HBMWD MSR SOI Adopted 03 19 25

Humboldt Bay Municipal Water District Municipal Services Review and Sphere of Influence Update Adopted March 19, 2025 www.humboldtlafco.org RESOLUTION NO. 25-01 APPROVING THE HUMBOLDT BAY MUNICIPAL WATER DISTRICT MUNICIPAL SERVICE REVIEW AND SPHERE OF INFLUENCE UPDATE WHEREAS, the Humboldt Local Agency Formation Commission, hereinafter referred to as the “Commission”, is authorized to conduct municipal service reviews and establish, amend, and update spheres of influence for local governmental agencies whose jurisdictions are within Humboldt County; and WHEREAS, the Commission conducted a municipal service review to evaluate the availability and performance of governmental services provided by the Humboldt Bay Municipal Water District, hereinafter referred to as the “District”, pursuant to California Government Code Section 56430; and WHEREAS, the Commission conducted a sphere of influence update for the District pursuant to California Government Code Section 56425; and WHEREAS, the Executive Officer gave sufficient notice of a public hearing to be conducted by the Commission in the form and manner provided by law; and WHEREAS, the staff report and recommendations on the municipal service review and sphere of influence update were presented to the Commission in the form and manner prescribed by law; and WHEREAS, the Commission heard and fully considered all the evidence presented at a public hearing held on the municipal service review and sphere of influence update on March 19, 2025; and WHEREAS, the Commission considered all the factors required under California Government Code Section 56430 and 56425. NOW, THEREFORE, BE IT RESOLVED by the Commission as follows: 1. The Commission, as Lead Agency, finds the municipal service review is exempt from further review under the California Environmental Quality Act pursuant to Title 14 California Code of Regulations Section 15306. This finding is based on the use of the municipal service review as a data collection and service evaluation study. The information contained within the municipal service review may be used to consider future actions that will be subject to additional environmental review. 2. The Commission, as Lead Agency, finds the sphere of influence update is exempt from further review under the California Environmental Quality Act pursuant to Title 14 California Code of Regulations Section 15061(b)(3). This finding is based on the Commission determining with certainty the update will have no possibility of Exhibit A Humboldt LAFCo Adopted - March 19, 2025 HUMBOLDT LOCAL AGENCY FORMATION COMMISSION Commissioners: Michelle Bushnell, District 2 Supervisor Steve Madrone, District 5 Supervisor Meredith Matthews, City of Arcata Cheryl Kelly, City of Trinidad Troy Nicolini, Peninsula Community Services District Heidi Benzonelli, Humboldt Community Services District Elaine Weinreb, Public Member Alternate Members: Mike Wilson, District 3 Supervisor Debra Garnes, City of Rio Dell David Couch, McKinleyville Community Services District Gordon Johnson, Public Member Staff: Colette Santsche, AICP, Executive Officer Krystle Heaney, AICP, LAFCo Analyst/Clerk Sarah Wickman, Associate Planner Amber Chung, Assistant Planner Louis Choy, GIS Analyst Acknowledgements: LAFCo would like to thank the staff and board members of the Humboldt Bay Municipal Water District for their assistance during the preparation of this Municipal Services Review. Humboldt LAFCo Adopted - March 19, 2025 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 Humboldt Bay Municipal Water District Background ................................................................ 4 2.1 Agency Overview .............................................................................................................................. 4 2.2 Formation and Development ........................................................................................................... 5 2.3 Boundary and Sphere of Influence ................................................................................................... 7 2.4 Tribal Lands ....................................................................................................................................... 9 2.5 Growth and Population .................................................................................................................. 10 2.6 Disadvantaged Unincorporated Communities ............................................................................... 10 2.7 Hazards ........................................................................................................................................... 13 2.8 Climate Change ............................................................................................................................... 16 3.0 Municipal Services .................................................................................................................. 18 3.1 Water Services ................................................................................................................................ 18 3.2 Electric Power Services ................................................................................................................... 31 3.3 Other Service Providers .................................................................................................................. 31 3.4 Shared Services ............................................................................................................................... 32 4.0 Governance & Finance ............................................................................................................ 34 4.1 Governance .................................................................................................................................... 34 4.2 Financial Overview ......................................................................................................................... 36 5.0 MSR Determinations ............................................................................................................... 38 6.0 SOI Determinations ................................................................................................................ 40 Humboldt LAFCo Adopted - March 19, 2025 List of Figures Figure 1: Humboldt Bay Municipal Water District Boundary and SOI ...................................................................... 8 Figure 2: Historic Legacy Communities and DUCs ................................................................................................... 12 Figure 3: Ruth Lake Reservoir Seasonal Elevation and Capacity 2022-2024 ........................................................... 19 Figure 4: Average Mad River Flow Below Damn 2022-2024 ................................................................................... 20 Figure 5: Turbine Flow from Mad River 2022-2024 ................................................................................................ 21 Figure 6: Water Diversion at John R. Winzler Operations and Control Center 2022-2024 ..................................... 21 List of Tables Table 1: HBMWD Contact Information ..................................................................................................................... 5 Table 2: HBMWD Wholesale Population – Current and Projected ......................................................................... 10 Table 3: HBMWD Retail Water Rates July 2024 ...................................................................................................... 24 Table 4: Wholesale Demands (2020 & 2023) .......................................................................................................... 25 Table 5: HBMWD Board of Directors ....................................................................................................................... 34 Table 6: SB929 Website Posting Requirements ...................................................................................................... 35 Table 7: Annual Budget Summary ........................................................................................................................... 36 Table 8: Audit Summary .......................................................................................................................................... 37 Table 9: Total Net Position Summary ...................................................................................................................... 37 Humboldt LAFCo Adopted - March 19, 2025 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 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, MSRs 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: Humboldt Bay MWD MSR & SOI Update [1] Humboldt LAFCo Adopted - March 19, 2025 (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. (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, Humboldt Bay MWD MSR & SOI Update [2] Humboldt LAFCo Adopted - March 19, 2025 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 Senate Bill (SB) 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged unincorporated communities,” (DUCs) including the addition of SOI determination number (5) listed above. Humboldt LAFCo has adopted DUC policy, which identifies 31 inhabited unincorporated “legacy” communities, including several within HBMWD, for purposes of implementing SB 244.1 These legacy communities were defined as part of the Humboldt County 2014 Housing Element for areas not located within the sphere of influence of a city. DUCs are recognized as social and economic communities of interest for purposes of recommending SOI determinations pursuant to Section 56425(c). DUCs are evaluated for the present and probable need for three primary services: water, wastewater, and fire/emergency response. HBMWD currently provides wholesale services to local agency water service providers within the District and retail water services to limited areas within the District. The existing HBMWD SOI is coterminous with the District boundary, meaning that any DUCs within the SOI are also within the District and to the extent that such areas have a need for municipal water services, primary consideration should be given to the nearest local agency water service provider for service delivery. Should any nearby areas outside the HBMWD boundary be proposed for annexation, careful consideration should be given to the boundary location and nearby local agency water service providers in order to ensure potentially disadvantaged areas are receiving vital services. 1 https://www.arcgis.com/apps/View/index.html?appid=4319a8066745442cbe7de6af1d13f98a Humboldt Bay MWD MSR & SOI Update [3] Humboldt LAFCo Adopted - March 19, 2025 2.0 HUMBOLDT BAY MUNICIPAL WATER DISTRICT BACKGROUND 2.1 Agency Overview The Humboldt Bay Municipal Water District (HBMWD or District) is an independent special district primarily located along the central coastline of Humboldt County, California. It lies along Highway 101 and 299 and includes the county's most populous communities, including Eureka, Arcata and McKinleyville. Humboldt Bay lies within the traditional lands of the Wiyot people, with Yurok also having a presence in the surrounding area. The Wiyot refer to the bay as Wigi (pronounced "wee-ghee"), and the Mad River as Baduwa’t, terms that holds significant cultural importance. HBMWD is authorized to provide wholesale and retail water services. The mission of HBMWD is to “Reliably deliver high quality drinking water to the communities and customers we serve in the greater Humboldt Bay Area at a reasonable cost; reliably deliver untreated water to our wholesale industrial customer(s) at a reasonable cost; and protect the environment of the Mad River watershed to preserve water rights, water supply and water quality interests of the District”. District Goals include (list order is not indicative of relative importance): • Safety and Public Health Ensure worker and public safety by consistently employing safe work practices, striving for zero o on-the-job reportable injuries each year. Operate the regional water system in full compliance with state and federal safe drinking water o laws and regulations to safeguard public health. • Financial Responsibility Conduct all operations cost-effectively to maintain the lowest possible rates for customers while o meeting public health, service, and reliability objectives. Strategically plan and budget for annual activities and projects, managing them in alignment with o the approved budget. • System Operation and Maintenance Maintain and upgrade the regional water system to ensure it reliably meets the needs of all o customers. Utilize preventive maintenance practices to maximize infrastructure longevity while investing in o upgrades and improvements when financially and operationally prudent. • Customer Service Understand and address the community’s water supply needs effectively. o Foster collaborative relationships with wholesale customers to address commercial and o operational matters critical to water supply and the regional system. • Future Positioning Develop a comprehensive long-term infrastructure plan, encompassing both capital projects o and maintenance, to ensure the system can reliably serve the community for the next 60 years. Protect the quality and quantity of the District’s water resources by maintaining local control of o water rights and safeguarding the watershed. Humboldt Bay MWD MSR & SOI Update [4] Humboldt LAFCo Adopted - March 19, 2025 Attract, retain, and support qualified employees, emphasizing training, professional o development, and empowerment to fulfill the District’s objectives. Collaborate with regulatory agencies to secure timely and cost-effective permits for operations o and maintenance while promoting long-term regulatory stability and predictability. Address climate change impacts by supporting initiatives that align with California's greenhouse o gas reduction goals (AB 32), focusing on projects that reduce the District’s emissions in line with its mission and core functions. Table 1: HBMWD Contact Information Contacts Contessa Dickson, Executive Assistant/Board Secretary E-mail office@hbmwd.com Address 828 Seventh Street Eureka, CA 95501 Phone 707-443-5018 Website www.hbmwd.com 2.2 Formation and Development HBMWD was formed on March 19, 1956, pursuant to the California Municipal Water District Act of 1911 (California Water Code §§ 71000–73001). HBMWD was established through a public initiative to create a reliable regional water supply to meet the growing demands of the Humboldt Bay area. At the time, the region's expanding communities and industrial sectors required a dependable water source for domestic, municipal, and industrial purposes. Recognizing this need, a public vote was held to form HBMWD as an independent special district, enabling it to secure funding for critical water infrastructure. The development of the regional water system included three initial parts with construction lasting from 1960 to 1962. One of HBMWD’s first major undertakings was the construction of the R.W. Matthews Dam on the Mad River, which created Ruth Lake in Trinity County, a vital reservoir for HBMWD’s water supply. HBMWD also built a diversion, pumping and control works on the Mad River at Essex (now known as the John R. Winzler Operations and Control Center) and a pipeline delivery system, establishing itself as a wholesale water supplier for nearby cities and community service districts. The pipeline system initially supplied water to the City of Arcata, the City of Eureka, and two pulp mills on the Samoa Peninsula. The original system infrastructure cost $13.8 million, which was financed through 40-year General Obligation bonds authorized by voters in 1956. These efforts establishing the District’s water infrastructure created a sustainable water system that has been vital in fostering Humboldt County’s growth, economic development, and long-term stability. After the construction of Ruth Lake, HBMWD chose not to assume secondary recreational responsibilities and instead, on December 31, 1964, entered into a Master Lease Agreement with Trinity County to address these responsibilities. Upon formation of the Ruth Lake CSD in 1966, Trinity County transferred and assigned the Master Lease to Ruth Lake CSD. This Assignment of Lease agreement assigns and transfers to the Ruth Lake CSD “all of its right, title and interest in and to that certain lease” provided, however, that this assignment “shall not in any way operate to release [the County] from any of the terms, conditions or obligations of said lease”. While the Master Lease was assigned to Ruth Lake CSD by Trinity County, the County remains responsible for compliance with the terms of the Master Lease. The original 39-year Master Lease agreement commenced on the first day of June, 1964, and provides for six ten-year extensions for a total of 99 years. The Master Lease was extended in Humboldt Bay MWD MSR & SOI Update [5] Humboldt LAFCo Adopted - March 19, 2025 May 2023 for another ten years. The lease allows the Ruth Lake CSD to maintain and operate boat launching facilities (the marina) and other recreational facilities including the camping and day-use areas. The Master Lease also allows the Ruth Lake CSD to sublease parcels of land for recreational purposes to private individuals. Use of sublease parcels for permanent residential purposes is prohibited by the Master Lease agreement and District policy. While Ruth Lake CSD’s primary focus is managing all the recreational aspects at Ruth Lake including sublease sites, the Marina and campgrounds, they also oversee small water systems, coordinate garbage pickup, and maintain onsite septic systems and outhouses at the marina and campground locations. Over time, HBMWD expanded its infrastructure, welcoming additional wholesale customers and making numerous upgrades to improve efficiency and reliability.2 These additions include: • South Bay Water Extension (1970) Extended the domestic water pipeline from Fairhaven along the Samoa Peninsula and installed o an under bay pipeline to serve the Humboldt Community Services District (CSD) and the City of Eureka. Cost: $1.95 million (50% funded by an U.S. Economic Development Administration (EDA) grant). o • Water Line Extensions to Blue Lake and Fieldbrook (1974) Expanded the pipeline to serve the Fieldbrook Glendale Community Services District and the City o of Blue Lake. Cost: $291,400. o • Industrial Direct Diversion – Pump Station 6 (1976) Built to address insufficient water delivery capacity for pulp mills and ensure contractual o obligations for industrial use. Facility supplies 60 MGD and was completed in 1977. o Cost: $5.7 million (50% funded by an EDA grant). o • Hydroelectric Plant (1983) Constructed a hydroelectric facility below R.W. Matthews Dam at Ruth Lake to generate revenue o from energy production. Cost: $3 million. o • Samoa Booster Pump Station (1996) Installed on the Samoa Peninsula to stabilize delivery pressure and increase system capacity by o 0.5 MGD. Cost: $391,000. o • Drinking Water Treatment Additions (1997–2003) Addressed safe drinking water regulations and improved water quality. o • Contact Time (CT) Tank (1997): A 2 MG reservoir to meet enhanced disinfection requirements. Cost: $1.2 million. o • Turbidity Reduction Facility (2003): Built to address high turbidity levels and ensure compliance with regulatory standards. Cost: $10.5 million (funded by a State Revolving Fund (SRF) zero-interest loan). o 2 Further in-depth details on the development and evolution of the HBMWD regional water system can be found in the writings by the previous District Engineer, John Winzler, including his historical accounts "A History of Water Development and Service Within the Humboldt Bay Area (1955–1979)" (written in 1979) and "Water Rate Evaluation—Historical Evolution of District Facilities and Capital Expenditures" (written in 1984). Humboldt Bay MWD MSR & SOI Update [6] Humboldt LAFCo Adopted - March 19, 2025 • Emergency Power Generator at Essex (2003) Installed a 2-MW generator to ensure water supply reliability during power outages and reduce o operational costs through energy programs. Cost: $787,000. o These additions have expanded the District’s capacity, improved water quality, and enhanced system reliability, supporting the region's growing needs. Since its inception, HBMWD's regional water system has consistently met the municipal and industrial water needs of the Humboldt Bay region, playing a crucial role in its long-term sustainability and progress. 2.3 Boundary and Sphere of Influence HBMWD’s jurisdictional boundary covers the greater Humboldt Bay area and extends into Trinity County, encompassing a total service area of approximately 225,000 acres (350 square miles). Within Humboldt County, the District’s boundaries extend from McKinleyville to the north, College of the Redwoods to the south, and the City of Blue Lake to the east as shown in Figure 1. It is important to note that Patrick Creek CSD, located north of McKinleyville CSD, receives HBMWD water through a service contract with MCSD. Within Trinity County, the HBMWD is the primary owner of more than 3,000 acres within Tax Rate Area (TRA) 066-003 that surrounds Ruth Lake (also shown in Figure 1). HBMWD’s SOI encompasses all existing service areas and is coterminous to its jurisdictional boundary. Humboldt Bay MWD MSR & SOI Update [7] Humboldt LAFCo Adopted - March 19, 2025 Figure 1: Humboldt Bay Municipal Water District Boundary and SOI Humboldt Bay MWD MSR & SOI Update [8] Humboldt LAFCo Adopted - March 19, 2025 2.4 Tribal Lands Humboldt Bay and the surrounding area serviced by HBMWD is located within the ancestral tribal lands of several Indigenous tribes in Northern California. The primary tribes whose traditional lands intersect with HBMWD's service area include: • The Wiyot Tribe is a sovereign and federally recognized tribe with around 600 members.3 The Wiyot people are the original inhabitants of the Humboldt Bay region, referring to the bay as Wigi and the Mad River as Baduwa’t. Their ancestral territory encompasses the area around Humboldt Bay, including present-day Eureka and Arcata. The Wiyot have a deep cultural and spiritual connection to this land, particularly to sites like Tuluwat Island within the bay and to Baduwa’t. • The Yurok Tribe is one of the largest sovereign and federally recognized tribes in California with over 5,000 enrolled members.4 The Yurok's traditional lands extend along the California coast, including areas north of Humboldt Bay. While their primary territory lies along the Klamath River, their influence and historical presence reach into parts of the HBMWD's operational area. • The Blue Lake Rancheria is a sovereign federally recognized tribe consisting of members of several indigenous groups, including Wiyot, Yurok, and Hupa tribes as well as members linked to the Tolowa and Cherokee people. The Blue Lake Rancheria actively engages with HBMWD regarding water supply and have partnered on projects like the Mad River Temperature Monitoring Study, aiming to assess and enhance water quality in the Mad River watershed. • The Trinidad Rancheria, is a sovereign federally recognized tribe consisting of members of several indigenous groups, including the Yurok, Wiyot, Tolowa, Chetco, Karuk, and Hupa peoples. The Cher-Ae Heights Indian Community of the Trinidad Rancheria is located north of Humboldt Bay. The Trinidad Rancheria lands are in proximity to the District's service region. The Trinidad Rancheria has engaged in discussions with HBMWD regarding water supply to support their community and development projects. • The Bear River Band of the Rohnerville Rancheria is a sovereign federally recognized tribe consisting of members of several indigenous groups, including Mattole, Bear River and Wiyot tribes. Although the Rancheria is located outside HBMWD’s district boundary, they are consulted on HBMWD’s construction projects located within the District’s boundary and Wiyot ancestral lands. Ruth Lake and the surrounding area, located in Trinity County, California, is situated within the ancestral territories of several Indigenous tribes which include:5 • Wailaki people, part of the Eel River Athapaskan linguistic group, traditionally inhabited areas along the Eel River and its tributaries, including regions encompassing Ruth Lake. Their territory extends into parts of present-day Trinity County, where Ruth Lake is located. Today, registered members of the Wailaki people can be found on the Grindstone Indian Rancheria of Wintun-Wailaki Indians in Elk Creek, California, as well as the Round Valley Reservation in Covelo, California. • Lassik people, also from the Eel River Athapascan linguistic group, are traditionally situated in the mountainous regions of Northern California, overlapping with areas around Ruth Lake.6 3 https://www.wiyot.us/ 4 https://www.yuroktribe.org/ 5 https://native-land.ca/maps/ 6 https://native-land.ca/maps/ Humboldt Bay MWD MSR & SOI Update [9] Humboldt LAFCo Adopted - March 19, 2025 • Nongatl people, part of the Eel River Athapascan linguistic group as well, traditionally lived in regions that include parts of present-day Trinity County, with territories that would encompass the area around Ruth Lake. 2.5 Growth and Population HBMWD utilized population data from the California Department of Finance (DOF) to estimate the population served within its service area. The DOF developed a database titled “Race/Ethnic Population with Age and Sex Detail, 2020-2070”, containing population data for each California county, including projections from 2020 to 2070. From this database, Humboldt County’s population projections through 2050 were used to estimate growth trends. The data showed an average annual growth rate of approximately 0.19% for Humboldt County from 2020 to 2050, alongside a notable population decline of 5% between 2019 and 2020. To determine the District’s service area population, census block population data and current boundaries for the District and applicable cities for 2020 were analyzed using Geographic Information System (GIS). This total population served was compared to Humboldt County’s reported population according to the 2020 US Census. This analysis indicated that in 2020 the District’s service area accounted for approximately 65% of Humboldt County’s population. This percentage was then used to project the District’s population through 2050 in 5-year increments, based on the DOF’s countywide projections. These projections allow HBMWD to plan for long-term service needs aligned with regional demographic trends. Table 2: HBMWD Wholesale Population – Current and Projected Population 2020 2025 2030 2035 2040 2045 2050 Served 85,755* 84,735 85,228 85,855 86,477 87,587 88,855 Notes: *For 2020, Census block population data was used for cities and districts that are wholesale customers to HBMWD and an additional 478 customers were added to include the District’s 200 retail water service connections with an average of 2.39 persons per household in Humboldt from 2019-2023.7 The District provides water to approximately 65% of the population of Humboldt County. According to the California Department of Finance's 2024 projections, Humboldt County's population is expected to experience a gradual increase over the coming decades. The county's population is projected to increase from approximately 136,000 in 2020 to about 141,000 by 2050.8. According to the Census, the population was 134,623 in 2010, increased to 136,463 by 2020, and then declined to an estimated 133,985 by July 1, 2023.9 These figures indicate a slight overall decrease of approximately 0.5% from 2010 to 2023. 2.6 Disadvantaged Unincorporated Communities As previously noted, Disadvantaged Unincorporated Communities (DUCs) are areas within California that are inhabited and have an annual median household income (MHI) less than 80% of the statewide MHI and have 12 or more registered voters. These communities often face challenges related to infrastructure and public services. Similarly, Humboldt County has identified “Unincorporated Legacy Communities” (ULCs). In 2011, Senate Bill 244 (Wolk) amended the Government Code to require counties to identify the infrastructure and service needs of 7 https://www.hbmwd.com/retail-water-services 8 https://dof.ca.gov/Forecasting/Demographics/projections/ 9 https://www.census.gov/quickfacts/fact/table/humboldtcountycalifornia/PST045223 Humboldt Bay MWD MSR & SOI Update [10] Humboldt LAFCo Adopted - March 19, 2025 unincorporated legacy communities as part of their general plans during the next Housing Element update. Under SB 244, an unincorporated legacy community is defined as a community that meets the following criteria: • Contains 10 or more dwelling units located in close proximity to one another; • Is geographically isolated and has existed for more than 50 years; and • Has a median household income that is 80% or less of the statewide median household income. Within the HBMWD SOI/district boundary, several Legacy Communities have been identified. These communities include Fieldbrook, Manila, Samoa, Fairhaven, and McKinleyville as shown in Figure 1. However, as most of the area of these communities are within the service areas of community services districts that receive wholesale water service from HBMWD, and these agencies assume the responsibility for planning and operations relating to the unique needs and challenges of these ULCs to ensure equitable access to water services, HBMWD is not directly responsible for water distribution nor water rate setting within these jurisdictions. Manila receives water and sewer service from the Manila Community Services District; Fieldbrook, and Glendale receive water and sewer service from the Fieldbrook-Glendale Community Services District; and McKinleyville receives water and sewer services from the McKinleyville Community Services District, and each of these service providers receives wholesale water from HBMWD. HBMWD provides retail water service to Samoa, Fairhaven and Finntown within the Peninsula CSD. In 2017 Peninsula CSD received approval from LAFCo for its formation. Peninsula CSD’s authorized services include: water; wastewater; fire protection; parks; recreation; trails; open space; landscape maintenance within public areas; streets and street maintenance; and storm drainage. In the 2017 Peninsula CSD formation resolution approved by LAFCo, HBMWD expressed its willingness to negotiate the transfer of its ownership of domestic water infrastructure within the boundaries of the Peninsula CSD. To date, Peninsula CSD has not formally approached HBMWD to accomplish this transfer of domestic water infrastructure including water rate setting responsibility. HBMWD infrastructure currently extends to McKinleyville in the north and College of the Redwoods south. However, DUC’s adjacent to HBMWD’s SOI/jurisdictional boundary that are disadvantaged or with inadequate access to water have the potential of requesting connection to HBMWD for water or supplemental water service. It should be noted that there are local agencies who provide water service near these areas, such as the Loleta and Westhaven Community Services Districts which should be considered when new water service is needed in DUC areas. Figure 2 shows communities and areas where the annual household income is less than 80% of the statewide median income north of HBMWD’s jurisdiction to Big Lagoon and south to King Salmon. Humboldt Bay MWD MSR & SOI Update [11] Humboldt LAFCo Adopted - March 19, 2025 Figure 2: Historic Legacy Communities and DUCs Humboldt Bay MWD MSR & SOI Update [12] Humboldt LAFCo Adopted - March 19, 2025 2.7 Hazards HBMWD participated in and met the participation requirements to be covered by the Multi-Jurisdictional Local Hazard Mitigation Plan (LHMP) for the Humboldt Operational Area, 2020.10 The Humboldt LHMP is a plan to identify and profile hazard conditions, analyze risk to people and facilities, and develop mitigation actions to reduce or eliminate hazard risks in Humboldt County and in incorporated jurisdictions within the County. Jurisdictions with FEMA-approved and formally adopted mitigation plans are eligible to apply for funding under FEMA’s hazard mitigation assistance programs, including Hazard Mitigation Grant Program, Pre-Disaster Mitigation and Flood Mitigation Assistance grant programs. The LHMP incorporates a process where hazards are identified and profiled, the people and facilities at risk are analyzed, and mitigation actions are developed to reduce or eliminate hazard risk. The implementation of these mitigation actions, which include both short and long-term strategies, involves planning, policy changes, programs, projects, and other activities. References to specific actions by HBMWD to reduce hazards, which primarily relate to flooding and earthquakes, are contained in the LHMP, Volume 2: Planning Partner Annexes. Similarly, the Humboldt County Dam Failure Contingency Plan outlines a comprehensive strategy to mitigate, respond to, and recover from potential dam failure flooding events originating from the R.W. Matthews Dam on the Mad River. The plan integrates coordinated response efforts across agencies, early warning systems, evacuation procedures, and public education to minimize the loss of life and property. HBMWD was involved in providing detailed inundation maps and flood response scenarios in collaboration with Humboldt County's Office of Emergency Services (OES). HBMWD also participated in and met the participation requirements to be covered by the Trinity County Local Hazard Mitigation Plan (HMP), adopted on December 3, 2024 by the Trinity County Board of Supervisors11. The Trinity County HMP is a comprehensive framework designed to reduce or eliminate long-term risks to people, property, and infrastructure from natural and man-made hazards. The plan considers the potential impacts of dam failure, water resource management, and environmental protection tied to HBMWD facilities. The HMP is updated every five years to reflect changing conditions and ensure that mitigation strategies remain relevant and effective. References to specific actions by the HBMWD to reduce hazards, which primarily relate to seismic vulnerability, are contained in the HMP in Appendix A. HBMWD Annex 11. Earthquakes HBMWD's infrastructure, including pipelines, the R.W. Matthews Dam, and control facilities, lies in a seismically active region near the Cascadia Subduction Zone. This zone poses a significant risk of high-magnitude earthquakes, potentially causing ground shaking, liquefaction, and landslides. Structural damage to the R.W. Matthews Dam could compromise water storage at Ruth Lake. HBMWD received a FEMA Hazard Mitigation Advance Assistance Grant in 2024 to perform a seismic assessment of the R.W. Matthews dam. Pending the results of that assessment, retrofits to the dam will be evaluated. Pipelines and the John R. Winzler Operations 10 Humboldt County Operational Area Hazard Mitigation Plan, 2020. https://humboldtgov.org/3011/County-Emergency-Plans 11 At the time the draft Trinity County Hazard Mitigation Plan (HMP) was reviewed by the Trinity County Board of Supervisors, the draft Humboldt Bay Municipal Water District (HBMWD) HMP Annex remains under review and revision by HBMWD. Per guidance from CAL OES to the Trinity County HMP planning team, HBMWD’s annex will be incorporated into the Trinity County HMP once revisions are complete and the document has been approved by the HBMWD Board of Directors. Humboldt Bay MWD MSR & SOI Update [13] Humboldt LAFCo Adopted - March 19, 2025 and Control Center could sustain operational disruptions or severe damage. The District has identified seismic retrofitting and/or redundancy as priorities for critical infrastructure to reduce vulnerability during earthquakes. HBMWD has secured Hazard Mitigation Grants (HMGs) to replace vulnerable infrastructure. For instance, in 2014 the District obtained $2.85 million to replace approximately 10,000 feet of an 18-inch Techite pipeline from the Terminal Reservoir at Samoa to the Humboldt Bay Crossing.12 This pipeline, crucial for delivering domestic water to thousands of residents, was susceptible to failure, particularly during seismic events that could trigger tsunamis. The replacement with more resilient materials enhances the system's durability against such hazards. Over time, HBMWD has consistently maintained their infrastructure by implementing specific measures to mitigate earthquake risks and enhance the resilience of its infrastructure. Most recently, HBMWD initiated a project to retrofit two tanks at the Korblex Reservoirs to improve their earthquake resilience.13 The project involved soliciting bids for construction management services, with specifications and bid documents made available in May 2024. A similar seismic retrofit project was undertaken for the Samoa Reservoir 1 Tank in May of 202414. Tsunamis A Cascadia Subduction Zone earthquake could generate a tsunami that affects the Humboldt Bay area. Tsunami inundation could potentially impact HBMWD’s pipelines and control systems near the coastline. HBMWD’s diversion and pumping facilities inland near Essex would be minimally impacted as they are on the fringes of the tsunami impact zone and the facility is built to withstand vernal flood conditions of more than 20 feet. HBMWD is actively engaged in regional tsunami hazard mitigation efforts. The Humboldt LHMP includes planning that ensures that these facilities can withstand potential inundation or are supported by contingency measures. In addition to HMGs, HBMWD has secured State grants to replace vulnerable infrastructure. HBMWD has focused on retrofitting emergency water supply interties (Calif. Prop. 50 and 84 grants) for communities like McKinleyville, Blue Lake, Fieldbrook-Glendale, Arcata, and Eureka. These pipeline replacements and interties provide alternative water supply routes if primary systems are compromised by flood, tsunami or earthquake events, ensuring continuous water service during emergencies. Flooding Intense rainfall events could result in the overflow of the Mad River and/or Ruth Lake during storms which could lead to flooding of HBMWD facilities and pipelines, especially in low-lying areas. The flood of record post dam construction occurred in 1964. The R. W. Matthews dam spillway had 2 feet of free board during this event and the embankment dam had an additional 10 feet of freeboard. There are no gates to control lake discharge flow through the spillway. Therefore, the reservoir discharge flow is considered “run of the river”. In the Mad River area, flood damage to diversion and treatment facilities near Essex could occur. Both the Mad River and Ruth Lake could also be subject to water quality risks due to sediment and debris influx. Erosion from flooding also poses a risk to both areas. At Ruth Lake, erosion along the reservoir's banks and surrounding lands could potentially destabilize adjacent infrastructure and increase sediment loads. Bridges, culverts, and other supporting infrastructure near Ruth Lake could be damaged or rendered impassable during flood events. For 12 https://humboldtgov.org/DocumentCenter/View/1029/Hazard-Mitigation-Plan-Progress-Report-PDF? 13 https://www.hbmwd.com/korblex-reservoirs-2-tanks-seismic-retrofit-project? 14https://www.hbmwd.com/samoa-reservoir-1-tank-seismic-retrofit-project-and-korblex-reservoirs-2-tanks-seismic-retrofit-project-plans-and-specs? Humboldt Bay MWD MSR & SOI Update [14] Humboldt LAFCo Adopted - March 19, 2025 the Mad River watershed, erosion along the riverbank can expose underground pipelines, making them vulnerable to physical damage, displacement, or ruptures during high-flow events. Facilities located near the river, such as diversion works and pumping stations, may experience foundation instability due to eroding soil, leading to structural damage or failure. Similar to Ruth Lake, erosion near access roads or pathways leading to HBMWD facilities can hinder maintenance crews' ability to reach and repair critical infrastructure. HBMWD mitigates these risks in several ways. There are regular inspections and HBMWD ensures the maintenance of the dam and surrounding infrastructure. Hydrological monitoring systems are also employed to predict and manage inflows. There are sediment management strategies to limit erosion and to maintain water quality. In addition, HBMWD actively works with regional agencies to maintain access roads and coordinate flood response plans. These efforts help ensure that the infrastructure in the Mad River watershed and Ruth Lake area can withstand flood events while maintaining its critical role in HBMWD's water supply system. Wildfire HBMWD has experienced significant impacts from wildfires, particularly in the area surrounding Ruth Lake. The August Complex Wildfire of 2020, which burned more than 1 million acres across five counties, devastated over 1,600 acres of vegetation on HBMWD-owned land, including large areas of forested lands on the eastern and southern edges of Ruth Lake.15 In addition to loss of forested lands, many structures around the lake were also lost and there was damage to the Ruth Lake CSD’s campground and dock facilities. In total, there were 78 lease lots affected by the fire.16 This destruction not only increased wildfire risks due to dead and charred vegetation but also disrupted the local ecosystem, and damaged access roads and other infrastructure. Wildfire devastation around Ruth Lake posed significant challenges for HBMWD, as all post-disaster rebuilding on HBMWD-owned lands, including all lease lot holder requests for rebuilding after the fire disaster, must be approved by Trinity County, Ruth Lake CSD and HBMWD. These impacts have highlighted the District's vulnerability to wildfires and the need for proactive fire management measures. To address these challenges, HBMWD has actively engaged in wildfire preparedness and mitigation efforts. The District has launched the Ruth Area Fire Fuel Reduction and Defensible Space Project, which involves clearing excess vegetation, removing fire-prone trees, and creating defensible space around structures and key infrastructure. These efforts align with CAL FIRE standards and aim to reduce the likelihood of wildfire spreading to or from the area surrounding Ruth Lake. In addition, HBMWD collaborates with public agencies and contractors to implement best practices for wildfire resilience, including vegetation management and improving access for firefighting crews. These initiatives not only safeguard HBMWD's infrastructure but also protect the broader community and environment in Southern Trinity County. Post 2020 August Complex wildfire, HBMWD received a CalFire Healthy Forest reforestation grant to begin the process of forest recovery. Grant partners include the US Forest Service and two private property owners. Approximately 1,750 acres are planned for re-forestation under this grant. 15 HBMWD, Ruth Area Fire Fuel Reduction & Defensible Space Project Part III – Request for Proposal (RFP) #3. Accessed from www.hbmwd.com/files/03d3ccc43/RFP+%233+-+CalFire+Fuels+Reduction+11.2023%2C+FINAL+11.20.23.pdf on November 20, 2024. 16 Ruth Lake CSD MSR/SOI Update. April 19, 2022. Humboldt Bay MWD MSR & SOI Update [15] Humboldt LAFCo Adopted - March 19, 2025 Dam Failure Dam failure represents a critical hazard for HBMWD due to its ownership and operation of the R.W. Matthews Dam. A dam failure at R.W. Matthews Dam could result in the uncontrolled release of water, leading to catastrophic flooding along the Mad River. The impacts would not only jeopardize downstream communities but also disrupt HBMWD's ability to supply water to its municipal and industrial customers, compromising critical infrastructure and public health. Erosion from this flooding would introduce sediment, debris, and nutrients into the Mad River. Recognizing these risks, HBMWD has implemented rigorous safety, maintenance, and emergency management protocols. These efforts include regular inspections, hydrological monitoring, and the development of Emergency Action Plans (EAPs) that align with local and state hazard mitigation strategies. HBMWD developed enhanced inundation maps to model potential flooding scenarios in the event of a catastrophic failure of the R.W. Matthews Dam. These maps assist in emergency preparedness by identifying areas at risk and informing evacuation plans of local emergency responders downstream of the dam. 2.8 Climate Change The effects of climate change can vary significantly by region. Two key climate change signals in the hydroclimate of California have been identified: progressively less frequent precipitation, particularly in the fall and spring, and greater precipitation extremes.17 More atmospheric rivers are predicted, with shorter more intense wet seasons, and longer dry seasons. Total annual rainfall amounts are expected to be more variable from year to year.18 Along the California coastline, climate change is expected to exacerbate challenges such as decreased water availability, reduced groundwater recharge, and rising sea levels, posing risks to both natural ecosystems and human infrastructure. It should be noted that during the 60 plus years of operation of the R. W. Matthews Dam, there has been only one year on record when the reservoir did not fill to capacity. This occurred during the 1976- 77 drought. The effects of climate change in the Humboldt Bay region are particularly pronounced and varied. Longer, drier summers have led to decreased precipitation and heightened wildfire risks, impacting the surrounding forests and communities. In addition, reduced groundwater recharge threatens the availability of freshwater resources for municipal, agricultural, and industrial use. HBMWD has demonstrated a proactive stance on climate resilience and disaster readiness for the following hazards: 1) power outages: installation of backup power generators at key pumping and treatment facilities; and 2) seismic event: redundancy of transmission pipelines and interties. Severe Weather Climate change is expected to impact wind patterns, increase rainfall, and worsen winter storms that are common in the region, potentially disrupting HBMWD operations. These weather changes could damage infrastructure from fallen trees, debris, or erosion. Power outages resulting from extreme weather could affect pumping and treatment facilities. While some amount of increased rainfall can benefit the HBMWD reservoir operations by capturing excess water, there are also risks and challenges anticipated from more intense rainfall events anticipated with climate change. 17 Scripps Institute of Oceanography https://scripps.ucsd.edu/research/climate-change-resources/faq-climate-change-california 18 Northern California Climate Adaptation Project https://ecoadapt.org/data/documents/EcoAdapt_NorCalClimateImpactsOverview_FINAL_Sept2021.pdf Humboldt Bay MWD MSR & SOI Update [16] Humboldt LAFCo Adopted - March 19, 2025 The District uses climate models and projections to anticipate long-term impacts, ensuring proactive management of its water rights and infrastructure. HBMWD has taken measures to protect its infrastructure from storms and high winds, including reinforcing pipelines and treatment facilities. The District's contingency planning includes protocols for power outages and system disruptions caused by severe weather events, such as storms and flooding. Given its reliance on the Mad River, HBMWD incorporates flood risk management into its operational strategies, ensuring the integrity of diversion works and the safety of water supplies during extreme weather. HBMWD incorporates climate change into its risk assessments, considering its effects on water availability and system vulnerabilities. For example, the District plans to address potential shifts in precipitation patterns, reduced snowpack, and longer dry seasons that could affect Ruth Lake’s reservoir capacity and the Mad River’s flow. HBMWD mitigates disruptions to power from extreme weather with backup power generators, such as the 2- MW emergency power generator at Essex, which ensures operational continuity during outages. Drought While Ruth Lake and the Mad River watershed typically provide ample water, drought conditions can still impact the region. For instance, in 2021, Humboldt County declared a local drought emergency due to low river flows and other drought-related challenges.19 However, HBMWD's operations are generally less affected by drought compared to other areas. During 2021, the Ruth Reservoir filled to capacity ensuring adequate water supply to HBMWD’s customers despite the drought declaration. The District's water usage represents a small fraction of the Mad River's total flow. Specifically, Ruth Lake's capacity is less than 5% of the river's average annual runoff, and HBMWD's diversions at Essex account for only about 3% of the total annual runoff. Additionally, HBMWD's management practices, such as releasing water from Ruth Lake to maintain downstream flows during the summer and early fall months, help mitigate drought impacts on water supply and aquatic ecosystems. These releases support river habitat during dry periods, benefiting aquatic species. Under California’s "use it or lose it" doctrine, water rights can be lost if the water use supported by those rights is less than what is allocated. Since the time when two industrial customers greatly reduced their water use, the District has not been putting to beneficial use the large volumes of water allocated in its water rights. The District is currently working with the State Water Resources Control Board to revise its water rights but the allocation would not be decreased in ways that would decrease the District’s flexibility to respond to drought conditions. Sea Level Rise Along the Humboldt Bay coastline, rising sea levels pose a significant challenge. This region is experiencing one of the highest rates of relative sea level rise on the U.S. West Coast, exacerbated by tectonic subsidence. The combination of sea level rise and storm surges increases the risk of flooding and erosion, jeopardizing infrastructure and facilities critical to HBMWD in and around Humboldt Bay. Flooding of low-lying infrastructure, including pipelines and operational facilities near the coast, could greatly impact water service delivery The District’s infrastructure located within the Samoa peninsula may be susceptible to sea level rise. An assessment of this vulnerability risk has not been undertaken. 19 Humboldt County Board of Supervisors, Resolution No. 21-77: Resolution of the Humboldt County Board of Supervisors Proclaiming the Existence of a Local Emergency Due to Drought. Accessed from humboldtgov.org/DocumentCenter/View/97922/Humboldt-County-Drought-Proclamation-July-20- 2021?bidId= on November 20, 2024. Humboldt Bay MWD MSR & SOI Update [17] Humboldt LAFCo Adopted - March 19, 2025 3.0 MUNICIPAL SERVICES 3.1 Water Services HBMWD provides water services through a comprehensive regional system that supports both municipal and industrial needs in Humboldt County. The District operates diversion facilities on the Mad River, capable of supplying up to 75 million gallons per day (MGD), the Lloyd L. and Barbara Hecathorn Turbidity Reduction Facility, over 35 miles of pipeline infrastructure, and advanced communication and control systems at the John R. Winzler Operations and Control Center. Source HBMWD obtains water from the Mad River watershed originating in Trinity County. The District owns 3,000 acres that surround Ruth Lake and operates R. W. Matthews Dam that creates the Ruth Lake reservoir on the Mad River and the Gosselin Hydro-Electric Power House associated with the dam. Located off of Highway 36 in Trinity County, Ruth Lake reservoir stores water captured from the watershed in accordance with the District’s permitted water rights as noted below: • Water Rights Permit 11714 (Application 16454) allows for appropriation of up to 48,030 acre-feet per year as storage that is to be collected from October 1 to April 30 of the following year. The total annual diversion and use allowed under this permit is limited to 132,030 acre-feet per year20. • Water Rights Permit 11715 (Application 17291) allows for appropriation of 116 cfs (74.97 MGD) by direct diversion year round and 20,000 acre-feet annually by storage to be collected from October 1 to April 30 of the following year. The maximum combined storage, for both Permit 11714 and 11715, cannot exceed 48,030 acre-feet per year. The total annual diversion and use allowed under Permits 11714 and 11715 is not to exceed 132,030 acre-feet per year21. Permit 11715 also requires that a minimum of 5 cfs be released into the natural streambed of the Mad River below R.W. Matthews Dam at all times. Additionally, there are specific bypass flows that are measured below Essex, the point of diversion/re-diversion, at different times of the year as detailed in the permit. • Water Rights Permit 18347 (Application 26657) allows for diversion of 1,000 cfs year-round and 120,000 acre-feet per year for storage to be collected from October 1 to April 30 of the following year22. The point of diversion is Ruth Reservoir and the intended purpose is for power. The 2024 annual progress report for the permit states 2,682 MW of power was generated that year. Water released from R.W. Matthews Dam flows either directly downriver via the spillway or through the power generation station before being released downriver. The Mad River generally flows northwest towards Blue Lake and then enters the Pacific Ocean near McKinleyville. At Essex, just west of Blue Lake, water is pumped from several wells below the riverbed to the District’s treatment facility. 20 SWRCB, Division of Water Rights, Permit for Diversion and Use of Water (Permit 11714). Filed on July 7, 1955. 21 SWRCB, Division of Water Rights, Permit for Diversion and Use of Water (Permit 11715), Filed on September 21, 1956. 22 State Water Resources Control Board (SWRCB), Division of Water Rights, Permit for the Diversion and Use of Water (Permit 18347). Filed on December 9, 1980. Humboldt Bay MWD MSR & SOI Update [18] Humboldt LAFCo Adopted - March 19, 2025 HBMWD monitors and collects telemetry data from its water diversion and storage systems, specifically focusing on critical metrics such as lake elevation, capacity, Mad River flow rates, turbine flow, and water diversions at Essex. Telemetry data from 2022-2024 was analyzed to determine trends and observations as discussed below.23 1. Ruth Lake Levels and Capacity: The lake's elevation and capacity fluctuate over time, reflecting seasonal water storage and release patterns. Lake capacity adjustments are made through water releases timed during the summer and fall to maintain supply and ecosystem needs. Figure 3: Ruth Lake Reservoir Seasonal Elevation and Capacity 2022-2024 2,658 2,656 2,654 2,652 2,650 2,648 2,646 2,644 2,642 2,640 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 23 HBMWD, Water Diversions, Telemetry Data for 2021 to 2023. Accessed from www.hbmwd.com/water-diversions on November 15, 2024. Humboldt Bay MWD MSR & SOI Update [19] )teef( noitavelE ekaL Ruth Lake Average Elevation by Month & Year 2022 2023 2024 55,000 50,000 45,000 40,000 35,000 30,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec )teef-erca( yticapaC ekaL htuR Average Lake Capacity by Month & Year 2022 2023 Series3 Humboldt LAFCo Adopted - March 19, 2025 2. Mad River Flows: Flows below the dam in the Mad River show variability based on tributary contributions and water releases for District diversions and environmental needs. During the high rain/flow seasons, HBMWD manages water storage at Ruth Lake and diverts water at Essex such that operations have minimal impact on the natural flow regime of the Mad River. During the dry/low flow seasons, HBMWD releases water to meet municipal demand, environmental low flow requirements, and for aquatic ecosystem enhancement; flows in the river are generally higher than they would have been historically, before the District began its operations.24 Figure 4: Average Mad River Flow Below Damn 2022-2024 2006 1506 1006 506 6 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3. Turbine Operations: Turbine flow data indicates regular use of the hydroelectric facility, with variations based on water storage levels, time of year, water needs for District customers, and access to the electrical grid to offload the electricity. The hydroelectric plant operates secondary to the water supply function, producing electricity as water is released. 24 HBMWD, Humboldt Bay Municipal Water District Urban Water Management Plan. 2020 Humboldt Bay MWD MSR & SOI Update [20] )sfc( dnoces rep teef cibuc Average Mad River Flow Below Dam by Month & Year 2022 2023 2024 Humboldt LAFCo Adopted - March 19, 2025 Figure 5: Turbine Flow from Mad River 2022-2024 300 250 200 150 100 50 0 4. Water Diversion at Essex: Diversion data at Essex demonstrate consistent delivery to municipal customers. Flow rates through the diversion facilities highlight HBMWD's ability to meet customer demands. Figure 6: Water Diversion at John R. Winzler Operations and Control Center 2022-2024 Infrastructure Ruth Lake Dam and Power House The R.W. Matthews Dam impounds runoff from the upper quarter of the approximately 121-square-mile Mad River basin, forming Ruth Lake reservoir in Trinity County. Ruth Lake has a storage capacity of 48,030 acre-feet, providing essential water resources for HBMWD’s operations downstream.25 The spillway at the dam is ungated, consequently, once the reservoir fills, the excess water flows uncontrolled through the spillway and downstream. This is typically referred to as a “fill and spill” reservoir. When water is not flowing through the spillway, water is released from Ruth Lake through the hydroplant to meet downstream municipal and industrial demand, to 25 BMWD, Humboldt Bay Municipal Water District Urban Water Management Plan. 2020 Humboldt Bay MWD MSR & SOI Update [21] )sfc( dnoces rep teef cibuc Turbine Flow from Mad River by Month & Year Average of 2022 Turbine Flow Average of 2023 Turbine Flow Average of 2024 Turbine Flow 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec )DGM( noisreviD Average Total Diversion from Mad River by Month & Year 2022 2023 Series3 Humboldt LAFCo Adopted - March 19, 2025 maintain minimum bypass flows in the Mad River below Essex, and to enhance aquatic ecosystem health downstream of the dam. During the high flow months, HBMWD’s reservoir and water management activities have minimal impact on the flow regime of the Mad River due to several factors. First, the volume of water impounded and diverted by HBMWD represents a small fraction of the Mad River’s total flow. Current diversions, without a pulp mill, are 8- 13 MGD. Also, downstream tributaries significantly contribute to the Mad River’s flow, buffering potential effects of District operations. Furthermore, there are no out-of-basin water transfers in the Mad River watershed. During low flow months, water released from Ruth Lake flows directly down the Mad River channel, augmenting low flows during the summer and fall when tributary flow is also low. This augmentation benefits aquatic species by expanding river habitats, as acknowledged in HBMWD’s Habitat Conservation Plan (HCP) for its Mad River activities26. The Gosselin Hydroelectric Power House is located below R.W. Matthews Dam. The power house was built in 1981 to generate renewable hydroelectric power by harnessing the flow of water released from Ruth Lake27. The hydroelectric plant has a capacity of 2 megawatts (MW), utilizing two 1-MW turbine generators. It plays a dual role in generating electricity and augmenting seasonal low flows in the river. Essex Pumping Facilities HBMWD operates diversion and pumping facilities near Essex, located northeast of Arcata along the Mad River. Water is pumped from the Mad River through four (4) Ranney Collector wells, which draw from the river’s gravel aquifer approximately 60 to 90 feet below the riverbed. The Ranney well pumping facilities provide an average of about 10 MGD (11,000 acre-feet per year) and support this District’s municipal water operations. Altogether, the Collector wells can produce approximately 20 to 21 MGD.28 However, HBMWD's water right allocation sets a legal limit on withdrawals, meaning the District has the capacity to pump more water than it is permitted to use. Industrial water is provided through a separate system that conveys water through a surface diversion facility called Pump Station #6 (also referred to as the Hilfiker Pump Station).29 Originally constructed in 1976 to support the pulp mills, the industrial system is capable of supplying 60 MGD of untreated water30. Pump Station #6 was idled on May 1, 2009. Turbidity Reduction Facility In response to winter storm events that increase turbidity in the Mad River to levels that could potentially interfere with the disinfection process, the California State Water Resources Control Board Division of Drinking Water (DDW) directed HBMWD (and other public water systems in the region) to address the wintertime turbidity issue. As a result, the District constructed the regional Lloyd and Barbara Hecathorn Turbidity Reduction Facility (TRF) which was completed in April 200331. The TRF addresses turbidity issues in the water supply by employing an in- 26 HBMWD, Beautiful Ruth Lake. Accessed from www.hbmwd.com/beautiful-ruth-lake on November 15, 2024. 27 HBMWD, Habitat Conservation Plan for its Mad River Operations. Final Approved HCP – April 2004. Accessed from www.waterboards.ca.gov/water_issues/programs/tmdl/records/region_1/2010/ref3683.pdf on November 15, 2024. 28 HBMWD, What We Do. Accessed from https://www.hbmwd.com/hbmwd on November 15, 2024 29 HBMWD, What We Do. Accessed from https://www.hbmwd.com/hbmwd on November 15, 2024 30 HBMWD, Urban Water Management Plan 2020. Adopted on June 10, 2021. 31 HBMWD, Urban Water Management Plan 2020 – Section 7.1.1: Water Quality. Adopted on June 10, 2021. Humboldt Bay MWD MSR & SOI Update [22] Humboldt LAFCo Adopted - March 19, 2025 line gravity filter process to reduce turbidity, ensuring compliance with state water quality standards.32 Constructed at a cost of approximately $10 million, it was financed through a zero-interest Safe Drinking Water State Revolving Fund Loan. The facility is designed to process 14 MGD during the wintertime and 21 MGD during the summertime when raw water turbidity is generally lower. Treatment Facility The District operates a single water treatment facility with a design capacity of 21 MGD. The District’s treatment plant is a direct mono-media, deep bed filtration plant designed for maximum turbidity reduction. HBMWD has storage facilities at various locations to service their domestic and industrial water systems.33 Demand In 2023, the District diverted a total of 3,895.5 acre-feet of water for municipal purposes that was then treated and distributed to the District’s customers. This is a decrease from the 2020 demand of 8,269 acre-feet reported in the District’s most recent Urban Water Management Plan (UWMP) 34. The District’s permitted direct diversion water right is 84,000 acre-feet per year. The District’s Rainey Collectors have a current production capacity ranging from approximately 41 MGD to 66.5 MGD depending upon river flows and a direct diversion capacity of up to 65 MGD. Therefore, it can be reasonably estimated that the District is using approximately 5.0% to 8.5% of its Rainey Collector source capacity. This is largely due to the loss of industrial users in 1993 and 2009. Industrial Contracts HBMWD’s industrial water system can supply up to 60 MGD of untreated surface water. This water was historically provided to two large pulp mills on the Samoa Peninsula. These mills ceased operations in 1993 and 2009, respectively. From 2000 to 2008, when one pulp mill was operating, deliveries of industrial water averaged 14 MGD (15,700 acre-feet per year)35. Recent interest in raw water for aquaculture and other industrial uses on the Samoa Peninsula could revitalize the District's industrial water system, albeit at reduced volumes compared to the former mills. At this time, the District does not have any industrial customers that use water in volumes approaching those of the former pulp mills. However, there is a possibility for future industrial customers which is discussed under “Potential Future Water Contracts”. Retail Contracts HBMWD provides retail water service to approximately 200 service connections.36 The number of retail connections remains fairly consistent with annual disconnections ranging from 0 to 9 from 2020 to December 2024.37 The properties served are primarily located in unincorporated areas outside the City of Arcata, including the West End Road and Warren Creek Road areas. Additional service areas include parts of the Arcata Bottoms 32 HBMWD, Barbara and Lloyd L. Hecathorn Turbidity Reduction Facility , Accessed from https://www.hbmwd.com/barbara-and-lloyd-l-hecathorn- turbidity-reduction-facility on December 15, 2024. 33 Industrial reservoir – 1 million gallons. Domestic reservoir – 1 million gallons; Domestic Contact reservoir – 2 million gallons. 34 HBMWD, Urban Water Management Plan 2020. Table 6-8: Wholesale: Water Supplies – Actual. Adopted on June 10, 2021. 35 HBMWD, Urban Water Management Plan 2010. Section 3.2 – Water Demands. Prepared June 2011. 36 HBMWD, Retail Water Services, Accessed from https://www.hbmwd.com/retail-water-services on December 13, 2024. 37 HBMWD, Number of Discontinuation of Water Services by Month, Accessed from https://hbmwd.specialdistrict.org/number-of-discontinuations-of- water-service-by-month on December 20, 2024. Humboldt Bay MWD MSR & SOI Update [23] Humboldt LAFCo Adopted - March 19, 2025 and portions of the Samoa Peninsula south of the Manila Community Services District, encompassing the communities of Fairhaven and Samoa. In 2020, Retail Customer deliveries totaled 274 acre-feet. In 2023, total demand for retail customers was 152.25 acre-feet. Current rates for FY 24/25 are summarized below. These rates were established by Board Resolution #2021-06, which implemented a structured system for annual increases over five years (FY 21/22 - FY 25/26). Retail revenues must align with the actual cost of providing service, including operations, maintenance, and infrastructure improvements. Cost-of-service varies by customer classes based on water usage patterns, the potential demand each has on the water system, and the cost of infrastructure needed to serve each class. As part of its long-term financial planning process, the District conducts a retail water rate study every five years. The next rate study is anticipated in late 2025/early 2026 to assess the reasonable cost of service and establish updated water rates for the next five-year period (FY 26/27 - FY 30/31). The District has established two service areas - Fairhaven and Non-Fairhaven - based on infrastructure costs. Non-Fairhaven customers are connected directly to the main transmission line and do not utilize the distribution system that serves Fairhaven customers. This cost difference is accounted for in the capital replacement charges, which have been in place for Fairhaven customers since FY 09/10. Additionally, the District provides fire suppression (public hydrants) to Fairhaven customers, which is incorporated into Fairhaven’s base rate but does not apply to Non-Fairhaven customers. The capital replacement costs cover the replacement of components within the retail distribution system to ensure the infrastructure remains in good working order. In 2016, the District updated these costs following the completion of the Techite Pipeline Replacement Project38 in 2014, providing a more accurate assessment of the expenses required to maintain the Fairhaven distribution system. The Fairhaven capital replacement reserve fund paid off prior capital expenses and began accumulating a positive balance in FY 23/24. As of January 2025, the reserve holds $33,282.59. The upcoming rate study is expected to reassess capital reserve needs and adjust capital replacement charges accordingly. Table 3: HBMWD Retail Water Rates July 2024 Category 1 – Domestic and Small Businesses Category 2 – Domestic and Small Businesses Located Located Within the Fairhaven Distribution Grid Outside the Fairhaven Distribution Grid Meter Size New Base Capital Monthly Meter Size New Base Capital Monthly Rate Replacement Base Rate Replacement Base Charge Charge Charge Charge 5/8 x 34” $44.01 $27.63 $71.64 5/8 x 34” $45.93 $2.90 $48.83 1” $69.69 $55.91 $125.60 1” $59.25 $7.72 $66.97 1.5” $163.13 $58.70 $221.83 1.5” $91.27 $15.95 $107.22 2” $199.84 $61.22 $261.06 2” $129.17 $23.36 $152.53 3” $366.29 $67.12 $433.41 3” $300.04 $46.73 $346.77 4” $587.04 $111.37 $698.41 4” $492.96 $63.49 $556.45 38 In March 2012, the Federal Emergency Management Agency (FEMA) awarded the District a capital grant to be used for the Techite pipeline retrofit project. FEMA obligated $2,185,178 in funds to be administered by the California Emergency Management Agency (CalEMA). Humboldt Bay MWD MSR & SOI Update [24] Humboldt LAFCo Adopted - March 19, 2025 6” $1,099.51 $124.24 $1,223.75 6” $1,008.77 $91.28 $1,100.05 8” $1,818.44 $128.28 $1,946.72 8” $1,729.59 $103.19 $1,832.78 6” FS Only $1,089.31 $93.25 $1,182.56 6” FS Only $1,003.75 $9.79 $1,013.54 8” FS Only $1,806.91 $93.25 $1,900.16 8” FS Only $1,721.35 $9.79 $1,731.14 Rates were updated 7/3/202439 and are reflective of a retail rate study set by a March 2021 Resolution. Municipal Water Contracts On a wholesale basis, HBMWD provides treated domestic water to seven municipal agencies, including the cities of: Arcata, Blue Lake, and Eureka, and the Community Services Districts of: Fieldbrook/Glendale, Humboldt, Manila, and McKinleyville, serving an estimated population of 94,000—approximately 65% of Humboldt County’s residents. A summary of water demand for each agency is provided in Table 4: Wholesale Demands (2020 & 2023) 40. The City of Eureka (City) maintains water rights on the Mad River equivalent to 5.16 MGD. Under an agreement between the District and the City, the deliveries from the District to the City (up to this quantity) are considered to be deliveries of the City’s water, emanating from its own water rights, not those of the District as the City’s water rights are senior to the District’s water rights on the Mad River. Deliveries to the City in excess of the City’s water rights are considered deliveries of the District’s water41. HBMWD has long-term contracts with its wholesale municipal customers, effective through June 30, 2037, with the potential for a ten-year extension. These contracts detail the allocation of operating, maintenance, and capital costs among customers, ensuring sustainable management of the regional water system. Additional revenue sources, such as property taxes, a portion of hydroelectric power sales, and retail water income, are credited back to the wholesale customers, offsetting their costs. Through collaborative initiatives like the Samoa Peninsula Infrastructure Workgroup, HBMWD works with public agencies to improve infrastructure, foster economic development, and enhance community well-being. This proactive approach ensures that HBMWD continues to support the water needs of Humboldt County while addressing future challenges and opportunities. Table 4: Wholesale Demands (2020 & 2023) Wholesale Agency Contract Allocation 2020 Demand (AF) 2023 Demand (AF) City of Arcata 3,360 1,679 1,782 City of Blue Lake 448 178 184 City of Eureka 7,841 3,554 3,785 Fieldbrook-Glendale CSD 482 186 178 Humboldt CSD 3,248 809 719 McKinleyville CSD 2,912 1,481 1,484 Manila CSD 168 103 123 39 https://hbmwd.specialdistrict.org/files/21bbb926a/Rates+July+2024.pdf 40 HBMWD, Urban Water Management Plan 2020. Table 4-1: Wholesale – Demands for Potable and Non-Potable Water – Actual. Adopted on June 10, 2021. 41 HBMWD, Urban Water Management Plan 2020 – Section 6.9: Summary of Existing and Planned Sources of Water. Adopted on June 10, 2021. Humboldt Bay MWD MSR & SOI Update [25] Humboldt LAFCo Adopted - March 19, 2025 Potential Future Water Contracts Industrial Water Users HBMWD is exploring opportunities to provide water for a potentially significant economic development project on the Samoa Peninsula: the Humboldt Bay Harbor, Recreation, and Conservation District's Offshore Wind Terminal. This project presents an opportunity for HBMWD to utilize its industrial water infrastructure, which has been underutilized since the closure of the Samoa pulp mills. • Offshore Wind Terminal The Harbor District is developing a Humboldt Bay Offshore Wind Heavy Lift Marine Terminal on the Samoa Peninsula to support the assembly and deployment of wind turbines for offshore wind energy production. This initiative is part of California's effort to expand renewable energy infrastructure. The terminal is expected to require industrial-grade water for various construction, operational, and maintenance activities, including dust control, turbine assembly, and other site needs. Water sales to the Offshore Wind Terminal would provide another beneficial use of water for HBMWD, contributing to the region’s transition to renewable energy and bolstering economic growth on the Peninsula. Domestic Water Users There is ongoing potential for additional potable water customers in the region. Future demand from HBMWD may arise from increased residential or mixed-use developments that require municipal water connections, expansion and build-out of industrial and commercial developments, and other emerging economic opportunities that necessitate reliable potable water service, such as Nordic Aquafarm’s proposed fish cleaning facilities, which may require up to 300,000 gallons of potable water a day. In 2022 the County of Humboldt established an Enhanced Infrastructure Financing District (EIFD) on the Samoa Peninsula, covering approximately 2,243 acres located southwest of the 255 Bridge outside of Eureka. The Samoa Peninsula EIFD was created to facilitate infrastructure projects that create jobs, enhance quality of life for visitors and residents, support existing and emerging industries, and mitigate climate change impacts. The EIFD could significantly impact HBMWD’s future water contracts by facilitating new industrial, commercial, and residential developments that require potable water service. By leveraging property tax increment financing for infrastructure improvements, the EIFD supports business growth and housing expansion, increasing potential demand for HBMWD’s municipal water supply. Additionally, the County’s active promotion of the area to attract businesses could lead to new water service agreements, particularly for industrial users such as Nordic Aquafarms and other future occupants of the district. Future development in Humboldt County, including projects led by Humboldt Community Services District (HCSD) and the City of Eureka, may result in additional demand for HBMWD’s domestic water supply. Continued collaboration with local agencies will be essential to expanding service and maintaining infrastructure resilience. Mainline Extensions The process for HBMWD to extend service to new areas is primarily led by parties interested in receiving a service connection. Project proposal, engineering, design, and construction is typically the responsibility of the interested party in consultation with HBMWD staff. Once the project is completed, HBMWD takes ownership of the facilities Humboldt Bay MWD MSR & SOI Update [26] Humboldt LAFCo Adopted - March 19, 2025 and infrastructure and assumes maintenance for the extent of the line from its connection point to the HBMWD pipeline. As of 2024, two proposed extensions are in the planning stages: • Trinidad Rancheria In June 2020, the Trinidad Rancheria requested extending water service from HBMWD to their tribal lands south of Trinidad. This initiative aims to secure a reliable water source to support Trinidad Rancheria's long-term development plans, which include constructing a hotel, RV park, gas station, convenience store, and tribal housing. The Trinidad Rancheria formally requested consultation with HBMWD to explore this extension. Subsequently, in February 2022, HBMWD and the Trinidad Rancheria approved a mainline extension agreement. The agreement stipulates that Trinidad Rancheria will develop detailed plans for the pipeline, including its size, path, regulatory approvals, and construction designs, all subject to HBMWD's approval. Once constructed, the pipeline would deliver water from HBMWD's system through McKinleyville CSD to a master meter on Trinidad Rancheria's tribal trust lands, enabling Trinidad Rancheria to distribute water to its facilities on their lands. As of 2024, Trinidad Rancheria has contracted engineers to evaluate pipeline routes and design options. Preliminary water delivery capacity has focused on estimates for 2-inch and 4-inch diameter pipelines under nominal pressure conditions42. HBMWD staff has estimated that a 2-inch pipe could deliver approximately 271,000 gpd, while a 4-inch pipe could deliver approximately 383,000 gpd. However, minimum fire flow requirements mandate the installation of a 6-inch diameter pipeline. The pipeline's final design and capacity will ultimately depend on the Rancheria's engineering studies and HBMWD's approval of the proposed plans. HBMWD has sufficient capacity for all 3 pipe sizes under evaluation. On December 4, 2020, HBMWD sent an official letter to the Westhaven CSD requesting whether they would be interested in participating in the mainline extension project by having a connection into the pipeline to the Trinidad Rancheria. This topic was discussed at Westhaven CSD’s subsequent meetings. Their board ultimately decided that they did not want to participate in the mainline extension project. On December 4, 2020, HBMWD sent an official letter to the Trinidad City Council requesting whether they would be interested in participating in the mainline extension project by having a connection into the pipeline to the Trinidad Rancheria. This topic was discussed by the Trinidad City Council during multiple subsequent Council meetings. The Trinidad City Council voted at three separate meetings not to participate in the mainline extension project. • Blue Lake Rancheria The Blue Lake Rancheria has requested a water mainline extension with HBMWD to directly connect the Blue Lake Rancheria to HBMWD's water system. Currently, the Rancheria receives water and wastewater services from the City of Blue Lake via several out of agency service connections. This proposed mainline extension aims to provide a reliable and high-quality water source to support Blue Lake Rancheria's community needs and future development plans. In July 2023, the HBMWD Board of Directors approved a Memorandum of Understanding (MOU) with the Blue Lake Rancheria for a water Mainline Extension. The Project has been progressing with feasibility studies. The proposed extension reflects Blue Lake Rancheria's commitment to securing sustainable 42 July 2, 2021 Letter from HBMWD to Water Advisory Committee (WAC) Humboldt Bay MWD MSR & SOI Update [27] Humboldt LAFCo Adopted - March 19, 2025 water resources for its community and underscores HBMWD's role in supporting regional water infrastructure development. While specific details about the project's timeline and scope are still under discussion, the ongoing engagement between the two entities highlights a proactive approach to addressing water supply reliability and resiliency challenges in the area. Planned Capital Improvements HBMWD outlined a comprehensive Capital Improvement Plan (CIP) in 2017 to ensure the reliability and efficiency of its regional water system and is currently scheduled for update during 2025. This plan addresses the challenges of aging infrastructure and the need for system enhancements. Key planned improvements include: • Ranney Collector Rehabilitation: Upgrading the Ranney Collectors, which are essential for drawing water from the Mad River, to maintain optimal performance and water quality. • Pipeline Replacements: Replacing aging pipelines, such as the Techite Pipeline, to prevent leaks and ensure consistent water delivery to customers, and the pipeline intertie between HBMWD, Arcata, Eureka, and McKinleyville to ensure reliable delivery of water. • Treatment Facility Enhancements: Modernizing water treatment facilities to meet current regulatory standards and improve the overall quality of the water supply, including a redundant pipeline to the Treatment Reduction Facility (TRF). • Hydroelectric Plant Upgrades: Implementing improvements at the Gosselin Hydroelectric Power Plant to enhance energy efficiency and reliability. And the seismic stability assessment to ensure structural integrity during earthquake events. • Communication and Control Systems: Updating the John R. Winzler Operations and Control Center to incorporate advanced technologies for better monitoring and management of the water system, including an upgrade to the 12kV switchgear and relocating it outside the flood plain. These initiatives are part of HBMWD's ongoing efforts to provide high-quality and reliable water services to the Humboldt Bay region. The CIP is a dynamic document, subject to updates based on evolving needs and circumstances. It serves as a strategic guide for prioritizing projects, allocating resources, and tracking progress to ensure the District's infrastructure continues to meet the community's water supply requirements effectively. Funding Sources The District secures funding through multiple channels to support its operations and infrastructure. The primary revenue source is the sale of water to municipal and industrial customers, which includes both treated and untreated water supplies. It should be noted that with the formation of the Peninsula Community Service District (PCSD), the responsibility for servicing the current HBMWD retail/domestic customers located within PCSD’s boundaries will likely be transferred to PCSD at some future date. HBMWD also generates income by selling hydroelectric power produced at the Gosselin Hydro-Electric Power House to Pacific Gas and Electric Company (PG&E) on an "as available" basis. HBMWD receives a share of Humboldt County’s 1% property tax revenue. Under HBMWD’s Ordinance 16, which governs the cost allocations to the industrial and wholesale municipal customers, the property tax revenue is a revenue credit to the wholesale municipal customers. Humboldt Bay MWD MSR & SOI Update [28] Humboldt LAFCo Adopted - March 19, 2025 Additionally, the District actively pursues grants and low-interest loans to finance capital improvement projects aimed at maintaining and upgrading its water infrastructure while minimizing the financial burden to its ratepayers. HBMWD actively pursues grants for projects such as instream flow studies, wildfire mitigation, and infrastructure upgrades. State Revolving Fund (SRF) Loans often provide funding for capital improvement projects. These opportunities have variable availability and amounts, but contribute to a diversified funding strategy that enables HBMWD to effectively manage its water resources and infrastructure, ensuring reliable service to its customers. More information on the District’s financial status is provided under Governance and Finance. Water Resource Planning HBMWD holds three separate water rights permits for direct diversion, storage, and hydroelectric generation. For nearly five decades, the District supplied 40 to 50 MGD to two large industrial customers— the pulp mills located on the Samoa Peninsula. However, the closure of the Simpson Pulp Mill in 1993 and the Evergreen Pulp Mill (previously known as the LP Pulp Mill) in 2009, with no prospects for reopening, significantly affected the District’s financial operations. These closures also resulted in a significant underutilization of water which poses a risk to the District’s water rights which are due for licensing in 2029. To address these challenges, HBMWD has proactively sought new users to maximize the beneficial uses of its water supply, aiming to safeguard its water rights and stabilize revenue streams. In 2005, the HBMWD Board of Directors initiated strategic planning efforts to address long-term issues of strategic importance to the District. Ultimately, the Board of Directors agreed to focus on two main planning initiatives regarding Water Resource Planning and Infrastructure Planning. HBMWD initiated the Water Resource Planning initiative in 2009 by forming an Advisory Committee comprising of a diverse array of stakeholders, including representatives from: municipal customers, environmental advocacy, fisheries, economic development, tribal government, and labor groups, to guide the planning process. Over 15 months, the committee engaged the community through educational initiatives and public input sessions, resulting in a comprehensive report of recommendations in 2010. These recommendations prioritized protecting local control of the District's water rights, achieving fiscal sustainability by generating new revenue streams, and ensuring environmental sustainability by preserving and potentially enhancing the Mad River ecosystem. The Board organized these recommendations into actionable segments, focusing on (1) local water sales, (2) water transfers to other agencies, and (3) exploring in-stream environmental water use options. The effort culminated in a detailed implementation plan adopted in 2011, which continues to guide HBMWD’s strategic efforts to secure and optimize its water resources for the benefit of the community and environment. Local Water Sales HBMWD has proactively pursued local municipal, commercial, and industrial water sales to utilize its available water resources effectively. As discussed previously, several projects and proposed extensions are currently in the works. One notable project within the District includes the development of the Humboldt Bay Offshore Wind Heavy Lift Marine Terminal at the Redwood Marine Terminal site on the Samoa Peninsula. This terminal is designed to support offshore wind energy projects along the West Coast, potentially increasing local industrial and domestic water demand. Humboldt Bay MWD MSR & SOI Update [29] Humboldt LAFCo Adopted - March 19, 2025 Water Transfer to Other Agencies HBMWD has actively explored the potential transfer of available water to other public agencies for authorized beneficial uses., This effort included engaging with stakeholders and conducting public outreach to identify community priorities and ensure the District’s local water rights interests are fully protected. Any transfer would be carried out under a strictly defined contract that safeguards the District’s water rights and aligns with public input received during the planning process. To date, neighboring municipalities such as Mendocino or Sonoma County have not expressed interest in water transfer. Instream Environmental Use HBMWD has taken steps to pursue dedicating a portion of its water rights to instream flows for environmental benefits. Pursuing this potential water use was contingent on clearly demonstrated environmental advantages and securing financial support to conduct the required scientific studies and obtain regulatory approvals. In 2018, HBMWD was awarded a $693,408 grant from the Wildlife Conservation Board to conduct the work needed to support dedicating a portion of its water rights to instream flows for environmental benefit43. This initiative focuses on improving habitats for fish and wildlife, particularly salmonids and other special-status species in the Mad River, and providing resilience to climate change. Supported by local organizations and environmental experts, the grant provided funding for scientific studies and permits necessary to file a "Petition for Change" with the State Water Resources Control Board. If approved, the petition would allocate up to 20 million gallons per day to instream flows, promoting aquatic ecosystem health while preserving HBMWD’s water rights under California’s "use it or lose it" doctrine. In fall of 2024, HBMWD submitted a Draft Petition for Change to the State Water Resources Control Board and awaits their response. Community Perspectives on Water Rights and Future Allocation Water is a critical resource that connects all communities, and ensuring equitable and sustainable access is essential for public health, economic stability, and environmental resilience. HBMWD is committed to working collaboratively with local governments, service providers, and residents to develop strategies that support both current and future water needs. The District has the capacity to provide high-quality, reliable water service to its existing communities and sees an opportunity to support neighboring areas struggling to secure dependable water resources. HBMWD's water rights remain a significant concern for the community, particularly given historical underutilization and the risk of forfeiture under California’s "use it or lose it" doctrine. Community members strongly advocate for retaining these rights and ensuring they are put to beneficial use. As new economic opportunities emerge and infrastructure evolves, it is essential to approach water distribution with collaboration and foresight. HBMWD supports a proactive, community-driven process that seeks balanced solutions for long- term water security. To build community resilience and support sustainable water access, there is potential to develop a Regional Source Water Infrastructure Plan that brings together local agencies, community leaders, and stakeholders. A structured, facilitated discussion could help align priorities, ensure clarity around water rights and availability, and explore ways to support communities in need without unintended consequences. This approach could help align 43 HBMWD, Water Resources Planning, WCB Press Release 2018. Accessed from www.hbmwd.com/files/2359b5358/WCB+Press+Release+2018.pdf on November 20, 2024. Humboldt Bay MWD MSR & SOI Update [30] Humboldt LAFCo Adopted - March 19, 2025 regional priorities, clarify water rights and availability, and explore ways to support communities in need while mitigating unintended consequences. The plan could focus on enhancing regional collaboration to improve water resource planning, optimizing infrastructure efficiencies, increasing public education and engagement to ensure transparency in decision-making, and developing long-term strategies that balance economic development, environmental sustainability, and community resilience. Through proactive coordination and shared planning, the region can create a sustainable framework that ensures water is used effectively to meet the needs of all communities. 3.2 Electric Power Services HBMWD owns the Gosselin Hydro-electric Power House which generates renewable hydroelectric power by utilizing water released from Ruth Lake, contributing to both energy production and water resource management. With a capacity of 2 megawatts (MW), the plant is equipped with two 1-MW turbine generators. HBMWD maintains a contract with PG&E to sell electricity on an "as available" basis. Unlike traditional hydroelectric plants operated as "peaking" facilities, the Gosselin Power House does not engage in "ramping," or rapid adjustments to water flow based on energy demand. Instead, power generation is an incidental function tied to the District's primary mission of meeting water supply needs. Releases from Ruth Lake are managed primarily to ensure water delivery and environmental flow requirements, with electricity generation occurring as a secondary benefit. 3.3 Other Service Providers In addition to HBMWD, other local governmental agencies that provide services within the boundaries of HBMWD include: • City Retail Providers within HBMWD: City of Arcata (local service provider for water services, wastewater services, solid waste and o recycling, public works, parks and recreation, police services, and planning/development) City of Blue Lake (local service provider for water services, wastewater services, solid waste, parks o and recreation, and police services contracted through the Humboldt County Sheriff’s Office) City of Eureka (local service provider for water services, wastewater services, solid waste and o recycling, public works, parks and recreation, police services, fire protection, and planning/development) • District Retail Providers within HBMWD: Fieldbrook-Glendale Community Services District (local service provider for water distribution, o fire protection, and street lighting) Humboldt Community Services District (local service provider for water distribution, wastewater o collection and treatment, solid waste and recycling, and park and recreation) Manila Community Services District (local service provider for water distribution, wastewater o services, stormwater management, and parks and recreation) McKinleyville Community Services District (local service provider for water distribution, o wastewater management, street lighting, parks and recreation, and library services) Humboldt Bay MWD MSR & SOI Update [31] Humboldt LAFCo Adopted - March 19, 2025 Peninsula Community Services District (local service provider for wastewater services, stormwater o management, fire protection, street lighting, and parks and recreation and future plans to take on water distribution for retail customers currently serviced by HBMWD) • Other Agencies: Humboldt Bay Harbor Conservation and Recreation District (countywide service provider of o harbor management and Humboldt Bay resource conservation) Humboldt County Resource Conservation District (countywide service provider of soil o conservation, agricultural services support, habitat conservation) Trinity County Resource Conservation District (countywide service provider of soil conservation, o agricultural services support, habitat conservation, wildfire and forest management, and community engagement and education) Humboldt County (countywide provider of general government, roads, drainage, law o enforcement) Trinity County (countywide provider of general government, roads, drainage, law enforcement) o Wiyot Tribe (a sovereign, federally recognized Tribal government that provides critical services o to Tribal members living within the Wiyot Ancestral Territory, including within the HBMWD). The Blue Lake Rancheria (a sovereign federally recognized Tribal government that provides o critical services to Tribal members within their ancestral territory, including within HBMWD boundaries) NOAA Fisheries (U.S. Department of Commerce’s National Oceanic and Atmospheric o Administration that is responsible for the stewardship of U.S. national marine resources) California Department of Fish and Wildlife (a state agency that manages and protects the state’s o wildlife, wildflowers, trees, and native habitats) U.S. Forest Service (an agency within the U.S. Department of Agriculture that administers the o national forest) Ruth Lake Community Services District (a special district that implements and oversees the o recreational activities on Ruth Lake) 3.4 Shared Services North Coast Resource Partnership HBMWD is an active participant in the North Coast Resource Partnership, a collaborative framework that brings together local governments, tribes, and resource agencies across the North Coast region to address water resources, watershed restoration, and climate adaptation. Through this partnership, HBMWD leverages state and federal funding opportunities for infrastructure improvements, water supply resilience projects, and ecological restoration in the Mad River watershed, including Ruth Lake. The NCRP fosters regional coordination and prioritizes projects that align with water security and environmental sustainability goals. Samoa Peninsula Infrastructure Workgroup Humboldt Bay MWD MSR & SOI Update [32] Humboldt LAFCo Adopted - March 19, 2025 HBMWD is a member of the Samoa Peninsula Infrastructure Workgroup, which focuses on infrastructure planning and economic revitalization for the Samoa Peninsula. The workgroup collaborates with public agencies, including HBMWD, to assess and develop necessary upgrades to water, wastewater, and other essential services on the Peninsula. Given HBMWD’s historical role in supplying raw and treated water to industrial customers, including the former pulp mills, the workgroup aims to explore opportunities for utilizing HBMWD’s water resources to support new economic development initiatives, such as aquaculture and renewable energy projects. Ruth Lake Community Services District Ruth Lake CSD oversees recreation facilities, water systems, and waste management around Ruth Lake, while HBMWD provides technical support and regulatory oversight for water use permits. Together, the two agencies ensure sustainable water management and recreational use of Ruth Lake. As discussed previously, the Ruth Lake CSD leases the land surrounding Ruth Lake from the HBMWD based on a Master Lease Agreement between HBMWD and Trinity County. The lease allows the Ruth Lake CSD to maintain and operate boat launching facilities (the marina) and other recreational facilities including the camping and day-use areas. The Master Lease also allows the Ruth Lake CSD to sublease parcels of land for recreational purposes to private individuals. Use of sublease parcels for permanent residential purposes is prohibited by the Master Lease agreement and Ruth Lake CSD policy. There are a total of 172 subleases including 36 boat leases and 136 road access leases around the lake which are managed according to Ruth Lake CSD policy. Most lots are accessible by vehicle, but some are only accessible by boat. Subleases must adhere to rules regulating the use of private docks, onsite wastewater treatment systems (septic systems), utilities, insurance requirements, and other regulations as set forth by the Ruth Lake CSD. Any proposed development or change to sublease properties must first be approved by the Ruth Lake CSD to ensure conformance with set policies and then by HBMWD. Subleases may also be transferred from one party to another with Ruth Lake CSD approval. The Ruth Lake Leaseholder’s Association is an organization for all leaseholders of Ruth Lake. The Association serves as a liaison to coordinate affairs between the leaseholder members and the Ruth Lake CSD. The Association keeps members informed through an Association newsletter, email blasts, and through its Facebook group. Humboldt Bay MWD MSR & SOI Update [33] Humboldt LAFCo Adopted - March 19, 2025 4.0 GOVERNANCE & FINANCE 4.1 Governance HBMWD is an independent special district served by a five-member Board of Directors that are elected to four- year staggered terms of office. Board meetings are held every second Thursday of each month at 9:00 a.m. Meetings are usually held at the HBMWD Board Room at 828 7th Street, Eureka but members of the public may join the meeting online. One annual meeting occurs jointly with Ruth Lake CSD at Ruth Lake. Table 5: HBMWD Board of Directors Board Member Division Term Tom Wheeler Division 1 November 2028 Sheri Woo Division 2 November 2028 David Lindberg Division 3 November 2028 J. Bruce Rupp Division 4 November 2026 Michelle Fuller Division 5 November 2026 In accordance with Senate Bill 41544, which became effective on January 1, 2018, the election of its Board Members coincides with the statewide general election which is held in even numbered years. Three positions were up for election in 2024. Staffing HBMWD’s core team of twenty eight professionals oversee its operations and ensure efficient service delivery. There is a General Manager who provides overall leadership and strategic direction for the District. The current long-standing General Manager is set to retire in mid-2025 which will result in transition in management. There is also a Superintendent who manages operational and technical functions, ensuring the water system operates reliably, supported by water system operations staff, maintenance and electrical staff and dam operations staff. There is a Business Manager who oversees financial and administrative functions, supported by an administrative team who handle financial transactions and regulatory reporting. The Executive Assistant and Board Secretary manages administrative tasks and board coordination. In total, the District employs 28 full-time employees, 2 part-time employees, and 2-4 seasonal employees. HBMWD offers employees a full benefit package including a retirement plan through CalPERS, health insurance (medical, dental, vision, and an Employee Assistance Plan), life insurance, long term disability, medical flight coverage, longevity pay, paid holidays, vacation time, and more45. 44 SB 415 prohibits a local government from holding an election on any date other than a statewide election date if doing so in the past has resulted in a significant decrease in voter turnout. The public policy behind SB 415 was to address waning civic engagement in politics as illustrated by declining voter turnout in federal, state, and municipal elections. The legislative analysis asserts that one major contributing factor to low voter turnout - the timing of elections - could be addressed by synchronizing municipal elections with statewide elections. 45 HBMWD, Summary of Benefits, 2024 Summary of Benefits. Accessed from www.hbmwd.com/summary-of-benefits#body_file-6f7d5fd6-b3f5-41d9- 86da-975085191f8a on December 20, 2024. Humboldt Bay MWD MSR & SOI Update [34] Humboldt LAFCo Adopted - March 19, 2025 Accountability and Transparency The District maintains a website in accordance with SB929 regulations46 (www.hbmwd.com). District audits since 2011 and state controller reports since 2014 are available on the website47 along with Consumer Confidence Reports (CCR) from 2016 to today48. The CCR is an annual report that must be distributed to consumers by July 1st every year and discusses the overall quality of water provided by the District. Table 6: SB929 Website Posting Requirements Type of Is the District in Description of Requirement Requirement compliance? District The bill does not state the specific contact information required. We recommend Contact posting, at a minimum: Information Physical address o Yes Mailing address o Phone number o E-mail address o Most Recent The most recent agenda must be: Agenda Posted at least 72 hours in advance of the meeting o Linked on the homepage of the website, navigating directly to the current o Yes agenda Searchable, indexable, and platform-independent (simply put, post the o agenda as a PDF) Financial The State Controller’s report for the District’s Financial Transaction report must Transaction be posted or linked to the corresponding State Controller website. Yes Report Staff The State Controller’s report for the District’s Staff Compensation report must be Compensation posted or linked to the corresponding State Controller website. Yes Report Enterprise As required by SB272, the Enterprise System Catalog must be posted. This System includes: Catalog Current system vendor o Current System product o Yes System’s purpose o A description of categories or types of data o Department that is the prime data custodian o Frequency in which system data is collected and updated o Board agendas and notices are posted at the District office at least 72 hours in advance of scheduled Board meetings and on the District’s website. Meetings of the Board of Directors are subject to the Ralph M. Brown Act which requires agendas to be posted at least 72 hours in advance of scheduled Board meetings in a location that is freely accessible to members of the public. 46 SB 929 was signed into law on September 14, 2018, requiring all independent special districts to have and maintain a website meeting all the special district transparency requirements of State law including the availability of agendas, policies, and financial information by January 1, 2020. 47 https://www.hbmwd.com/financial-reports 48 https://www.hbmwd.com/water-related-resources Humboldt Bay MWD MSR & SOI Update [35] Humboldt LAFCo Adopted - March 19, 2025 4.2 Financial Overview HBMWD adopts an annual budget for the fiscal year (July 1 – June 30). The budgeting process allows the District to review annual expenses, assess the need for capital improvement projects, and plan for major infrastructure upgrades. Based on the District’s most recent budget, adopted on July 11, 2024, the largest revenue source for the District is Wholesale Contracts, followed by Grant Funding. The largest expense category for the District is Projects, which accounts for 64% of the District’s overall expenses. The budget is prepared using the cash basis method of accounting. Table 7: Annual Budget Summary Category FY 22-23 FY 23-24 FY 24-25 Revenues Wholesale Contract Funding 7,774,141 8,039,196 8,315,604 Grant Funding 6,482,793 7,225,758 7,105,518 Other Revenue Funding 1,750,000 1,525,000 1,540,000 Adv. Charges Collected, Reserves, Debt Service 4,868,757 4,833,407 5,011,658 Total Revenues $20,875,691 $21,623,361 $21,972,780 Expenditures Salaries & Wages 2,889,433 2,843,013 2,974,680 Employee Benefits 1,826,621 1,776,146 1,819,707 Service & Supply 933,700 983,700 1,028,600 Power 907,000 1,019,000 1,131,300 Projects 13,421,600 14,180,265 14,121,157 Debt Service/ Capital Financing Funding 547,337 547,337 547,337 Charges for Reserves 350,000 350,000 350,000 Total Expenditures $20,875,691 $21,623,361 $21,972,781 HBMWD utilizes a third party to conduct an annual audit which is prepared using the accrual basis for accounting. The most recent audit for FY2022-23 was prepared by O’Connor & Company CPA’s and provides details about the District’s revenues and expenses for the fiscal year. Over the last six years reviewed, the District has seen an average net gain of $2.61 million. Over that same time period, the District increased their overall net position by $15.82 million from $20.51 million in FY2017-18 to $36.33 million in FY2022-23. This indicates that the District has sufficient revenues to cover year to year expenses and is able to save up over time to complete major capital improvement projects. Additionally, the District was able to increase its unrestricted fund balance from (-$2.80 million) to $1.38 million. This allows the District to have more flexibility and resiliency when responding to sudden financial needs such as a drop in sales, infrastructure failure, or other unforeseen circumstances. The District’s Ordinance 16 delineates the methodology for the District’s annual charges to its wholesale water customers. HBMWD’s budget is an estimation of future expenses. The District uses the cash basis of accounting to report its financial transactions on a monthly basis. The audit utilizes the accrual accounting basis in accordance with the American Institute of Certified Public Accountants (AICPA) and Generally Accepted Accounting Principles (GAAP). There are inherent differences between cash basis and accrual basis accounting and reporting. Humboldt Bay MWD MSR & SOI Update [36] Humboldt LAFCo Adopted - March 19, 2025 Table 8: Audit Summary Category FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Revenues Operating Municipal Water Sales $5,187,851 $ 6,558,913 $6,536,355 $6,662,289 $7,608,421 $7,253,439 Retail Water Sales $304,080 $434,443 $330,744 $337,430 $359,543 $372,492 Power Sales $424,774 $497,664 $349,052 $260,924 $423,988 $370,233 SRF Debt Service Receipt $547,337 $552,061 $501,726 $546,063 $9,361 $546,528 Other Operating $19,255 $575,600 $411,713 $573,721 $1,171,201 $- Nonoperating Taxes $854,051 $972,985 $996,833 $1,055,543 $1,133,337 $975,000 Interest Income $49,325 $37,647 $78,556 $31,051 $9,936 $230,024 Grant Revenues $526,404 $1,358,201 $1,339,444 3,374,358 $- $- Total Revenue $7,913,077 $10,713,846 $10,544,423 $12,841,379 $10,785,787 $9,747,716 Expenses Operating Expense $6,348,732 $7,653,714 $6,985,703 $6,433,252 $6,604,486 $6,611,234 Non-operating Expense $11,047 $23,077 $9,257 $5,292 $12,888 $30,425 Depreciation $1,261,601 $1,341,741 $1,400,033 $1,426,647 $1,410,651 $1,429,352 Less Reimbursements $(235,878) $(359,858) $(406,540) $(360,214) $(341,621) $(331,626) Total Expense $7,385,502 8,658,674 $7,988,453 $7,504,977 $7,686,404 $7,739,385 Net Gain/(Loss) $527,575 $2,071,105 $2,608,866 $5,336,402 $3,099,383 $2,008,331 Table 9: Total Net Position Summary Category FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Total Current Assets 5,333,346 5,835,277 9,314,591 14,178,055 15,097,916 15,436,398 Total Noncurrent Assets 25,191,635 26,448,947 28,316,486 26,193,527 27,800,720 27,972,022 Total Assets $30,524,981 $32,284,224 $37,631,077 $40,371,582 $42,898,636 $43,408,420 Total Current Liabilities 551,177 813,600 3,081,584 998,678 1,259,765 880,568 Total Noncurrent Liabilities 10,617,901 9,958,803 9,660,143 7,869,965 5,223,500 6,671,385 Total Liabilities $11,169,078 $10,772,403 $12,741,727 $8,868,643 $6,483,265 $7,551,953 Deferred Outflows 1,281,831 1,190,306 1,126,728 1,037,378 973,874 2,127,303 Deferred Inflows 124,366 117,654 125,500 1,313,337 3,062,882 1,649,076 Total Net Position $20,513,368 $22,584,473 $25,890,578 $31,226,980 $34,326,363 $36,334,694 Unrestricted (-2,796,573) 3,143,413 (-3,290,151) 488,184 1,095,823 1,378,434 Long Term Liabilities HBMWD has several long-term liabilities including a State Revolving Fund Note, compensated absences (vacation and sick time), net pension liability, and other post-employment benefits. According to the District’s most recent audit, $547,337 in payments were made on the SRF note, and other long-term liabilities decreased by $738,924. However, net pension liabilities increased by $2,317,210. The SRF note was used to finance construction of the Turbidity Reduction Facility that was built in April 2003. The note was set for a 20-year term and is set to be paid off in FY2024-25. To date, the District does not have any other long-term loans. Humboldt Bay MWD MSR & SOI Update [37] Humboldt LAFCo Adopted - March 19, 2025 5.0 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) HBMWD encompasses a large portion of Humboldt County’s most populated areas and as such, the District’s service area accounts for approximately 65% of the County’s total population. b) The estimated 2020 population for the District was 85,477. Based on a projected decline going into the next decade, it is estimated that the population within the District will be approximately 85,228 by 2030. (2) The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence a) Numerous DUCs exist in and around the HBMWD boundary. These include the coastline from the Eel River Valley to Westhaven, areas around McKinleyville, Fieldbrook, Blue Lake, Manila, Jacoby Creek, and Loleta along with others. However, since HBMWD is primarily a wholesale provider, when looking at the provision of water service to these areas, other local water service providers should be considered first. b) Within and around the HBMWD boundary there are several identified legacy communities. These are populated areas that are generally geographically isolated, have existed for more than 50 years, and have a MHI that is less than 80% of the statewide MHI. These communities include: Fairhaven, Fieldbrook, Manila, McKinleyville, and Samoa. (3) Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies a) HBMWD holds three water rights to the Mad River including one for storage at Ruth Lake, one for hydroelectric generation, and one for direct diversion from the Essex pumps. Direct diversion is not to exceed 116 cfs (74.97 MGD) and 84,000 acre-feet per year. b) The hydroelectric plant near Ruth Lake has the capacity to produce 2 MW of power utilizing two 1-MW turbine generators. This power generation is used to support District operations and help offset the cost of water distribution. However, it is not a main source of income for the District. c) HBMWD maintains four Ranney Collector wells at Essex that pump an average of 10 MGD (11,000 acre-feet per year). These support the District’s municipal water supply system. d) HBMWD maintains a surface water diversion facility that is capable of pumping an average of 65 MGD for industrial water consumption. This facility is currently only operated on an occasional basis. e) The District’s Turbidity Reduction Facility was constructed to meet state requirements for disinfection and help improve overall water quality through turbidity reduction. The facility can process 14 MGD during the winter and 21 MGD during the summer when raw water turbidity is generally lower. HBMWD MSR & SOI Update [38] Humboldt LAFCo Adopted - March 19, 2025 f) In 2023, the District diverted a total of 3,895.5 acre-feet of water from the Mad River for municipal services. This is approximately 5.0% to 8.5% of the District’s Rainey Collector total source capacity. This highlights the District’s ability to provide additional services to the area, such as the proposed Redwood Marine Terminal projects. g) HBMWD regularly plans for and implements capital improvement projects such as well rehabilitation, pipeline replacements, treatment facility enhancements, and more. These projects are included in the District’s Capital Improvement Plan and budgeted for on an annual basis. (4) Financing ability of agencies to provide services a) HBMWD adopts an annual budget for the fiscal year (July 1 – June 30). Budget review and preparation typically takes place in the spring of each year with final adoption occurring in June or July. b) The District conducts annual audits in accordance with generally accepted accounting principles. Based in the District’s FY2022-23 audit, revenues totaled $9.7 million and expenses totaled $7.7 million for a net gain of approximately $2.0 million. c) Over the last six fiscal years reviewed, the District has increased their overall net position by $15.82 million and improved their unrestricted fund balance. This shows sound financial planning and management that allows the District to build up reserves and be more resilient to sudden financial needs. (5) Status of, and opportunities for, shared facilities a) HBMWD works in coordination with Ruth Lake Community Services District to manage the lands around Ruth Lake for recreational purposes. b) The District regularly coordinates with its wholesale municipal water service contract agencies including the cities of: Arcata, Blue Lake, and Eureka and community service districts of: Fieldbrook-Glendale CSD, McKinleyville CSD, Manila CSD, and Humboldt CSD. c) There may be an opportunity to work with agencies near the current HBMWD boundaries including Westhaven CSD, City of Trinidad, Blue Lake Rancheria, and the Trinidad Rancheria. Additional feasibility analysis and environmental documents will be required to assess the potential for extending water mains to these areas. (6) Accountability for community service needs, including governmental structure and operational efficiencies a) HBMWD is an independent special district served by a five-member Board of Directors. The Board meets monthly on the second Thursday of every month and meetings are open to the public for in person and online attendance. Meeting agendas are posted at least 72 hours in advance of the meeting both online and at the District’s Eureka office. b) The District currently maintains a website in compliance with SB929 requirements. Financial reports including annual audits and State Controller reports can be accessed from the website. To increase transparency, the District may want to consider posting its adopted budget with the other available financial reports. (7) Any other matter related to effective or efficient service delivery a) No other matters are to be considered at this time. The District is encouraged to continue its water use planning efforts so that the region can be sufficiently supplied with reliable potable water. HBMWD MSR & SOI Update [39] Humboldt LAFCo Adopted - March 19, 2025 6.0 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 local agency, 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) The District serves a wide area that includes both urban and rural land uses. It also encompasses three distinct City service areas that are subject to their own individual land use and zoning ordinances. b) HBMWD encompasses areas of Timber designated lands within the Mad River watershed around Ruth Lake. (2) Present and probable need for public facilities and services in the area. a) The greater Humboldt Bay region continues to be the most densely populated region of the county. As such, there is a present and continued need for reliable water service in the area. b) Areas north of the HBMWD boundary continue to experience water reliability issues including diminishing surface water supply, aging water systems, lack of sufficient personnel to manage systems, and limited system redundancy. (3) Present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. a) HBMWD is currently utilizing approximately 5.0% to 8.5% of its Rainey Collector source capacity due to the loss of its industrial water contracts in 1993 and 2009. However, this also means that the District has ample water supply to provide service to new wholesale or industrial contracts as is beneficial for the area. (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) Several established communities exist within the District boundaries including several cities and census designated places around Humboldt Bay. Many of these communities have local public service providers that receive water through contracts with HBMWD. (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) No changes to the existing HBMWD SOI are proposed at this time. Should future extension of services be considered, additional feasibility studies and environmental documentation will likely be required to support the extension of services and an amendment to the SOI. HBMWD MSR & SOI Update [40]