feet, which includes: Riverside CSD 2022 MSR & SOI Update [8] Table 1: Eel River Groundwater Basin Annual Water Use Percent of Water Category Annual Usage Total Usage Agricultural Irrigation 12,559 acre-feet (85%) Municipal Drinking Water 1,733 acre-feet (12%) Domestic Drinking Water 414 acre-feet (3%) Other 132 acre-feet (<1%) According to the Eel River Valley Groundwater Sustainability Plan, approved January 29, 2022, the sustainable yield for the Basin is estimated to be at least 30,000 acre-feet per year. Water quality within the Basin is generally of good quality and suitable for its intended uses. There are no known conditions of degradation of groundwater quality related to groundwater management or use. The GSP determined that the Basin’s sustainability goal is being achieved and the Humboldt County GSA will continue to perform the monitoring and reporting activities required by SGMA and will consider other projects and management actions as appropriate to maintain sustainable groundwater conditions and enhance beneficial uses of groundwater and interconnected surface waters. The GSP concludes that the best investment of time and resources would likely be for projects to increase streamflow entering the Basin, especially during the dry season, and for instream restoration projects to improve geomorphic conditions within the Eel River, Van Duzen River, and other surface waters within the Basin6. 2.6 Growth and Population The District boundary covers a portion of the Eel River flood plain that has been historically utilized for agricultural purposes. As noted under Land Use above, zoning is predominately agricultural which indicates very low-density development. As such, the total population of the District is limited. According to a State Water Resources Control Board inspection conducted in 2020, the District serves a population of approximately 3277. However, the latest 2020 decennial census data for the area estimates a population of 2198. 2010 census data appears to be incomplete so a growth rate cannot be calculated for the area. Based on population data available for the nearby City of Ferndale, which has experienced limited to no growth over the last decade (2010 – 1,371 to 2020 – 1,398)9, growth within the District is likely to be limited in the next five to ten years). 6 Eel River Valley Groundwater Sustainability Plan, January 29, 2022. https://humboldtgov.org/DocumentCenter/View/103631/ERVB-GSP-final-1-29-2022 7 State Water Resources Control Board (SWRCB), Riverside CSD Public Water System Inspection (PWS# 1200518) – Consumer & Production Data. April 15, 2020. 8 US Census Bureau, 2020 Decennial Census. Table P2 – Hispanic or Latino, and Not Hispanic or Latino by Race for Blocks 3033, 3034, 3035, 3036, 3037, 3038, 3039, 3040, 3041, 3048, and 3061 of Block Group 3 in Census Tract 112 of Humboldt County. 9 US Census Bureau, 2020 and 2010 Decennial Census. Table P1 – Race for the City of Ferndale, CA. Riverside CSD 2022 MSR & SOI Update [9] 2.7 Hazards Riverside CSD is almost entirely within the Eel River floodplain, FEMA 100-year flood zone10. Portions of the District, including all of the Port Kenyon area, are also located in the FEMA floodway which is “the channel of a river or other watercourse and the adjacent land areas that must be reserved in order to pass the base flood discharge without cumulatively increasing flood elevations.11” During large rainfall events, such as those that occurred in early 2019, the area can become inundated with flood waters from the Eel River. It is important for the District to plan for such events to ensure that infrastructure is safe from any potential contamination or erosion issues caused by flooding. Much of the District also lies within a designated tsunami hazard zone12. The Juan de Fuca Plate, Gorda Plate, and Explorer Plate subducting beneath the North American Plate, form the “Cascadia Subduction Zone,” which runs offshore of Humboldt and Del Norte Counties north through Oregon and Washington states. Recent investigations have shown that this system has moved in unison in a series of great earthquakes (magnitude 8 to 9) over the last 20,000 years, most recently about 300 years ago, with events occurring at 300–500 year intervals13. The Eel River area is a part of Humboldt County that is closest to the Cascadia Subduction Zone and would be subject to significant ground shaking and a tsunami from a large local source earthquake. A tsunami may arrive in this area as soon as ten minutes after a local earthquake occurs. As indicated above, low lying areas within the Eel River valley, including the District, are subject to coastal and river flooding, which are also areas that are vulnerable to the impacts of sea level rise. The California Coastal Commission is encouraging local agencies to plan for the impacts of sea level rise and Humboldt County is conducting coordinated sea level rise planning around Humboldt Bay to address potential impacts to coastal-dependent uses; critical public facilities such as roads, wastewater treatment plants and shoreline protection structures and communities. Once complete, updates to the Humboldt Bay Area Plan will likely guide future updates to the Eel River Area Plan land use policy, effecting land uses and hazard planning within the District. Port Kenyon is also located within an area of potential liquefaction14. During a large earthquake, the area could experience moderate to severe shaking and ground instability. This has the potential to damage water infrastructure in the area including laterals to residences. Due to the potential hazards in the area, it is recommended that the District develop and adopt an emergency response plan. 10 FEMA, Flood Insurance Rate Map Number 06023C1185F. Effective November 4, 2016. 11 California Department of Water Resources National Flood Insurance Program Quick Guide, 2020. 12 California Geological Survey, Tsunami Hazard Area Map, Humboldt County - 2021. Accessed from https://www.conservation.ca.gov/cgs/tsunami/maps on May 5, 2022. 13 Humboldt County General Plan RDEIR, Chapter 3.8, Geology and Soils https://humboldtgov.org/DocumentCenter/View/58837/Section-38-Geology-and-Soils-Revised-DEIR-PDF. 14 Humboldt County GIS, Hazards Layer for Tsunami Hazard Area (CGS 2021) and Area of Potential Liquefaction. Accessed May 4, 2022. Riverside CSD 2022 MSR & SOI Update [10] Figure 2: Riverside CSD FEMA Flood Zones and Tsunami Inundation Areas Riverside CSD 2022 MSR & SOI Update [11] 2.8 Disadvantaged Unincorporated Communities Disadvantaged unincorporated communities, or “DUCs,” are inhabited territories (containing 12 or more registered voters) where the annual median household income (MHI) is less than 80 percent of the statewide annual median household income. The estimated 2019 MHI for Humboldt County Census Tract 112, Block Group 3 is $57,18815. This is 71 percent of the estimated California MHI of $80,440,16 which means the District qualifies as a DUC. Nearby communities include the City of Ferndale to the southeast, which has a MHI that is 63% of the California MHI17. The City of Ferndale’s MHI is less than 80% of the statewide annual MHI, however, it is incorporated and currently served by its own city services and the Ferndale Fire Protection District. Therefore, it is not considered a DUC. 2.9 Municipal Services Riverside CSD is currently authorized to provide water services. All other services are considered latent. Water Services The District’s primary source of water is a well (Well 06) located along Centerville Road that is 115 feet deep and provides water at a rate of approximately 30 gallons per minute (gpm) from a pump located at 90 feet. Water is pumped from the well to a 6,000 gallon holding tank located adjacent to the well and water treatment building before flowing into the collection sump for treatment. The District’s original wells (Well 01 and 02) are Artesian Springs located uphill of the treatment plant. These wells have sanded in substantially since they were originally developed in the early 1990’s and now only produce a combined flow of 1-3 gpm. The District previously drilled Well 03 which was subsequently destroyed, and has several other well locations which are inactive18,19. Raw water from Well 06 previously contained higher than normal levels of sand. In an effort to reduce the amount of sand pumped from the well, the pumping rate has been decreased over time and water is pumped into the holding tank so that sand may settle out. The District’s wells (01, 02, and 06) also contain higher levels of manganese which are above the secondary maximum contaminant level (MCL). However, secondary MCLs are primarily based on aesthetic concerns and the level of manganese present is not considered high enough to be a health concern20. The District is aware of this issue and continues to monitor quality to ensure the continued health and safety of customers. 15 US Census, ACS 2019 5-year Estimates, Table B19013 for Humboldt County Census Tract 112, Block Group 3. Accessed February 3, 2022. 16 US Census, ACS 2019 5-year Estimates, State of California, Table S1903. Accessed February 3, 2022. 17 US Census, ACS 2018 5-year Estimates, Table S1903 for City of Ferndale (MHI $50,897). Accessed February 3, 2022. 18 SWRCB, Water System Inspection – Source Data. April 15, 2020. 19 Well 04 (Inactive) produces approximately 3gpm but causes Well 01 and 02 to draw down which reduces their production. Wells 05, 5A, 07 (French Drain), and Chinese Cave are listed as inactive due to low production and persistent total coliform contamination. 20 SWRCB, Water System Inspection – Raw Water Chemical Monitoring. April 15, 2020. Riverside CSD 2022 MSR & SOI Update [12] Raw water from Wells 01, 02, and 06 flows to the collection sump where it is treated with a chlorine solution and then pumped to the District’s 60,000 gallon reinforced concrete main tank. From the main tank, water gravity flows into the distribution system. Water mains in the distribution system are predominately two to four inch PVC pipe that was installed in 1993 to 1994. There is also a small percentage (six percent) of mains comprised of asbestos cement, ductile iron, HDPE, or galvanized steel pipe21. The District serves 99 connections which include single family and mobile homes along with multiple farms and dairies. The District does not currently have any fire hydrants. Due to small main size and low pressure, the system is not capable of supporting fire flows22. In 2018, the treatment plant produced 5,996,470 gallons of water with a maximum production month in June 2018 of 571,128 gallons and an estimated maximum daily demand of 29,000 gallons23. Based on the primary well’s capacity of approximately 30 gpm, (approximately 43,000 gallons per day or 1,296,000 gallons per month), the District is utilizing 44 to 68 percent of its capacity. This indicates there is adequate water to support the current and future demand of the District. While there is currently adequate water to support demand, the District does not have a secondary source of water to support the community in the event Well 06 goes offline. The original wells (01 and 02) continue to decrease in production and are not a reliable source of water. Additionally, the District has expressed the need for a new well and has worked with State Water Resources Control Board (SWRCB) staff on site selection. The proposed well would be located approximately 275 feet west of Well 06 and along Centerville Road. This location would require minimal additional piping to connect to the treatment plant and is anticipated to have similar production and quality of water as Well 06. The District has been seeking funding to construct the new well but has been unable to secure any grant funds for the project24. They most recently submitted a grant application to the State Water Resources Control Board in November 2021. Their planning grant includes three components: 1) Raising the existing well head while keeping the existing well as an emergency backup; 2) Drill a new water well and secure permanent well easement; and 3) Replace 1,600 feet of 4-inch asbestos cement (AC) pipe that is over 50-years old with 6-inch PVC pipe for the watermain connecting the District’s treatment building to the distribution system. State Water Resources Control Board Inspection During the District’s last routine inspection conducted by the SWRCB on January 31, 2020, a number of items were listed as deficiencies which included the following: 1. Updated chemical monitoring schedule with several tests listed as “Due Now”. 2. Overdue disinfection byproducts monitoring. Sampling must be completed every three years. 21 SWRCB, Water System Inspection – Distribution System. April 15, 2020. 22 Humboldt County, Community Infrastructure and Services Technical Report prepared for the Humboldt County General Plan Update. July 2008. 23 SWRCB, Water System Inspection – Consumer & Production Data and Log Inactivation. April 15, 2020. 24 Riverside CSD, Personal Communication with Plant Operator (in person). February 2, 2022. Riverside CSD 2022 MSR & SOI Update [13] 3. The need for a completed and signed Cross-Connection Hazards Survey and Cross- Connection Program submitted to the SWRCB. 4. Well 06 well head was strongly encouraged to be raised to conform with ANSI/AWWA standards in addition to other minor modifications. 5. Need for monthly bacteriological sampling at Wells 01 and 02. 6. Need for a Bacteriological Sample Siting Plan. 7. Need for adequate secondary spill containment for gasoline stored onsite at the treatment facility or removal of gasoline cans from the site. The District does have a policy related to cross connections which states: “A notice to comply is issued to property owners when a cross-connection is known to exist. They will then have ten days to comply. Annual cross-connection device inspections have to be performed by a certified inspector and provided to the District.”25 It is recommended that the District continue to work with the SWRCB to ensure compliance with required monitoring and testing schedules to help ensure the health and safety of the community. Rates Fees for services are set by the Riverside CSD Board of Directors. A list of fees included under Section 2.11- Financial Overview. Del Oro Water Company Del Oro Water Company is an investor-owned public utility company that provides water service to the City of Ferndale and surrounding area. Water for the City is sourced from the High Line Springs, Low Line Springs, and Van Ness Well26. As discussed in the City of Ferndale 2018 MSR, the City is utilizing approximately 40% of its source supply of 518,000 gallons per day27. As mentioned above, the Riverside CSD does not have a backup source of water supply, which is now required for small water suppliers in accordance with SB 552 (Hertzberg)28. In addition to seeking funding to construct a new well, the Riverside CSD should continue to explore the feasibility of establishing an emergency intertie between Riverside CSD and Del Oro water systems. Other Services Fire Services The Ferndale Volunteer Fire Department (VFD) provides fire protection services on behalf of the Ferndale Fire Protection District to a large portion of the Eel River flood plain south of the Eel River. The FPD boundary extends from just north of Price Creek Road to the 25 Riverside CSD, Resolution 2020-1: Fees for Service. June 2020. 26 Del Oro Water Company, 2020 Water Quality Report – Ferndale District. 27 Humboldt LAFCo, City of Ferndale Municipal Services Review and Sphere of Influence Update – Section 5.2: Water. Adopted November 14, 2018. 28 SB 552 (Hertzberg), approved in 2021, requires small water suppliers to develop and maintain an abridged Water Shortage Contingency Plan that includes specified drought-planning elements no later than July 1, 2023, and implement, subject to funding availability, specified drought resiliency measures, including, among others, having at least one backup source of water supply. Riverside CSD 2022 MSR & SOI Update [14] mouth of the Eel River at the Pacific Ocean and partially into the hills above the flood plain. In 2020, the Ferndale VFD responded to 216 calls for service including 132 medical calls and six structure fires29. Since the Riverside CSD does not have fire hydrants, the Ferndale VFD and mutual aid partners must shuttle water to a fire within the District using water tenders that obtain water from sources with adequate capacity, such as fire hydrants connected to the Del Oro water system. More information on the Ferndale VFD and FPD can be found in the Humboldt County Fire Chiefs’ Association 2020 Annual Report and the 2017 Eel River Valley – Lost Coast Regional Fire Services Municipal Service Review. Other Services Outside of the City of Ferndale limits, wastewater services in the area are typically provided by onsite wastewater systems permitted through the Humboldt County Department of Environmental Health. Solid waste disposal is provided by Recology Humboldt. Police services are provided by the Humboldt County Sherriff’s Department and the City of Ferndale Police Department when necessary. 2.10 Organizational Structure The Riverside CSD is an independent special district served by a five-member Board of Directors that is elected to four-year staggered terms. Table 2: Riverside CSD Board of Directors Board Member Title Term Expiration Glenn Giaimo Director 2020-2024 Mark Dekens Director 2020-2024 Annjanette Dodd Director 2017-2022 Hugh Gallagher Director 2017-2022 Ingrid Pfeiffer Director 2017-2022 In accordance with Government Code §61044, a board of directors shall hold a regular meeting at least once every three months. The Board typically meets on the second Wednesday of the month at 5:30pm via Zoom. 2.11 Accountability and Transparency The District currently does not have an office location and has limited staff capacity to respond to inquiries. In order to increase transparency and provide a higher level of service to its customers, it is recommended that the Board consider adopting policies and procedures for responding to inquiries. The District has established a website (www.riversidecommunityservicesdistrict.com) but its unknow whether it is in compliance with SB 929 which requires all special districts to maintain a website with basic information, including contact information, agendas, minutes, budgets, audits and other district information. This will provide a location for District documents to be posted that is easily accessible by the public. 29 Humboldt County Fire Chiefs’ Association, 2020 Annual Report. November 2021. Riverside CSD 2022 MSR & SOI Update [15] 2.12 Financial Overview Fees for Services Riverside CSD is funded by service fees. A rate increase was last completed in 2016. Table 3: Riverside CSD Fees for Services Fee Type Cost* Monthly Minimum for Meter Service $.32.32 Water Usage Rate Per Gallon $0.0055 (Rate applies to residential & commercial customers) New Customer Deposit $50.00 Returned Check Charge $25.00 Service Call $40.00/hr Restoration of Service (after no-pay shut off) $50.00 Reconnection Charge (after having service discontinued) $500.00 New Service Installation (plus all cost of parts and labor) $600.00 Late fee for unpaid bills $25.00 *These rates were obtained from a rate sheet at the District’s treatment facility. On the final day of the month, customer water bills are mailed out individually on post cards. If the customer has multiple accounts, then group mailings are sent to the address on record. The customer may request the bill be emailed to them. A meter fee of $32.32 is due in order to keep the meter active, no matter the usage. A water usage fee of $0.0055 per gallon is placed on the account based on the usage. The bills are due by the 20th of the month and payment can be made via mail to the P.O. Box 857, or dropped off at the pump house mail slot. Accounts that are two months or more behind on their bill will receive an overdue notice stating that water will be shut off in ten days if payment is not received. Those accounts will be charged a late fee of $25.00 for handling charges, if no payment is received by the shutoff date. By the 30th of the month, a text or call is made to customers with overdue accounts, as well as a new bill being mailed out. By the first of the month, the customer’s water will be shut off unless an alternate arrangement has been made. Full payment must be made in order to turn the water back on for a residence. While the water is shut off, the monthly meter fee continues to accrue. A fee of $50.00 is also necessary in order to resume services. All accounts must be held by the property owner, not renters or tenants. Renters or tenants may receive duplicate account statements. The property owner is responsible for the payment of overdue accounts. New customers are required to pay the most current fee, including property leased or rented. After one year, the deposit is returned or credited to the customers in good standing. Otherwise, it will be returned to customers when they move, unless there is an unpaid balance. Riverside CSD 2022 MSR & SOI Update [16] When two personal checks for water payment service are returned by the bank, for any reason, the District will no longer accept personal checks for future payment.30 District Revenues and Expenses The District submits annual reports to the California State Controller’s Office that outline their revenues and expenses for the prior year. The table below shows the last five years’ worth of data as provided by the State Controller’s Office. As shown in the table below, the District has been operating at a loss over the last five fiscal years which is in part due to the depreciation of assets. The District is encouraged to review its current expenditures to see if any inefficiencies can be identified and corrected. It is also recommended that the District conduct a rate study to assess the feasibility of raising rates to help offset expenditures. Table 4: Riverside CSD Reported Revenues Category FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Revenues Residential Water $51,696 $65,879 $60,176 $60,678 $63,462 Business Water $8,250 $9,750 $9,450 $9,750 $10,250 Investment Earnings $37 - $21 $28 $118 Other Water Sales $360 $100 $150 $83 $25 Total $60,343 $75,729 $69,767 $70,539 $73,855 Expenses General and Admin $35,044 $26,765 $30,375 $22,378 $23,642 Depreciation $17,498 $17,390 $17,377 $17,341 $18,785 Pumping $11,044 $9,254 $11,137 $11,299 $10,325 Treatment $8,280 $6,468 $7,418 $6,328 $7,288 Transmission and Distribution $11,955 $6,764 $17,071 $6,650 $5,419 Customer Accounting $2,078 $2,920 $3,064 $3,814 $5,319 Other Operating $5,978 $5,858 $4,934 $3,887 $2,654 Other Non-Operating $1,649 $2,587 $137 - $1,913 Total $93,526 $78,036 $91,513 $71,697 $75,345 Gain/(Loss) ($33,183) ($2,307) ($21,746) ($1,158) ($1,490) In accordance with Government Code §61110(f), on or before September 1 of each year or, for districts using two one-year budgets or a biennial budget, every other year, the board of directors shall adopt a final budget that conforms to generally accepted accounting and budgeting procedures for special districts. The general manager shall forward a copy of the final budget to the auditor of each county in which the district is located. Additionally, in accordance with Government Code §61118, the board of directors shall provide for regular audits of the district’s accounts and records and file annual financial reports to the State Controller. At this time, it is unknown if the District regularly adopts an annual budget. 30 Riverside CSD, Shutoff Procedures. Updated March 2022. Riverside CSD 2022 MSR & SOI Update [17] Audits The District conducts regular audits on a biannual basis. Since FY 2016-17, the net position of the District has been decreasing. As stated previously, this is largely due to depreciation of District assets. Although, the liabilities went down from $1,388 in FY 2018-19 to $1,363 in FY 2019-20. Table 5: Riverside CSD Net Position FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 Assets $596,562 $584,385 $581,271 $579,756 Liabilities $1,934 $1,342 $1,388 $1,363 Net Position $594,628 $583,043 $579,883 $578,393 The District’s operating revenues have not covered operating expenses since FY 2016-17. Operating revenues have increased from FY 2018-19 to FY 2019-20 by $823. The nonoperating revenues/(expenses) have increased from an expense of $22 in FY 2016-17 to a revenue of $118 in FY 2019-20. The District’s largest expense in FY 2019-20 was for payroll and the second largest was depreciation of assets. In the District’s FY2019-20 audit it was noted that significant deficiencies existed regarding District accounting practices. These include absence of appropriate segregation of duties, reviews and approvals of transactions, and application of generally accepted account principles in recording the District’s financial transactions. There is also an inadequate design of internal control over the preparation of financial statements31. According to the audit, this is typical of small entities that lack sufficient staff to implement checks and balances in their accounting practices. While these items are considered deficiencies, they are not significant enough to lead to a misstatement of the District’s financial standing. Table 6: Riverside CSD Revenues and Expenses Category FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 Operating Revenues Service Charges and Other $75,729 $71,519 $72,914 $73,737 Other Income - - - - Total Operating Revenues $75,729 $71,519 $72,914 $73,737 Operating Expenses Contracted Services $13,050 $13,900 $13,545 $14,550 Payroll Expenses $22,358 $21,435 $20,387 $20,154 Insurance $2,931 $4,195 $3,920 $3,905 Membership, Fees and Permits $1,030 $3,435 $1,451 $1,325 Office Expense and Postage $3,672 $3,985 $3,094 $3,031 Operating Supplies and Operating Costs $9,140 $11,005 $11,701 $10,851 31 Riverside CSD, Financial Statements for Fiscal Years ending June 30, 2019 and 2020: Exhibit F – Schedule of Findings. Riverside CSD 2022 MSR & SOI Update [18] Category FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 Professional Services $350 $4,825 $425 $831 Depreciation $17,519 $18,465 $19,176 $18,785 Easements for Water Service $2,587 $1,880 $2,486 $1,913 Total Operating Expenses $72,637 $83,125 $76,185 $75,345 Net Operating Income $3,092 ($11,606) ($3,271) ($1,608) Nonoperating Revenues (Expenses) Interest Revenue $21 $111 $118 Interest Expense and Other ($22) Total Nonoperating Revenues (Expenses) ($22) $21 $111 $118 Gain/ (Loss) $3,070 ($11,585) ($3,160) ($1,490) Riverside CSD 2022 MSR & SOI Update [19] 3.0 RIVERSIDE MSR DETERMINATIONS As set forth in Section 56430(a) of the CKH Act- In order to prepare and to update the SOI in accordance with Section 56425, the commission shall conduct a service review of the municipal services provided in the county or other appropriate area designated by the commission. The commission shall include in the area designated for a service review the county, the region, the sub-region, or any other geographic area as is appropriate for an analysis of the service or services to be reviewed, and shall prepare a written statement of its determinations with respect to each of the following: (1) Growth and population projections for the affected area a) The current population of the District is estimated to be between 219 and 327. Based on the limited growth of nearby communities, growth within the District is likely to be limited in the next five to ten years). (2) The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence a) Riverside CSD and surrounding unincorporated areas are considered DUCs with a 2019 estimated MHI that is 71 percent of the statewide MHI. (3) Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies a) Riverside CSD is currently utilizing approximately 44 to 68 percent of its water capacity. This indicates there is adequate water to support current and future needs. b) While there is adequate supply to meet current demand, the District does not have a reliable secondary source of water. The District is actively pursuing grant funding for establishment of a secondary well and existing water source improvements. It is recommended the District also explore the feasibility of establishing an intertie with Del Oro Water Company. c) Based on the District’s location within the Eel River floodplain, a tsunami inundation area, and an area of potential liquefaction, it is recommended that the District develop and adopt an emergency response plan. (4) Financing ability of agencies to provide services a) Based on available information from the State Controller’s Office and District audits, the District has been operating at a loss over the last five fiscal years. This is in part due to the depreciation of District assets. b) The District is encouraged to review its current expenditures and consider a rate study to assess the potential for raising rates to help cover the costs of services and build reserve funding for future projects. c) The District is encouraged to reach out to entities that provide project development technical assistance and grant support including the North Coast Resource Partnership, RCRC and California Rural Water Association. Riverside CSD 2022 MSR & SOI Update [20] (5) Status of and, opportunities for, shared facilities a) At this time there does not appear to be any opportunities for shared facilities. (6) Accountability for community service needs, including governmental structure and operational efficiencies a) The District is governed by a five member board of directors that is elected to staggered four-year terms. Board meetings are typically held on the second Wednesday of the month at 5:30pm via Zoom. b) The District has limited transparency and does not actively maintain its website. It is recommended that the District review its policies and procedures for responding to requests for information and regularly update and maintain the district website. (7) Any other matter related to effective or efficient service delivery a) A sphere of influence reduction is proposed to exclude the northwestern extent of the District not being served, including a portion of the Riverside Ranch property located near the Salt River and the Eel River Estuary that is managed by the California Department of Fish and Wildlife for agricultural open space, habitat conservation and public access. Riverside CSD 2022 MSR & SOI Update [21] 4.0 RIVERSIDE SOI DETERMINATIONS In order to carry out its purposes and responsibilities for planning and shaping the logical and orderly development of local governmental agencies to advantageously provide for the present and future needs of the county and its communities, the commission shall develop and determine the sphere of influence of each city, as defined by G.C. Section 56036, and enact policies designed to promote the logical and orderly development of areas within the sphere. In determining the sphere of influence of each local agency, the commission shall consider and prepare a written statement of its determinations with respect to the following: (1) Present and planned land uses in the area, including agricultural and open-space lands. a) Land use and zoning designations within the District are predominately agricultural. It is unlikely that this designation will change over the next five to ten years and limited development is anticipated. (2) Present and probable need for public facilities and services in the area. a) The area in and around the District maintains a low population density and is largely used for agricultural activities which require a reliable source of water to remain productive. (3) Present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. a) Currenlty the District has limited financial and staff capacity to extend service. b) The District has adequate water supply to support current needs but needs a reliable back up water supply to support customers in the event of an emergency. (4) Existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. a) The nearby City of Ferndale provides a full range of municipal services and provides some opportunities for obtaining basic services and supplies such as groceries and fuel. K-12 schools and limited medical services are also available. b) The City of Fortuna is located approximately six and half miles to the east of the District and provides a larger range of services including more extensive medical care facilities. (5) For an update of a sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere. a) The area surrounding the Riverside CSD boundary is within the same census block as the District and can be considered disadvantaged. Riverside CSD 2022 MSR & SOI Update [22]