Sativa L.a. County Water District Municipal Service Review (August 2012)

<b>LAFCO</b> Local Agency Formation Commission for the County of Los Angeles Sativa L.A. County Water District Municipal Service Review August 2012 L.A. GO <b>Administrative Draft</b> Prepared by: Prepared for: Hogle-Ireland, Inc. <b>Local Agency Formation Commission</b> 2860 Michelle Drive, Suite 100 for the County of Los Angeles Irvine, CA 92606 80 South Lake Avenue, Suite 870 Acknowledgements gency Formation Commission for the County of Los Angeles Sativa Los Angeles County Water District Municipal Service Review Prepared for: Agency Formation Commission for the County of Los Angeles <b>Local Agency Formation Commission for the County of Los Angeles</b> 80 South Lake Avenue, Suite 870 Pasadena, CA 91101 Prepared by: Hogle-Ireland, Inc. 2860 Michelle Drive, Suite 100 Irvine, CA 92606 Sativa MSR Page 1 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Table of Contents Page 2 8 6 1 . W . . . . . . . . . . . . . . . . . . . 3 a) and the second second second second second second second second second second second second second second second second second second second second second second second second second second second second second second seco . g # . . . 9 0 2 T T 8 950 <b>3</b> R Table of Contents or the County of Los Angeles Table of Contents Executive Summary......5 1. Sativa Los Angeles County Water District MSR Summary......6 1.1 Agency Profile......9 2. History ______10 2.1 Sativa Los Angeles County Water District - Today.................................... 2.2 Key Findings and Research.................................... 3. Affected Agency and Stakeholder Groups .................................... 3.1 Growth and Population Projections .................................... 4. Regional Summary................................... 4.1 Local Summary .................................... 4.2 Infrastructure Needs and Deficiencies.................................... 5. Water Sources .................................... 5.1 Water Supply and Demand.................................... 5.2 Existing and Proposed Supplies and Facilities................................... 5.3 Financing Opportunities or Constraints......25 6. Revenues 25 6.1 Expenses .................................. 6.2 Net Income .................................... 6.3 Annual Audit and Budget ......27 6.4 Financial Ability of Agency to Provide Services .................................... 6.5 Economies of Service.................................... 7. Cost Avoidance Opportunities .................................... 7.1 Opportunities for Shared Facilities................................... 7.2 Evaluation of Management Efficiencies.................................... 7.3 Government Structure Options .................................... 8. Options.................................... 8.1 Local Accountability and Governance .................................... 9. Determinations and Findings .................................... 10. Sphere of Influence (SOI) and District Recommendation.................................... 10.1 Appendix A – Meter Legal Determination.................................... Appendix B – Agency Correspondence.................................. Appendix C - Sativa Budget .................................... Sativa MSR Page 3 August 2012 <b>Figures</b> Figure 2-1: Regional and Vicinity Map......9 Figure 2-2: District Service Area and SOI.................................... Figure 4-1: SCAG RTP Estimated Population Projections ......20 Figure 7-1: Central Basin Service Area......32 Figure 7-2: GSWC and PWC Service Areas ......34 Figure 10-1: Census Tract Locations.................................... <b>Tables</b> Table 2-1: District Summary Chart.................................... Table 3-1: Affected Agency and Stakeholder Groups......16 Table 4-1: City of Compton and Lynwood Population Growth Projections .................................... Table 5-2: Service Area Water Supply and Demand .................................... Table 6-1: Sativa Budget Summary......27 Table 7-1: Water District Rate Comparison .......35 Table 9-1: Sativa Los Angeles County Water District Governance.......41 Table 10-1: City of Compton and Lynwood Population Projections......44 Table 10-2: Census Tract Annual Median Household Income.................................... Table of Contents Page 4 <b>Executive Summary</b> Local Agency Formation Commission for the County of Los Angeles 1. Executive Summary A Municipal Service Review (MSR) is a comprehensive study to determine the adequacy of governmental services being provided by the local agencies under the Local Agency Formation Commission (LAFCO). The MSR is used by LAFCO, other governmental agencies, and the public to better understand and improve the provision of services and to identify opportunities for greater cooperation between service providers. The purpose of this MSR is to evaluate the Sativa Los Angeles County Water District (District) for Local Agency Formation Commission for the County of Los Angeles (LAFCO). An MSR allows the LAFCO to evaluate how agencies currently provide municipal services within the MSR study area and to evaluate the impacts on those services from future growth and other changes that may occur in the study area over the next 10 to 20 years. The MSR report is also required to identify potential opportunities to address any shortfalls, gaps, opportunities for increased efficiency and/or impacts on services and governmental structure that may currently exist or are anticipated in the future. MSRs are also required to be conducted prior to, or concurrent with, sphere of influence (SOI) updates. Beginning in 2001, Local Agency Formation Commissions (LAFCOs) were mandated to review and, as necessary, update the SOI of each city and special district. SOIs are boundaries, determined by LAFCO, which define the logical, ultimate service area for cities and special districts. No SOI can be updated, however, unless the LAFCO first conducts a MSR. The mandate to conduct MSRs is part of the Cortese-Knox-Hertzberg (CKH) Act of 2000. Per Section 56425 of the CKH Act, LAFCO must review and if necessary, update each SOI at least every five years. The MSR and SOI update are one of many LAFCO responsibilities, but is often considered the most important as it provides the mechanism to shape the orderly and logical development of the local government agencies. The MSR process consists of three primary processes: The Municipal Service Review Report reviews the agency/focus area of service delivery. Additionally, the agency's infrastructure, governance functions, and capacity based on projected growth in the area are evaluated along with any identified issues, needs and/or deficiencies. The MSR process then requires responses to specific questions or "determinations" as described below: Sativa MSR Page 5 August 2012 Sativa MSR Growth and population projections for the affected area. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies. Financial ability of agencies to provide services. Status of, and opportunities for, shared facilities. Accountability for community service needs, including governmental structure and operational efficiencies. Any other matter related to effective or efficient service delivery, as required by the LAFCO Commission. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. The Stakeholder Input Process provides a forum for representatives from the stakeholder agencies, to provide information in preparation of the MSR and to identify issues gaps or opportunities for efficiencies not otherwise reflected in this report. A summary of the stakeholder input and comments are included in Section 3: Key Findings and Research. The Sphere of Influence Update is the third part of the MSR process. Based on the information in the MSR report, LAFCO Staff's recommendation, and stakeholder input the LAFCO Commission will make a decision to retract, expand, or maintain the existing SOI boundaries. 1.1 Sativa Los Angeles County Water District MSR Summary This MSR evaluates the study area defined by the jurisdictional boundary of the District, which serves a 0.28 square mile area in the Willowbrook area of unincorporated Los Angeles County and a small portion of the City of Compton. The District is bounded on the west and south by the City of Compton. The District's boundaries are Mona Boulevard on the east, Otis Street on the south, Wilmington Avenue and Paulsen Avenue on the west, and 131st Street on the north. District issues identified in this MSR include management inefficiencies, lack of financial strength, and failure to follow State requirements regarding independent audits. Refer to Section 7.3. It is strongly recommended that the Board consider the dissolution of the Sativa Los Angeles County Water District; and increasing the Central Basin Municipal Water District's sphere of influence to include all of the Sativa Los Angeles County Water District's <b>Executive Summary</b> Page 6 <b>Executive Summary</b> for the County of Los Angeles former sphere of influence. Please refer to Section 10.1: Sphere of Influence (SOI) and District Recommendation. Growth and population projections The District's service area is currently built out with a population of approximately 6,320 persons. There is no anticipation of any significant further growth. Present and planned capacity of public facilities including infrastructure needs or deficiencies The District is currently able to meet its water demands through a combination of three active ground water wells and purchasing leased water. The District also has an emergency water inter- connection with the City of Compton. The District has plans to drill a replacement well to increase water production supply and pressure. The District also plans to relocate water mains from the rear of customers' properties to the front of the properties, to avoid structures being built over existing service lines. Both projects are proposed to be funded through grants, loans, or rate increases. Financial ability of agencies to provide services The District has the financial capacity to continue to provide services on the same level as it has in the past with the current infrastructure. However, it lacks the ability to accomplish major repairs or upgrade District facilities, such as installing water meters, without substantially raising water rates or securing loans, or grants. Status of, and opportunities for, shared facilities There does not appear to be any opportunities for shared facilities unless the District is dissolved and the successor agency utilizes its own equipment, staff, and Board of Directors. Accountability of community service needs The District is governed by a five-member Board of Directors, each elected by voters within five separate voting districts within the District. The governing board is responsible for a complete range of public governance actions and holds regularly scheduled meetings every other Tuesday to inform the public about the Sativa MSR Page 7 August 2012 Sativa MSR District and recent water activities. The District's board meetings are publicly noticed through posting agendas at the District's administrative office located at 2015 E Hatchway Street. In order to ensure that the District's operations and finances are made readily available to the public it is recommended that the District create a public website. Any other matter related to effective or efficient service delivery It is recommended that LAFCO consider the dissolution of the District and increasing the Central Basin Municipal Water District's SOI to include the District's former SOI. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence Senate Bill 244, recently enacted on February 10, 2011, imposed state mandates on local governments, including cities, counties and LAFCOs. This bill requires LAFCO to make determinations "disadvantaged unincorporated communities." A regarding "disadvantaged community" is defined as a community with an annual median household income that is less than 80 percent of the statewide annual median household income. "Severely disadvantaged community" means a community with a median household income less than 60 percent of the statewide average (Water Code Section 79505.5). The District is generally located within two census tracts one of which is considered to be a disadvantage community while the other is considered to be a severely disadvantaged community. Please refer to Section 10: Determinations and Findings. Executive Summary Page 8 Agency Profile Local Agency Formation Commission for the County of Los Angeles 2. Agency Profile The District serves an approximately 180-acre or 0.28 square miles area in the Willowbrook area of unincorporated Los Angeles County and a small portion of the City of Compton. The District is adjacent, on the west and south, to the City of Compton. The District is generally bordered by South Mona Boulevard to the east, Oris Street to the south, North Paulsen Avenue to the west, and 131st Street to the north. The District is responsible for providing water to 1,661 service connections, of which only 1,631 are currently active. The District serves a population of approximately 6,320 people. The District's existing sphere of influence is coterminous with the District's boundaries. Figure 2- 1: Regional and Vicinity Map depicts the District's service boundaries. 42 City of<br>South Gate City of Regional Map Los Angeles City of Lynwood Los Angeles Sativa County County Water District & SOI Sativa County City of Water District & SOI Compton E Wayside E 131st Street Avenu Figure 2-1: E 133rd Street Regional and Vicinity Map Oris Street with Willowbr City of Compton City of Compton Peach Street Mook Avenue Not to Scale <b>Vicinity Map</b> Sativa MSR Page 9 August 2012 Sativa MSR As previously discussed, the District is primarily located within the unincorporated area of Los Angeles County with three separate areas that total to approximately 11 acres that lie within the City of Compton. There is an approximately 10.5 acre area that is bounded to the south, west, and north by the City of Compton and two areas, each less than a quarter of an acre in size, located north of Otis Avenue. The 10.5 acre area consists of 56 parcels primarily developed as single-family residences, a portion of North Wilmington Avenue and a vacant lot. The two less than a quarter of an acre areas include a park and a paved parking area that serves the Sacred Heart Church. Apart from the area located within the City of Compton, the District's service area is 100% residential with only 12 vacant lots. Original lot sizes in the service area were 50' by 100' however, a large number of these lots have been subdivided to 25' by 100'. This increased density has created higher services demands for the District. There is no projected growth in the District through 2020. 2.1 History The District was originally named Sativa Water and Electric, and was formed in 1913 and owned by Joseph Sativa. The present District was formed in 1938 under the County Water District Act (California State Water Code Section 30000 et seq.) 2.2 Sativa Los Angeles County Water District - Today The District relies on groundwater drawn from the Central Basin through three wells located throughout the District, known as "wells # 2, 3, and 5". The District had a fourth well known as "well #4", which has been decommissioned due to high levels of contaminants. The District also has a water inter-connection with the City of Compton to provide emergency water services. This metered water inter-connection consists of a 12" waterline in the City of Compton that transitions to a 8" waterline in the District's service boundary. The emergency metered water inter-connection that was established in 2007 and to this date has not been used. The primary source of District revenue is water sales and service. The District has no long-term debt, with limited reserves, and utilizes a "pay-as-you-go" system for improvements. Agency Profile Page 10 Agency Profile Agency Formation Commission for the County of Los Angeles The District does not have meters, and bills a flat monthly fee. Residents can pay monthly, quarterly, semi-annually, or annually. The last rate increase was approved by the District's governing board in 2009, when the monthly flat fee was raised to $55.00. The District is one of the few water districts in urbanized, developed areas in the State of California that does not have metered water connections. In a determination made by the District's legal counsel on March 21, 2006, it was concluded that the District is not required to install meters, pursuant to Section 525 of the California Water Code, as the District has less than 3,000 service connections and less than 3,000 acre-feet of annual water demand. However, if at some point in the future, the District directly or indirectly provides water to 3,000 customers or delivers more than 3,000 acre-feet annually that would trigger a requirement that the District install meters within ten years. Per Assembly Bill (AB) 2572 water meters must be installed on all <b>new</b> water service connections on and after January 1, 1992. Please refer to Appendix A to view a copy of the legal counsel's determination. Legend Sativa County Sativa County Water Water District & SOI District - Boundary & SOI E 133rd Street Figure 2-2: District Service Area and SOI vani u vortenduci a ir Peach Street Not to Scale The District has Central Basin pumping rights of 474 acre-feet per year and leases additional water rights to meet the annual demand of 804 acre-feet. The District's pumping rights were determined through a 1965 court order. The District leases 330 acre-feet per year at $255 per acre-foot to fulfill their demand. It Sativa MSR Page 11 August 2012 Sativa MSR is anticipated that the District will continue to lease water to meet its existing and future demands until a replacement for well #4 can be drilled or alternative sources of water, such as recycled water can be obtained. The water is held in four active tanks. Only three tanks are used at any given time and are rotated periodically. As previously discussed, well #4 was closed in 2009 because the water pumped through that well had traces of manganese and iron that exceeded state water quality levels. The District investigated several methods to treat the water, but ultimately decided to discontinue use of the well as it was determined to be unsustainable. Well #5, built in 1994, is a 910 ft. deep well that if need be could sustain the entire District demand. The District has proposed a new well on property recently purchased adjacent to well site #4. Where it is proposed to dig a 910-ft deep well. However the District does not have the financial capacity to move this project forward. The District has tried to get a grant to build the well for the past three years. The District applied for a $950,000.00 grant from the Los Angeles County share of the money received from the 2009 American Recovery and Reinvestment Act to build the additional well. The application was denied as the project was not deemed to be a top priority project. The District currently does not have any conservation programs. It distributes water conservation related handouts and conducts water use surveys twice per year. Agency Profile Page 12 Agency Profile for the County of Los Angeles Table 2-1: <b>District Summary Chart</b> <b>Agency Information</b> Service Area Information 2015 E. Hatchway Street Service Area: 180 ac. or 0.28 sq. miles Address: 2012 Population: Compton, CA 90222 6,320 <b>Projected Population:</b> Theresa Johnson Contact: 2015 6,320 Phone: (310) 631-8176 2020 6,320 Website: No website 2025 6,320 6,320 2030 2035 6,320 Financial Information (FY 2011 - 2012) $1,032,418.35 $1,312,185.46 Expenses: Revenues (including interest income): $279,767.11 <b>Capital Improvement</b> Net Income at $0.00 <b>Budget:</b> year end: <b>System Information</b> Number of Employees: 6 staff members, 5 people on board of directors 3 operating wells - #s 2, 3, and 5 Number of Groundwater Wells: 1 inactive well - # 4 474 Acre-feet per year (AFY) - 1965 court order Pumping Rights in Central Basin: 330 AFY @ $225 per AF Leased Water: Miles of Pipe: 8 miles Number of Pump Stations: 3 Number of Pressure Zones: 1 50,000 AF Storage Capacity: Typical Monthly Residential Water Bill (Flat Rate) <b>Fixed Distribution</b> Water NA Monthly $55.00 NA and Customer Charge: Bill: Charge: Service Area Water Supply and Demand 2010 2015 2020 2025 2030 2035 Water Supply (AFY) 474 474 474 474 474 Groundwater 474 330 330 330 330 330 330 Leased Water 804 804 804 804 804 804 Total Supply 804 804 804 804 804 804 Demand Projection Planned Water Conservation 0 0 0 0 0 0 <b>Total Demand</b> 804 804 804 804 804 804 Table Notes: 1) Sativa Los Angeles County Water District LAFCO Supplemental Questionnaire - July 25, 2012 Sativa MSR August 2012 Page 13 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Agency Profile Page 14 Key Findings and Research Local Agency Formation Commission for the County of Los Angeles 3. Key Findings and Research The purpose and intent of municipal service review is to gather data and information to document an agencies capacity to provide efficient and cost-effective water services to property owners, residents, and businesses within the District's service boundaries. To meet this requirement, LAFCO and the Hogle-Ireland and Mocalis Group team prepared this service review based on sound, defensible data and information, with a focus on ensuring the future provision of safe and efficient water services, and through an open and inclusive process with input from the affected and surrounding agencies. In order to create a comprehensive, future-focused service review, the project team met with representatives from the District, City of Compton Municipal Water Department, and the Central Basin Municipal Water District (CBMWD). The purpose of these discussions was to encourage the affected agency and stakeholder groups to: Identify new strategic approaches and joint opportunities for regional collaboration. Discuss service, infrastructure and governance efficiencies, deficiencies and/or opportunities for improvement. Introduce other pertinent information that may have been - overlooked in the preparation and approval of this municipal service review report. 3.1 Affected Agency and Stakeholder Groups During May 2012, the project team met with the following stakeholders: Sativa MSR Page 15 August 2012 Sativa MSR Table 3-1: Affected Agency and Stakeholder Groups Title Meeting Representative Agency Date Theresa Johnson Manager <b>Board President</b> Johnny Johnson Sativa Los Angeles County <b>Board Member</b> 5/16/2012 Luis Landeros Water District <b>Board Secretary</b> April McCall Elizabeth Hicks <b>Board Treasurer</b> Production Alex Santos City of Compton Municipal 5/21/2012 Supervisor Water Department General Manager Kambiz Shoqhi 6/19/2012 David Hill Water Resources & Central Basin Water District Planning Manager During each of the meetings the affected agency and related stakeholders were presented a letter (please see Appendix B) to introduce the MSR process and have a frank discussion regarding the provision of existing and future water services. After each of the meetings, representatives were provided with a questionnaire to solicit additional information regarding growth and population projections, present and planned capacity of public facilities, opportunities for shared facilities, and any additional information that was not discussed during the in-person meetings. Copies of the completed questionnaires are included in Appendix B. The stakeholder agencies were able to provide valuable information about their past and present interactions with the District, interconnections between the stakeholder agencies and the District, existing and future population projections, and the operability of the District in relationship to their own water service provisions. Key findings from each of the stakeholder interviews include: <b>Central Basin Municipal Water District</b> CBMWD does not have a direct connection with the District for water or recycled water. The District does not have a connection to the Metropolitan Water District. CBMWD is primarily a water wholesaler however retail water service is provided within CBMWD's statutory authority. Key Findings and Research Page 16 Key Findings and Research Agency Formation Commission for the County of Los Angeles CBMWD provides retail services to a select area of unincorporated Los Angeles County. CBMWD could provide effective management for retail water service to the District's customer base. However, an evaluation of infrastructure and potential cost implications would be needed and subject to approval by CBMWD's Board of Directors. CBMWD's high quality financial rating would allow access to adequate sources of funding for potential improvements. The CBMWD service area includes multiple Los Angeles County unincorporated areas, almost all of which are served by investor owned utilities (IOU). The District's area is bordered by two IOU's including Golden State Water Company and Park Water Company and the City of Compton (non-IOU). The fact that the District does not have individual property meters severely limits the ability of the District to implement and measure the positive impact of conservation measures. It is very expensive to install meters, with costs ranging from hundreds of thousands of dollars to millions of dollars. As the District was incorporated in 1938, much of the existing mainlines are probably pre-World War II, and have probably reached the limit of their life expectancy. City of Compton Municipal Water Department The City of Compton has a water interconnection with the District. The waterline varies in diameter with a 12" water line in the City of Compton that transitions to an 8" waterline within the District's boundaries. The City of Compton has a positive working relationship with the District with no past conflicts. The City of Compton has the ability to service the District in the event that the District is dissolved. Sativa MSR Page 17 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Key Findings and Research ... Page 18 Growth and Population Projections for the County of Los Angeles 4. Growth and Population Projections The District is primarily located within the unincorporated area of Los Angeles County adjacent to the north end of the City of Compton. The District encompasses an approximately 180 acre area or approximately 0.28 square miles. Of this 180 acre area, approximately 169 acres lie within the unincorporated area of Los Angeles County, while 11 acres lie within the City of Compton. 4.1 Regional Summary In accordance with the 2012 Southern California Association of Governments (SCAG) Regional Transportation Plan (RTP), the unincorporated area of Los Angeles County had a 2008 population of 1,052,800 persons and a projected 2035 population of 1,399,500 persons. This population increase of 346,700 represents a growth rate of approximately 32% percent from 2008 to 2035. It is important to recognize that the unincorporated area of Los Angeles County encompasses an approximately 2,600 square mile area. The unincorporated area of Los Angeles County is unofficially grouped into 137 non-contiguous areas, some of the unincorporated areas are as small as a few blocks, some are urban centers with more than 150,000 residents and some, with sparse populations, cover hundreds of square miles in the high desert. Given the vast size and varying demographics of the unincorporated area of Los Angeles County, a more realistic estimate of the future population projections of the District can be derived by evaluating the population projections of the cities surrounding the District including Compton and Lynwood. Based on the SCAG RTP population, household, and employment projections the cities surrounding the District are projected to experience moderate to little growth over the next 23 years. Table 4-1: City of Compton and Lynwood Population Growth Projections provides a breakdown of the anticipated population, households, and employment projections for each of these two cities. Sativa MSR Page 19 August 2012 Sativa MSR Table 4-1: City of Compton and Lynwood Population Growth Projections Overall <b>SCAG 2020</b> <b>SCAG 2035</b> <b>SCAG 2008</b> RTP <b>Increase</b> RTP Regional Projection <b>Transportation</b> Projection Plan (RTP) <b>City of Compton</b> 97,900 2,000 95,900 96,900 Population 200 23,100 22,900 23,100 Households 32,200 1,600 31,200 30,600 Employment City of Lynwood 5,000 74,300 69,300 72,300 Population 15,700 1,100 14,600 15,300 Households 14,500 1,300 13,800 13,200 Employment Table Notes: 1) Southern California Association of Governments (SCAG) 212 Regional Transportation Plan (RTP) Growth Forecast Population 180,000 160,000 140,000 120,000 ☐ City of Compton 97,900 96,900 95,900 Figure 4-1: 100,000 131 -------------------------------------- SCAG RTP Estimated ****** 74,300 72,300 80,000 ******************************** 69,300 Population Projections ACCRECATE AND PARTY OF 60,000 △ City of Lynwood 40,000 20,000 2035 Years 2008 Growth and Population Projections Page 20 Growth and Population Projections Commission for the County of Los Angeles Local Summary 4.2 As it exists today, the District's service area is primarily built out with an estimated population of 6,320 persons and 1,631 active service connections. There are only 12 vacant lots within the District's service area. While there are no plans for future redevelopment within the District's service area, several of the original lots, which were sized at 50' x 100' have been subdivided into lots sized at 25' x 100'. These subdivisions have created higher densities and as result increased water demand. There are no plans for future redevelopment within the service area and the existing population of 6,320 persons is not anticipated to increase or decrease significantly over the next 20 years. Any development that would occur within the District's service boundaries would occur as a result of residential subdivisions and/or redevelopment projects. Sativa MSR Page 21 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank 70 00 15 Growth and Population Projections Page 22 Infrastructure Needs and Deficiencies gency Formation Commission for the County of Los Angeles Infrastructure Needs and Deficiencies 5.1 Water Sources The District serves a 180 acre or 0.28 square mile area in the Willowbrook area of unincorporated Los Angeles County and a small portion of the City of Compton. The source of the District's water supply is exclusively ground water. 5.2Water Supply and Demand The District is responsible for providing water to 1661 service connections, of which only 1631 are currently active connections, serving a population of approximately 6,320 persons. The service area is 100% residential. There are currently only 12 vacant lots in the service area. Original lot sizes in the service area were 50' x 100'. A large number of those lots have been subdivided to 25' x 100', creating higher densities and higher demand in excess of original allocation rights. The District has Central Basin pumping rights of 474 acre-feet per year and an annual water demand of 804 acre-feet. To meet the excess demand created by the lot subdivisions, the District leases additional water rights of 330 acre-feet per year at a rate of $255 per acre-foot. The District also has a standby and emergency intertie meter connection with the City of Compton that was established in 2007 and to this date has not been used. There is no significant projected growth in the District through 2035. Sativa MSR Page 23 August 2012 Sativa MSR 5.3 Existing and Proposed Supplies and Facilities The District's water supply consists solely of groundwater, which is pumped through District wells in the Central Basin. The District has three operating wells and one inactive well, # 4, all located on District owned property. Well # 4 was abandoned and sealed in 2009. The District has plans to drill a replacement well on the lot adjacent to well number 4, which will be a large well to increase water production supply and pressure. The District also plans to relocate water mains from the rear of customers' properties to the front of the properties, to avoid structures being built over existing service lines. Both projects are proposed to be funded through grants, loans, or rate increases. The District is anticipated to rely on a combination of groundwater and leased water to meet its consumer demand through 2035. As the District has no metered connections, it severely limits the District's ability to actively encourage and monitor conservation measures. Although the District has an exemption from installing meters (please refer to Appendix A), incentives for reducing demand through conservation can be measured only with meters in place. Without meters, neither the consumer nor the District can measure the positive impacts of conservation including the possibility for decreased water demands and the potential for cost savings for both the customer and the District. Table 5-2: Service Area Water Supply and Demand provides a summary of the District's water supplies as well as projected water demands. <b>Table 5-2:</b> Service Area Water Supply and Demand Service Area Water Supply and Demand 2025 2030 2035 2015 2020 2010 Water Supply (AFY) 474 474 474 474 474 474 Groundwater 330 330 330 330 330 330 Leased Water 804 804 804 804 804 804 Total Supply 804 804 804 804 804 804 Demand Projection 0 0 0 0 0 Planned Water Conservation 0 804 804 804 804 804 804 <b>Total Demand</b> Table Notes: 1) Sativa Los Angeles County Water District LAFCO Supplemental Questionnaire - July 25, 2012 Infrastructure Needs and Deficiencies Page 24 Financing Opportunities or Constraints Local Agency Formation Commission for the County of Los Angeles 6. Financing Opportunities or Constraints The District is funded through service charges and fees. Revenues are accounted for through an enterprise fund, and are adequate for expenses. The District has no long term debt associated with the water system improvements. 6.1 Revenues The District's operating revenue is generated through water sales and service. In addition to operating revenue, the District also collects interest income. For the fiscal year 2011-2012, the District has estimated total operating revenue of $1,312,185.46 and interest income of $3,191.09 for total revenue of $1,315,376.55. 6.2 Expenses The expenses that the District incurs on an annual basis are divided into four categories including: Operating Expenses, General and Administrative costs, water treatment, and Other Operational Expenses. A brief description of each of these categories is provided below. Operating Expenses The District's Operating Expenses include purchasing leased water and pumping costs, which includes the electricity used to pump water from the Central Basin. For FY 2011-2012 the District estimates water purchasing costs of $211,989.86 and pumping costs of $66,109.52 for a total of $278,099.38. <b>General and Administrative Costs</b> The District's General and Administrative Costs includes but is not limited to the board of directors stipend, employee pay and benefits, office repair and maintenance, utilities, equipment, and general maintenance. For FY 2011-2012 the District estimated a total of $687,921.41 for General and Administrative Costs. Water Treatment In order to ensure that the water pumped from the District's ground water wells is potable and treated in accordance the State of California water quality requirements, the District has estimated $8,850.52 for water treatment costs for FY 2011-2012. Sativa MSR Page 25 August 2012 Sativa MSR Other Operational Expenses For FY 2011-2012 the District has estimated $61,216.10 in Other Operational Expenses, which includes the depreciation of District owned assets and facilities. The District's total expenses for FY 2011-2012 are $1,035,609.44. 6.3 Net Income For FY 2011-2012 the District has estimated total revenues of $1,315,376.55 against total expenses of $1,035,609.44, for a net income of $279,767.11. It is important to recognize that for FY 2009-2010, the District had total revenues of $1,029,669.68 against total expenses of $1,019,173.59, for a net income of $10,496.09. This stark difference of $269,271.02 in net income between the actual FY 2009-1010 and estimated FY 2011-2012 is accounted for by increased revenues and decreased expenditures. Most notably, the abandonment costs for well #4 in FY 2009-2010 at $66,575.42 and Professional fees in FY 2009-2010 at $43,496.33. In addition, the District has estimated an increase of revenue of $286,127.03 from FY 2009-2010 to FY 2011-2012, which could be accounted for by the District's rate increase from $41.00 per service connection to $55.00 per service connection that took effect in 2009. The project team has followed up with the District to obtain a more complete explanation as to how the District's net income can increase so significantly within a two-year time period. However, as of this writing the project team has not been able to receive a response from the District. Table 6-1: Sativa Budget Summary provides a summary of the District's FY 2009-2010, FY 2010-2011, and FY 2011-2012 budgets. A complete copy of the District's budget for each of the aforementioned fiscal years can be found in Appendix C. Financing Opportunities or Constraints Page 26 Financing Opportunities or Constraints or the County of Los Angeles Table 6-1: Sativa Budget Summary Revenue Actual 2009- Budget 2010- Budget 2010- 2011 2011 2010 Operating Revenue 1,192,895.87 1,312,185.46 1,026,058.43 3,191.09 2,900.99 3,611.25 Interest Income 1,195,796.86 1,315,376.55 1,029,669.68 <b>Total Revenue</b> Expenses 277,621.41 252,383.10 240,184.84 Operating Expenses General and Administrative 687,921.41 625,383.10 712,274.40 Costs 8,850.52 12,681.35 8,045.93 Water Treatment 61,216.10 55,561.00 54,033.00 Other Operational Expenses 941,373.13 1,035,609.44 1,019,173.59 <b>Total Expenses</b> <b>Net Income</b> 279,767.11 254,423.73 10,496.09 Table Notes: 1) Sativa Los Angeles County Water District LAFCO Supplemental Questionnaire - July 25, 2012 Annual Audit and Budget 6.4 In accordance with California Government Code 26909(a)(2): "When an audit of a special district's accounts and records is made by a certified public accountant or public accountant, the minimum requirements of the audit shall be prescribed by the Controller and shall conform to generally accepted auditing standards and a report thereof shall be filed with the Controller and with the county auditor of the county in which the special district is located. The report shall be filed within 12 months of the end of the fiscal year or years under examination." The Los Angeles County Auditor-Controller last prepared an audit of the District on August 3, 2005 for the fiscal years 2002, 2003, and 2004. A financial audit of the District has not been performed since then. It is highly recommended that the District perform an annual audit, not only to ensure compliance with the California Government Code but to demonstrate to their customers, the Los Angeles County Auditor-Controllers office, and LAFCO that the finances and expenditures of the District and being prepared in accordance with State Law. Table 6-1: Sativa Budget Summary provides an overview of the District's budget for FY's 2009-2010, 2010-2011, 2011-2012 while the entire budget for each of the aforementioned fiscal years can be found in Appendix C. In evaluation of the District's budget Sativa MSR Page 27 August 2012 Sativa MSR there were several questionable expenses that were found. Each of these expenses are briefly described below: The District has a budget expense of $39,370 for fiscal year 2011-2012 for their board of directors meeting stipend. However, as there are five board members who meet 26 times per year and receive $150 per meeting, the stipend should be closer to $19,500 rather than more than double at $39,370. It is important to note that per email correspondence between the project team and Theresa Johnson, Office Manager, on July 5, 2012 Ms. Johnson indicated that board members receive no additional compensation such as health insurance apart from the $150.00 per meeting. Furthermore, Ms. Johnson did not indicate if the Board attends any additional meetings apart from the 26 regularly scheduled meetings. Please refer to Appendix B. ▶ The budget includes an audit expense of $505.96 for fiscal year 2009-2010; however, the District's last audit was prepared on August 3, 2005 for the fiscal years 2002, 2003, and 2004. It is uncertain as to if an audit report was prepared and the results of this audit. For fiscal year 2011-2012 the District has estimated auto fuel expenses of $5,403.33 or about $450.00 per month. As the District is approximately 0.28 square miles and does not have meters that need to be read, the estimated fuel charges are questionable. For fiscal year 2009-2010 the District had payroll taxes of $13,105.91. These taxes jumped significantly to $30,489.08 in fiscal year 2010-2011 and are estimated at $33,537.99 for fiscal year 2011-2012. It is unknown why the District's payroll taxes increased so significantly especially considering that the District's staff has not increased. The District's estimated telephone expenses for fiscal year are estimated at $14,197.52 or about $1,200 per month. This number appears to be high considering that there are six employees who work for the District and that the District's 0.28 square mile service area is all within one area code. 6.5 Financial Ability of Agency to Provide Services Based on the analysis provided above, the District has the financial capacity to continue to provide services on the same level as it has in the past with the current infrastructure. However, it lacks the ability to accomplish major repairs or upgrade District Financing Opportunities or Constraints Page 28 Financing Opportunities or Constraints Local Agency Formation Commission for the County of Los Angeles facilities, such as installing water meters, without substantially raising water rates or securing loans. Sativa MSR Page 29 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Financing Opportunities or Constraints Page 30 Economies of Service Local Agency Formation Commission for the County of Los Angeles 7. Economies of Service 7.1 Cost Avoidance Opportunities As previously discussed, the District does not have meters and charges a flat rate of $55.00 per service connection. This rate of $55.00 per service connection was last updated in 2009. It is important to recognize that the District is adjacent to, within, and within close proximity to several water agencies that have the capacity to provide services to the District in the event that the District were dissolved. These water districts include the City of Compton Municipal Water Department, Central Basin Municipal Water District, as well as Golden State Water Company and Park Water Company. Both Golden State Water Company and Park Water Company are investor owned utilities (IOUs) that are governed by the California Public Utilities Commission. Each of these water agencies are briefly described below. City of Compton Municipal Water Department (CCMWD) The City of Compton Municipal Water Department (CCMWD) provides water service to approximately 80% of the City of Compton as well as some unincorporated areas. The City is a member agency of the Metropolitan Water District. The CCMWD receives 80% of its water from ground water wells and 20% from the Metropolitan Water District. The CCMWD updated their water rates on July 1, 2012. The updated water rates includes rates for areas within the incorporated area of the City of Compton and rates for areas that are served by the CCMWD service area, but within the County of Los Angeles. The monthly meter fee and charge for the amount of water used for the unincorporated area of Los Angeles County are 50% higher than the rates charged for customers within the incorporated area of the City of Compton. The CCMWD charges $45.81 per month for a 3/4" water connection in the unincorporated area of Los Angeles County. The CCMWD charges $4.07 per hundred cubic feet (HCF) of water used when 20 or less HCF of water is used. When 21 or more HCF of water is used the CCMWD charges $4.70 per HCF. Central Basin Municipal Water District (CBMWD) Central Basin Municipal Water District (CBMWD) was established by a vote of the people in 1952 to protect the Central Sativa MSR Page 31 August 2012 Sativa MSR CBMWD Groundwater Basin from over pumping. Today, wholesales potable water to 26 cities, mutual water companies, investor-owned utilities, water districts and private water companies in the region. In addition, CBMWD supplies recycled water to the region for municipal, commercial, and industrial use. CBMWD supplies imported and recycled water to its customer agencies to help protect the Central Groundwater Basin and develop a more balanced portfolio of water supplies. CBWMD is governed by a five member Board of Directors elected from within the service area. Each Director serves a four-year term once elected. CBMWD's service area covers approximately 227 square miles and includes 24 cities and several unincorporated areas in Southeast Los Angeles County including the District. CBMWD maintains an official population of approximately 1.65 million people according to the Southern California Association of Governments (SCAG), but due to the undercounting of the area's immigrant population, the number is believed to be closer to two million. Please refer to Figure 7-1: Central Basin Service Area to view CBMWD's service area in relationship to the District's service area. El Monte Rosemead South Monterey Park El Monte Los Angeles 710 County East LA 605 Montebello 60 Vernon Commerce County Pico Maywood West<br>Whittier- Rivera Huntington Park Los Nietos Bell Florence- Bell Graham Walnut Whittier Cudaby! Gardens Figure 7-1: La Habra Heights Sativa County Central Basin Service Area Santa Fe Water District & SOI Springs South Downey Whittier Lynwood Willowbrook La Mirada Norwalk Paramount <b>Compton</b> Bellflower Cerritos D1 Artesia 605 Carson Lakewood - Hawaiian<br>Gardens 405 Long Beach 710 Signal Not to Scale Economies of Service Page 32 Economies of Service Local Agency Formation Commission for the County of Los Angeles CBMWD is one of the 26 member agencies of the Metropolitan CBMWD's Board of Directors appoints two Water District. representatives to serve on the 38-member Metropolitan Water District Board of Directors. Although CBMWD is primarily a water wholesaler, CBMWD could provide effective management for retail water service to Sativa's customer base, since retail service is provided within their statutory authority. CBMWD does not have established retail water rates and would need to establish these rates based on their cost to produce and sell water in the event that the District was to be dissolved. CBMWD is primarily a water wholesaler however retail water service is provided within CBMWD's statutory authority. Golden State Water Company (GSWC) The Golden State Water Company (GSWC) is an IOU that distributes water to communities throughout California. GSWC relies on a myriad of complex infrastructure systems including numerous wells, pumping stations, thousands of miles of mains and service lines. The GSWC has been in operation for over 80 years and is a wholly owned subsidiary of American States Water Company. The GSWC currently has a service area directly to the north of the District. Please refer to Figure 7-2: GSWC and PWC Service Areas below to view the District's service area in relationship to GSWC and Park Water Company's (PWC) local service areas. The GSWC updated its rates on January 1, 2012. The GSWC charges a fixed service charge of $20.95 per month for a 3/4" water connection. The GSWC charges $3.466 for the first 11 hundred cubic feet (HCF) of water used, 3.986 for the next four HCF of water used, and $4.583 for any water used over 15 HCF. Park Water Company (PWC) Park Water Company (PWC) is an IOU that provides water service to approximately 28,000 accounts. PWC's service area is divided including: systems water three separate into Lynwood/Rancho West), (Compton Compton/Willowbrook Dominguez (Compton East), and Bellflower/Norwalk. PWC obtains its water supply from three sources including: imported water, groundwater, and recycled water. PWC's potable Sativa MSR Page 33 August 2012 Sativa MSR imported and recycled water supplies are purchased from the CBMWD. PWC's groundwater supply is pumped from the adjudicated Central Groundwater Basin. PWC currently has a service area directly to the east of the District. The PWC updated its rates on January 27, 2012. The PWC charges a fixed service charge of $25.50 per month for a 3/4" water connection. The GSWC charges $3.449 for the first 12 hundred cubic feet (HCF) of water used and $3.947 for any water used over 12 HCF. Please refer to Figure 7-2: GSWC and PWC Service Areas below to view the District's service area in relationship to GSWC and PWC's local service areas. Legend Sativa County Water District & SOI Park Water Company 110 City of Service Boundary Los Angeles Golden State Water Company . . Service Boundary 105 City of Park Water Company Lynwood Service Boundary Golden Sate Water Company Service Boundary Figure 7-2: GSWC and PWC Service Areas Sativa County Water District & SOI Unincorporated County of Los Angeles City of Compton Golden Sate Water Company Service Boundary Not to Scale Table 7-1: Water District Rate Comparison provides a summary of the charges anticipated from CCMWD, GSWC, PWC, and the District assuming that 18 HCF of water is used at a single- family residence with a 3/4" connection. Based on the District's 1,631 active water connections and an annual demand of 804 AFY, it is assumed that each connection within the District uses 18 HCF per year. It is important to note however, that as the District does not have meters, it does not charge a monthly meter fee as the other adjacent and nearby water agencies do. Furthermore, Economies of Service Page 34 Economies of Service Local Agency Formation Commission for the County of Los Angeles the District's reserves for capital improvements are far less than the adjacent and nearby water agencies. Table 7-1: Water District Rate Comparison <b>GSWC</b> CCMWD Rate as of June Rate as of July 1, <b>Rate Tier</b> Rate Tier 2012 2012 18 @ $4.70 = $84.60 Tier 1 (0-11 HCF) 11 @ $3.466 = Tier 1 (0-20 HCF) $38.13 4 @ 3.986= Tier 2 (11-15) $15.94 N/A Tier 2 (20+ HCF) Tier 3 (15+) 3 @ 4.583 = $13.75 Fixed Distribution and Fixed Distribution and $45.81 $20.95 Customer Charge Customer Charge Total $88.77 $130.41 Total <b>Sativa Los Angeles County Water District</b> <b>PWC</b> (District) Rate as of January <b>Rate Tier</b> Rate as of 2009 Rate Tier 27, 2012 12 @ $3.449 = $41.39 Tier 1 (0-12 HCF) 6 @ 3.947 = $23.68 Tier 2 (12+ HCF) Fixed Rate $55.00 Fixed Distribution and $25.50 Customer Charge $55.00 $90.57 Total Total Table Notes: 1) Water usage is billed by hundred cubic feet (HCF). 1 HCF = 748 gallons. One billing unit is equivalent to one HCF (748 gallons). Based on the analysis above, there does not appear to be any cost avoidance opportunities for the District as it is presently constituted. However, in the event of District dissolution, there would be an opportunity for the succeeding agency to obviate a substantial portion of the District's current expenses, including but not limited to such expenses as Board of Directors' stipends and a major part of employee wages and benefits. There would also be a greater opportunity to install metered connections and encourage water conservation. 7.2 Opportunities for Shared Facilities There does not appear to be any opportunities for shared facilities, unless the District is subject to dissolution and the successor agency utilizes its own equipment, staff, and Board of Directors. Sativa MSR Page 35 August 2012 Sativa MSR 7.3 Evaluation of Management Efficiencies An evaluation of the District's management efficiencies reveals a very disturbing and pervasive pattern of unacceptable actions or lack of actions regarding District responsibilities. Consider the following: (From the December 14, 2005 Staff Report of the Local Agency Formation Commission for the County of Los Angeles (LAFCO), page 2): "The (Sativa) District has been highly uncooperative in providing staff with any information and has refused to provide any financial accounting statements other than their budget for 2003-2004." (From the Independent Auditor's Report, County of Los Angeles, Department of Auditor-Controller, August 3, 2005): "In previous internal control reports, we noted a lack of separation of duties over the cash receipts and disbursements function performed by office staff. The District needs to properly separate the cash receipts and record-keeping functions. There has been no change in how the District collects and records its cash payments. There are only three office employees, two of whom are related to each other and to the President of the District's Board of Directors. All three employees have access to both cash and the accounting records......We recommend the District hire an outside consultant, either an expert bookkeeper or an accountant, to assist the District with its bookkeeping." The Los Angeles County Auditor-Controller's office last performed an audit for the District on August 3, 2005 for the fiscal years 2002, 2003, and 2004, which was the last audit prepared by them for the District. It should be noted that the Auditor-Controller's office subsequently informed the District that the Auditor- Controller's office would not have the resources to conduct future audits of the District, and that the District should have a 3rd party consultant prepare their annual audits, as provided by the California Government Code. California Government Code Section 26909(a)(2) states: "(2) Where an audit of a special district's accounts and records is made by a certified public accountant or public accountant, the minimum requirements of the audit shall be prescribed by the Controller and shall conform to generally accepted auditing standards and a report thereof shall be filed with the Controller and with the county auditor of the county in Economies of Service Page 36 Economies of Service Local Agency Formation Commission for the County of Los Angeles which the special district is located. The report shall be filed within 12 months of the end of the fiscal year or years under examination." The District budget reflects audit expenses of $505.96 in FY 2011- 12. According to the Auditor-Controller's office, the District has not filed any audit reports with them since the last audit was performed by the Auditor-Controller's office in 2005. What was being audited in FY 2011-12, and who got the results? The District's history of inaccurate or non-existent records has greatly reduced the ability of the project team to make accurate findings or forecasts from official records without referring questions of substance to the District's staff. The District's staff has been very uncooperative in providing accurate information in a timely manner, if at all. This mirrors the experience of LAFCO's staff, as described in the LAFCO Staff Report of December 14, 2005. Additionally, when information has been provided, it often is not accurate or reliable. An example can be found on page 2 of the Agency Profile sheet produced by the District on July 5, 2012 as part of the information it provided in response to LAFCO's Supplemental Request for Information. It states in the opening paragraph that the District's service area is approximately one- half square mile. A few lines further down, it states that the District's service area is 2 ½ square miles, a difference of 500 percent. However, based on the project team's review of the most recent Geographic Information Systems (GIS) "shapefile" of the District's service area it is estimated that the District's service area is approximately 180 acres or 0.28 square miles. Similarly, it states on that same page that the District has approximately 1,488 service connections, but on page 8 of the same report it states that there are 1,580 service connections. Another example is found on page 7 of the report, under Average Annual Demand. The District states that it presently has 6,320 residential service connections, but that by the year 2015 the District will have shrunk to only 1,606 connections, leaving a customer base 25% of the District's original size. This is surely not the case. Another example is found in the District's current budget for Board The current total budgeted amount is meeting stipends. $39,370.00 and the Board members are paid $150.00 for each Board meeting they attend. Board meetings are scheduled for 26 regular meetings a year. 26 meetings X 5 Board members X Sativa MSR August 2012 Page 37 Sativa MSR <math>$150.00 = $19,500.00</math> for Board stipends per year. But the adopted budget states $39,370.00 for Board stipends. The project team emailed the District's office manager on July 31, 2012, and specifically asked about Board meetings: "6. We understand that the Board meets twice a month for a total of 26 meetings. Are there any other meetings that the Board attends? Is so, can you please specify?" The District's answer: "The Board meets every other Tuesday. Totaling 26 regular meetings." The project team remains unable to determine where the other $19,870.00 in Board stipends goes. A review of the budget raised questions about other budget items, including bank charges, fuel costs, telephone expenses, auto expenses, audit expenses, professional fees, and payroll taxes. It seems only a forensic auditor can provide accurate answers to these questions. Economies of Service Page 38 Government Structure Options Local Agency Formation Commission for the County of Los Angeles 8. Government Structure Options The purpose of evaluating government structure options as part of the Municipal Service Review (MSR) is to encourage the current and future orderly formation of local government agencies, create logical boundaries, and promote the efficient delivery of services. This MSR is an informational document that will be used by the Local Agency Formation Commission for the County of Los Angeles (LAFCO) and staff, agencies and organizations, stakeholders, and the public to discuss future governance options for the District. One of the required components to be addressed in the MSR is a list of all possible government structure options including an analysis of all possible advantages and disadvantages of agency reorganization. There are several advantages and disadvantages that may occur from reorganization including: Advantages Reduction in cost or fees due to economies of scale Improved service delivery in terms of both water delivery and administrative functions including customer service and billing Simplification of jurisdictional boundaries. Disadvantages Political opposition Loss of local control and accountability No or limited cost savings Discontinuity of services during the reorganization process The Commission is not required to implement any of the governmental structure options described in this report. However, the Commission must update or reaffirm the sphere of influence of the District, which as it exists today is concurrent with the District's boundaries. It is important to note that at the time this report was prepared, the District had no plans to expand or retract its sphere of influence or service boundary. 8.1 Options The LAFCO Staff and Commission should consider the following three options when evaluating the sphere of influence (SOI) for the Sativa Los Angeles County Water District: Maintain the status quo; expand the SOI; reduce the SOI, and having water services Sativa MSR Page 39 August 2012 Sativa MSR provided by the City of Compton Municipal Water Department (City) or the CBMWD. Maintain the Status Quo This option would maintain the existing District boundaries and current SOI. In this scenario, the District would continue to provide water services in the same manner as it does today, maintain the existing infrastructure, and carry out administrative functions including customer service and billing. Residents, landowners, and business owners within the District will continue to pay the same uniform $55.00 monthly flat rate. As the District's service boundaries are built-out, there are no anticipated increases in population and water demands that would have an impact on the ability of the District to continue to provide water services. <b>Expand the Sphere of Influence</b> The District currently does not have plans to expand its SOI or existing service boundary. Considering that the District does not have water rights or infrastructure that could be expanded beyond their jurisdictional boundaries, an expansion of the District's SOI is highly unlikely Reduce the Sphere of Influence As previously discussed, the District's SOI boundary is Reducing the coterminous with the District's service area. District's SOI to a zero SOI would provide the basis for the future dissolution of the District. Potential Agency Merger As previously discussed, the District is located adjacent to the City of Compton, and in fact supplies water to a small area within the City. During meetings with the City and CBMWD, both agencies indicated that they would have the ability and capacity to provide water services to the District in the event that the District was dissolved. However, considering that the City is currently experiencing serious financial problems, it seems an illogical decision to merge the District into the City, particularly since the District may be facing substantial facilities upgrades in the near future, such as installing District-wide water meters. Government Structure Options Page 40 Local Accountability and Governance gency Formation Commission for the County of Los Angeles 9. Local Accountability and Governance The District is governed by a five-member board of directors, elected from within each of the five electoral districts in the District. Members for each of the districts must reside in the district they represent and are elected by voters within that district. All board members serve a four-year term. Table 9-1: Sativa Los Angeles County Water District Governance below provides a summary of the governance and local accountability of the District. Table 9-1: Sativa Los Angeles County Water District Governance Date formed: 1913 County Water District Act (California <b>Statutory Authorization:</b> State Water Code Section 30000 et seq.) Twice a Month <b>Board Meetings:</b> Compensation Title Board of Directors President Johnny E. Johnson Vice President $150.00 per meeting. No other benefits Ruben Hernandez including health insurance are provided Secretary April McCall to board members Treasurer Elizabeth Hicks <b>Board Member</b> Luis Landeros Table Notes: 1) Sativa Los Angeles County Water District LAFCO Supplemental Questionnaire - July 25, 2012 The District has water rights and owns a complete water infrastructure, including an office and maintenance facilities, wells, storage tanks, and a distribution system, not including water meters. The governing board is responsible for a complete range of public governance actions and holds regularly scheduled meetings twice a month to inform the public about the District and recent water activities. The District's board meetings are publicly notified through newspaper publications and are open to the public. Sativa MSR Page 41 August 2012 Sativa MSR The District was originally named Sativa Water and Electric, and was formed in 1913 and owned by Joseph Sativa. The present District was formed in 1938 under the County Water District Act (California State Water Code Section 30000 et seq.) Local Accountability and Governance Page 42 Determinations and Findings Agency Formation Commission for the County of Los Angeles 10. Determinations and Findings California Government Code Section 56430 provides that LAFCOs, upon receipt and consideration of an MSR, are required to adopt written findings addressing each of the following seven topics: Growth and population projections for the affected area. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies. 3. Financial ability of agencies to provide services. 4. Status of, and opportunities for, shared facilities. 5. Accountability of community service needs, including governmental structure and operational efficiencies. 6. Any other matter related to effective or efficient service delivery, as required by the LAFCO Commission. 7. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Below is a summary of what each determination will assess as well as an overview of the findings for each determination. 1. Growth and population projections for the affected area. This determination requires an analysis of current and future population and demographic characteristics related to city and special district service plans and delivery. Local and regional growth projections should be analyzed for compatibility with planned facilities. The District is fully built out with a population of approximately 6,320 people. There is no future growth projected in the District. The existing water infrastructure and facilities are adequate to continue to serve the District. The cities adjacent to the District are projected to experience moderate to little growth from 2012 to 2035. Table 10-1: City of Compton and Lynwood Population Projections provides a breakdown of the anticipated population growth for those cities. Sativa MSR Page 43 August 2012 Sativa MSR Table 10-1: City of Compton and Lynwood Population Projections <b>SCAG 2008</b> Annual <b>SCAG 2035</b> regional Population <b>Growth Rate</b> RTP Transportation City Name Increase through 2035 Plan (RTP) Population Population 0.08% 2,000 95,900 97,900 Compton 0.27% 5,000 74,300 69,300 Lynwood Table Notes: ¹Southern California Association of Governments (SCAG) 212 Regional Transportation Plan (RTP) Growth Forecast 2. Present and planned capacity for public facilities and adequacy of public services, including infrastructure needs or deficiencies. The purpose of this determination is to evaluate existing infrastructure to determine existing sufficiency and future demand. The analysis will address future planned expansions within the MSR study area, both locally and regionally. The existing facilities are adequately serving the existing District, and, given the fact that the District is fully built out, have the future capacity to continue to adequately serve the District. The only facility not presently provided is water meters. The District is also planning on replacing Well No. 4, which was taken out of service in 2009. 3. Financial ability of agencies to provide services. The purpose of this determination is to analyze the present and future ability of the District to financially support the current and long-term municipal service needs. Based on the analysis provided in Section 6: Financing Opportunities or Constraints, the District has the financial capacity to continue to provide services on the same level as it has in the past with the current infrastructure. However, it lacks the ability to accomplish major repairs or upgrade District facilities, such as installing water meters, without substantially raising water rates or securing loans. Determinations and Findings Page 44 Determinations and Findings gency Formation Commission for the County of Los Angeles 4. Status of, and opportunities for, shared services. The purpose of this determination is to analyze potential opportunities, if any, for enhancing operational efficiencies by sharing services and/or facilities. An increased level of efficiency and effectiveness can be reached by dissolving the District and having the CBMWD provide water services to the District's service area. The revenues collected by the District can be transferred to CBMWD to fund water resources, infrastructure repair and maintenance, and administrative functions. In accordance with Section 56430(b) of the Cortese-Knox-Hertzberg Local Government Reorganization Act, "the commission may assess various alternatives for improving efficiency and affordability of infrastructure and service delivery within and contiguous to the sphere of influence, including, but not limited to, the consolidation of governmental agencies." 5. Accountability for community service needs, including governmental structure and operational efficiencies. The purpose of this determination is to evaluate the current and alternative government structure of the District. This evaluation includes opportunities for public participation provided by the District. The District is governed by a five-member Board of Directors, each elected by voters within five separate voting districts within the District. The governing board is responsible for a complete range of public governance actions and holds regularly scheduled meetings every other Tuesday to inform the public about the District and recent water activities. The District's board meetings are publicly notified through posting agendas at the District's administrative office located at 2015 E Hatchway Street. In order to ensure that the District's operations and finances are made readily available to the public it is recommended that the District create a public website. At a minimum the website should provide the following information: Board member names and contact information, Date, time, and location of board meetings, Meeting minutes from past board meetings, Sativa MSR Page 45 August 2012 Sativa MSR Agendas for upcoming board meetings, Relationship between the District and adjacent cities, A description of how water service is currently provided to the area, The most current water rates, and Conservation measures to help reduce water consumption. 6. Any other matter related to effective or efficient service delivery, as provided by Commission policy. The purpose of this determination is to provide an analysis of any other matters as related to the data analysis provided in the previous sections of this report, the stakeholder agency interviews, affected and and distributed questionnaires. Please refer to Section 10.1: Sphere of Influence (SOI) and District Recommendation below. 7. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Senate Bill 244, recently enacted on February 10, 2011, imposed state mandates on local governments, including cities, counties and LAFCOs. This bill requires LAFCO to "disadvantaged determinations regarding make communities." Disadvantaged unincorporated unincorporated communities are defined as territory that constitutes all or a portion of a "disadvantaged community" including 12 or more registered voters or some other standard as determined by the LAFCO Commission. A "disadvantaged community" is defined as a community with an annual median household income that is less than percent of the statewide annual median household 80 income. "Severely disadvantaged community" means a community with a median household income less than 60 percent of the statewide average (Water Code Section 79505.5). The legislation will impact LAFCO operations in three respects: 1. Municipal Service Review (MSR) determinations. 2. Sphere of Influence updates on or after July 1, 2012 3. Annexation approval restrictions of territory adjacent to disadvantaged communities. Determinations and Findings Page 46 Determinations and Findings ocal Agency Formation Commission for the County of Los Angeles Item numbers one and two are further described below, however as this MSR does not concern the approval of an annexation, item number three will not be discussed in this report. 1. Municipal Services Reviews - §56430 The Commission is required to prepare specific written determinations on infrastructure needs or deficiencies related to sewer, water, and fire protection services in any disadvantaged unincorporated community within or contiguous to the sphere of influence of a city or special district that provides those services. 2. Spheres of Influence - §56425 After July 1, 2012 the Commission is required to adopt additional determinations for an update of a sphere of influence of a city or special district that provides public facilities, or services related to sewer, water, or fire protection. The Commission must make determinations regarding the present and probable need for those public facilities and services in any disadvantaged unincorporated communities within the existing sphere of influence. In accordance with the 2010 United States Census, the median statewide household income is $54,459. Eighty percent of the median statewide household income is $43,567. As the District does not conform to city boundaries, census tracts were used to determine the median household income. The unincorporated areas of the District includes two census tracts identified as tract # 5414 and 5415. It is important to note that these census tracts are not contiguous with the District's service boundary and encompass a much larger area as shown in Figure 10-1: Census Tract Locations below. Census tract # 5414 has an annual average household income of $30,417 or 56% of the statewide annual median household income, making it a severely disadvantaged community. Census tract # 5415 has an annual average household income of $40,202 or 74% of the statewide annual median household income, making it a disadvantaged community. Each of these two census tracts along with the surrounding census tracts are further described in Table 10-2: Census Tract Annual Median Household Income below. Sativa MSR Page 47 August 2012 Sativa MSR City of Legend Los Angeles \ Sativa County<br>Water District & SOI 105 - 7 Census Tract Boundary Unincorporated County of Los Angeles 5407 5406 5408 City of 5415 5414 Lynwood Figure 10-1: Sativa County<br>Water District & SOI 5416.03 Census Tract Locations 5413 5426.01 City of 5427 Compton Not to Scale Table 10-2: Census Tract Annual Median Household Income Percentage of Annual <b>Annual Statewide</b> Median Statewide Annual <b>Census Tract</b> <b>Annual Median</b> Household Median Income Income Income 58% $31,366.00 5406 68% $36,814.00 5407 61% $33,000.00 5408 74% $40,202.00 5413 56% $30,417.00 $54,459.00 5414 96% $52,500.00 5415 77% $42,014.00 5416.03 69% $37,363.00 5426.01 $40,938.00 75% 5427 Table Notes: 1) 2010 United States Census Determinations and Findings Page 48 Determinations and Findings Agency Formation Commission for the County of Los Angeles Sphere of Influence (SOI) and District 10.1 Recommendation It is strongly recommended that the Commission consider the dissolution of the Sativa Los Angeles County Water District; and increasing the Central Basin Municipal Water District's sphere of influence to include all of the Sativa Los Angeles County Water District's former sphere of influence. This determination is based on the following findings: The District's use of a "pay as you go" financial approach has resulted in lower customer rates, but has failed to achieve a responsible method of assuring that the system facilities can be maintained at the level required of a public water system. The District does not have the present financial ability to fund major facilities replacements that will be required for an aging system. Because the customer base is so small, any loans or rate increases to pay for needed system replacements will result in unacceptably high costs to the customers. A significant portion of the District's existing budget could be obviated if the District were subject to dissolution, and that money could be used by the successor agency towards creating a system replacement fund. In addition, a large agency such as CBMWD can more effectively spread future costs at less impact upon its larger base of customers. District's management deficiencies have been The adequately documented previously herein. The fact that one-third of the District's employees are related to the Board President leads to an unavoidable appearance of nepotism. Because of the District's demonstrated inability or unwillingness to provide accurate, timely answers to official inquiries, the family linkage between a policy maker and staff is very troubling. In order to establish a basic level of confidence in the reliability of District records, it is also recommended that the Commission order a forensic audit of the District's financial records. Sativa MSR Page 49 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Determinations and Findings Page 50 Appendix A – Meter Legal Determination Appendix A – Meter Legal Determination CONFIDENTIAL/ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT COMMUNICATION NOSSAMAN LLP MEMORANDUM TO: Sativa Los Angeles County Water District Alfred Smith and Melissa A. Poole FROM: DATE: March 21, 2006 Applicability of Recent Legislation Requiring Installation of Water Meters RE: (AB 2572 - Kehoe) 280841-0001 Issue: Does AB 2572, which requires the installation of water meters, apply to Sativa Los Angeles County Water District ("Sativa")? Short Answer: If Sativa does not directly or indirectly provide water to more than 3,000 customers or deliver more than 3,000 acre-feet of water annually, the requirement to install water meters on all service connections prior to 2025 does not apply. If at some point in the future Sativa directly or indirectly provides water to 3,000 customers or delivers more than 3,000 acre-feet annually that would trigger a requirement that Sativa install meters within 10 years. As Sativa is likely aware, existing law (renumbered by AB 2572) requires Sativa to install water meters on all new water service connections on and after January 1, 1992. Analysis: Assembly Bill 2572 (Kehoe) of the 2003-2004 Legislative Session amended the California Water Code to require all urban water suppliers that do not receive water from the Central Valley Project to install water meters on all municipal and industrial service connections located within its service area before January 1, 2025. Cal. Water Code §527(a)(1)1. In addition, once meters are installed, urban water suppliers are required to "charge each customer that has a service connection for which a water meter has been installed based on the actual volume of deliveries as measured by the water meter." §527(a)(2)(A). Section 527(b) provides that an urban water supplier required to install meters may recover the costs associated with the purchase, installation and operation of the water meters by raising rates, fees, or charges. Urban water suppliers that do receive water from the Central Valley Project are also required to install meters on a more expedited time schedule. §526. ¹ All references are to the California Water Code. LA_IMAN_321745_1 Sativa MSR Page 51 August 2012 Sativa MSR Memorandum March 21, 2006 Page 2 Section 528(c) provides that the term "urban water supplier" is defined pursuant to Section 10617 which provides that an "urban water supplier" is "a supplier, either publicly or privately owned, providing water for municipal purposes either directly or indirectly to more than 3,000 customers or supplying more than 3,000 acre-feet of water annually." "Customer" is defined as "a purchaser of water from a water supplier who uses the water for municipal purposes, including residential, commercial, governmental, and industrial uses." §10612. Thus, if Sativa does not directly or indirectly provide water to more than 3,000 customers or deliver more than 3,000 acre-feet of water annually, the requirement to install water meters on all service connections prior to 2025 would not apply. However, if Sativa's activities would classify it as an "urban water supplier," the requirement to install meters prior to 2025 would apply. AB 2572 amended and renumbered Water Code section 110. Pursuant to AB 2572, former section 110 is now Water Code section 525. Section 525, originally enacted in 1991, requires "every water purveyor who ... delivers water service to any person shall require, as a condition of new water service on and after January 1, 1992, that a suitable water meter to measure the water service shall be installed." "Water purveyor" is defined in Section 512 as "any person who furnishes water service to another person." Section 525 is therefore distinguishable from section 527 discussed above, because section 525 applies to all water purveyors, whereas section 527 applies only to water suppliers with over 3,000 customers or water suppliers delivering more than 3,000 acre-feet per year. Section 525 also only applies to "new" installations, whereas 527 applies to all connections within the service area. Section 525 is properly interpreted to apply to all "new" connections installed on or after January 1, 1992; but it does not appear to apply when service is merely changed. Section 523 provides: "The Legislature finds and declares that the California goal for measurement of water use is the achievement by January 1, 1992, of the installation of water meters on all new water service connections after that date." In addition, the legislative history supports this interpretation of the statute.2 Thus, pursuant to Section 525, as to connections installed on or after January 1, 1992, Sativa is to require as a condition of new water service the installation of a water meter. Section 528 sets forth provisions applicable to "water purveyors" who become "urban water suppliers", i.e. the purveyor reaches the point where it delivers water to more than 3,000 customers or delivers more than 3,000 acre-fee of water annually. A "water purveyor" that becomes an "urban water supplier" after January 1, 2005, is required to install water meters on all municipal and industrial service connections and charge each customer with a meter based on the actual water delivered within 10 years of meeting the definition of an urban water supplier. §528. It also should be noted that in fulfilling the requirements of the statute, Section 521(g) provides that "an urban water supplier should take any available necessary step consistent ² AB 2572 Assembly Water Parks & Wildlife Committee Analysis ("Existing law requires the installation of a water meter as a condition of water service to any connection installed after 1992.") Similarly, the Legislative Counsel's Digest provides: "Existing law generally requires the installation of a water meter as a condition of water service provided pursuant to a connection installed on or after January 1, 1992." LA_IMAN_321745_1 Appendix A - Meter Legal Determination Page 52 Appendix A – Meter Legal Determination Memorandum March 21, 2006 Page 3 with state law to ensure that the implementation of this chapter does not place an unreasonable burden on low-income families." LA_IMAN_321745_1 3 Sativa MSR Page 53 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank <math display="block">\{ i \}</math> 83 82 Appendix A - Meter Legal Determination Page 54 Appendix B – Agency Correspondence Appendix B - Agency Correspondence Riverside Irvine Pasadena Hogle-Ireland 626.356.4460 949.553.1427 951.787.9222 Planning & Development Consulting Advance Planning | Community Design & GIS | I Community Engagement | I Contract Staffing | Entitlement Services | Environmental Planning June 19, 2012 Art Aquilar, General Manager Central Basin Water District 6252 Telegraph Road Commerce, CA 90040 Dear Mr. Aguilar: Our meeting with you on June 19, 2012 is for the purpose of reviewing the last Mandatory Service Review (MSR) of the Sativa County Water District, dated November 1, 2005. State law requires an updated MSR every five years, and the Los Angeles Local Agency Formation Commission has retained Hogle-Ireland to prepare an updated MSR for the Sativa County Water District. Some of the agencies we will be meeting with concerning the Sativa County Water District include the City of Compton and the Sativa County Water District. What we hope our meeting with you will produce is a frank discussion on what may have happened or transpired concerning the Sativa County Water District since its last MSR, which should be considered in an updated MSR. In case you do not have a copy of the last MSR, we can provide you with a digital copy upon your request. If you should have any questions prior to the meeting, please call me at our Irvine Office at 949-553-1427. Sincerely, Keith Carwana, Project Manager Hogle-Ireland, Inc. 2860 Michelle Drive, Suite 100 | Irvine, CA 92606 www.hogleireland.com t: 949.553.1427 | f: 949.553.0935 Sativa MSR Page 55 August 2012 Sativa MSR Pasadena Hogle-Ireland Irvine Riverside 951.787.9222 626.356,4460 949.553.1427 Planning & Development Consulting Advance Planning | Community Design & GIS | Community Engagement | Contract Staffing | Entitlement Services | Environmental Planning May 21, 2012 Bryan Batiste, City Manager City of Compton 205 S. Willowbrook Avenue Compton, CA 90220 Dear Mr. Batiste: Our meeting with you on May 21, 2012 is for the purpose of reviewing the last Mandatory Service Review (MSR) of the Sativa County Water District, dated November 1, 2005. State law requires an updated MSR every five years, and the Los Angeles Local Agency Formation Commission has retained Hogle-Ireland to prepare an updated MSR for the Sativa County Water District. Some of the agencies we will be meeting with concerning the Sativa County Water District include the Central Basin Municipal Water District and the Sativa County Water District. What we hope our meeting with you will produce is a frank discussion on what may have happened or transpired concerning your City and the Sativa County Water District since its last MSR that may affect your City, which should be considered in an updated MSR. In case you do not have a copy of the last MSR, we can provide you with a digital copy upon your request. If you should have any questions prior to the meeting, please call me at our Irvine Office at 949-553-1427. Sincerely, Keith Carwana, Project Manager Hogle-Ireland, Inc. 2860 Michelle Drive, Suite 100 | Irvine, CA 92606 www.hogleireland.com t: 949.553.1427 | f: 949.553.0935 Appendix B - Agency Correspondence Page 56 Appendix B – Agency Correspondence Riverside Pasadena Irvine Hogle-Ireland 626,356,4460 949.553.1427 951.787.9222 Planning & Development Consulting Advance Planning | Community Design & GIS | Community Engagement | Contract Staffing | Entitlement Services | Environmental Planning May 16, 2012 Theresa Johnson, Manager Sativa County Water District 2015 E Hatchway St. Compton, CA 90220 Dear Ms. Johnson: Our meeting with you on May 16, 2012 is for the purpose of reviewing the last Mandatory Service Review (MSR) of the Sativa County Water District, dated November 1, 2005. State law requires an updated MSR every five years, and the Los Angeles Local Agency Formation Commission has retained Hogle-Ireland to prepare an updated MSR for the Sativa County Water District. Some of the agencies we will be meeting with concerning the Sativa County Water District include the Central Basin Municipal Water District and the City of Compton Municipal Water Department. What we hope our meeting with you will produce is a frank discussion on what may have happened or transpired with the Sativa County Water District since its last MSR. In case you do not have a copy of the last MSR, we can provide you with a digital copy upon your request. If you should have any questions prior to the meeting, please call me at our Irvine Office at 949-553-1427. Sincerely, Keith Carwana, Project Manager Hogle-Ireland, Inc. 2860 Michelle Drive, Suite 100 | Irvine, CA 92606 www.hogleireland.com t: 949,553.1427 | 1: 949.553.0935 Sativa MSR Page 57 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank Appendix B - Agency Correspondence <math display="block">\widehat{g}_{i,j}^{(i)}</math> Page 58 Appendix B – Agency Correspondence Irvine Riverside Pasadena Hogle-Ireland 949.553.1427 626.356.4460 951.787.9222 Planning & Development Consulting Advance Planning | Community Design & GIS | Community Engagement | Contract Staffing | Entitlement Services | Environmental Planning June 19, 2012 David Hill, Water Resources & Planning Manager Central Basin Water District 6252 Telegraph Road Commerce, CA 90040 Dear Mr. Hill: As you may be aware as part of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 LA LAFCO is mandated to conduct Municipal Service Review (MSR) every five years. LA LAFCO has retained Hogle-Ireland, Inc. in conjunction with the Mocalis Group I, LLC to prepare a MSR for the Sativa County Water District. The LAFCO Commission must make determinations on six (6) topics required under the CKH Act for purposes of adopting the MSR: Growth and population projections in the affected area 2. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies. Financial ability of agencies to provide services. Status of, and opportunities for, shared facilities. 5. Accountability for community service needs, including governmental structure and operational efficiencies. 6. Any other matter related to effective or efficient service delivery, as required by Commission. To assist us with the completion of the MSR and to better understand issues related to the provision of service in the area we are asking for you to provide, to the best of your ability, responses to the questions listed on the following page. Thank you for your assistance, Jim Mocalis Keith Carwana President Project Manager Mocalis Group I, LLC Hogle Ireland, Inc. 2860 Michelle Drive, Suite 100 | Irvine, CA 92606 www.hogleireland.com f: 949.553.0935 1: 949.553.1427 Sativa MSR Page 59 August 2012 Sativa MSR How much population growth is anticipated within the agency service area and 1. sphere of influence over the next 5, 10, 15 years? Central Basin's 2010 UWMP indicates a population increase in the service area of about 2% every 5 years or about a .5% annual increase. So considering the 2010 population at 1.65 million, the population is expected to increase to 1.68 in 2015, 1.72 in 2020 and 1.75 in 2025. The Sativa District is a built out community with little opportunity for growth, so increase in population would be minimal at best. (Source - Page 2-2 and 2-3, Central Basin 2010 UWMP) How much is municipal service demand anticipated to increase within the agency's 2. sphere of influence over the next 5, 10, 15 years? The region saw it largest imported water demand period in FY 2006-07 when Central Basin sold 68,100 AF plus another 51,150 AF for groundwater replenishment, for total imported water sales of 119,200 AF. With groundwater withdrawal in Central Basin of 149,000 AF, total municipal demand reached 268,000 AF. However, with the economic downturn in late 2008 and the recent 4- year drought, imported sales have fallen off substantially. In FY 2011-12, Central will import about 38,000 AF, plus another 13,000 AF for replenishment, for a total of about 51,000 AF. Groundwater withdrawals are down to about 139,000 AF for a total demand of about 190,000 AF. Quite a difference! So going forward, we would expect municipal demand to pick up as the economy recovers. Total expected municipal and groundwater replenishment demand for imported water for 2015 is expected to be 72,025 AF; for 2020, about 73,685 AF; and for 2025, about 75,670 AF. Groundwater is expected to remain steady at 145,000 AF annually. We do not expect the Sativa District's water demand to increase; however, because the Sativa District does not maintain water meters for any of the properties in its service area, water demand can only be measured on the macro level. A lack of water meters also minimizes to measure any benefits of conservation measures. (Source - Table 2-3, Page 2-4, 2010 UWMP) 3. What is the current adequacy of service provided within the agency boundaries? All municipal and industrial demands within the Central Basin service area are being met. Imported water provides a substantial back-up supply for the region, if needed. Metropolitan Water District maintains a six-month emergency supply of surface water storage should imported sources be disrupted for any reason. Adequacy of existing service for the Sativa District is probably reasonable unless one of their wells break down which could put its supplies at risk and require imported water purchases. Since there is no connection to the MWD system, imported water is not really a viable option. 4. To what extent are the service providers able to meet anticipated growth in demand? Appendix B - Agency Correspondence Page 60 Appendix B – Agency Correspondence Growth in the Central Basin service area is quite minimal over the next 5, 10 and 15 years, so any increase in demand can be easily managed by most retail agencies. For the Sativa District, it is mostly a built out service area, so a substantial increase in demand is highly unlikely. 5. What are the present and planned land uses within the existing sphere of influence? The region is mostly built out so any changes in land use will only be through redevelopment. Rehabilitation of underutilized property could result in higher water usage. What contiguous unincorporated areas could potentially be included in the agency's sphere of influence? The Central Basin service area has multiple Los Angeles County unincorporated areas, almost all of which are served by investor owned utilities (IOU). The Sativa District area is bordered by two IOU's and the City of Compton. 7. Which service provider(s) is (are) best equipped to serve the unincorporated areas contiguous to the agency boundaries? At this point, water service for most of the unincorporated areas of Los Angeles County within Central Basin's service area is being provided by IOU's. These include the Golden State Water Company and Park Water Company. Also bordering Sativa is the City of Compton (non-IOU). Central Basin Municipal Water District could provide effective management for retail water service to Sativa's customer base, since retail service is provided within our statutory authority. However, an evaluation of infrastructure and potential cost implications would be needed and subject to approval by the Central Basin Board of Directors. Plus, Central Basin's high quality financial rating would allow access to adequate sources of funding for potential improvements. 8. What is the current capacity of public facilities and adequacy of public services that the local agencies are providing? Unknown. 9. What opportunities exist for service providers in and near the agency boundaries to share public facilities to more effectively and efficiently deliver services? Always possible, but the two IOU's are competitors for new services. Therefore, we would expect these agencies to provide competing proposals for service to the California Public Utilities Commission. Again, Central Basin could take over management duties for the Sativa District. 10. Do the service providers of interest have adequate public facilities and other infrastructure to accommodate anticipated growth in service demand in the area? Sativa MSR Page 61 August 2012 Sativa MSR Most service providers do have adequate facilities and infrastructure. However, the delivery capability varies from service area to service area. 11. What cost avoidance opportunities, financing constraints and financing opportunities exist in providing water service to the area of interest? The main issue will be condition of the infrastructure. Since Sativa District was incorporated in 1938, much of the existing mainlines are probably pre-WWII, and have probably reached the limit of their life expectancy. The other issue is the need for water meter installation. The area in question has an exemption from installing meters, but incentives for reducing demand through conservation can only be measured with meters in place. So costs could be hundreds of thousands of dollars. 12. How do cost avoidance opportunities, financing constraints and financing opportunities affect the optimal service delivery to areas contiguous to the agency? Central Basin offers conservation programs for residents in all areas of the District service area as method of cost avoidance to limit the impact of taking imported water, including Sativa. The fact that Sativa does not have individual property meters, however, severely limits measuring the positive impacts of conservation. Without a means of determining savings, access to funding assistance could be limited because of reporting requirements of grants. However, long-term financing opportunities are probably improved because of the ability to raise the flat rate of all residential properties to pay for the bonds sold to provide the needed funding for larger capital improvements. This could be accomplished through Central Basin due to its excellent financial rating. IOU's have the ability to spread infrastructure costs throughout a larger service area (with California PUC approval). The PUC allows IOU's to break down their service areas into "districts" to allow for local conditions and costs to determine the rates. Thus, each district has its own rate case to make to the PUC. So yes, IOU's can and do spread costs throughout each of their "districts." 13. What opportunities for rate restructuring exist? A volumetric commodity charge would be appropriate to allow property owners the ability to control their water usage and thus benefit themselves, but without individual meters, this is probably unworkable. The flat rate would have to be increased to cover system improvements. 14. What government structure options exist relevant to the provision of water service in the areas of agencies, and what are the advantages and disadvantages of consolidating or reorganizing service providers? Appendix B - Agency Correspondence Page 62 Appendix B – Agency Correspondence The Sativa service area lies within unincorporated Los Angeles County. Potentially, Los Angeles County itself could provide water service as it does through their network of "Waterworks Districts." However, it is unknown if this is even logistically possible for Los Angeles County. Other government structure options include water service from the City of Compton, Central Basin Municipal Water District, and the IOU's (Golden State Water Company and Park Water Company). Advantages for the residents would include having a water agency that provides greater assurance for meeting state and federal water quality standards. A disadvantage for other agencies to take over water service would include the burden of unknown infrastructure improvements. 15. To what extent are service providers in the area of interest accountable to the population being served? If an Investor Owned Utility (IOU) is determined as the best agency to take over water service in the Sativa service area, then the California Public Utilities Commission (CPUC) becomes the authority responsible for insuring the public's right of redress for any management or major billing issues. This is typical for many cities and areas across the state that is served by an IOU. If a city, such as Compton is chosen as the best option for providing service, then the Compton City Council becomes the local authority. If Central Basin is chosen as the best option, then the Central Basin Board of Directors becomes the major authority. The ;atter two options increase local control. 16. What governance structures currently exist among the service providers of interest? Please see the answer for question #14. 17. What is the consultant's evaluation of current and potential management efficiencies as they relate to optimal service provision and optimal spheres of influence? Unknown. Sativa MSR Page 63 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank 8 Appendix B - Agency Correspondence Page 64 Appendix B - Agency Correspondence p.2 3106325492 Sativa Water Di Aug 02 12 04:43p SATIVA LOS ANGELES COUNTY WATER DISTRICT July 5, 2012 AGENCY PROFILE The District was incorporated on December 30, 1938 in the State of California. The District supplies domestic water service to a portion of the Willowbrook area, an unincorporated area of the County of Los Angeles. The service area is approximately 2.5 square mile and contains approximately 1,580 customer's service connections. Contact Information 2015 E Hatchway Street, Compton, CA 90222-3519 Mailing/Site Address: Website: (310) 631-8176 (FAX) (310) 632-5492 Phone Number: Theresa Johnson Title: Office Manager Staff: Title: Administrator Manager Toshia Williams Title: Chief Plant Operator Patrick Udeh Title: Assistant Plant Operator Jonathan Dredd Rosa Hernandez Title: Office Clerk Title: Field/Maintenance Worker Peter Ovalle theresajhn068@aol.com Contact's E-mail Address: Water Types of Service: 6,320 Population Served: 2.5 square miles Size of Service Area: December 30, 1938 Date of Formation: Sativa Los Angeles County Water District Board of Directors Governing Body: Johnny E. Johnson, Board President Ruben Hernandez, Board Vice President April McCall, Board Secretary Elizabeth Hicks, Board Treasurer Luis Landeros, Board Member Number of Directors: 4 years, staggered terms Nature/ Length of Terms: Population based. Is governing body landowner or population? ø Elected. Are Directors elected or appointed? District Are elections or appointments at large or by district? Directors of Sativa Los Angeles County Water District receives $150 per day for each day's attendance at meetings of the Board or the each day's service rendered as a member of the Board by request of the Board. Public Participation: The public is notified of District meeting through posting agendas: 1) at the District's Administrative Office located on Hatchway Street. Sativa MSR Page 65 August 2012 Sativa MSR 3106325492 p.3 Sativa Water Di Aug 02 12 04:43p Sativa County Water District - Municipal Service Review Follow-Up Keith Carwana to you + 1 moreshow details Sativa Audit Cover_Letter.pdf (1.5 MB Good afternoon Ms. Johnson, Thank you again for completing the LAFCO questionnaire and providing us with a copy of your FY 2010-2011 and 2011-2012 budget. After reviewing the completed materials we had a few follow up questions we were hoping that you could help us address. We are working on completing a draft copy of our Municipal Service Review this week and would appreciate it if you could provide us with responses before then. If it is easier to discuss the responses over the ; phone, we will be available whenever it is most convenient for you. In the budget, what is the column heading titled "Actual 2010" showing? Is it the FY 2009-2010 or the FY 2010-2011 budget? FY 2009-2010" 2. What is the size of the District's service area? The Agency Profile provided states that it is approximately one-half square mile and also 2.5 square miles. However measuring the District's boundaries we receive a size of approximately 0.28 square miles. 2.5 Miles 3. Is the District's service area strictly residential? Are there any commercial, industrial, or institutional sites that consume larger amounts of water? Are they charged the same $55 flat rate? Yes strictly residential. No commercial or industrial or institution sites in the district. 4. Where does the District lease their water from? What are the terms of the lease agreement? The district lease it water from various outside entities the term each fiscal year. 5. Do Board members receive health insurance or any other benefits apart from the $150.00 they receive per day for each day's attendance at meetings of the Board? No. 6. We understand that the Board meets twice a month for a total of 24 meetings. Are there any other meetings that the Board attends? If so, can you please specify? The Board meets every other Tuesday. Totaling 26 regular meetings. Append Page 66 Appendix B - Agency Correspondence Rug 02 12 04:43p Sativa Water Di 3106325492 p. 4 On page seven of the returned questionnaire (question #23), can you please clarify why the average annual water demand fluctuates from 6,320 AFY today to 1,606 AFY in the year 2015 and 1,633 AFY sin the year 2020? ESTIMATED 2012 AVERAGE ANNUAL SERVICE WATER DEMAND: 760 A/F 2015 AVERAGE ANNUAL SERVICE WATER DEMAND: 760 A/F 2020 AVERAGE ANNUAL SERVICE WATER DEMAND: 760 A/F In the budget, can you please clarify what account number "610.00, Bank Charges" is? Account number 610.05 bank charges: bank debits to account If we understand correctly, there are 5 board members representing each of the District's 5 service divisions. Can you provide us with a map showing each of the 5 service divisions? Sativa has district not divisions. Member live within District and are elected by registered voters within the District's Boundaries. What is the estimated charge to drill a well to replace well #4, which as we understand was abandoned in 2009? Estimate cost to drill replacement Well is approximately $700,000 11. In the budget, can you please clarify why account number "610.19, Field Supplies" fluctuates from $51,909.06 in 2010 and then decreases to $25,194.01 in FY 2010-2011 and further decreases to $2,713.41 in FY 2011-2012? Verification needed -- possible equipment was added into supplies 12. In the cover letter from the 2005 County Auditor's report (please see attached), it was mentioned that there are two employees that are related to each other and to the President of the District's Board of Directors. Can you please identify these employees and whether or not they have access to the cash and/or accounting records? Yes. The Office Manager and Administrator Manager are related to Board President. Board President – access to cash or accounting records. No Office Manager - has access to the records for cash, but does not have access to the actual cash. Administrator Manager - has access to cash & cash receipts Office Clerk - has access to the cash in the register Sativa MSR Page 67 August 2012 Sativa MSR 3106325492 p.5 Aug 02 12 04:43p Sativa Water Di Thank you again for your help and please do not hesitate to contact me should you have any questions or would like to further discuss. Keith Carwana Project Manager Hogie-Ireland, Inc. A Land Planning & Development Consulting Firm Irvine | Riverside | Pasadena 2860 Michelle Drive, Suite 100 Irvine, CA 92606 £: 949-553-1427 £: 949-553-0935 e: 805-636-6676 w: www.hogleireland.com This message contains information that is confidential or privileged. The information is intended for the use of the individual or entity named above. If you are not the intended recipient, be aware that may disclosure, co Please consider the environment before printing this email. Appendix B - Agency Correspondence Page 68 Appendix B – Agency Correspondence 3106325492 p.6 Aug 02 12 04:43p Sativa Water Di LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY <b>AFCO</b> MUNICIPAL SERVICE REVIEW - WATER SERVICE Supplemental Request for Information GENERAL INFORMATION Contact Person THERESA JOHNSON, OFFICE MANAGER Agency SATIVA L.A. COUNTY WATER DISTRICT Zip Code 90222-3519 City COMPTON <u>Address</u> 2015 E. HATCHWAY STREET Agency Website Telephone <b>Fax</b> 310-632-5492 310-631-8176 Theresajhn068@aol.com Email Address of Contact Person Please provide a map showing the agency's boundaries, all areas served, pressure zones, water mains, and storage facilities. Show any private or mutual water companies within your sphere of influence (SOI) if their boundaries are known. Is your agency a water wholesaler? No ٧ Yes, our agency replenishes groundwater basins with pumping rights held by cities, mutual water companies, private companies, and/or investor-owned utilities. Yes, our agency sells imported water to cities, mutual water companies, private companies, and/or investor- owned utilities. Please name other agencies you provide water to. Email Address of Contact Person <b>None</b> 2. What is the source of your wholesale water? Sativa do not have wholesale water. The District is a retail special district and relies on groundwater for its source of supply is from three wells located on District's owned land, and five storage tanks. These storage tanks have a capacity of 10,000 gallons each, which is estimated to be equivalent of seven days of normal usage. Normal operating procedure for the District is to utilize two wells while maintaining the third well in a reserve status except during peak usage days (estimated to occur five to seven times per year). This is standard procedure which allows for sufficient reserve capacity in case of pump failure or other disruption in the operation of a well. Page 1 Sativa MSR Page 69 August 2012 Sativa MSR p.7 3106325492 Sativa Water Di Aug 02 12 04:44p LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY AFCO 3. How many acre-feet of water are provided to each agency? 1 None 1 Please describe the range of services the agency provides and to whom services are provided. None V No Yes 5. Does your agency deliver, supply, treat, or replenish water at the wholesale level? 6. If the agency provides services to municipalities, mutual water companies, and private companies, please list then and briefly describe those services. No Page 2 Appendix B - Agency Correspondence Page 70 Appendix B - Agency Correspondence 3106325492 P.8 Aug 02 12 04:44p Sativa Water Di LAFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 7. Does the agency's water service extend beyond the City's boundaries or District service boundaries? Yes No V If yes, please explain why? 8. Is the City or District obligated by law or by contract to provide service beyond its boundaries, or to another agency? Please explain. .. No Please answer questions 9 and 10 only if you provide service to another agency by contract. 9. Does the City/District contract agency jointly plan for future demand? ì 10. Which agency is responsible for upgrade and maintenance of infrastructure? . Page 3 Sativa MSR Page 71 August 2012 Sativa MSR p.9 3106325492 Sativa Water Di Aug 02 12 04:44p AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 11. Are there any area land use plans and growth patterns that may be affecting service demand? No. 12. Indicate whether there are geographic areas in other jurisdictions which you are frequently called upon for water supply assistance. Describe these areas and why your agency may be better suited to provide service. The Los Angeles Public Works to fill Water Sweepers on occasion. 13. List any water retailers that provide service to customers within your agency's boundaries and describe why they are providing service None 14. How is water allocation to a particular agency determined? Pumping Allocations are issued to the District through Central Basin. Page 4 Appendix B - Agency Correspondence Page 72 Appendix B - Agency Correspondence Rug 02 12 04:44p Sativa Water Di 3106325492 p. 10 AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 15. Does your agency receive service from another agency or have a reciprocal/joint service agreement with another agency? Explain. No, but we do have an inter connection with the Compton for emergency purposes only. 16. List service-related joint powers authority or joint decision-making efforts in which the agency participates, and any savings derived through these partnerships. None 17. Does your agency face revenue/operating constraints that affect the level of service and condition of infrastructure of your agency? The District operates its water utility as an enterprise activity. The District has no long term debt associated with water system improvements. Page 5 Sativa MSR <math display="block">{\mathcal D}_{i}</math> Page 73 August 2012 Sativa MSR p. 11 Sativa Water Di 3106325492 Aug 02 12 04:44p AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 18. Are there any financing constraints in meeting future demand needs? No. 19. Please describe water conservation programs that are being implemented? Watering restriction with fines, and consist patrol of the District for water waste. Leaks which are the District's responsibility are repaired within 3 days, if not immediately. Leaks that are the customer's responsibility must be repaired within 3 day of awareness. 20. Describe current water demand and peak demand by zone or sub-area. If master plan has been provided, you may cite page number. Chief Plant Operator has to provide this information to you. Refer to meter readings. (Example Summer months peaks. Winter may reduce) Page 6 Appendix B - Agency Correspondence Page 74 Appendix B – Agency Correspondence p.12 Sativa Water Di 3106325492 Aug 02 12 04:45p AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 21. Provide the total number of water service connections by type for the following areas: SOI Outside of SOI Outside Boundary within Within Service Boundary 0 Domestic & Commercial 0 Domestic & Commercial Domestic & Commercial 1631 0 Agriculture Agriculture 0 Agriculture 0 0 Reclaimed 0 Reclaimed Reclaimed 0 0 0 . . Other 0 Other Other 22. Provide the following information: Average Daily Demand (MGD) Maximum Daily Demand (MGD) Miles of Pipe 8 miles Number of Pump Stations 3 Number of Pressure Zones 1 Storage Capacity 50.000 Population Served 6,320 AVERAGE ANNUAL DEMAND 23. Please provide the following information for forecasted service demand: Year 2020 Year 2015 Existing 760 Residential 760 Residential 760 Kesidentiai Commercial/Industrial 0 Commercial/Industrial Commercial/Industrial 0 0 0 Municipal 0 Municipal Municipal 0 0 Other 0 Other 0 Other 0 Unaccounted for ٥ 0 Unaccounted for Unaccounted for Page 7 Sativa MSR Page 75 August 2012 Sativa MSR 3106325492 p.13 Sativa Water Di Aug 02 12 04:45p AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY <b>GROUND WATER</b> 24. Please provide the percentage of groundwater derived from the following sources: Sylmar Basin Raymond Basin Central Basin 100% 0.00% 0.00% Verdugo Basin 0.00% San Fernando Basin Hollywood Basin 0.00% 0.00% 0.00% West Coast Basin Chino/Spadra/Six Basins Santa Monica Basin 0.00% 0.00% 0.00% Saugus Formation & Alluvial Aquifer Main San Gabriel Basin 0.00% 25. Please provide the percentage of water imported from the following sources: Metropolitan Water District 0.00% Los Angeles Aqueduct 0.00% 0.00% Other State Water Project 0.00% 26. Describe the process and requirements for property owners that request your agency to provide service within your boundaries. Indicate the number of new hookups by type for the most recent year. Owner must have California ID, Proof of ownership or rental agreement and pay required deposit amount (currently $110.00). Number of New Installations: 1 27. Explain how connection fees are established, and which additional costs are covered through connection fees or other levies on new Do existing customers subsidize new capacity? Explain. Connection fees are established by Board's approval. Appendix B - Agency Correspondence Page 76 Appendix B - Agency Correspondence 3106325492 p. 14 Aug 02 12 04:45p Sativa Water Di AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 28. Is your agency planning construction of any new facilities? If so, please provide a detailed description of the project(s) and how it is being funded. * Note: If you have already provided this information in the Capital Improvement Plan (CIP), reference the CIP. The Capital Improvement Project is reviewed annually as part of the budget process. 29. Does your agency have water storage facilities? If yes, please indicate the net change in stored amounts for the past three years. No. Storage Tanks: Well 2 - have one 10,000 gallon tank Well 3 - have two 10,000 gallon tanks Well 4 - have one 10,000 gallon tank Well 5 - have one 10,000 gallon tank Total: 5 30. How are infrastructure upgrades, replacement, and maintenance funded? Describe policies for depreciation and replacement of infrastructure? District infrastructure upgrade, replacement, and maintenance are funded through district funds. Sativa MSR Page 77 August 2012 Sativa MSR p. 15 3106325492 Aug 02 12 04:45p Sativa Water Di AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 31. Does the agency have franchise agreements with other water retailers that provide service within the agency's boundaries? No. 32. Has your agency exceeded state and federal drinking water quality maximum contaminant levels in the last 5 years? If so, please explain. No. 33. Are there any regulatory standards that apply to the services your district provides? Are they published and where can they be obtained? 00 No. 34. Are there industry standards that apply to the services your district provides? Are they published and where can they be obtained? Yes. The California Health Department Appendix B - Agency Correspondence Page 78 Appendix B – Agency Correspondence Hug 02 12 04:46p Sativa Water Di 3106325492 p. 16 AFCO LOCAL AGENCY FORMATION COMMISSION FOR THE COUNTY 35. Does your district have level of service standards? Please explain. Standards are in compliance with the California Health Department, Drinking Water standards. 36. How does the department/district monitor and track its workload? Sativa uses performance evaluation and productivity monitoring to track workloads and improvement. The District has 2 staff operators with Treatment and Distribution certification, the Chief Plant Operator and Assistant Plant Operator. 37. How many employees does your agency have? Provide a list of title positions held and the number of employees in each position. 6 Full Time Employees 0 Part Time Employees 0 . Contract Employees 0 Seasonal Employees The District have (1) Chief Plant Operator, (1) Assistant Plant Operator, (1) Field Maintenance, (1) Administrator (1) Office Manager and (1) Office Clerk. Page 11 Sativa MSR Page 79 August 2012 Sativa MSR Sativa L.A. County <b>Water District</b> Municipal Service Review This page intentionally left blank . Appendix B - Agency Correspondence Page 80 Appendix C – Sativa Budget Appendix C – Sativa Budget 3106325492 Aug 02 12 04:46p Sativa Water Di p.17 SATIVA LOS ANGELES COUNTY WATER DISTRICT PROPOSED BUDGET - FISCAL YEAR 2011-2012 BUDGET BUDGET ACTUAL ACCT. 2011-2012 2010-2011 2009-2010 NO. <b>OPERATING REVENUE</b> 1,280,274.12 1,163,885.56 995,176.86 WATER SALES AND SERVICE 410.01 31,911.34 29,010.31 30,881.57 OTHER OPERATING REVENUE 420.00 1,312,185.46 1,192,895.87 1,026,058.43 TOTAL OPERATING REVENUE OPERATING EXPENSES 510.00 211,989.86 192,718.05 171,400.70 WATER PURCHASE/REPLENISH 510.01 56,109.52 60,099.56 68,784.14 PUMPING COSTS (ELECTRICITY) 510.02 278,099.38 252,817.61 240,184.84 <b>TOTAL EXPENSES</b> GENERAL AND ADMINSTRATIVE 66,575.42 ABANONMENT COSTS (WELL #4) 610.02 5,403.33 4,912.12 7,270.04 <b>AUTO EXPENSE (FUEL)</b> 610.03 4,780.33 4,345.75 6,431.64 BANK CHARGES 610.00 411.40 374.00 1,156.00 <b>BLANKET BOND</b> 610,07 39,370.62 35,791.47 39,015.35 BOARD OF DIRECTORS (STIPEND) 610.09 100.00 DONATIONS 610.10 3,880.16 3,527.42 3,860.47 <b>DUE AND SUBSCRIPTIONS</b> 610.11 41.04 ELECTION/COMMUNITY EXPENSES 610.13 505.96 AUDIT EXPENSES 610.04 7,061.58 6,419.62 5,563.10 <b>EMPLOYEE BENEFITS</b> 610.15 13,721.46 12,474.05 15,824.49 EQUIPMENT RENTAL 610.17 2,713.41 25,194.01 51,909.06 <b>FIELD SUPPLIES</b> 610.19 16,517.60 15,016.00 10,158.67 HEALTH SERVICE FEES 610.20 2,750.00 2,500.00 4,075.00 GROUND EXPENSES 610.21 22,448.47 20,407.70 18,233.00 INSURANCE - WORKERS COMP 610.22 79,000.55 71,818.68 51,162.90 INSURANCE - HEALTH & LIFE 610.23 11,562.71 10,511.55 9,265.10 610.24 INSURANCE - GENERAL LIABILITIES 30,306.58 30,005.98 33,866.98 610.25 MAINTENANCE - GENERAL PLANT 41,761.26 37,964.78 43,736.21 610.29 OTHER EXPENSES 33,537.99 30,489.08 13,105.91 610.31 PAYROLL TAXES 19,828.81 18,026.19 610.27 OFFICE REPAIR/MAINTENANCE . - - 610.30 CASUAL 499.25 453.86 215.28 610.33 PENALITIES 10,083.71 9,167.01 8,662.35 POSTAGE 610.35 14,910.80 13,555.27 43,496.33 PROFESSIONAL FEES 610.37 A COMPRESSION PAGE 1 OF 1 Sativa MSR Page 81 August 2012 Sativa MSR 3106325492 Aug 02 12 04:46p Sativa Water Di p. 18 SATIVA LOS ANGELES COUNTY WATER DISTRICT PROPOSED BUDGET -- FISCAL YEAR 2011-2012 272,305.37 247,550.34 254,316.25 610.41 SALARIES AND WAGES 9,290.44 8,445.85 7,684.01 610.43 SECURITY 110.00 100.00 775.00 610.45 SEMINARS - 50.00 610.46 MEETINGS 1,171.15 1,064.68 2,133.03 610.49 OFFICE SUPPLIES 14,197.52 12,906.84 11,791.84 610.53 TELEPHONE 2,596.94 2,360.85 1,293.97 610.57 UTILTIES 660,221.44 625,383.10 638,428.94 <b>TOTAL EXPENSES</b> 8,850.52 8,045.93 12,681.35 520.00 WATER TREATMENT 669,071.96 633,429.03 652,404.26 61,216.10 55,651.00 54,033.00 620.01 DEPRECITATION 730,288.06 689,080.03 706,437.26 TOTAL 1,312,185.46 1,192,895.87 1,026,058.43 <b>TOTAL REVENUES</b> 410.00 (277,621.41) (252,383.10) (240,184.84) SOURCE OF SUPPLY & PUMPING 510.00 (687,921.41) (625,383.10) (712,274.40) GENERAL AND ADMINISTRATIVE 510.00 (8,850.52) (8,045.93) (12,681.35) WATER TREATMENTS 520.00 (61,216.10) (55,651.00) (54,033.00) OTHER OPE EXP - DEPRECIATION 620.00 276,576.02 251,432.74 6,884.84 <b>OPERATING INCOME</b> 3,191.09 2,900.99 3,611.25 115.00 INTEREST INCOME (NON-OP REV) 279,767.11 254,333.73 10,496.09 <b>NET INCOME</b> (279,767.11) (254,333.73) (10,496.09) RESERVE/RESTRICTED FUND 150.00 - - TOTAL M CONFIDENTIAL Appendix C – Sativa Budget Page 82 Sativa L.A. County <b>Water District</b> Municipal Service Review TE COMPTON Prepared for: Local Agency Formation Commission for the County of Los Angeles Prepared by: Hogle-Ireland Planning & Development Consulting 8 - 6 - 2 e² 9 <b>1</b> . e v A ....................................