LAFCO
Gualala CSD, 2024
Read the report at Local Agency Formation Commissions ↗
Gualala Community Services District
Municipal Service Review and
Sphere of Influence Update
Workshop: June 3, 2024
Prepared By/For:
Public Hearing: July 1, 2024
Mendocino LAFCo
200 South School Street
Adopted: July 1, 2024
Ukiah, California 95482
LAFCo Resolution No: 2024-25-02
http://www.mendolafco.org/
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Gualala Community Services
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Gualala Community Services District Gualala Community Services District Parcels
Area of Interest Area of Interest Highways
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Source: This map was prepared by the Information Services Divison GIS Program, July 10, 2024. 1,000 500 0 1,000
Note: This map is not a survey product. Feet
Table Of Contents
List of Tables............................................................................................................................ 1-2
List of Figures .......................................................................................................................... 1-2
ACRONYMS ............................................................................................................................. 1-1
1 INTRODUCTION ................................................................................................................ 1-1
1.1 Local Agency Formation Commission ..................................................................................... 1-1
1.2 Mendocino LAFCo ................................................................................................................. 1-1
1.3 Municipal Service Review ...................................................................................................... 1-2
1.4 Sphere of Influence ............................................................................................................... 1-3
1.5 Additional Local Policies ........................................................................................................ 1-3
1.5.1 Mendocino County General Plan – Coastal Element ...................................................................... 1-3
1.5.2 Gualala Town Plan ........................................................................................................................ 1-4
1.6 Senate Bill 215 ...................................................................................................................... 1-4
2 AGENCY OVERVIEW.......................................................................................................... 2-1
2.1 History .................................................................................................................................. 2-1
2.1.1 Formation ..................................................................................................................................... 2-1
2.1.2 Boundary ...................................................................................................................................... 2-1
2.1.3 Services ........................................................................................................................................ 2-1
2.2 Government Structure .......................................................................................................... 2-2
2.2.1 Governing Body ............................................................................................................................ 2-2
2.2.2 Public Meetings ............................................................................................................................ 2-3
2.2.3 Standing Committee ..................................................................................................................... 2-3
2.2.4 Public Outreach ............................................................................................................................ 2-4
2.2.5 Complaints ................................................................................................................................... 2-4
2.2.6 Transparency and Accountability ................................................................................................... 2-4
2.3 Operational Efficiency............................................................................................................ 2-4
2.3.1 Management and Staffing ............................................................................................................. 2-4
2.3.2 Contract or JPA Services ................................................................................................................ 2-5
2.3.3 Agency Performance ..................................................................................................................... 2-5
2.3.4 Regional and Service Specific Collaboration ................................................................................... 2-6
2.3.5 Shared Services and Facilities ........................................................................................................ 2-7
2.3.6 Government Structure and Community Needs .............................................................................. 2-8
2.4 Finances ................................................................................................................................ 2-9
2.4.2 Long Term Financial Considerations ............................................................................................ 2-17
2.4.3 Current Fiscal Health ................................................................................................................... 2-19
2.5 Present and Planned Land Use and Development ................................................................ 2-19
2.5.2 Existing Population ..................................................................................................................... 2-21
2.5.3 Projected Growth ....................................................................................................................... 2-21
2.5.4 California Housing Goals ............................................................................................................. 2-22
2.6 Disadvantaged Unincorporated Communities ...................................................................... 2-23
3 MUNICIPAL SERVICES ....................................................................................................... 3-1
3.1 Service Overview ................................................................................................................... 3-1
3.1.1 Services ........................................................................................................................................ 3-1
3.1.2 Outside Agency Services ............................................................................................................... 3-1
3.2 Wastewater Services ............................................................................................................. 3-4
3.2.1 System History .............................................................................................................................. 3-4
3.2.2 Service Overview .......................................................................................................................... 3-4
3.2.3 Infrastructure and Facilities ........................................................................................................... 3-4
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
3.2.4 Service Adequacy ......................................................................................................................... 3-9
3.3 Determinations ................................................................................................................... 3-14
3.3.1 MSR Review Factors .................................................................................................................... 3-14
4 SPHERE OF INFLUENCE ..................................................................................................... 4-1
4.1 Mendocino LAFCo Policies ..................................................................................................... 4-1
4.2 Existing Sphere of Influence................................................................................................... 4-4
4.2.1 Study Areas .................................................................................................................................. 4-4
4.2.2 Area of Interest Designation.......................................................................................................... 4-5
4.3 Proposed Sphere of Influence ................................................................................................ 4-6
4.4 Consistency with LAFCo Policies ............................................................................................ 4-6
4.5 Determinations ..................................................................................................................... 4-7
4.5.1 Present and Planned Land Uses .................................................................................................... 4-7
4.5.2 Present and probable need for facilities and services in the area ................................................... 4-7
4.5.3 The present capacity of public facilities and adequacy of public services that the agency provides or
is authorized to provide............................................................................................................................... 4-8
4.5.4 The existence of any social or economic communities of interest in the area if the Commission
determines that they are relevant to the agency.......................................................................................... 4-8
4.5.5 The present and probable need for public facilities and services of any disadvantaged
unincorporated communities ...................................................................................................................... 4-9
4.6 Recommendation .................................................................................................................. 4-9
5 REFERENCES ................................................................................................................... 5-11
6 ACKNOWLEDGEMENTS .................................................................................................... 6-1
6.1 Report Preparation ................................................................................................................ 6-1
6.2 Assistance and Support ......................................................................................................... 6-1
7 APPENDICES ..................................................................................................................... 7-1
7.1 Appendix A - Community Services District Law (California Government Code §61100 Latent
Powers 7-1
7.2 Appendix B – Open Government Resources ........................................................................... 7-4
7.3 Appendix C – Website Compliance Handout .......................................................................... 7-5
7.4 Appendix D – Housing Legislation Trends and Results ............................................................ 7-6
7.5 Appendix E – District Financial Audits .................................................................................... 7-9
List of Tables
Table 1-1: Current Mendocino LAFCO Commissioners, 2024 ................................................................. 1-1
Table 2-1: GCSD Profile ......................................................................................................................... 2-1
Table 2-2: GCSD Board of Directors....................................................................................................... 2-2
Table 2-3: GCSD Financial Summary.................................................................................................... 2-10
Table 2-4: Cash Accounts .................................................................................................................... 2-10
Table 3-1: Service connections in Service Zones 1 and 2 ....................................................................... 3-4
Table 3-2: Recommended Capital Improvements.................................................................................. 3-9
Table 3-3: SWRCB – GCSD Regulatory Measures ................................................................................. 3-10
Table 7-1: Mendocino County RHNA Allocations ................................................................................... 7-7
List of Figures
Figure 1-1: Regional Location ................................................................................................................ 1-6
Figure 1-2: Gualala Community Services District Boundary .................................................................. 1-7
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
Figure 2-1: District Revenues and Expenses ........................................................................................ 2-13
Figure 2-2: District Revenues Over/Under Expenses ........................................................................... 2-14
Figure 2-3: District Assets ................................................................................................................... 2-15
Figure 2-4: District Liabilities ............................................................................................................... 2-15
Figure 2-5: District Net Position .......................................................................................................... 2-16
Figure 2-6: District Cash Accounts ....................................................................................................... 2-16
Figure 2-7: Mendocino County General Plan Land Use Mapping ......................................................... 2-20
Figure 2-8: Mendocino County Zoning Map ........................................................................................ 2-20
Figure 3-1: The Sea Ranch Development ............................................................................................... 3-2
Figure 3-2: GCSD Service Zone Map ...................................................................................................... 3-3
Figure 3-3: Aerial View of GCSD's Treatment Facilities .......................................................................... 3-5
Figure 3-4: GCSD Gravity and Pressurized Sewer Mains ........................................................................ 3-6
Figure 3-5: Facility Location Map .......................................................................................................... 3-7
Figure 4-1: GCSD Proposed Sphere of Influence and Area of Interest .................................................. 4-10
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
ACRONYMS
ADU Accessory Dwelling Unit
ACS American Community Survey
AOI Area of Interest
BOS Board of Supervisors
CalPERS California Public Employees Retirement System
CDP Census Designated Place
CEQA California Environmental Quality Act
CIP Capital Improvement Plan
CKH Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000
CPUC California Public Utilities Commission
CSA County Service Area
CSD Community Services District
CWSRF Clean Water State Revolving Fund
DAC Disadvantaged Community
CWA Clean Water Act
DDW Division of Drinking Water
DOF Department of Finance
DUC Disadvantaged Unincorporated Community
DWR Department of Water Resources
EDU Equivalent Dwelling Units
FY Fiscal Year
GC Government Code
GCSD Gualala Community Services District
GMAC Gualala Municipal Advisory Council
Gpd Gallons per day
GTP Gualala Town Plan
HOA Homeowners Association
JPA Joint Powers Authority
LAFCo Local Agency Formation Commission
MCOG Mendocino Council of Governments
MCWD2 Mendocino County Waterworks District No. 2
Mg Million gallons
Mgd Million gallons per day
MHI Median Household Income
MPO Metropolitan Planning Organization
MSR Municipal Service Review
MWCP Mandatory Water Conservation Program
NGWC North Gualala Water Company
PCH Pacific Coast Highway
RCAC Rural Community Assistance Corporation
RHNA Regional Housing Needs Allocation
ROWD Report of Waste Discharge
RTP Regional Transportation Plan
RWQCB Regional Water Quality Control Board
SB Senate Bill
SDUC Severely Disadvantaged Unincorporated Community
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
SDRMA Special District Risk Management Association
SOI Sphere of Influence
SRF State Revolving Fund
SRGL Sea Ranch Golf Links
SRN Sea Ranch North
SRSZ Sea Ranch Sanitation Zone
SSMP Sewer System Management Plan
SSO Sanitary Sewer Overflows
STEP Septic Tank Effluent Pumping
SWA Sonoma Water Agency
SWRCB State Water Resources Control Board
WDR Water Discharge Requirements
WQO Water Quality Order
WWTP Wastewater Treatment Plant
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
INTRODUCTION 1-1
1 INTRODUCTION
1.1 Local Agency Formation Commission
The Local Agency Formation Commission (LAFCo) is a quasi-legislative, independent local agency
established by State legislation in 1963 to oversee the logical and orderly formation and development of
local government agencies including cities and special districts. There is one LAFCo for each county in
California.
LAFCo is responsible for implementing the Cortese-Knox-Hertzberg Local Government Reorganization Act
of 2000 (CKH) under California Government Code (GC) Section (§) 56000 et. seq. with goals to promote
orderly growth, prevent urban sprawl, preserve agricultural and open space lands, and oversee efficient
provision of municipal services.
LAFCo has the authority to establish and reorganize cities and special districts, change their boundaries
and authorized services, allow the extension of public services, perform municipal service reviews, and
establish spheres of influence. Some of LAFCo’s duties include regulating boundary changes through
annexations or detachments and forming, consolidating, or dissolving local agencies.
1.2 Mendocino LAFCo
The CKH Act provides for flexibility in addressing State regulations to allow for adaptation to local needs.
Each LAFCo works to implement the CKH Act to meet local needs through the flexibility allowed in how
state regulations are implemented. As part of this process, Mendocino LAFCo has adopted policies,
procedures, and principles that guide its operations. These policies and procedures can be found on
Mendocino LAFCo’s website1.
Mendocino LAFCo has a public Commission with seven regular Commissioners and four alternate
Commissioners. The Commission is composed of two members of the Mendocino County Board of
Supervisors, two City Council members, two Special District Board of Directors members, and one Public
Member-At-Large. The Commission also includes one alternate member for each represented category.
Table 1-1 below lists the current Commissioners, the local government category they represent, if they
are an alternate, and the date their term expires.
Table 1-1: Current Mendocino LAFCO Commissioners, 2024
Commissioner Name Position Representative Agency Term Expires
Gerardo Gonzalez Commissioner City 2026
Candace Horsley Commissioner Special Districts 2026
Glenn McGourty Commissioner County 2024
Maureen Mulheren Chair County 2026
Mari Rodin Commissioner City 2025
Gerald Ward Vice-Chair/Treasurer Public 2026
Vacant Commissioner Special Districts 2024
Francois Christen Alternate Special District 2026
Douglas Crane Alternate City 2025
John Haschak Alternate County 2027
1 Mendocino LAFCo Policies and Procedures Manual: http://www.mendolafco.org/policies.html.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
INTRODUCTION 1-2
Commissioner Name Position Representative Agency Term Expires
Vacant Alternate Public 2027
Source: Mendocino LAFCo
1.3 Municipal Service Review
The CKH Act requires each LAFCo to prepare a Municipal Service Review (MSR) for its cities and special
districts. MSRs are required prior to and in conjunction with the update of a Sphere of Influence (SOI)2.
This review is intended to provide Mendocino LAFCo with the necessary and relevant information related
to the services provided by Gualala Community Services District (GCSD/District).
An MSR is a comprehensive analysis of the services provided by a local government agency to evaluate
the capabilities of that agency to meet the public service needs of their current and future service area.
An MSR must address the following seven factors:
1. Growth and population projections for the affected area.
2. The location and characteristics of any disadvantaged unincorporated communities within or
contiguous to the sphere of influence.
3. Present and planned capacity of public facilities, adequacy of public services, and infrastructure
needs or deficiencies including needs or deficiencies related to sewers, municipal and industrial
water, and structural fire protection in any disadvantaged unincorporated communities within or
contiguous to the sphere of influence.
4. Financial ability of agencies to provide services.
5. Status of, and opportunities for, shared facilities.
6. Accountability for community service needs, including governmental structure and operational
efficiencies.
7. Any other matter related to effective or efficient service delivery, as required by commission
policy.
Municipal Service Reviews include written statements or determinations with respect to each of the seven
mandated areas of evaluation enumerated above. These determinations provide the basis for LAFCo to
consider the appropriateness of a service provider’s existing and future service area boundary. This MSR
Update studies the wastewater services provided by GCSD. This review also provides technical and
administrative information to support Mendocino LAFCo’s evaluation of the existing boundary for GCSD.
With this MSR, Mendocino LAFCo can make informed decisions based on the best available data for the
service provider and area. Written determinations (similar to ‘findings’), as required by law, are presented
in Chapter 3. LAFCo is the sole authority regarding approval or modification of any determinations,
policies, boundaries, spheres of influence, reorganizations, and provision of services. This MSR/SOI study
makes determinations in each of the seven mandated areas of evaluation for MSRs.
Ideally, an MSR will support LAFCo’s directives and deliberations and will also provide the following
benefits to the subject agencies:
• Provide a broad overview of agency operations including type and extent of services provided;
2 Assembly Committee on Local Government, “Guide to the Cortese-Knox-Hertzberg Local Government Reorganization Act of
2020.” December 2023.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
INTRODUCTION 1-3
• Serve as a prerequisite for an SOI Update;
• Evaluate governance options and financial information;
• Identify areas within the factors noted above that may benefit from improvement;
• Demonstrate accountability and transparency to LAFCo and to the public; and
• Allow agencies to compare their operations and services with other similar agencies.
1.4 Sphere of Influence
The CKH Act requires LAFCo to adopt an SOI for all local agencies within its jurisdiction. An SOI is “a plan
for the probable physical boundary and service area of a local agency or municipality as determined by
the Commission” (GC §56076)3.
When reviewing an SOI for a municipal service provider, under GC §56425(e)4, LAFCo will consider the
following five factors:
1. The present and planned land uses in the area, including agricultural and open space lands.
2. The present and probable need for public facilities and services in the area.
3. The present capacity of public facilities and adequacy of public services that the agency provides
or is authorized to provide.
4. The existence of any social or economic communities of interest in the area if the commission
determines that they are relevant to the agency.
5. For an update of a sphere of influence of a city or special district that provides public facilities or
services related to sewers, municipal and industrial water, or structural fire protection, that occurs
pursuant to GC §56425(g) on or after July 1, 2012, the present and probable need for those public
facilities and services of any disadvantaged unincorporated communities within the existing
sphere of influence.
Sphere of Influence studies include written statements or determinations with respect to each of the five
mandated areas of evaluation enumerated above. These determinations provide the basis for LAFCo to
consider the appropriateness of establishing or modifying a service provider’s SOI or probable future
boundary.
1.5 Additional Local Policies
1.5.1 Mendocino County General Plan – Coastal Element
The Mendocino County General Plan was originally adopted in November 1985 and last updated in
November of 2021. In conformance with the Coastal Act, the County maintains a Coastal Element as part
of their Local Coastal Program5. Given Gualala’s coastal location, the Coastal Element includes a section
of policies pertaining specifically to Gualala and the neighboring town of Anchor Bay. Policies from Section
4.12 of the Coastal Element include requirements for septic system installation for new development and
3 GC §56076 text can be found here: https://law.justia.com/codes/california/2022/code-gov/title-5/division-3/part-1/chapter-
2/section-56076/
4 GC §56425-56434 text can be found here: https://law.justia.com/codes/california/2010/gov/56425-56434.html
5 Mendocino County. “Mendocino County General Plan Coastal Element.” November 9, 2021.
https://www.mendocinocounty.gov/home/showpublisheddocument/56978/638181067153900000
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
INTRODUCTION 1-4
that new development be connected to the GCSD within the District boundary through the approval
process. These policies and others related to Gualala can be found in the Gualala Town Plan.
1.5.2 Gualala Town Plan
On January 15, 2002, Mendocino County adopted the Gualala Town Plan (GTP/Plan) as part of the Coastal
Element of the Mendocino County General Plan6. In accordance with the California Coastal Act, the GTP
serves as the Local Coastal Plan and identifies planning goals and policies that establish a scenario for
growth within the Town Plan area over a 30-year planning horizon (i.e., until 2032)7. The GTP also includes
a map that depicts an Urban/Rural boundary for the community, which includes Service Zones 1 and 2 of
the District.
The GTP notes that the District’s treatment system was designed to accommodate annual increases of
residential growth at a constant rate of two percent for a 20-year planning horizon. This was in
conformance with population increases projected in Policy 3.9 of the GTP (Locating and Planning New
Development) of between 0.5 and 2.4 percent. Annual increases in commercial development were
projected at three percent for the 20-year planning period. The GTP concluded as part of its sewer service
and septic availability analysis that the District may not have sufficient capacity to accommodate the
demands for sewer connections for the 30-year planning horizon of the GTP, which is 2032.
In 1991, the County Board of Supervisors created the Gualala Municipal Advisory Council (GMAC) with a
two-part mandate: 1) to advise the Board of Supervisors on current development applications; and 2) to
inform long-range planning efforts to update the Coastal Element of the Mendocino County General Plan
as it pertains to the Gualala area.
The GMAC is responsible for the development of the GTP, which was a result of community discussions at
GMAC meetings over a four-year period. The GMAC ultimately reviewed the GPT, facilitated public
discussions, and hosted public meetings supporting the Plan development. The GMAC’s GTP was
submitted to the County Board of Supervisors in May 1995. After an initial review by County staff and
public agencies, a revised draft was prepared by the Gualala Town Plan Advisory Committee that included
representatives of GMAC, the County Board of Supervisors, County Planning Commission, and Planning
Department staff. The draft was ultimately adopted in 2002.
1.6 Senate Bill 215
Senate Bill (SB) 215 (Wiggins) requires LAFCo to consider regional transportation plans and sustainable
community strategies developed pursuant to SB 375 before making boundary decisions. SB 375
(Sustainable Communities and Climate Protection Act) requires each Metropolitan Planning Organization
(MPO) to address regional greenhouse gas emission reduction targets for passenger vehicles in their
Regional Transportation Plan (RTP) by integrating planning for transportation, land use, and housing in a
sustainable communities strategy.
6 The Gualala Town Plan is located here: https://www.mendocinocounty.gov/government/planning-building-
services/plans/gualala-town-plan
7 The Gualala Town Plan is available on the County’s website here: https://www.mendocinocounty.gov/government/planning-
building-services/plans/gualala-town-plan
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
INTRODUCTION 1-5
Mendocino County is not located within an MPO boundary and therefore is not subject to the provisions
of SB 375. However, the Mendocino Council of Governments (MCOG) supports and coordinates the local
planning efforts of Mendocino County and the Cities of Fort Bragg, Point Arena, Ukiah, and Willits to
address regional housing and transportation needs and helps provide a framework for sustainable
regional growth patterns through the 2018 Mendocino County Regional Housing Needs Allocation (RNHA)
Plan and Vision Mendocino 2030 Blueprint Plan. MCOG is also responsible for allocating regional
transportation funding to transportation improvement projects consistent with the 2017 RTP for
Mendocino County.
Mendocino County and the cities of Fort Bragg, Point Arena, Ukiah, and Willits are the local agencies
primarily responsible for planning regional growth patterns through adoption and implementation of
general plan and zoning regulations. While Mendocino County is not subject to the provisions of SB 375,
LAFCo will review applicable regional transportation and growth plans when considering a change of
organization or reorganization application.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
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AGENCY OVERVIEW 2-1
2 AGENCY OVERVIEW
Table 2-1: GCSD Profile
Agency Name: Gualala Community Services District
General Manager Chris Troyan
Office Location: 42455 CA-1, Sea Ranch, CA 95497
Mailing Address: PO Box 124, Gualala, Ca 95445
Phone Number: (707) 884-1715 (Office)
(707) 785-2331 (Wastewater Treatment Plant)
Website: https://gualalacsd.org
Email: gcsdoffice@gualalacsd.org; gcsdplant@gmail.com
Date of Formation: August 5, 1986
Agency Type: Community Services District, Single-Service Provider
Enabling Legislation Community Services District Law (GC §61000 et seq.)
Board Meeting Schedule: Fourth Thursday of each month at 5:00 PM
2.1 History
2.1.1 Formation
The Gualala Community Services District (GCSD/District) was initially formed as a Community Services
District on July 7, 1986 (Mendocino LAFCo Resolution 86-4; Mendocino County Board of Supervisors
Resolution 86-175).
2.1.2 Boundary
The GCSD is located on the southernmost coast of Mendocino County and serves residents of the
unincorporated coastal community of Gualala and surrounding areas (Figure 1-1). Located south of Point
Arena and north of The Sea Ranch Community (Sonoma County), the Gualala community is the
socioeconomic center of the area.
The District’s service area encompasses approximately 1,430 acres (2.23 square miles) extending from its
southern boundary, formed by the County line and Gualala River, north to approximately Big Gulch Road.
The Pacific Ocean forms the District's western boundary; the eastern boundary extends approximately 1.5
miles inland to the Bohdi Tree Lane area. (Figure 1-2)
There have been no changes to the District boundaries since its formation.
2.1.3 Services
The GCSD is empowered to provide wastewater services to the coastal, unincorporated community of
Gualala. Services include the collection, treatment, and disposal of wastewater generated by residential
and commercial connections within the service area, and maintenance of related facilities and equipment.
For information regarding the District’s services, refer to Chapter 3.
The District also provides wastewater treatment services to an adjacent wastewater service provider
under the terms of a Tri-Party Agreement8. The Agreement between the District, Sonoma Water Agency
(a division of Sonoma County) (SWA), and the Sea Ranch Golf Links (SRGL) covers the treatment of effluent
8 The Tri-Party Agreement was amended in 2016 and is located here: https://img1.wsimg.com/blobby/go/dd308714-d493-42e5-
84bd-d358e0fa409d/downloads/1c79bo1jp_384347.pdf?ver=1713304824442
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
AGENCY OVERVIEW 2-2
from a portion of The Sea Ranch development at the District’s Wastewater Treatment Plant (WWTP). The
District also provides collection and treatment services for Gualala Point Regional Park, a Sonoma County
park located adjacent to the District just south of the County line. For more information regarding outside
agency services and services provided by contract or agreement, refer to Section 3.1.2.
2.1.3.1 LATENT POWERS
Latent powers are those services, functions, or powers authorized by the principal act under which the
District is formed, but that are not being exercised or authorized by the Local Agency Formation
Commission (LAFCo). The Community Services District Law (Government Code (GC) Section (§) 61100)9
allows for the delivery of up to 32 different types of services, such as fire protection, water, sewer, and
recreation services (see Appendix 7.1).
It is often considered favorable to add new services to existing special districts where possible, rather than
creating new entities, due to the base cost of operating a special district, including electing directors,
conducting meetings, hiring management, and maintaining insurance and facilities.
The GCSD is currently a single-service provider providing wastewater services. However, GMAC has
inquired with the District about creating a Parks and Recreation division. It is noted that there are no
recreational opportunities for the District in connection with existing facilities.
Any expansion of powers would necessitate prior approval from LAFCo through an application for
activation of latent powers, which generally follows the Commission proceedings for a change of
organization or reorganization (GC §56650 et seq.).
2.2 Government Structure
2.2.1 Governing Body
The District is governed by a five-member Board of Directors elected at-large by registered voters within
the District boundaries. To be elected to the Board, candidates must be registered voters residing within
the District boundaries. If there are insufficient candidates for the election of Board vacancies, or if the
number of filed candidates is equal to the number of Board vacancies, then District Board members may
be appointed instead of elected by the County Board of Supervisors (BOS) per Elections Code §10515; all
current members of the Board were appointed by the BOS. New directors take office at noon on the first
Friday in December following their election. The current directors, positions, and terms are shown in Table
1-1Table 2-2.
Table 2-2: GCSD Board of Directors
First Year of
Name Office/Position Service Term Expiration
De Denten President 2017 2024
Gary Abel Vice-President 2022 2026
Bruce Jones Secretary 2019 2026
John Denten Member 2015 2024
Randy Burke Member 2020 2026
9 GC §61100 can be found here:
https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=GOV&division=3.&title=6.&part=&ch
apter=&article=
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Government Code §1780-1782 governs the process for appointment of Board of Director seats vacated
prior to the scheduled term expiration date. The District Board of Directors has 60 days to appoint an
interested and qualified individual to a vacant seat if proper notice requirements have been met. If the
District cannot fill the seat within the 60-day period, the County BOS can appoint a Director to the District
Board during a 30-day period following the initial 60-day period. If the vacant seat is not filled during the
total 90-day period, the vacant seat remains empty until the next election.
There are currently no vacancies on the Board, but as a small district, generally has difficulty filling
vacancies due to the eligibility requirement that Board members be, and remain, residents of the District
and registered voters in the County throughout their terms. As discussed in Section 2.5 below, much of
the District is comprised of vacation homes or short-term rentals with a small number of full-time
residents who would qualify to sit on the District Board. This is a widespread problem for other small
service providers within the region as well as throughout rural areas of California in general.
Five of the Board members have served the District for multiple terms, which can be a significant benefit
in establishing long-standing positive working relationships in the community, understanding the history
and unique aspects of the organization, and maintaining institutional knowledge. However, it can also
indicate difficulty in attracting interested individuals to serve on the Board.
The GCSD has several external partners including The Sea Ranch (and its golf course), the GMAC, the SWA,
and Mendocino County. Issues with both the GMAC and the Sea Ranch were documented in a 2007 Grand
Jury report produced by the County of Mendocino10; however, a process to help maintain positive
relations with the SRGL, Sea Ranch, and the SWA has been developed and includes a monthly meeting
among the signatories of the Tri-Party Agreement. These monthly meetings have been effective in
opening communication and resolving issues. Additionally, the 2007 Grand Jury report also reported on
differences between the District and GMAC concerning future buildout of the District area. Those
discrepancies have also since been resolved amongst the parties.
2.2.2 Public Meetings
In accordance with the Brown Act, all District Board meetings are open to the public and are publicly
posted a minimum of 72 hours prior to regular meetings, or a minimum of 24 hours prior to special
meetings. Postings and meeting agendas are located on public information boards in town at the Gualala
Post Office. Meeting agendas and minutes are posted on the District’s website and distributed by email
upon request.
Regularly scheduled meetings are held on the fourth Thursday of the month at 5:00 PM. Meetings are
located at the Coast Life Support District office at 38901 Ocean Drive in Gualala.
2.2.3 Standing Committee
Committees assist in carrying out various functions of local government to support and implement Board
direction. The District currently has a standing ordinance committee consisting of two board members.
Additionally, the District appoints a budget committee at every March meeting, which also consists of two
board members.
10 The May 3, 2007 Mendocino County Grand Jury Report titled Waste Not…Want Not is located here:
https://www.mendocinocounty.gov/home/showpublisheddocument/4420/636239889631330000.
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2.2.4 Public Outreach
With the passage of Senate Bill (SB) 929 in 2018, all special districts were required to establish and
maintain a website with specific information and accessibility requirements by January 2020 (a
compliance handout is included in Appendix C – Website Compliance Handout). The District maintains a
website at https://gualalacsd.org/, which includes recent meeting agendas and minutes, rates, current
annual budget, recent studies, permit information, personnel manual, etc.
The District keeps residents informed of District requirements and activities through word-of-mouth and
during public meetings.
2.2.5 Complaints
Complaints are directed to the General Manager and may be submitted in person, by phone, or through
the website’s contact page. In the last five years, the District has received 10 complaints that may be
generally characterized as data entry errors. The data entry errors are typically a result of the District’s
transmittal of individual customer sewer charges to Mendocino County for entry and collection via
property tax bills. Over the past five years, the data entry errors have resulted in the District overcharging
undeveloped parcels; the issues have been resolved through refunds to the property owners.
2.2.6 Transparency and Accountability
The GCSD Bylaws were originally adopted in 1986 and serve as the District’s legal guidelines by providing
written rules that control internal affairs. They define the District’s official name, purpose, director
eligibility requirements, officer titles, responsibilities, how offices are to be assigned, how meetings should
be conducted, and the frequency of meetings.
The District also maintains a District Policy Manual to guide operations, personnel, conflicts of interest,
and financial matters; the Manual was last revised in November 2019.
The Political Reform Act requires all state and local government agencies to adopt and promulgate a
Conflict-of-Interest Code pursuant to GC §81000 et seq. The Act also requires persons who hold office to
disclose their investments, interests in real property, and incomes by filing a Statement of Economic
Interests (Fair Political Practices Commission Form 700) each year under GC §87203. The District staff
confirm that they comply with the requirement and are current through 2023.
According to Assembly Bill 1234, if a local agency provides compensation or reimbursement of expenses
to local government officials, then all local officials are required to receive two hours of training on public
service ethics laws and principles at least once every two years and establish a written policy on
reimbursements pursuant to GC §53235. District compensation for its Board members is $50 per meeting
they attend; its directors and staff attend Brown Act/Ethics training regularly.
Refer to Appendix B for a brief list of educational resources regarding open government laws and
Appendix C for a website compliance handout.
2.3 Operational Efficiency
2.3.1 Management and Staffing
The District employs five individuals, including three full-time employees: a General Manager/Chief Plant
Operator, an Operations Supervisor (Grade 2), and a Grade 1 Operator. The District also employs two part-
time employees, including a Finance Director and an Administrative Assistant. GCSD has an extensive
training program that supports its employees in expanding their abilities and knowledge. The General
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Manager oversees all plant and collection system operations; schedules all maintenance and work
assignments for the operators; helps prepare the annual budget; monitors expenditures; keeps the
operations in compliance with the Discharge Permits; and prepares monthly and annual reports for the
Regional Water Quality Control Board (RWQCB). The General Manager and both operators have recently
upgraded their operator grade levels issued through the State Office of Operator Certification. The
General Manager holds a Grade 5 Wastewater License from the State Water Resources Control Board
(SWRCB).
2.3.2 Contract or JPA Services
The District utilizes contract services for various tasks including the preparation of financial audits for the
District, rate studies, and grant administration.
This District does not contract with private or public entities or provide services to District residents
through Joint Powers Authority (JPAs).
However, the GCSD does support other service providers in the region through contracts and agreements.
The Tri-Party Agreement to provide treatment services to a portion of The Sea Ranch development is
discussed further in Section 3.1.2, as is the contract with Sonoma County to serve the Gualala Point
Regional Park.
Additionally, the Mendocino County Waterworks District No. 2 (MCWD2) receives staffing support from
the GCSD through a contract.
2.3.2.1 MENDOCINO COUNTY WATERWORKS DISTRICT NO. 2
Since 2023, the District has maintained a services agreement with MCWD2 to provide management,
operations, and administrative services to support MCWD2. GCSD’s General Manager and staff work
directly with the MCWD2 Board of Directors to provide administrative and operational support.
The MCWD2 is located approximately three miles north of the District and serves the small
unincorporated community of Anchor Bay. As part of the agreement, the District provides management,
operations, and administrative staff to assist with budget preparation, expenditure monitoring, Discharge
Permits compliance, and RWQCB reporting. The GCSD’s General Manager supervises MCWD2’s only
employee, a part-time Operator who works 20 hours per week, and oversees the day-to-day management
of the MCWD2, including customer service and connection enforcement duties. In addition, by default,
GCSD oversees all issues that arise beyond what is anticipated in the contract. For example, GCSD fully
managed a recent emergency construction project to bypass a compromised sewer hole, avoiding a
catastrophic failure and environmental disaster.
2.3.3 Agency Performance
A component of monitoring agency performance is routinely evaluating staff productivity. The District
does not track employee workload and productivity through a timekeeping mechanism but does conduct
annual written performance evaluations for their employees. The District outlines its evaluation
procedures in the District’s Personnel Manual11.
In the regular performance of duty, District staff identifies areas of improvement and takes corrective
action when feasible and appropriate or informs the Board when further direction is needed.
11 The GCSD Personnel Manual is located on their website: https://gualalacsd.org/files.
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The District also monitors and evaluates agency operations through regulatory reporting and review of
District databases and records.
2.3.3.1 CHALLENGES
The District reported that in recent years it has relied on its reserves for operations due to various
challenges, but primarily cash-flow issues associated with delayed grant reimbursements. In 2018, the
District implemented an engineering project under a planning grant from the SWRCB. The contractor
billing for the project outpaced the grant reimbursements, thereby forcing the District to rely on reserve
funds to meet its contractor commitments. With the completion of the project, the issue has been
resolved.
In 2023, the District successfully completed a Proposition 218 process to establish a 28 percent service
rate increase to be implemented over the next five years. Further, the District, Sonoma County, and SRGL
renegotiated their Tri-Party Agreement, resulting in a substantial rate increase of 56 percent to be
consistent with GCSD customer rates. However, the increased revenue will still not be sufficient to address
the District’s significant capital improvement challenges related to aging and failing infrastructure. To
address this challenge, the GCSD is actively pursuing grant funding to upgrade the system’s collection
system and treatment plant.
2.3.3.2 DISTINGUISHED SERVICE
In 2023, the District was awarded a safety award from the Special District Risk Management Authority
(SDRMA) for no workman compensation claims in five consecutive years.
2.3.3.3 STRATEGIC OR SUCCESSION PLAN
The District does not currently have an established strategic plan, mission statement, or official goals. In
lieu of these documents, the Board reviews progress and setbacks over the prior year during the annual
budget development process, adjusting as needed for the next fiscal year.
2.3.4 Regional and Service Specific Collaboration
The District participates in the SDRMA JPA for insurance purposes. The SDRMA JPA was formed according
to GC Section 6500 et seq. and is comprised of California special districts and agencies for the purpose of
jointly funding and developing programs to provide stable, efficient, and long-term risk financing for
special districts. These programs are provided through collective self-insurance, the purchase of insurance
coverage, or a combination thereof (Calenteno, 2023). The District purchases insurance through SDRMA
but does not currently have any debt with SDRMA or any other lender. Further, the relationship between
the District and the JPA is such that the JPA is not a component unit of the District for financial reporting
issues.
The Gualala River Watershed Council is a nonprofit community group that promotes facilitation and
shared understanding among landowners, resource managers, agencies, community organizations, and
interested citizens in working towards restoring the natural balance of the Gualala River Watershed.
Although the GCSD does not currently participate in the Council, participation could be beneficial in
increasing District outreach with its residents, and collaboration within the community through this
network of community leaders. Participation in the Watershed Council could also give the District advance
notice on upcoming grant opportunities, potentially leveraging watershed and community projects to also
support infrastructure and service improvements, and other opportunities for community collaborations.
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2.3.5 Shared Services and Facilities
The District works cooperatively with other local agencies to deliver services more effectively or efficiently
by sharing public facilities, resources, and/or service delivery responsibility when feasible.
The sharing of services and facilities is demonstrated by the District’s participation in three service
agreements with neighboring agencies and parties:
1) Tri-Party Agreement with Sonoma County’s Community Service Area 6 (CSA6) and the SRGL golf
course.
2) Service Agreement with Sonoma County for Gualala Point Regional Park.
3) Contract with MCWD2 to provide management, operations, and administration staff to that
district.
The first two agreements are for the treatment of collected effluent through the GCSD WWTP (see Section
3.1.2). The third contract is for shared management and staffing to support the MCWD2 board and
operations (see Section 2.3.2.1).
Additionally, the District shares office space with the MCWD2, and holds its board meetings in the Coast
Life Support District offices.
2.3.5.1 ADJACENT PROVIDERS
Due to its geographical isolation, there are only two nearby providers of wastewater services within the
vicinity and two water providers in the area.
• Wastewater
o Mendocino County Waterworks District No 2 – Anchor Bay (MCWD2)
o Sea Ranch North Sanitation Zone (Owned by SWA)
• Water
o North Gualala Water Company (NGWC)
o Sea Ranch Water Company (SRWC)
The District maintains service agreements with both MCWD2 and the Sea Ranch Sanitation Zone (for more
detail, see Sections 2.3.2.1 and 3.1.2, respectively).
The North Gualala Water Company is a private water service provider that currently provides residential
drinking water services to the Anchor Bay and Gualala areas, and which overlaps customers of both the
GCSD and the MCWD2. Although the Company does not provide wastewater services, there is potential
for consolidation of services under a single service-provider serving this region. Expansion of the special
district area and services requires appropriate LAFCo process and approval.
2.3.5.2 DUPLICATION OF SERVICES
Based on feedback from the RWQCB, the District’s WWTP was located south of the Gualala to be
regionally located and available for treatment of effluent from communities and entities in proximity (i.e.,
The Sea Ranch community and Gualala Point State Park). The Sea Ranch is located within Sonoma County’s
CSA6 Sea Ranch Sanitation Zone (SRSZ), which is managed by the Sonoma Water Agency and has its own
collection system and wastewater plants. However, the SRSZ North Plant is no longer permitted by the
RWQCB and since 2014 has served as a pumping station to move effluent to the GCSD WWTP for
treatment (see Section 3.1.2.1 for more detail).
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During the preparation of this MSR, staff communications with Sonoma LAFCo revealed the planning
efforts of the SWA and The Sea Ranch Association to study the potential infrastructure and permitting
needs to internalize all wastewater services within the SRSZ. Doing so may eliminate the need for the
GCSD to provide treatment services for The Sea Ranch development in the future. It is anticipated that
the feasibility of those plans will be more defined before the next MSR cycle for GCSD.
Although the District’s contract with MCWD2 for management, operational, and administrative staff
support rather than duplicate services, the interconnectedness of the agencies indicates room for
efficiencies of services in general (see Section 2.3.2.1 for more detail).
2.3.5.3 INTERAGENCY COLLABORATION
As previously stated, the District collaborates with multiple neighboring agencies through the three
existing agreements. These agreements dictate the varying levels of collaboration that exist between the
District and its neighbors.
Members of the MCWD2 board have stated that their contract with GCSD has enabled MCWD2 to address
long-deferred infrastructure and management issues that would have otherwise threatened their ability
to provide adequate wastewater services. In addition, GCSD has been able to provide engineering and
grant expertise that MCWD2 did not previously have access to. Through the agreement with MCWD2,
there may be potential for reorganizations or consolidations of wastewater services if there is district and
community support.
2.3.6 Government Structure and Community Needs
2.3.6.1 ENHANCED SERVICE DELIVERY OPTIONS
The District is the primary provider of wastewater services in the community of Gualala and the immediate
surrounding area. The County of Mendocino provides law enforcement, code enforcement,
transportation, and stormwater collection services within the District. The South Coast Fire Protection
District provides fire suppression, basic life support and medical services, cliff and water rescue, hazardous
conditions, and vehicle collision response, as well as other safety assistance such as lift assist, vehicle lock-
ins, etc. CAL FIRE Mendocino Unit provides wildland fire suppression and mutual aid to local fire agencies
during the declared fire season. The Coast Life Support District provides ambulance services to the region.
There is no redundancy in the provision of municipal services to the District, and no new opportunities for
the District to achieve organization or operational efficiencies were identified during the preparation of
this MSR.
2.3.6.2 GOVERNMENT RESTRUCTURE OPTIONS
Government restructuring options should be pursued if there are potential benefits in terms of reduced
costs, greater efficiency, better accountability or representation, or other advantages to the public.
Community Services Districts (CSDs) are typically formed in unincorporated communities “to achieve local
governance, provided needed facilities, and supply public services.” Per GC §61001(b), CSDs are a
permanent form of local government that can provide locally adequate levels of public facilities and
services; a form of governance that can serve as an alternative to incorporation. It is also an effective form
of governance for combining two or more special districts that serve overlapping or adjacent territories
into a single, multifunctional special district. Many efficiencies can be gained through the consolidation of
services.
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The District’s agreement with MCWD2 provides management, operational, and administrative support to
MCWD2. Despite the assistance from the District, the MCWD2 Board is still more involved in
administrative tasks than is typical or desired by the existing board members of MCWD2. There has been
expressed interest in expanding the agreement with GCSD to provide additional support, even seeking
consolidation if the respective boards are amenable.
In developing the 2024 Draft MCWD2 MSR/SOI Study, the Board President indicated an interest in
continuing discussions of consolidation or some form of regionalization with GCSD. With the existing
contract with GCSD for support already in place, such a reorganization would benefit MCWD2 residents
and create efficiency of services to the region served by both Districts.
The current contract gives the GCSD a solid understanding of MCWD2’s operations, infrastructure needs,
and an awareness of the issues that MCWD2 is currently facing. From a financial standpoint, consolidation
would primarily benefit MCWD2. MCWD2 has expressed that the District’s infrastructure needs significant
upgrades to maintain its service, which will incur high infrastructure costs. The benefits to the GCSD of
absorbing the MCWD2 are mostly limited to increased economies of scale and quality of services to the
MCWD2 customers.
Although not a special district, the North Gualala Water Company service area encompasses both GCSD
and the MCWD2 and provides domestic water services to its customers. In the future, if there is interest
in absorbing water services into the GCSD, an application would be made to LAFCo for activation of
appropriate powers and likely an expansion of boundaries.
2.4 Finances
LAFCo is required to make determinations regarding the financial ability of the GCSD to provide its
services. This section provides an overview of the financial health of the District and a context for LAFCo’s
financial determinations. This MSR utilizes audited financial statements for Fiscal Years (FYs) 2019-2020,
2020-2021 and 2021-2022, and the budget for FY 2022-2023 as the primary sources of information for
this section.
In California, special districts are classified as either enterprise or non-enterprise based on their source of
revenue. GCSD operates as an enterprise District, meaning that charges for wastewater services are
intended to pay for the costs of providing such services.
The primary funding source for the District is fees for services, which is generally a reliable and reoccurring
revenue source, provided that adopted rates are sufficient to cover the actual cost of services. The District
operates out of a single enterprise fund for operational and maintenance purposes (Refer to Table 2-3
and Table 2-4.
The District’s sole fund is considered a proprietary fund. Proprietary funds are accounted for using the
“economic resources” measurement focus and the accrual basis of accounting. Under the accrual basis of
accounting, revenues are recognized in the period in which the liability is incurred. Operating revenues in
the proprietary fund are those revenues that are generated from the primary operations of the fund. All
other revenues are reported as non-operating revenues. Operating expenses are those expenses essential
to the primary operations of the fund and all other expenses are reported as non-operating expenses.
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Table 2-3: GCSD Financial Summary
FY 18-19 FY 19-20 FY 20-21 FY 21-22
Operating Revenues
Service charges 583,735 564,007 532,845 493,949
Other operating income 232,710 198,376 188,732 199,174
Total Operating Revenues 816,445 762,383 721,557 693,123
Operating Expenses
Salaries 269,995 257,920 294,725 328,105
Employee Benefits 83,535 101,711 109,171 114,501
Collection System 102,600 61,275 47,751 51,317
Treatment Plant 209,825 151,455 132,482 101,077
Utilities 39,957 50,957 43,224 7,153
Vehicle Expense 10,864 15,425 10,794 19,246
Legal and Other Professional Services 26,964 47,680 31,520 29,420
Office Expense 1,498 2,460 2,878 2,703
Insurance 17,886 16,954 22,723 22,646
Other Administrative Expenses 11,250 25,091 28,455 26,280
Depreciation 268,531 269,672 263,328 260,303
Total Operating Expenses 1,042,887 1,000,600 987,051 1,023,251
Operating Income/(Loss) (226,442) (238,217) (265,495) (330,128)
Non-Operating Revenues (Expenses)
Interest Income – Bank & County Treasury 4,871 3,164 1,031 1,546
Federal and State Funding - - - 195,549
Grant Income - 142,723 327,340 66,405
Grant Expense - (89,863) (345,596) (105,815)
Gain/(Loss) on Sale of Capital Assets 700 - - 19,202
PERS Actuarial Assumption Changes (33,250) (20,192) (23,862) 7,267
Interest Expense (45,108) (41,488) (38,547) (33,574)
Total Non-Operating Revenue (Expenses) (72,787) (5,656) (79,634) 150,580
Net Income (Loss) (299,229) (243,873) (345,128) (179,548)
Beginning Net Position 5,313,394 5,014,165 4,770,292 4,425,164
Ending Net Position 5,014,165 4,770,292 4,425,164 4,245,616
Source: Celentano, 2023
The District’s cash accounts are summarized below:
Table 2-4: Cash Accounts
Type FY 18-19 FY 19-20 FY 20-21 FY 21-22
Cash and Cash Equivalents – Beginning of
736,736 715,746 512,721 324,159
Year
Cash and Cash Equivalents – Ending of Year 715,746 512,721 324,159 364,398
Source: RFI
2.4.1.1 REVENUE AND EXPENDITURES
The District’s revenues and expenditures for FYs 2019-2020 through 2021-2022 are summarized in Figure
2-1. District service charge revenues have declined over each of the last few FYs due to a number of factors
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all occurring at the same time. In 2018 the District received a planning grant totaling $484,000 through
the SWRCB Disadvantaged Community (DAC) program; contractor billing for the project outpaced State
reimbursements, causing a substantial cash-flow problem for the District and forcing reliance on reserves
to bridge the reimbursement gap and address contractor obligations. Further, project expenditures
exceeded grant funding and the requested grant amendment took nearly two years to receive State
approval. In addition, the District did not collect revenue from SRGL service charges for nearly a year due
to a disagreement over rate prices; however, the issue has since been resolved. Furthermore, impacts
from the COVID-19 pandemic (2020-2021) resulted in increases in operating costs that were not readily
recoverable, in part due to some customers’ inability to pay fees.
Collectively, the District’s wastewater fees and charges provide approximately 70-72 percent of the
District’s annual revenue, the SWA consists of approximately 18-22 percent of the District’s total annual
revenue, and the SRGL makes up the difference. Wastewater fees are collected by Mendocino County
with the property taxes and paid to the District three times a year: August, December, and April.
It should be noted that as part of the District’s most recent rate study, which was produced in March 2023,
an extensive analysis was prepared that included an evaluation of the Tri-Party Agreement. The terms of
the original Tri-Party Agreement were based on the GCSD customers paying for most of the fixed
operational costs while the Sea Ranch customers were responsible for relatively small percentages of the
overall costs. The arrangement was determined and stipulated in the Agreement using various
calculations for estimating increases in energy, chemicals, and un-burdened manpower to operate the
plant. However, the findings in the 2023 rate study illustrated that this prior model was no longer fiscally
sustainable for the GCSD. A combination of “fair share” costs must be collected from the SRSZ customers
in addition to significant rate increases for GCSD customers for the District to be financially viable in the
future. At the time of this rate study, Sonoma Water was paying the District $8.49 per 1,000 gallons of
wastewater treated, but actual costs were estimated to be approximately $15.36 per 1,000 gallons.
In response to the 2023 rate study, in November 2023 the Sonoma County Supervisors approved a
negotiated new rate of $13.28 per 1,000 gallons; the 56 percent increase took effect January 1, 2024. This
increase will have a substantial impact on the revenues brought in from the Tri-Party Agreement and
should support the District’s financial stability.
During negotiations, the District and SWA agreed to a rate of approximately $13.28 per 1,000 gallons, with
the difference in actual versus negotiated rate to be recovered through the sale of tertiary treated water
back to the SRGL, based on the incoming flow percentage. Currently, SRGL pays approximately $2.65 per
1,000 gallons for tertiary treated water, which is reflected in the total cost estimate calculated in the rate
study. Because SWA agreed to the new rate of $13.28 per 1,000 gallons, the District’s new cost agreement
with the SRGL will be a rate of $2.08 per 1,000 gallons, which amounts to the difference between $15.36
and $13.28.
Expenditures in FY 2019-2020 totaled $1,000,600; $987,051 in FY 2020-2021; and $1,023,251 in FY 2021-
2022. The top expenditures for FY 2019-2020 included salaries/benefits; maintenance to the WWTP,
which included repairs to the system’s clarifier and collection system; and depreciation.
Effective January 1, 1997, the District entered into the California Public Employees Retirement System
(CalPERS). Qualified employees are covered under a multiple employer defined benefit pension plan
maintained by an agency in the State of California. Contribution requirements of plan members and the
District are established and may be amended by CalPERS.
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Figure 2-6, the District’s cash accounts have varying trends. The most reliable cash account is the cash
from operating activities. The significant drop in cash flows from capital and related financing activities
in 2022 is attributed to a replacement of the control panel for Lift Station #2.
As shown in Figure 2-4, the District’s expenditures exceeded revenues for each of the last three fiscal
years, necessitating reliance on reserves to cover the difference. The District’s inability to regularly cover
the expenses of operating the District without utilizing its reserves suggests it is not in a stable financial
position. However, in recent years the District has been able to support its revenue/expenditures balance
with grant funding, particularly for capital improvements and maintenance. Additionally, the
implementation of the 2024 rate increases for District customers as well as parties to the Tri-Party
Agreement should support the District’s financial stability. However, to address needed and costly
infrastructure improvements, the GCSD will need to secure grant funding to upgrade the system’s
collection system and treatment plant.
2.4.1.2 ASSETS AND LIABILITIES
As shown in Figure 2-3, the District’s largest asset is infrastructure for which depreciation costs have been
accounted for in the expense section. The District’s other largest assets are income from grants and a
special assessment debt.
The District also recently applied for a $10.7 million dollar grant through the SWRCB State Revolving Fund
(SRF) Program. If awarded, these grant funds will be used to rehabilitate the WWTP to become fully
compliant with Title 22 and to also rehabilitate the collection system within Zones 1 and 2.
2.4.1.3 NET POSITION
As shown in Table 2-3, the District is currently operating at a net loss as a result of the various factors
discussed in Section 2.4.1.1.
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Figure 2-1: District Revenues and Expenses
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
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Figure 2-2: District Revenues Over/Under Expenses
Gualala Community Services District | 2023 MSR and SOI
AGENCY OVERVIEW 2-15
Figure 2-3: District Assets
Figure 2-4: District Liabilities
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Figure 2-5: District Net Position
Figure 2-6: District Cash Accounts
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2.4.2 Long Term Financial Considerations
2.4.2.1 RESERVES
The District maintains a policy on reserves that limits use to available “Unrestricted” Funds (not obligated
by law, contract, or agreement), including donations, interest earned, fees for service, or other non-grant
earnings. All special use funds are designated by formal action of the Board of Directors. The General
Manager, in collaboration with the Administrative Assistant, performs a reserve status analysis annually,
which is provided to the Board of Directors during the annual deliberation/approval of Budget and Reserve
Funds.
By the terms of a loan received in 2016 from CoBank, the District is required to maintain a reserve of
approximately $65,000.
2.4.2.2 OUTSTANDING DEBT/COST AVOIDANCE
In the early 1990s, the District issued special assessment debt to help finance the acquisition and
construction costs of the land, structures, water treatment plant, and equipment. The bonds are issued
upon and are secured by paid and unpaid assessments, lawfully levied under the Improvement Bond Act
of 1915 (Division 10 of the California Streets and Highways Code). The bonds are described as Gualala
Community Services District Sewer System Assessment District 1987-1 and were originally issued on March
12, 1991, for $973,118.18. The bonds bear an interest rate of five percent per annum with interest paid
semi-annually on March 2 and September 2 each year; principal payments are scheduled to be paid
annually in various amounts on September 2 of each year. The bonds are subject to redemption on any
March 2 or September 2 in advance of maturity date upon thirty days prior notice and upon payment of
accrued interest and principal plus a redemption premium of three percent of the principal amount
redeemed.
Required with the bond issuance was the establishment of a Bond Reserve Fund as security should the
District become delinquent on its bond payments. The funds are maintained in the County treasury and
are restricted for bond repayment use only. The County of Mendocino has no other payment obligation
for these bonds except to advance funds from the reserve fund to the bond redemption fund, as needed.
The District borrowed $750,000 to fund improvements on November 17, 2016, through a CoBank loan.
Terms of the loan include variable monthly payments and an annual interest rate of 3.51 percent, which
varies based with the London Interbank Offered Rate and is fully amortized on December 20, 2026.
The District has been making regular principal and loan payments on a yearly basis, with the loan
payments historically being between $84,000 to $90,000 per year. Since the GCSD has very limited
reserves set aside on an annual basis for both emergency and planned capital replacements, it has relied
heavily on outside loan funding agencies to assist in the financing of necessary improvements. The
remaining debt for the loan is currently $260,631 in principal and $39,946 in interest for a total of
approximately $300,000.
The District also received a line of credit through the Rural Community Assistance Corporation (RCAC) in
2023 for $150,000 as an advance on the reimbursements from the planning grant amendment. The loan
supports cash flow needs as the District implements the grant.
The District’s CalPERS annual pension cost for FY 2021-2022 was $14,093. These costs are expected to
increase because of CalPERS unfunded liability. Contributions to the District’s pension plans are expected
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AGENCY OVERVIEW 2-18
to increase to $15,877 in FY 2022-2023, $16,212 in FY 2023-2024, and $18,661 in FY 2024-2025 (CalPERS,
2024).
2.4.2.3 RATE RESTRUCTURING
In March of 2023, a Rate Study was prepared for the District in accordance with Proposition 218. As a
result, effective July 1, 2024, the District adopted the following fees for its three classes of users: (1)
residential, (2) commercial, and (3) hotels. For 2023, residential customers pay a flat rate of $1,263.53 per
year, which is assessed on property annual tax bills and collected by Mendocino County. That rate consists
of a sewer fee of $901.11, a maintenance fee of $56.18, and a capital improvement/reserves fee of
$306.24. This represents a 10 percent increase in fees from the previous year and rate structure.
Residential customers with two separate septic tanks are charged twice the annual flat rate of $1,263.53.
Residential customers with multiple units on their property that share a single septic tank are charged a
single sewer fee, the maintenance fee, and the capital improvement/reserves fee, multiplied by the
number of Equivalent Dwelling Units (EDUs). For example, for a customer with three units on their
property, the maintenance fee of $56.18 and the capital improvement/reserve fee of $306.24 are totaled
and multiplied by three, to equal $1,087.26 ($56.18 + $306.24 = $362.42 x 3 = $1,087.26). The single sewer
fee of $901.11 is then added for an annual total of $1,988.37 for the sewer fee in this example.
The District bills commercial properties on a monthly basis at the minimum rate of $105.29 per month,
which includes a minimum sewer fee of $75.09 per month, a maintenance fee of $4.68 per month, and a
capital improvement/reserve fee of $25.52 per month. Those fees are multiplied for each EDU of
wastewater use, as described below.
The EDU of wastewater use is calculated by the total amount of wastewater used by all District customers
divided by the number of customers. For the District’s FY 2021-22, that wastewater usage was 122 gallons
per day (gpd). Thus, if a commercial customer uses 366 gpd for the billing period, the customer will be
considered to have three EDUs of use and the monthly fees would be multiplied by three to determine
the sewer bill for that month, $105.29 x 3 = $315.87.
Hotels are billed in the same manner as commercial accounts, but the total monthly bill is multiplied by
the average occupancy rate percentage. GCSD uses the state average when determining the occupancy
rate each year. Using the above example, if a hotel has EDU wastewater usage at thhree units, but had
average occupancy during of 70 percent, then the hotel’s bill for the month would be $315.87 x 0.70 =
$221.11.
The most recent rate study recommended annual rate increases over the next five years: 10 percent from
FY 2023-2024; seven percent from FY 2024-2025; five percent from FY 2025-2026; and three percent from
July 1, 2026, to June 30, 2028. The new rates were adopted by the District Board in May of 2023 and
should improve the District’s financial stability.
According to GCSD staff, the rate increase has enabled the District to transition all commercial customers
to monthly accounts, who previously had a mix of monthly and property tax payment structures. This shift
has reportedly increased the District’s revenue from $14,000 to $32,000 and reduces the need to depend
on county disbursements.
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2.4.2.4 CAPITAL IMPROVEMENT PLAN
The District does not currently have a Capital Improvement Plan (CIP), although one is currently being
developed. While the most recent rate study prepared for the District outlines the necessary
improvements that need to be made in order to provide adequate service, a CIP will help identify potential
funding sources and prioritize projects.
2.4.3 Current Fiscal Health
The District is currently operating at a net loss based on the information provided in the financial audits
and shown in Table 2-3. The District anticipates that recently approved and implemented rate increases,
including the 56 percent rate increase approved by the Sonoma County Board of Supervisors for the Tri-
Party Agreement, will support the District’s goals for financial stability.
Further, while the District does not currently have existing reserves to fund the multiple infrastructure
improvements to the WWTP and collection system that are needed, the District has applied for a $10.7
million grant through the SWRCB to cover some of the improvements; the grant application is still under
review as of April 2024.
2.5 Present and Planned Land Use and Development
The GCSD boundaries are entirely located within the unincorporated area of Mendocino County.
Mendocino County has land use authority over privately-owned lands within the GCSD boundaries and
makes land use decisions guided by the County’s General Plan and Zoning Regulations. The District is also
located in the Coastal Zone and land use proposals are subject to the regulations of the County’s Coastal
Element as part of Mendocino County’s Local Coastal Plan that was approved by the Coastal Commission.
As such, any proposed changes to the land use or development patterns of the District area must also be
approved by the Coastal Commission (County of Mendocino General Plan, 2009).
The Gualala Town Plan serves as the Local Coastal Plan required by the California Coastal Act and covers
most of the GCSD service area. The Plan identifies planning goals and policies that establish a scenario for
growth within the Plan area over a 30-year planning horizon (to 2032).
2.5.1.1 LAND USE
The Mendocino County General Plan identifies land use designations for the area that are generally rural
residential and resource-based, with areas of commercial and higher density residential within the core
Gualala Town area along State Highway 1 (Figure 2-7).
The specific land use zones are identified in the County’s Zoning Ordinance and are consistent with its
General Plan land use designations (Figure 2-8). Zoning within the District include Rural Residential 1-acre
minimum (RR1), Rural Residential 5-acre minimum (RR5), Remote Residential 20-acre minimum (RMR20),
Gualala Village Mixed Use (GVMU), Gualala Highway Mixed Use (GHMU), Gualala Planned Development
(GPD), Gualala Industrial (GI), Rural Residential, 5-acre minimum [Suburban Residential] (Planned
Development) RR5:PD [SR:PD], Timberland Production (TP), Forest Land (FL), Limited Industrial (LI), and
Rangeland (RL).
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Figure 2-7: Mendocino County General Plan Land Use Mapping
Figure 2-8: Mendocino County Zoning Map
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2.5.1.2 DEVELOPMENT
Future growth and development of the District is subject to Mendocino County land use regulations,
which are based on the General Plan, Zoning Ordinance, and adopted plans and policies to regulate
growth. The County’s Zoning Ordinance contains three major geographical zones (Inland, Coastal, and
Mendocino Town); the Gualala area is included in the Coastal Zone (County of Mendocino Coastal
Element, 2021). As shown in Figure 2-8: Mendocino County Zoning Map, the County’s Zoning Ordinance
designates the majority of the Gualala community as single-family residential.
The Gualala Town Plan includes Gualala-specific designations aimed at creating comprehensive mixed use
planned development projects. Further, land use policies contained in the Plan support new residential
and commercial development in the Plan Area. For example, the Ocean Ridge Subdivision, located near
the eastern part of Service Zone 3, consists of 100 lots and only 40 percent of which are currently
developed. Additionally, a 480-acre “residential reserve” located east of the core community was
identified as a suitable location for future residential development. However, water conservation efforts
mandated by the California Public Utilities Commission (CPUC) since September 2014 have severely
impacted the ability to develop in the area.
Additionally, the GMAC advises the BOS on development applications and informs long-range planning
efforts to update the Coastal Element of the Mendocino County General Plan as it pertains to the Gualala
area.
2.5.2 Existing Population
Gualala is a small, unincorporated community that serves as the economic and social hub for the south
coast of Mendocino County, as well as The Sea Ranch development located across the County line in
northern Sonoma County. Gualala is a former logging town and attracts thousands of visitors each year
due to its scenic qualities and recreational opportunities. State Highway 1 (Pacific Coast Highway/PCH) is
the primary transportation and commercial corridor through the community.
Gualala is located within Mendocino County Census Tract 111.02, which includes the area that extends
from the southern end of Gualala to areas just north of Manchester and has an estimated population
of 4,305.
While the District serves a small number of commercial customers along State Highway 1, the District
consists primarily of second homes and short-term vacation rental properties. The number of wastewater
connections that the District serves (approximately 416) does not change throughout the year, but
demand for service fluctuates seasonally. It is also notable that the year-round population within the
District has increased as a result of refugees seeking relocation as a result of devastating fires throughout
the state and the COVID-19 pandemic; however, it is difficult to quantify those numbers.
The 2014 MSR estimates the 2015 population for the entire District at approximately 2,133 residents.
Current estimates from the District for Zones 1 and 2, based on the number of residential service
connections and average household size in the County, are approximately 816 residents.
2.5.3 Projected Growth
Projecting future growth within the District boundaries is a challenge since US Census data is not specific
to Gualala. Compounding this problem is that growth in the region is driven by economic activities in
Sonoma County.
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A Community Action Plan was prepared for Gualala in 2007, which includes a socio-economic study:
Economic Inputs to Gualala Community Action Plan (Gualala Community Action Plan, Appendix D). The
study estimated a future growth rate for Gualala at approximately 16 new residences per year with an
average household size of 2.25 persons per household, which equates to an average annual growth rate
of approximately eight percent.
Given that the community plans prepared for Gualala are approximately 15 years old or more, and the
changes in County growth projections and trends, the population projections are likely outdated. Current
State Department of Finance (DOF) projections predict that the population of Mendocino County will
decline by a little more than 2.7 percent in the next 10 years, from 91,601 in 2023 to 89,091 by 2033, and
89,139 by 2043 (DOF, 2023).
A significant limiting factor affecting growth rates in the area is the moratorium on new water services
imposed by the North Gualala Water Company (NGWC), which provides domestic water service to
residents of the GCSD and surrounding areas. The moratorium is in part due to the water conservation
efforts mandated by CPUC since September 2014. For their part, the NGWC imposes its Mandatory Water
Conservation Program (MWCP) when stream flows in the North Fork of the Gualala River are at or below
specific levels12. During these times, water use restrictions prohibit the use of water for construction
purposes. As of March 2024, NGWC was actively seeking funding opportunities to construct a reservoir to
lift the moratorium. However, given the increasingly recurrent drought trends, it is unlikely that any new
construction will be approved in the area because of the moratorium on new potable water connections.
Until the moratorium is lifted, population growth in the area is expected to be minimal.
Although an outside agency service, the District’s Tri-Party Agreement to treat wastewater from the (SRSZ
Northern Plant requires consideration of growth within that portion of The Sea Ranch development that
is served. The number of undeveloped lots in the SRSZ is unknown; however, the future development of
the vacant residential lots within The Sea Ranch community is also unlikely in the near future given a
current moratorium on water services provided by the Sea Ranch Water Company.
It is noted that recent changes in California Housing laws, particularly related to increased density
allowances in residential areas, could result in a slight increase in development and population within the
District in the years to come.
2.5.4 California Housing Goals
In 2017, the State of California passed SB 299 and SB 1069 to address the increasingly desperate need for
affordable housing in the State. The legislation allowed local ordinances for Accessory Dwelling Unit (ADU)
construction in districts zoned for single and multifamily residential uses. An ADU is a secondary dwelling
unit for one or more persons on the same parcel as a larger, primary dwelling. An ADU can either be
attached or detached to the primary residential structure on the property but must include complete
independent living facilities (including permanent provisions for entry, living, sleeping, eating, cooking and
sanitation, and adequate water service and sewage disposal systems).
As codified by GC §65852.150, the California Legislature found and declared that, among other things,
allowing ADUs in zones that allow single-family and multifamily uses provides additional rental housing
12 For more information on NGWC’s water conservation efforts see their website: https://ngwco.com/conservation/mandatory-
conservation/
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and is an essential component in addressing California’s housing needs. In the years since, state ADU law
has been revised to improve its effectiveness in creating more housing units.
New laws have since been passed that address barriers to their implementation at scale; for example,
setting development criteria for ADUs, streamlined permit processing, and limiting impact fees.
Implementation of state law requires updating local ordinances, estimating ADU capacity when used to
address RHNA in housing element updates, and a housing element program to incentivize and promote
ADUs that can be offered at affordable rents.
As the state continues to pass legislation to help tackle the ongoing housing crisis, the inevitable impacts
to service providers as a result of development will continue to mount. It is imperative that small districts
such as GCSD stay up to date on legislative changes.
For additional information and data on housing legislation see Appendix 7.4.
2.6 Disadvantaged Unincorporated Communities
Senate Bill 244, which became effective in January 2012, requires LAFCo to evaluate any Disadvantaged
Unincorporated Communities (DUCs), including the location and characteristics of any such communities,
when preparing an MSR that addresses agencies that provide water, wastewater, or structural fire
protection services13. A DUC is an unincorporated geographic area with 12 or more registered voters with
a median household income (MHI) that is less than 80 percent of the State MHI. According to the US
Census American Survey (ACS) 2022 1-year estimates, the statewide MHI for California was $91,551 (US
Census, 2022A). Thus, the MHI DUC threshold is $73,240 and the threshold for severely disadvantaged
unincorporated communities (SDUC) (less than 60 percent of the State MHI) is $54,930.
DUCs are identified to address a myriad of issues from environmental justice to land use planning. Linking
these disparate issues together, the sole statutory criterion for the determination of a DUC is MHI. The
smallest geographic units for which MHI data is publicly available are census block groups. Outside of
heavily urbanized areas, however, census block groups are geographically expansive. They often include
both incorporated and unincorporated territory and do not necessarily coincide with typically understood
community boundaries. Although a block group might be identified as having an MHI of less than 80
percent, various portions of that block group could be significantly wealthier in rural areas, or the block
group could split into an otherwise contiguous community.
As a result, within rural areas, such as Mendocino County, assembling income data for specific
unincorporated communities is not always straightforward. In Mendocino County, identifying and
mapping DUC locations is a complex process because the delineation of DUC boundaries often differs from
those common to the local agency and the public. Some entities, such as Sonoma County LAFCo and
Stanislaus County, utilize Census Designated Place (CDP) communities to help provide usable geographies
for DUC boundaries, but even then, mapping and data challenges persist. MHI ratios are subject to
adjustment over time and can result in a change to a community’s disadvantaged status. Similarly, the
number of registered voters can fluctuate during election years causing further variability. SB 244
describes the general characteristics of DUCs and provides the following criteria:
• Contains 10 or more dwelling units in close proximity to one another;
13 Technical advisory on SB 244 can be found here: https://opr.ca.gov/docs/SB244_Technical_Advisory.pdf
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• Is either within a city SOI, is an island within a city boundary, or is geographically isolated and has
existed for more than 50 years; and
• Has an MHI that is 80 percent or less than the statewide MHI
• This analysis is based on CALAFCO recommendations that calculated the “MHI Threshold” to be
80 percent of the statewide MHI ($73,240) (The MHI for the State of California is $91,551) (US
Census, 2022A)
• Income data was sourced from the ACS 5-year Estimates dataset for 2018-2022 and the 2022 ACS
1-Year Estimates.
This State legislation is intended to ensure that the needs of these communities are met when considering
service extensions and/or annexations in unincorporated areas.
Mendocino County has an MHI of $65,520 with a majority of the County considered DUCs, including both
the census tract and block group that the District is located within (US Census, 2022B). Because Gualala
falls within the County of Mendocino and is not a CDP, the MHI of its residents is assumed to approximate
the County median household income of $56,378. The MHI for Gualala is 71 percent of the statewide MHI
and is therefore considered to be a DUC.
It is also worth noting that the census block group that the District is located within (Block Group 3, 20
square miles) has a population of 1,866 (843 households) and a MHI of $79,596 (Census Reporter, 2022A);
and the census tract the District is located within (Census Tract 111.02, 320 square miles) has a population
of 4,827 (1,968 households) and a MHI of $83,135 (Census Reporter, 2022B). By both of these measures
the District would not be considered to be located within DUC territory.
The residents within Gualala receive adequate services with respect to fire, which is provided by South
Coast Fire Protection 14. Water services are provided by North Gualala Mutual Water Company, though it
should be noted that there are properties within the District boundaries and adjacent properties that
utilize well water. According to data sourced from the State Department of Water Resources (DWR), the
District spans two Public Land Survey Sections, M11N15W27, which is documented as having eight
domestic wells15.
Residents within the District’s Zones 3 and 4 continue to utilize onsite septic systems for their wastewater
needs. However, some of these have failed, or are failing, and ultimately it will be incumbent upon the
GCSD to provide service in these areas. Further, an unsewered area adjacent to the District has been
identified with failing septic systems as well; this area has been identified as proposed Zone 5 (See Section
3.2.4.2.3 for more information).
While the Gualala area qualifies as DUCs under this methodology, the community is currently receiving
adequate essential municipal services of fire, water, and wastewater.
14 Source is the 2018 Mendocino LAFCo Multi-District Fire Protection Services SOI found here:
https://www.mendolafco.org/files/01d2409c9/Multi-District+Fire+SOI+Update+Adopted+FINAL.pdf
15Well Completion Report Map Application data can be found here:
https://dwr.maps.arcgis.com/apps/webappviewer/index.html?id=181078580a214c0986e2da28f8623b37
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MUNICIPAL SERVICES 3-1
3 MUNICIPAL SERVICES
A Municipal Service Review (MSR) is a comprehensive analysis of the services provided by a local
government agency to evaluate the capabilities of that agency to meet the public service needs of their
current and future service area. The MSR determinations inform the Sphere of Influence (SOI) Update
process and assist the Local Agency Formation Commission (LAFCo) in considering the appropriateness of
a public service provider’s existing and future service area boundary. The information and analysis
presented in Chapters 2 and 3 of this document form the basis for the MSR determinations provided under
Section 3.3.
3.1 Service Overview
3.1.1 Services
The District provides collection, treatment, and disposal of wastewater generated by connections within
the service area and provides maintenance of related facilities and equipment. The District is divided into
four service zones: Zones 1-4.
This is the second MSR prepared for the District; the first MSR was adopted by the Commission on October
6, 2014.
3.1.1.1 SERVICE AREAS
The District’s jurisdictional boundaries are located entirely within Mendocino County; however, the
District’s wastewater treatment facilities are located on a District-owned parcel in Sonoma County. Of the
four service zones, only Service Zones 1 and 2 receive services. Located along the State Highway 1 corridor,
Service Zones 1 and 2 cover approximately one-third of the District’s territory (see Figure 1-1). Properties
within Service Zones 3 and 4, while within the District boundaries, do not currently receive services from
the District and rely on individual onsite septic systems.
The District also provides outside agency services to two areas in northern Sonoma County: a portion of
The Sea Ranch development and Gualala Point Regional Park (see Section 3.1.2 for more detail).
3.1.2 Outside Agency Services
The District is party to multiple service agreements with both public and private parties to provide outside
agency services to areas in neighboring Sonoma County.
3.1.2.1 SONOMA WATER AGENCY – SEA RANCH SANITATION ZONE, NORTHERN FACILITY
The District maintains its Tri-Party Agreement with the County of Sonoma (Sonoma Water Agency), which
owns and operates the Sea Ranch Sanitation Zone (SRSZ), and Sea Ranch Golf Links (SRGL). This 40-year
agreement was adopted in 1991 and was amended and restated in March 2016; the current rates were
negotiated in November 2023.
The Sea Ranch residential development and its golf course (SRGL) are located in the Sonoma Water
Agency’s (SWA) SRSZ, which was formed in 1972. The Sonoma County Board of Supervisors (BOS) serves
as the Board of Directors for the SWA SRSZ. While Sonoma County owns the SRSZ facilities, the Sea Ranch
Water Company operates the system. The SRSZ owns two wastewater treatment facilities: the Central
Plant located at 37875 Highway 1, and the Northern Plant located at 41775 Highway 1. Under the Tri-
Party Agreement, the District treats raw wastewater from the Northern Plant at its Wastewater Treatment
Plant (WWTP). The District then disposes of the tertiary effluent through a contract with the SRGL for
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MUNICIPAL SERVICES 3-2
irrigation purposes. The SRSZ Service Area comprises 4,600 acres in total and serves a population of 1,100
(607 single-family dwelling unit equivalents, though the exact number of parcels served in unknown).
Figure 3-1: The Sea Ranch Development
Source: The Sea Ranch website; Photo credit: Bill Oxford.
3.1.2.2 SONOMA COUNTY – GUALALA POINT REGIONAL PARK
The District also maintains an agreement with Sonoma County to service Gualala Point Regional Park. The
terms of the agreement include District collection and treatment of wastewater originating from the Park,
which is managed by the Sonoma County Parks Department. The Park is located adjacent to the District
boundary in Sonoma County, just south of the Mendocino County line and Gualala River, and north of The
Sea Ranch (See Figure 3-2). In 2016, the Gualala Point Regional Park was added to the District’s SOI in
acknowledgement of the extended services. The Park is part of the larger Sonoma County Regional Parks
system and consists of 195 acres of open meadows and coastal forest and contains a visitors’ center, picnic
tables, a campground, a 2.9-mile trail system, and Gualala Point Beach.
As part of this agreement, the District also provides pumping services via truck to six nearby facilities
owned by Sonoma County: Salal Beach, Shell Beach, Pebble Beach, Black Point Beach, Stillwater Beach,
and Stillwater campgrounds. No records exist of the original agreement; however, the District reports that
the Park has paid fees since service began in 1992.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
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D
A
O
Gualala Community B R The Sea Ranch Northern
Wastewater Treatment Plant
Services District Zones
|ÿ
Zone 1 The Sea Ranch 1
Zone 2
ROCK COD
SCREECH
OWL
Zone 3 K E Y E S AI L L E E W
Zone 4 B U C M AI N
W H A
L E A R D
R D
E
Q U IN O
HALCYON
E
Y X
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G
Gualala Community Services Gualala CSD SOI 2016 Coastal Zone Boundary
Out of District Services Area Highways
District Zones
o
Parcels Roads
Source: This map was prepared by the Mendocino County 500 250 0 500
Information Services Division, GIS Program, March 8, 2024. Feet
MUNICIPAL SERVICES 3-4
3.2 Wastewater Services
3.2.1 System History
Due to the District’s location within the environmentally sensitive Gualala River Watershed, the State
Water Resources Control Board (SWRCB) took particular interest in the District during its inception and
recommended that the WWTP be located in Sonoma County, partially as a reclamation facility for the
SRGL. The use of the GCSD’s reclaimed water to irrigate the golf course is beneficial because the Regional
Water Quality Control Board (RWQCB) regulations prohibit wastewater from being discharged directly to
a ditch, creek, or stream. Authorities felt that this recommendation would also reduce and offset
freshwater demands on the Gualala River.
Construction of the infrastructure and treatment facilities was completed in September 1992 and the
WWTP began operations on October 1, 1992. Subsequent improvements to the system’s infrastructure
are discussed in Section 3.2.3.2.
3.2.2 Service Overview
Services provided by the District include the collection, treatment, and disposal of wastewater generated
by residential and commercial connections within the service area, and maintenance of related facilities
and equipment. The District is regulated under North Coast RWQCB Order No. R1-2022-000416.
The District serves approximately 415 equivalent dwelling units (EDUs) on a total of 369 parcels within
Service Zones 1 and 2 (Table 3-1). Additionally, Sea Ranch North contributes approximately 494 EDUs. (MC
Engineering, 2022B)
Table 3-1: Summary of Equivalent Dwelling Units by Source
Source Total Calculated EDUs per agency
Gualala Community Service District 415
Sea Ranch North 494
Total EDUs 909
3.2.3 Infrastructure and Facilities
The GCSD owns 15.47 acres just south of the County line and Gualala River in Sonoma County that contains
the WWTP, a maintenance garage, an office trailer, and a lab. The District’s facilities were constructed
utilizing 10 percent local funding and a grant under the Clean Water Act (CWA) through the SWRCB.
Construction of the infrastructure and treatment facilities was completed in September 1992 and the
WWTP began operations on October 1, 1992. Wastewater is collected within the GCSD service areas and
piped to the District’s facility for treatment.
16 The District’s Waste Discharge Requirements and Master Reclamation Permit are available here:
https://img1.wsimg.com/blobby/go/dd308714-d493-42e5-84bd-
d358e0fa409d/downloads/22_0004_Gualala_CSD_WDR.pdf?ver=1713304824442
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
MUNICIPAL SERVICES 3-5
Collection System
The GCSD collection system currently
serves GCSD Service Zones 1 and 2,
which comprise roughly one-third of
the District boundary area. The
collection system consists of 34,600
feet of gravity and 27,900 feet of
pressurized mains ranging in diameter
from two to six inches, interceptor
tanks, and three lift stations. At the
terminus of the collection system a
fourth lift station, Lift Station No. 4,
pumps collected septic tank effluent
through a six-inch diameter force main
to the WWTP on the south side of the
Figure 3-3: Aerial View of GCSD's Treatment Facilities
Gualala River.
Each connection to the Gualala collection system includes a Septic Tank Effluent Pumping (STEP) process,
which consists of a septic tank to separate the solids and pre-treat the wastewater and a submersible,
low-horsepower sump pump that discharges the wastewater to the collection system. The District
currently maintains a total of 238 septic tanks and 125 control panels, including 177 residential systems
and 61 commercial systems. (MC Engineering, 2022B)
Additionally, collection infrastructure is constructed within and to the Gualala Point Regional Park, which
has received service from the District since the WWTP became operational in 1992. The District also
provides pumping services for some of the Park systems’ waste systems that are not connected to the
collection system.
The existing collection system and facilities are shown in Figure 3-5 and Figure 3-4.
Wastewater Treatment Facility
The District’s wastewater treatment system is designed as an extended aeration activated sludge plant.
The facility includes two aerated ponds and two clarifiers for secondary treatment, a travelling bridge and
fine screen filter for tertiary treatment, and a chlorine contact chamber for disinfection (See Figure 3-5).
The GCSD WWTP includes four effluent storage ponds with a combined capacity of 28.4 million gallons
(mg). Three of the ponds, totaling 20 mg of capacity, are located adjacent to the Gualala WWTP and were
designed with subdrain systems that can be monitored to determine if there is leakage from the ponds.
The fourth pond, with a capacity of 8.4 mg, is located at the Sea Ranch Northern Plant site.
Recycled water from all four effluent storage ponds is delivered to the SRGL, an 80-acre golf course,
through an eight-inch diameter pipeline for irrigation of turf grass within the fairways, tee boxes, and
greens.
The GCSD also owns several pieces of construction equipment used for trenching, driveway maintenance,
drying bed cleaning, and work around the facility. GCSD staff reports the backhoe is in excellent condition
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MUNICIPAL SERVICES 3-6
and is 11 years old; the trencher is also in excellent condition and was purchased new in 2006. The
Catepillar Inc. equipment is in very good condition and is 35 years old. A recently acquired roller is in good
condition and is several years old (exact age unknown).
Figure 3-4: GCSD Gravity and Pressurized Sewer Mains
Source: MC Engineering, 2022B
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
POINT
ARENA
GUALALA
SANTA
ROSA
BODEGA
BAY
Figure 1.3 -1 Project Location Map
MUNICIPAL SERVICES 3-8
3.2.3.1 SEA RANCH SANITATION ZONE
The SRSZ is owned by the SWA (a division of Sonoma County) and operated by the Sea Ranch Water
Company. The SRSZ system consists of collection lines, a Central Plant, a Northern Plant, and several
storage ponds. The SRSZ currently serves 612 equivalent single-family dwellings within a 4,600-acre
service area.
Wastewater service in the southern portion of SRSZ is either by private on-site septic systems or septic
systems that utilize a common area that is managed by The Sea Ranch Association. Sea Ranch Water
Company staff monitor the roughly two-thirds of Sea Ranch homes that use individual septic systems. The
remaining homes use one of two sanitary sewer collection and treatment systems.
The Central Plant collection system includes a total of 1.9 miles of sewer lines, for which Sonoma Water
Agency is responsible: 1.3 miles of gravity sewer mains, 0.3 miles of force mains and one pump station,
and 0.3 miles of service laterals. Effluent is treated in the Central Plant WWTP.
The Sea Ranch North (SRN) Collection System collects sewage from the northern portion of The Sea Ranch
development and includes 11 miles of four to twelve-inch PVC and asbestos cement gravity sewer and
force mains. The majority of the pipeline is gravity. Flows from the SRN are conveyed by four dedicated
lift stations to the County Service Area (CSA6) primary pond where the liquids are subsequently pumped
through the SRN Plant to GCSD for secondary and tertiary treatment before it is returned for disbursement
on the Sea Ranch Links golf course. Since 2014, the SRSZ's Northern Plant acts as a pumping station to
transfer raw effluent collected within The Sea Ranch to the GCSD WWTP for treatment, disinfection,
storage, and subsequent reclamation at the SRGL (MC Engineering, 2022B).
3.2.3.2 SYSTEM IMPROVEMENTS
The District takes measures to ensure the integrity of the wastewater collection system, including regular
inspections of the system (visual and video) and adding cleanouts in the gravity lines for camera access.
The District reported that the WWTP and collection system are generally in good condition. However, as
identified in the 2023 Rate Study, the system is aging and system-wide deterioration has been analyzed
to identify infrastructure for replacement and/or upgrading.
The District recently experienced a failing filter, which was ultimately replaced, allowing the District to
recondition the failed filter at a low cost. A second clarifier was added in 2017, making the major
components of the treatment plant fully redundant. This substantially reduces risk in case of a major
equipment failure. Additionally, in 2022 the District replaced the control panel at Lift Station #2 as a result
of weather damage.
The 2023 Rate Study included recommended capital improvements, which were compiled based on
current significant and necessary replacements and upgrades and based on age, deterioration, and new
Water Discharge Requirements (WDR). Identified projects totaling $10.7 million (Table 3-2) were
submitted as part of a grant application to the SWRCB State Revolving Fund (SRF) program, which is still
currently under review as of the publication of this report.
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MUNICIPAL SERVICES 3-9
Table 3-2: Recommended Capital Improvements
Total Cost
(With Soft Costs
Component Component Description and Contingency)
Short-Term Title 22 Aeration
and Sludge Storage Improvements $117,359
Aeration Basin
Secondary Sedimentation RAS Pump Station w/Handrails $235,303
Metering w/Turbidimeter and
Tertiary Filtration $132,193
Programming
$62,339
Disinfection Metering
$518,104
Tertiary Storage/Reclamation Pond 1 Liner
$710,444
Sludge Storage Basin New Sludge Storage Basin
Sludge Dewatering Facilities Drying Beds (Bags) and Landfill Hauling
$1,001,499
(Drying Beds)
$712,726
Septage Receiving Facility Septage Receiving
Operations Building, Upgrade/Replace Siding on I Control
Administration, Vehicle and Building (1,800 sf) $1,963,302
Equipment Storage, and (N) Admin Building
(N) Vehicle/Equipment Storage
Chemical Storage Room
(N) Chemical Storage Room
Potable at WWTP with Use of Existing
$52,599
Potable Water
5,000 Gallon Tank
$336,186
Fire Protection Facilities Emergency Fire-Flow at Plant
$538,427
Access Road Road Improvements, Only
Emergency Access for Pipeline 1065 LF Cleaning and Grubbing I(E) FM
$89,752
Repairs
GCSD STEP Systems (Interceptor
Rehabilitation of (E) STEPS $2,180,202
Tanks)
$1,958,138
GCSD Lift Stations LS 1-4 Improvements
Sea Ranch North Collection System Aeration/Pond/Pump Improvements
$105,309
and CSA 6 Facility
$10,713,882
Total Cost for Existing Facility Improvements
Source: 2023 Rate Study prepared by MC Engineering, Inc.
3.2.3.3 ENGINEERING REPORTS
In 2022, MC Engineering prepared the SWRCB Grant Funded Wastewater Project Engineering Report for
the District with grant funds from the Clean Water State Revolving Fund (CWSRF). The planning study
addressed deficiencies and impending issues with the District’s wastewater collection system, WWTP, and
the associated service area by recommending future capital improvement projects and related funding
sources and responsibilities. The study also identified unsewered areas both within and outside the GCSD
boundaries for potential inclusion in the District’s service area (MC Engineering, 2022A).
3.2.4 Service Adequacy
Based on information provided by the District regarding facilities, management practice and
accountability, and financing, GCSD’s services appear to be limited but adequate for its current customers
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MUNICIPAL SERVICES 3-10
and agreements. However, a number of infrastructure improvements have been identified that will be
necessary in order to accommodate future growth.
Although very little growth is likely to occur within the District within the planning horizon of this study,
the identified infrastructure improvements and capacity will be needed to serve the potential buildout of
the District’s service area or for the District to serve its Service Zones 3 and 4. The limitations would apply
to remaining undeveloped residential lots in the Sea Ranch development as well, as it pertains to the Tri-
Party Agreement. Though the newly adopted service rates for both District customers and under the
Agreement include escalating increases over the next five years, the increased revenue is expected to just
barely cover rising expenditures, leaving the District to find additional revenue or grants to fund the
identified infrastructure upgrades, particularly if not awarded the SRF grant (Table 3-2).
The cost of the recommended infrastructure improvements is beyond the District’s current finances,
which will necessitate successful grant awards to support those projects. However, the District has
recently applied to the SWRCB Disadvantaged Community (DAC) program for $10.7 million to upgrade the
WWTP and existing infrastructure to increase capacity to meet anticipated needs. The District was able to
complete an engineering study under a planning grant from the SWRCB that supports their current grant
application.
3.2.4.1 REGULATORY PERMITS AND COMPLIANCE HISTORY
The District operates under RWQCB Order No. 91-2022-0004 (pursuant to Waste Discharge Requirements
Order No. 92-120, adopted on September 24, 1992). As required by the permit, the General Manager
prepares monthly and annual reports for the RWQCB. A regulatory history of the District can be found
below in Table 3-3.
Table 3-3: SWRCB – GCSD Regulatory Measures
Reg Measure ID Reg Measure Type Program Order No. Effective Date Expiration Date Status Amended?
409176 WDR WDRMUNIOTH R1-2022-0004 04/07/2022 04/07/2032 Active N
261039 Letter WDR 051203 05/12/2003 Historical N
137948 WDR WDRMUNIOTH 92-120 09/24/1992 09/22/2014 Historical N
137888 WDR WDRMUNIOTH 89-030 04/26/1989 04/26/1994 Historical N
Source: North Coast Regional Water Quality Control Board
The District submitted incomplete Reports of Waste Discharge (ROWD) and Title 22 Recycled Water
Engineering Reports in 2016, 2017, 2019, and 2020. These submittals were modified in response to
Regional Water Board comments and State Water Board Division of Drinking Water (DDW) staff
comments. On May 11, 2021, the District submitted a written response titled GCSD Response to SWRCB
DDW review of May 2020 Resubmittal of Title 22 Technical Report for DDW review. On July 7, 2021, DDW
provided a letter conditionally accepting the May 2020 Title 22 Recycled Water Engineering Report with
the update provided by the District’s response. Additionally, on November 23, 2021, the District submitted
a revised Engineering Report titled Production, Distribution, and Use of Recycled Water – November 2021
Resubmittal (Title 22 Engineering Report), which updated the November 2021 Title 22 Engineering Report
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MUNICIPAL SERVICES 3-11
to include the results of a tracer study conducted by the District on its chlorine disinfection system. The
DDW issued acceptance of the report in April 202217.
The GCSD and Sea Ranch North collection systems, including the temporary storage of wastewater at the
Sea Ranch North effluent pond, are enrolled separately under SWRCB Order No. 20060003-DWQ,
Statewide Waste Discharge Requirements for Sanitary Sewer Systems.
3.2.4.1.1 Sanitary Sewer Spills
A sanitary sewer spill is a discharge of sewage from any portion of a sanitary sewer system due to a sewage
overflow, operational failure, and/or infrastructure failure. The SWRCB’s Sanitary Sewer Spill Incident Map
shows spill reports for individual locations where sewage was discharged from a sanitary sewer system
enrolled under the Statewide General Waste Discharge Requirements for Sanitary Sewer Systems Order,
Water Quality Order (WQO) No. 2022-0103-DWQ (the Statewide Sanitary Sewer Systems Order).
When searching the SWRCB’s sanitary sewer overflow (SSO) incident data for GCSD, only one spill incident
was identified for the District, which was listed as a Category 1 Spill Events18.
Category 1 Spill Events are defined as a spill of sewage from or caused by a sanitary sewer system
regulated under the General Order that results in a discharge to:
o A surface water, including a surface water body that contains no flow or volume of water; or
o A drainage conveyance system that discharges to surface waters when the sewage is not fully
captured and returned to the sanitary sewer system or disposed of properly.
Any spill volume not recovered from a drainage conveyance system is considered a discharge to surface
water unless the drainage conveyance system discharges to a dedicated stormwater infiltration basin or
facility.
On May 11, 2008, as a result of a pipe structural failure, a total of 33,264 gallons of effluent spilled; 9,000
was recovered by GCSD. Three additional SSOs took place in 2005 and 2008, which led to enforcement
actions from the RWQCB. The RWQCB levied fines on the District, which were paid. Additionally, peak
flow capacity was exceeded in February 2009 and January 2010 at 0.1324 million gallons per day (mgd)
and 0.1726 mgd, respectively. There have been no additional spills or violations noted in the online
reporting system since 2008.
3.2.4.2 CAPACITY
The District takes measures to ensure the integrity of the wastewater collection system, including regular
inspections of the system (visual and video) and adding clean outs in the gravity lines for camera access.
The District reported that the WWTP and collection system are generally in good condition.
The WWTP has a design capacity of 131,000 gallons per day (gpd). The current daily average of 77,500
gpd represents 59 percent of the design capacity; therefore, it can be determined that the District has
capacity to handle some limited growth.
17 Summary provided by the SWRCB in the GCSD Waste Discharge Requirements and Master Reclamation Permit.
18 Data for Spill Events can be found here: https://www.waterboards.ca.gov/water_issues/programs/sso/
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MUNICIPAL SERVICES 3-12
The WWTP annually treats approximately 28.25 million gallons (mg), which is based on actual flows from
2023. The District’s four effluent storage ponds have a combined capacity of 28.4 mg. A 2016 ROWD
prepared by the District in compliance with the North Coast RWQCB permit identified that the storage
pond capacity for recycled water is inadequate during periods of above-average precipitation. At the time,
the District stated that they were concerned that the cost of constructing additional recycled water
storage to address extreme wet weather conditions was not an effective use of its limited financial
resources.
Should the SRSZ treatment facilities be upgraded as needed and full wastewater services be assumed by
the SWA (see Section 2.3.5.2), the GCSD would have additional capacity to serve areas in GCSD Service
Zones 3 and 4, as well as Proposed Zone 5 (see below).
3.2.4.2.1 Sea Ranch Sanitation Zone
The SWA-owned SRSZ consists of two treatment facilities; however, only the Northern Plant sends its
flows to the GCSD for treatment. Since 2014, the Northern Plant has operated as a pumping station to
move untreated effluent to the GCSD WWTP for treatment. The Northern Plant, which began operation
in 1972, is no longer permitted as a WWTP. The SWA’s discharge permit was rescinded by the SWRCB in
2022 when the GCSD’s WDR was issued; the Northern Plant is now classified as part of the SWA collection
system.
Currently, the SRSZ Northern Plant pumps a daily average of 47,039 gpd to the GCSD WWTP, which
accounts for approximately 60 percent of the overall effluent flowing through the GCSD facility.
3.2.4.2.2 Gualala Point Regional Park
In addition to a collection system, the District provides pumping services to the Gualala Point Regional
Park. In 2015, the District purchased a new truck to service the Park. No other updates regarding this
service were provided.
3.2.4.2.3 Future Service Areas
3.2.4.2.3.1 Service Zones 3 and 4
Service Zones 3 and 4 are located within the District’s current boundaries. However, except for isolated
collection system extensions to address failing septic systems, the District does not have the infrastructure
or capacity to serve these zones comprehensively. In 2003, the District commissioned a Sewer Feasibility
Study, which outlined various options and costs for extending and expanding District facilities to provide
sewer service to these zones. Any service extended to these areas would require large infrastructure
installations, increased capacity at the WWTP, Coastal Commission permits, and extensive environmental
review.
The District would likely need a new assessment to fund an extension of services to the entirety of Zones
3 and 4, which would require a resident majority to pass. Extending full service to either zones would
necessitate significant financial investment from the District and residents in this area, which is not
presently feasible.
Notably, the 2018 planning grant awarded to the District was originally intended to cover the cost of an
updated feasibility study to assess expanding service to Zones 3 and 4. However, during the study
development, it became apparent the WWTP would need to be upgraded to accommodate the additional
flow that would be created by Service Zones 3 and 4. Further, the current collection system in Service
Zones 1 and 2 needed rehabilitation before an expansion of the system could take place. It is noted that
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MUNICIPAL SERVICES 3-13
the projected effluent flows for Service Zones 3, 4, and proposed Zone 5 are estimated to be 50,000 to
75,000 gpd.
Due to costs of engineering and installation of infrastructure, and residents’ preference, the District has
no immediate plans to expand their facilities beyond their current service areas.
3.2.4.2.3.2 Proposed Zone 5
Also identified in the SWRCB Grant Funded Wastewater Planning Project Engineering Report (MC
Engineering 2022B) was an area north of the District boundary that has reported septic system failures.
The area, identified as Proposed Zone 5, is located along Old Stage Road and Ocean Ridge Drive. The need
for future service within this area is critical to addressing possible groundwater and surface water
pollution by replacing the current septic tanks with interceptor tanks for collection and transmission to
the WWTP. Existing septic systems have a variety of inherent deficiencies as a result of, and/or a
combination of, high groundwater, steep slopes, tree roots, settlement around septic tanks, improper
construction techniques, and other miscellaneous issues. Providing sewer service to the expansion area
will require additional force mains, gravity sewer mains, and lift stations, including new infrastructure and
appurtenances from the street mains to the homes (MC Engineering, 2022B).
3.2.4.3 NEEDS AND DEFICIENCIES
The District’s 2023 Rate Study identified that the condition of the existing infrastructure facilities required
immediate attention, due to both age and system-wide deterioration and condition. More specifically, the
General Manager noted that some collection system components were exposed to the elements within
Service Zones 1 and 2 and are beyond their useful life or are corroded due to the above-average moisture
in the air (i.e., components include the lift station pump control panels, lift station discharge piping, relief
valves, check valves, and gate vales).
The SWRCB DAC grant application for $10.7 million submitted by the District covers many of the
infrastructure needs identified in Table 3-2.
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MUNICIPAL SERVICES 3-14
3.3 Determinations
This section presents the required MSR determinations pursuant to California Government Code (GC)
Section (§) 56430(a) for the GCSD
3.3.1 MSR Review Factors
3.3.1.1 GROWTH
Growth and population projections for the affected area
1. The estimated number of residents served within Zones 1 and 2 is approximately 816, based on the
number of residential connections and average household size in the County.
2. The population growth within Mendocino County was an average of 1.1 percent annually between
2000 and 2010. The current growth trends for the County are at a slightly negative rate.
3. The District anticipates limited population growth in the future within Zones 1 and 2, primarily due to
a moratorium on new potable water connections from the North Gualala Water Company (NGWC)
which constrains new development.
4. A significant increase in system capacity to collect and treat wastewater would be required to expand
service provision into Zones 3 and 4. However, GCSD has completed a feasibility study that analyzes
and provides options for future expansion of service to Zones 3 and 4 and is actively pursuing grant
funding to implement the identified capital improvements.
3.3.1.2 DISADVANTAGED UNINCORPORATED COMMUNITIES
The location and characteristics of any disadvantaged unincorporated communities within or contiguous
to the sphere of influence
5. The District serves the unincorporated community of Gualala. Because Gualala is not a Census
Designated Place (CDP), the Median Household Income (MHI) of its residents is assumed to
approximate the County MHI of $56,378. The MHI for Gualala is less than 80 percent (71 percent) of
the statewide MHI of $78,672 and is therefore categorized as a Disadvantaged Unincorporated
Community (DUC). The residents of Gualala are receiving adequate essential municipal services of fire,
water, and wastewater for the area. While these areas currently do not lack public services they would
benefit from upgraded systems.
3.3.1.3 CAPACITY OF FACILITIES AND ADEQUACY OF SERVICES
Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or
deficiencies including needs or deficiencies related to sewers, municipal and industrial water, and
structural fire protection in any disadvantaged unincorporated communities within or contiguous to the
sphere of influence
6. The GCSD was established in 1986 to provide collection and treatment of wastewater.
7. Mendocino County Board of Supervisor Resolution 86-175 also indicates the District can provide
storm water services; however, it is unclear whether the District has ever provided this service and it
has never been activated through LAFCo.
8. The GCSD is divided into four service zones (Zones 1, 2, 3, and 4) within its boundaries; only Service
Zones 1 and 2 receive wastewater services.
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9. Zones 1 and 2 consist of 353 parcels along the State Highway 1 corridor, each of which has its own
interceptor tank. All new development within Service Zones 1 and 2 is required to connect to the
wastewater treatment system.
10. Expansion of wastewater collection, treatment, and disposal service into Zones 3 and 4 would require
significant infrastructure upgrades to the system capacity, in addition to new collection infrastructure.
These upgrades have been studied in detail by the District in their 2003 Sewer Feasibility Study. No
expansion is planned at this time.
11. Upon recommendation of the RWQCB, the GCSD WWTP was constructed on District-owned property
located outside the District’s boundaries, south of the Gualala River in Sonoma County.
12. The GCSD WWTP has a design capacity of 131,000 gpd. The current daily average of 77,500 gpd
represents 59 percent of the original design capacity. The District has sufficient capacity to serve
existing connections, including the outside agency service agreements for the Gualala Point Regional
Park and the SRSZ North Plant.
13. The outside agency services Tri-Party Agreement with SWA and SRGL has been in place since 1991. In
November 2023, the Sonoma County Supervisors approved a negotiated new rate of $13.28 per 1,000
gallons (a 56 percent increase) that went into effect beginning January 1, 2024. The District is also in
negotiations with SRGL to increase rates for tertiary treatment of wastewater for use of reclaimed
water on the golf course.
14. The existing outside agency service agreement with Sonoma County to serve the Gualala Point
Regional Park has been in place since 1992 and remains current.
15. The 2023 Rate Study identified numerous improvements to the collection system and WWTP
necessary to maintain adequate service. The District is actively seeking grant funding to address its
capital improvement needs.
16. Should the SRSZ assume full-service provision internally, the GCSD WWTP may have increased
capacity to provide services to other areas (i.e., Service Zones 3, 4, and proposed Zone 5).
17. No boundary changes are pending or proposed at this time.
3.3.1.4 FINANCIAL ABILITY OF AGENCY
Financial ability of agencies to provide services
15. The GCSD is funded primarily through service charges and sewer fees.
16. The implementation of the 28 percent rate increase scheduled over the next 5 years will support the
District’s financial stability.
17. The District’s Sewer System Management Plan (SSMP) describes their approach to addressing long-
term capital improvement needs. New development proposals will need to fund required
improvements to the system’s capacity.
18. Residents in Zones 3 and 4 have reported failing septic systems and expansion of service into those
areas has been extensively studied by GSCD. Paying for the upgrades in infrastructure that would be
needed to achieve this expansion is a concern to the District and residents. Potential sources of
funding have been identified, including property assessments, bonds, and grants. However, a detailed
financing plan has not yet been completed, partly due to preferences by local property owners to
retain their existing septic systems.
19. Rates should continue to be reviewed and adjusted as necessary to fund District costs and provide for
capital improvements as needed.
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3.3.1.5 SHARED SERVICES AND FACILITIES
Status of, and opportunities for, shared facilities
20. The GCSD does not presently practice wastewater facility sharing; however, it maintains a Tri-Party
Agreement with SWA’s SRSZ to provide treatment of wastewater from the SRSZ North Plant and to
dispose of treated wastewater at the SRGL.
21. The District has provided outside agency services to Gualala Point Regional Park since 1992 as part of
a service agreement with Sonoma County.
22. The District has a contract with Mendocino County Water Works District No. 2 (MCWD2) to provide
management, operations, administrative support, and a shared office space to MCWD2.
23. Based on the current contractual arrangement between GCSD and MCWD2 to provide essential
services to MCWD2, the District could consider expanding the services offered to MCWD2 where
possible and potentially explore consolidation options.
24. The District holds its board meetings in the Coast Life Support District offices.
25. No other opportunities for shared facilities have been identified at this time.
3.3.1.6 ACCOUNTABILITY, STRUCTURE AND OPERATIONAL EFFICIENCIES
Accountability for community service needs, including governmental structure and operational
efficiencies
26. GCSD demonstrated accountability through its prompt disclosure of information requested by LAFCo
for preparation of this MSR.
27. Board meetings are publicly noticed and appear to comply with the Brown Act. Meetings are held on
the fourth Thursday of each month.
28. The District maintains a website with recent meeting agendas and information; however, some
compliance components appear to be missing. It is recommended that the District continue to
develop their website to achieve compliance with Senate Bill (SB) 929. A website compliance handout
is included in Appendix C.
29. The District practices cost reduction through careful purchasing and bidding processes that are guided
by policies adopted by the District Board.
30. In the short-term, no additional cost avoidance opportunities have been identified.
31. According to audits provided by the District, the GCSD follows standard accounting procedures.
32. Board Members have access to GCSD data, records, and information.
33. The District does not currently have a strategic plan that outlines its mission statement, vision
statement, and goals and objectives. Developing a strategic plan could help the District improve upon
planning efforts, accountability, and transparency.
34. The GCSD does not currently participate in the Gualala Watershed Council, participation could be
beneficial in increasing District outreach with its residents and collaboration within the community
through this network of community leaders. Participation in the Watershed Council could also give
the District advance notice on upcoming grant opportunities, potentially leveraging watershed and
community projects to also support infrastructure and service improvements, and other opportunities
for community collaborations.
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4 SPHERE OF INFLUENCE
The Local Agency Formation Commission (LAFCo) prepares a Municipal Service Review (MSR) prior to or
in conjunction with the Sphere of Influence (SOI) Update process. An SOI Update considers whether a
change to the SOI, or probable future boundary, of a local government agency is warranted to plan the
logical and orderly development of that agency in a manner that supports the Cortese-Knox-Hertzberg
(CKH) Law and the Policies of the Commission. The MSR and required determinations are presented in
Chapters 2 and 3 of this document and form the basis of information and analysis for this SOI Update. This
chapter presents the SOI Update and required determinations pursuant to Government Code (GC) Section
(§) 56425(e).
4.1 Mendocino LAFCo Policies
In addition to making the necessary determinations for establishing or modifying a SOI consistent with
the CKH Act, the appropriateness of an agency’s SOI is also based on an evaluation of consistency with
local LAFCo policies.
The following Sphere of Influence policies are from the Mendocino LAFCo Policies and Procedures Manual,
adopted November 5, 2018.
10.1.1 Legislative Authority and Intent
A sphere of influence is the probable 20-year growth boundary for a jurisdiction’s physical development.
The Commission shall use spheres of influence to:
a) promote orderly growth and development within and adjacent to communities;
b) promote cooperative planning efforts among cities, the County, and special districts to address
concerns regarding land use and development standards, premature conversion of agriculture and
open space lands, and efficient provision of public services;
c) guide future local government reorganization that encourages efficiency, economy, and orderly
changes in local government; and
d) assist property owners in anticipating the availability of public services in planning for the use of their
property.
10.1.2 Definitions
The Commission incorporates the following definitions:
a) an “establishment” refers to the initial development and determination of a sphere of influence by
the Commission;
b) an “amendment” refers to a limited change to an established sphere of influence typically initiated by
a landowner, resident, or agency; and
c) an “update” refers to a comprehensive change to an established sphere of influence typically initiated
by the Commission.
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10.1.3 Sphere Updates
In updating spheres of influence, the Commission’s general policies are as follows:
a) The Commission will review all spheres of influences every five years for each governmental agency
providing municipal services. Municipal services include water, wastewater, police, and fire protection
services.
b) Sphere of influence changes initiated by any agency providing a municipal service shall generally
require either an updated or new service review unless LAFCo determines that a prior service review
is adequate.
c) Spheres of influence of districts not providing municipal services including, but not limited to,
ambulance, recreation, hospital, resource conservation, cemetery, and pest control shall be updated
as necessary.
10.1.4 Reduced Spheres
The Commission shall endeavor to maintain and expand, as needed, spheres of influence to accommodate
planned and orderly urban development. The Commission shall, however, consider removal of land from
an agency’s sphere of influence if either of the following two conditions apply:
a) the land is outside the affected agency’s jurisdictional boundary but has been within the sphere of
influence for 10 or more years; or
b) the land is inside the affected agency’s jurisdictional boundary but is not expected to be developed
for urban uses or require urban-type services within the next 10 years.
10.1.5 Zero Spheres
LAFCo may adopt a “zero” sphere of influence encompassing no territory for an agency. This occurs if
LAFCo determines that the public service functions of the agency are either nonexistent, no longer
needed, or should be reallocated to some other agency (e.g., mergers, consolidations). The local agency
which has been assigned a zero sphere should ultimately be dissolved.
10.1.6 Service Specific Spheres
If territory within the proposed sphere boundary of a local agency does not need all of the services of the
agency, a “service specific” sphere of influence may be designated.
10.1.7 Agriculture and Open Space Lands
Territory not in need of urban services, including open space, agriculture, recreational, rural lands, or
residential rural areas shall not be assigned to an agency’s sphere of influence unless the area’s exclusion
would impede the planned, orderly, and efficient development of the area. In addition, LAFCo may adopt
a sphere of influence that excludes territory currently within that agency’s boundaries. This may occur
when LAFCo determines that the territory consists of agricultural lands, open space lands, or agricultural
preserves whose preservation would be jeopardized by inclusion within an agency’s sphere. Exclusion of
these areas from an agency’s sphere of influence indicates that detachment is appropriate.
10.1.8 Annexations Are Not Mandatory
Before territory can be annexed to a city or district, it must be within the agency’s sphere of influence (GC
§56375.5). However, territory within an agency’s sphere will not necessarily be annexed. A sphere is only
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one of several factors that are considered by LAFCo when evaluating changes of organization or
reorganization.
10.1.9 Islands or Corridors
Sphere of influence boundaries shall not create islands or corridors unless it can be demonstrated that
the irregular boundaries represent the most logical and orderly service area of an agency.
10.1.10 Overlapping Spheres
LAFCo encourages the reduction of overlapping spheres of influence to avoid unnecessary and inefficient
duplication of services or facilities. In deciding which of two or more equally capable agencies shall include
an area within its sphere of influence, LAFCo shall consider the agencies’ service and financial capabilities,
social and economic interdependencies, topographic factors, and the effect that eventual service
extension will have on adjacent agencies. Where an area could be assigned to the sphere of influence of
more than one agency, the following hierarchy typically applies:
a) Inclusion within a city’s sphere
b) Inclusion within a multi-purpose district’s sphere
c) Inclusion within a single-purpose district’s sphere
Territory placed within a city’s sphere indicates that the city is the most logical provider of urban services.
LAFCo encourages annexation of developing territory (i.e., area not currently receiving services) that is
currently within a city’s sphere to that city rather than to one or more single-purpose special districts.
LAFCo discourages the formation of special districts within a city’s sphere. To promote efficient and
coordinated planning among the county’s various agencies, districts that provide the same type of service
shall not have overlapping spheres.
10.1.11 Memorandum of Agreements (For City Sphere Amendments and Updates)
Prior to submitting an application to LAFCo for a new city sphere of influence or a city sphere of influence
update, the city shall meet with the County to discuss the proposed new boundaries of the sphere and
explore methods to reach agreement on development standards and planning and zoning requirements
as contained in GC §56425. If an agreement is reached between the city and County the agreement shall
be forwarded to LAFCo. The Commission shall consider and adopt a sphere of influence for the city
consistent with the policies adopted by LAFCo and the County, and LAFCo shall give great weight to the
agreement to the extent that it is consistent with LAFCo policies in its final determination of the city
sphere.
10.1.12 Areas of Interest
LAFCo may, at its discretion, designate a geographic area beyond the sphere of influence as an Area of
Interest to any local agency.
a) An Area of Interest is a geographic area beyond the sphere of influence in which land use decisions or
other governmental actions of one local agency (the "Acting Agency") impact directly or indirectly
upon another local agency (the "Interested Agency"). For example, approval of a housing project
developed to urban densities on septic tanks outside the city limits of a city and its sphere of influence
may result in the city being forced subsequently to extend sewer services to the area to deal with
septic failures and improve city roads that provide access to the development. The city in such a
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situation would be the Interested Agency with appropriate reason to request special consideration
from the Acting Agency in considering projects adjacent to the city.
b) When LAFCo receives notice of a proposal from another agency relating to the Area of Concern, LAFCo
will notify the Interested Agency and will consider its comments.
c) LAFCo will encourage Acting and Interested Agencies to establish Joint Powers Agreements or other
commitments as appropriate.
4.2 Existing Sphere of Influence
The GCSD’s SOI was originally established in 1986 as part of the District’s formation and was last updated
by LAFCo in 2016. In 2016, the SOI was expanded to include the Gualala Point Regional Park, which is
located in Sonoma County and has been served by the GCSD since 1992.
4.2.1 Study Areas
Study areas are unique to a specific agency and are used to define the extent of one or more locations for
SOI analysis purposes. Study areas may be created at different levels of scope and/or specificity based on
the circumstances involved. The following descriptions demonstrate the array of scenarios that may be
captured by a SOI study area.
• An area with clear geographic boundaries and scope of service needs based on years of interagency
collaboration or public engagement and a project ready for grant funding or implementation.
• An area involving broader community regions or existing residential subdivisions with a large or long-
term vision in need of fostering and/or establishing interagency partnerships.
• An area in early stages of conception that is not currently geographically well-defined and generally
involves one or more ideas identified by agency or community leaders needing further definition.
• An area geographically defined by a gap between the boundaries of existing public service providers.
• An area adjacent to an existing agency’s boundary slated for development needing urban services.
Study areas can result in a proposed SOI or sphere expansion area or the designation of an Area of Interest
to earmark areas for enhanced interagency coordination or for future SOI consideration.
4.2.1.1 MENDOCINO COUNTY WATERWORKS DISTRICT NO. 2 – ANCHOR BAY
The District has been party to a contract with the Mendocino County Waterworks District No. 2 (MCWD2)
since early 2023 to provide management, operations, and administration of that agency’s wastewater
facilities and services. The MCWD2 provides wastewater treatment services to approximately 80
customers, some of whom have multiple connections. Their service area includes the unincorporated
community of Anchor Bay with approximately 68 residences, the Anchor Bay Campground, and a small
commercial area straddling State Highway 1. There are several customers who own more than one
Equivalent Dwelling Unit (EDU); therefore, the total number of treatment connections is closer to 100.
The MCWD2 Board President has stated that the contract with GCSD has enabled the District to address
long-deferred infrastructure and management issues that would have otherwise threatened the District’s
ability to provide adequate wastewater services. The potential for consolidation of the agencies has been
broached by staff and individual members of the boards; however, no formal discussions have taken place
yet.
District staff state that the WWTP has sufficient capacity to serve the MCWD2 customers should
consolidation or regionalization be pursued.
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4.2.1.2 UNSEWERED AREAS AND PROPOSED ZONE 5
Unsewered areas within GCSD Zones 3 and 4, as well as outside boundary areas located along Old State
Road and Ocean Ridge Drive have been experiencing septic system failures. These areas were identified
in the 2022 SWRCB Grant Funded Wastewater Planning Project Engineering Report prepared by MC
Engineering as proposed Zone 5. The need for future service of unsewered development in Zones 3, 4, &
5 is critical to remove the possibility of groundwater and surface water pollution by upgrading/replacing
the current septic tanks into interceptor tanks. This would facilitate the treatment and disposal of the
unsewered portions of the community which is experiencing health risk and water pollution problems due
to the failures of on-site septic systems (MC Engineering, 2022B) (See Figure 4-1).
The District is pursuing grant funding to implement WWTP and collection system improvements that will
increase capacity sufficient to serve these unsewered areas. The Engineering Report identified specific
infrastructure needs and preliminary mapping of the proposed Zone 5 and unsewered areas of Zones 3
and 4 (Figure 4-1).
4.2.1.3 THE SEA RANCH
The Sea Ranch is a planned community consisting of approximately 2,200 homes and undeveloped lots
governed by a homeowners association (HOA) and a board of directors. The Sea Ranch located in Sonoma
County and within County Service Area 6, which is operated by Sonoma Water Agency (a division of
Sonoma County), for sewer services. GCSD has been party to the Tri-Party Agreement between Sonoma
County and the Sea Ranch Sanitation Zone since 1991, with amendments in 2016 and rate adjustments in
2023. The Sea Ranch Association operates two wastewater collection and treatment facilities, one of
which (the Northern Plant) acts as a pumping station to send collected raw wastewater to the GCSD
WWTP for treatment. The GCSD sells its tertiary treated water to The Sea Ranch Golf Links for irrigation
purposes. See Section 3.2.3.1 for more information.
As such, the District has substantial economic and service ties with the master planned community known
as the Sea Ranch. Although the community is located south of the District in Sonoma County, it is directly
adjacent to the GCSD.
It is noted that the Sea Ranch Association (SRA) is currently in discussions with the SWA, which oversees
SRSZ, regarding upgrading the two treatment facilities located within The Sea Ranch to SWA and
transferring services to SWA. Should this occur, it would likely negate the relationship with GCSD and free
up capacity in the District’s WWTP.
4.2.1.4 RECREATION SERVICES
There has been expressed interest (particularly through the GMAC) in the creation of a special district in
the south coast area (including Gualala, Anchor Bay and north to Manchester) focused on the provision
of recreation services for the region. Rather than creation of a new district, it is often a more logical and
efficient route to consider expanding service powers of existing special districts. The CSD principal act
allows for provision of recreation services upon activation of that latent power should the District and
south coast community wish to pursue recreation services. There have been no formal proposals at this
time.
4.2.2 Area of Interest Designation
LAFCo’s Area of Interest Policy, per Section 10.1.12, provides for the designation or identification of
unincorporated areas located near to, but outside the jurisdictional boundary and established SOI of a city
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or district, in which land use decisions or other governmental actions of another local agency directly or
indirectly impact the subject local agency.
An Area of Interest (AOI) designation serves as a compromise approach that recognizes situations
involving challenging boundary or municipal service delivery considerations, or for which urbanization
may be anticipated in the intermediate or long-range planning horizons. It is a tool intended to enhance
communication and coordination between local agencies.
An AOI designation is most helpful when the County and city or district can reach agreement that
development plans within a LAFCo-designated AOI will be treated the same as if these areas were within
the city or district SOI boundary, particularly regarding notifications and consideration of input from the
city or district.
It is recommended the Commission establish AOIs, as follows (See Figure 4-1):
1. The MCWD2 (Anchor Bay) service area, acknowledging the potential for consolidation of services;
and
2. GCSD’s proposed Zone 5, indicating the District’s interest in future annexation and service to this
area once necessary capacity upgrades are implemented and that it will likely occur outside the
planning horizon of this study.
4.3 Proposed Sphere of Influence
The District has expressed interest in expanding its SOI north to include the MCWD2 serving Anchor Bay,
and northeast to include proposed Zone 5 along Old Stage Road and Ocean View Drive.
The MCWD2 is located approximately three miles north of the current GCSD boundaries. There has been
interest expressed by staff and individual board members from both districts in studying a potential
consolidation of the two agencies, or alternatively, a regionalization of wastewater services.
Although an initial planning study has been prepared, until significant infrastructure and WWTP upgrades
have been funded and implemented, the expansion remains conceptual and an expansion of the SOI to
cover these areas would be premature.
4.4 Consistency with LAFCo Policies
Mendocino LAFCo has established local policies to implement its duties and mandates under the CKH Act.
This section identifies potential inconsistencies between the proposed SOI and local LAFCo policies.
The proposed District SOI is consistent with Mendocino LAFCo Policies (see Section 4.1 for SOI policies).
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4.5 Determinations
In determining the SOI for an agency, LAFCo must consider and prepare written determinations with
respect to five factors as outlined in GC §56425I. These factors are as follows:
1. The present and planned land uses in the area, including agricultural and open space lands;
2. The present and probable need for public facilities and services in the area;
3. The present capacity of public facilities and adequacy of public services that the agency provides
or is authorized to provide;
4. The existence of any social or economic communities of interest in the area if the Commission
determines that they are relevant to the agency; and
5. The present and probable need for public facilities and services (including sewers, municipal and
industrial water, or structural fire protection) of any disadvantaged unincorporated communities
within the existing Sphere of Influence.
4.5.1 Present and Planned Land Uses
The primary land uses within the District service area are described in Section 2.5. The entirety of the
District service area is located around the community of Gualala in coastal unincorporated Mendocino
County. The primary uses of the coastal zone are rural residential uses and small commercial areas, many
of which are specific to the town of Gualala (i.e., Gualala Village Mixed Use and Gualala Planned
Development, etc.) and described in the County’s Gualala Town Plan. Agricultural uses also exist within
the area (Timberland Production and Forest Land). The outside agency service area of Gualala Point
Regional Park, which is located in Sonoma County, is generally considered open space, but services
provided are for recreational public facilities and therefore are also consistent with LAFCo policy. The
Gualala Town Plan includes land use policies that support new residential and commercial development
in the area. However, water conservation efforts mandated by the California Public Utilities Commission
(CPUC) since September 2014 have severely limited development in the area. Furthermore, based on
population projections for the County, it is likely buildout of the residential parcels will not occur until well
beyond the planning horizon of this document. Based on the District’s location in the coastal zone, the
area is subject to additional development regulations, and land use changes in the area must be approved
by both the County and Coastal Commission.
4.5.2 Present and probable need for facilities and services in the area
Within the GCSD service area, the District provides wastewater treatment services to approximately 416
billable units on a total of 369 parcels within Service Zones 1 and 2 (252 residential homes, 2 mobile home
parks with 78 residential units, 141 commercial uses, and a handful of mixed use residences [commercial
and residential]). Given the current water service moratorium and anticipated low growth rate, the need
for services presently provided by the District are expected to remain fairly consistent with only a slight
increase in the foreseeable future. More notably, as described in Section 2.5.3, the North Gualala Water
Company (NGWC) currently has a water moratorium in place that prohibits new connections for potable
water. Until that moratorium is lifted, no new building permits will be issued. The US Census’s projected
population decline of 2.7 percent throughout the County suggests that buildout of the residential parcels
will likely not occur until well beyond the planning horizon of this document.
The outside agency service area of Gualala Point Regional Park is expected to continue to require service
and services may expand as Sonoma County improves its visitor amenities.
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The outside agency services provided to the Sea Ranch Sanitation Zone (SRSZ) may become unnecessary
soon, as the Sonoma Water Agency (SWA) and SRSZ explore options for providing services independently.
With development of the 2022 SWRCB Grant Funded Wastewater Planning Project Engineering Report,
numerous failed or failing septic systems were identified in GCSD Service Zones 3 and 4, as well as within
an area identified as proposed Zone 5. Zones 3 and 4 are within the GCSD boundaries but do not currently
receive wastewater services; proposed Zone 5 is located adjacent to the northeastern boundary of the
District along Old Stage Road and Ocean View Drive. Serving these areas will require infrastructure
installation and WWTP upgrades to increase capacity, and, in the case of proposed Zone 5, annexation
into District.
4.5.3 The present capacity of public facilities and adequacy of public services that the agency
provides or is authorized to provide
The current design capacity of the Wastewater Treatment Plant (WWTP) is 131,000 gallons per day (gpd).
The District’s WWTP serves approximately 416 billable units on a total of 369 parcels within Service Zones
1 and 2. District facilities include four effluent storage ponds with a combined capacity of 28.4 million
gallons; it has been noted that capacity of the ponds is insufficient during periods of above average
precipitation. The District has experienced only a few noted violations; five since July 2005 with the most
recent taking place in September 2022. The District’s infrastructure is in need of extensive repairs in order
to continue providing adequate service to its existing customers. The District applied for State grant
funding totaling $10.7 million to help cover the costs of the needed improvements; this grant is currently
still under review for approval.
In 2022, MC Engineering prepared the State Water Resources Control Board Grant Funded Wastewater
Planning Project Engineering Report, which the District is using to pursue grant funding to implement. The
District has submitted an application for the State Water Resources Control Board (SWRCB)
Disadvantaged Community (DAC) program grant funding amounting to approximately $10.7 million to
implement the improvements and upgrades to its collection system and WWTP in order to increase
capacity to serve Zones 3 and 4, as well as proposed Zone 5.
There have been initial conversations regarding potential consolidation or regionalization of services with
MCWD2, which is located several miles north of the District. The GCSD currently provides management,
operations, and administration services under contract with MCWD2, which has, until recently, been run
primarily by board members. Should the GCSD consolidate with the MCWD2, or regionalize services, a
robust plan for services would be developed, including a financial analysis and plan for providing the
services to the Anchor Bay community. Any such change of organization would require consideration and
approval by LAFCo. District staff have indicated there is sufficient capacity to treat effluent from the
MCWD2 customers.
Another capacity consideration relates to the current consideration by the SWA and SRSZ to assume full
service provision internally. Should that occur, the GCSD WWTP would have increased capacity to provide
to other service areas (i.e., Service Zones 3, 4, and proposed Zone 5).
4.5.4 The existence of any social or economic communities of interest in the area if the
Commission determines that they are relevant to the agency
The District has substantial economic and service ties with the community of Sea Ranch immediately south
of the District. The Sea Ranch is located in the SRSZ, which is owned by the SWA and who is one of the
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SPHERE OF INFLUENCE 4-9
parties to the Tri-Party Agreement with GCSD and Sonoma County. The Tri-Party Agreement has been in
place since 1991, was updated in 2016, and again in 2023 to establish new rates that reflect a 56 percent
increase and take effect as of January 1, 2024; this increase should have a substantial impact on the
District’s revenues. Given that the District treats a significant amount of the wastewater generated from
the SRSZ, any changes that may affect the Sea Ranch will likely have an impact on the District.
4.5.5 The present and probable need for public facilities and services of any disadvantaged
unincorporated communities
The District serves the unincorporated town of Gualala. Because the community of Gualala is not a Census
Designated Place (CDP), the Median Household Income (MHI) of its residents is assumed to approximate
the County MHI of $56,378. The MHI for Gualala is less than 80 percent (71 percent) of the statewide MHI
of $78,672 and is therefore considered to be a Disadvantaged Unincorporated Community (DUC). The
residents of Gualala are receiving adequate essential municipal services of fire, water, and wastewater for
the area. While these areas currently do not lack public services they would benefit from upgraded
systems
4.6 Recommendation
Pursuant to The Community Services District Law (GC §61100), the Commission does hereby establish the
functions and classes of services provided by the Gualala Community Services District as limited to
wastewater collection and treatment.
Based upon the information contained in this report and the expressed interest of the GCSD, it is
recommended that the 2014 Gualala Community Services District Area SOI be affirmed with no changes.
Further, it is recommended that two AOIs be established: (1) the MCWD2 boundaries, serving the Anchor
Bay community; and (2) the proposed Zone 5, located adjacent to the northeast boundary of the District
along Old Stage Road and Ocean View Drive. (Figure 4-1)
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Source: This map was prepared by the Information Services Divison GIS Program, July 10, 2024. 1,000 500 0 1,000
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REFERENCES 5-11
5 REFERENCES
Assembly Committee on Local Government. (2023, December ). Guide to the Cortese–Knox–Hertzberg
Local Government Reorganization Act of 2000. Retrieved from
https://calafco.org/sites/default/files/resources/CKH-Guides/CKH%20GUIDE%20-%202023%20-
%20linked.pdf
Calenteno. (2023). GCSD Audit.
CalPERS. (2024). Actuarial Resources . Retrieved from
https://www.calpers.ca.gov/page/employers/actuarial-resources
Census Reporter. (2022A). Block Group 3 Statistics Based on ACS 2022. Retrieved from
https://censusreporter.org/profiles/15000US060450111023-bg-3-tract-11102-mendocino-ca/
Census Reporter. (2022B). Census Tract 111.02 Statistics Based on 2022 ACS. Retrieved from
https://censusreporter.org/profiles/14000US06045011102-census-tract-11102-mendocino-ca/
County of Mendocino Coastal Element. (2021, November). County of Mendocino Coastal Element.
Retrieved from
https://www.mendocinocounty.org/home/showpublisheddocument/56978/638181067153900
000
County of Mendocino General Plan. (2009, August). County of Mendocino General Plan. Retrieved from
https://www.mendocinocounty.org/government/planning-building-services/plans/mendocino-
county-general-plan
County, M. (2002). Gualala Town Plan. Retrieved from
https://www.mendocinocounty.gov/government/planning-building-services/plans/gualala-
town-plan
County, M. (2009). Mendocino County General Plan, Coastal Element. Retrieved from
https://www.mendocinocounty.gov/government/planning-building-services/plans/mendocino-
county-general-plan
DOF. (2023, December ). Department of Finance. Retrieved from County Population Projections:
https://dof.ca.gov/forecasting/demographics/projections/
HCD. (2023). Housing Element Annual Progress Report (APR) Data. Retrieved from California Open Data
Portal: https://data.ca.gov/dataset/housing-element-annual-progress-report-apr-data-by-
jurisdiction-and-year
MC Engineering (2022A). Gualala Community Services Asset Evaluation, Rate Study, and Revenue
Strategies. Available Online: https://img1.wsimg.com/blobby/go/dd308714-d493-42e5-84bd-
d358e0fa409d/downloads/9%2026%202022%20Asset%20Evaluation%20Rate%20Study%20and
%20Reve.pdf?ver=1713882305002. Accessed April 23, 2024.
MC Engineering (2022B). Gualala Community Services District SWRCB Grant Funded Wastewater
Planning Project Engineering Report. Available Online:
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
REFERENCES 5-12
https://img1.wsimg.com/blobby/go/dd308714-d493-42e5-84bd-
d358e0fa409d/downloads/SWRCB%20Grant%20Funded%20Wastewater%20Planning%20Projec
t.pdf?ver=1713882305002. Accessed April 23, 2024.
US Census. (2022A). 2022 ACS Survey MHI California. Retrieved from
https://data.census.gov/profile/California?g=040XX00US06
US Census. (2022B). 2022 ACS MHI Mendocino County. Retrieved from
https://data.census.gov/profile/Mendocino_County,_California?g=050XX00US06045
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
ACKNOWLEDGEMENTS 6-1
6 ACKNOWLEDGEMENTS
6.1 Report Preparation
This Municipal Service Review and Sphere of Influence Update was prepared by Hinman & Associates
Consulting, Inc., contracted staff for Mendocino LAFCo.
Uma Hinman, Executive Officer
Spencer Richard, Analyst
Jen Crump, Analyst
6.2 Assistance and Support
This Municipal Service Review and Sphere of Influence Update could not have been completed without
the assistance and support from the following organizations and individuals.
Chris Troyan, General Manager
Gualala Community Services District
Geraldine LiaBraaten, Administrator
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-1
7 APPENDICES
7.1 Appendix A - Community Services District Law (California Government Code §61100
Latent Powers
a) Supply water for any beneficial uses, in the same manner as a municipal water district, formed
pursuant to the Municipal Water District Law of 1911, Division 20 (commencing with Section
71000) of the Water Code. In the case of any conflict between that division and this division, the
provisions of this division shall prevail.
b) Collect, treat, or dispose of sewage, wastewater, recycled water, and storm water, in the same
manner as a sanitary district, formed pursuant to the Sanitary District Act of 1923, Division 6
(commencing with Section 6400) of the Health and Safety Code. In the case of any conflict
between that division and this division, the provisions of this division shall prevail.
c) Collect, transfer, and dispose of solid waste, and provide solid waste handling services, including,
but not limited to, source reduction, recycling, and composting activities, pursuant to Division 30
(commencing with Section 40000), and consistent with Section 41821.2 of the Public Resources
Code.
d) Provide fire protection services, rescue services, hazardous material emergency response
services, and ambulance services in the same manner as a fire protection district, formed
pursuant to the Fire Protection District Law, Part 2.7 (commencing with Section 13800) of Division
12 of the Health and Safety Code.
e) Acquire, construct, improve, maintain, and operate recreation facilities, including, but not limited
to, parks and open space, in the same manner as a recreation and park district formed pursuant
to the Recreation and Park District Law, Chapter 4 (commencing with Section 5780) of Division 5
of the Public Resources Code.
f) Organize, promote, conduct, and advertise programs of community recreation, in the same
manner as a recreation and park district formed pursuant to the Recreation and Park District Law,
Chapter 4 (commencing with Section 5780) of Division 5 of the Public Resources Code.
g) Acquire, construct, improve, maintain, and operate street lighting and landscaping on public
property, public rights-of-way, and public easements.
h) Provide for the surveillance, prevention, abatement, and control of vectors and vector borne
diseases in the same manner as a mosquito abatement and vector control district formed
pursuant to the Mosquito Abatement and Vector Control District Law, Chapter 1 (commencing
with Section 2000) of Division 3 of the Health and Safety Code.
i) Provide police protection and law enforcement services by establishing and operating a police
department that employs peace officers pursuant to Chapter 4.5 (commencing with Section 830)
of Title 3 of Part 2 of the Penal Code.
j) Provide security services, including, but not limited to, burglar and fire alarm services, to protect
lives and property.
k) Provide library services, in the same manner as a library district formed pursuant to either Chapter
8 (commencing with Section 19400) or Chapter 9 (commencing with Section 19600) of Part 11 of
the Education Code.
l) Acquire, construct, improve, and maintain streets, roads, rights-of-way, bridges, culverts, drains,
curbs, gutters, sidewalks, and any incidental works. A district shall not acquire, construct,
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-2
improve, or maintain any work owned by another public agency unless that other public agency
gives its written consent.
m) Convert existing overhead electric and communications facilities, with the consent of the public
agency or public utility that owns the facilities, to underground locations pursuant to Chapter 28
(commencing with Section 5896.1) of Part 3 of Division 7 of the Streets and Highways Code.
n) Provide emergency medical services pursuant to the Emergency Medical Services System and the
Prehospital Emergency Medical Care Personnel Act, Division 2.5 (commencing with Section 1797)
of the Health and Safety Code.
o) Provide and maintain public airports and landing places for aerial traffic, in the same manner as
an airport district formed pursuant to the California Airport District Act, Part 2 (commencing
with Section 22001) of Division 9 of the Public Utilities Code.
p) Provide transportation services.
q) Abate graffiti.
r) Plan, design, construct, improve, maintain, and operate flood protection facilities. A district shall
not plan, design, construct, improve, maintain, or operate flood protection facilities within the
boundaries of another special district that provides those facilities unless the other special district
gives its written consent. A district shall not plan, design, construct, improve, maintain, or operate
flood protection facilities in unincorporated territory unless the board of supervisors gives its
written consent. A district shall not plan, design, construct, improve, maintain, or operate flood
protection facilities within a city unless the city council gives its written consent.
s) Acquire, construct, improve, maintain, and operate community facilities, including, but not
limited to, community centers, libraries, theaters, museums, cultural facilities, and childcare
facilities.
t) Abate weeds and rubbish pursuant to Part 5 (commencing Section 14875) of the Health and Safety
Code. For that purpose, the board of directors shall be deemed to be a “board of supervisors” and
district employees shall be deemed to be the “persons” designated by Section 14890 of the Health
and Safety Code.
u) Acquire, construct, improve, maintain, and operate hydroelectric power generating facilities and
transmission lines, consistent with the district's water supply and wastewater operations. The
power generated shall be used for district purposes or sold to a public utility or another public
agency that generates, uses, or sells electrical power. A district shall not acquire hydroelectric
power generating facilities unless the facilities' owner agrees.
v) Acquire, construct, improve, maintain, and operate television translator facilities.
w) Remove snow from public streets, roads, easements, and rights-of-way. A district may remove
snow from public streets, roads, easements, and rights-of-way owned by another public agency,
only with the written consent of that other public agency.
x) Provide animal control services pursuant to Section 30501 of the Food and Agricultural Code.
Whenever the term “board of supervisors,” “county,” “county clerk,” or “animal control officer”
is used in Division 14 (commencing with Section 30501) of the Food and Agricultural Code, those
terms shall also be deemed to include the board of directors of a district, a district, the general
manager of the district, or the animal control officer of a district, respectively. A district shall not
provide animal control services in unincorporated territory unless the county board of supervisors
gives its written consent. A district shall not provide animal control services within a city unless
the city council gives its written consent.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-3
y) Control, abate, and eradicate pests, in the same manner as a pest abatement district, formed
pursuant to Chapter 8 (commencing with Section 2800) of Division 3 of the Health and Safety
Code. A district's program to control, abate, or eradicate local pine bark beetle infestations shall
be consistent with any required plan or program approved by the Department of Forestry and
Fire Protection.
z) Construct, maintain, and operate mailboxes on a district's property or rights-of-way.
aa) Provide mail delivery service under contract to the United States Postal Service.
bb) Own, operate, improve, and maintain cemeteries and provide interment services, in the same
manner as a public cemetery district, formed pursuant to the Public Cemetery District Law, Part
4 (commencing with Section 9000) of Division 8 of the Health and Safety Code.
cc) Finance the operations of area planning commissions formed pursuant to Section 65101.
dd) Finance the operations of municipal advisory councils formed pursuant to Section 31010.
ee) Acquire, own, improve, maintain, and operate land within or without the district for habitat
mitigation or other environmental protection purposes to mitigate the effects of projects
undertaken by the district.
ff) Construct, own, improve, maintain, and operate broadband facilities and provide broadband
services. For purposes of this section, broadband has the same meaning as in subdivision (a) of
Section 5830 of the Public Utilities Code. A district shall comply with Article 12 (commencing
with Section 53167) of Chapter 1 of Part 1 of Division 2 of Title 5 when providing broadband
services pursuant to this subdivision. If the district later determines that a private person or entity
is ready, willing, and able to acquire, construct, improve, maintain, and operate broadband
facilities and to provide broadband services, and to sell those services at a comparable cost and
quality of service as provided by the district, the district may do one of the following:
a. Diligently transfer its title, ownership, maintenance, control, and operation of those
broadband facilities and services at a fair market value to that private person or entity.
b. Lease the operation of those broadband facilities at a fair market value to that private
person or entity.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-4
7.2 Appendix B – Open Government Resources
The purpose of this appendix is to provide a brief list of some educational resources for local agencies
interested in learning more about the broad scope of public interest laws geared towards government
transparency and accountability. This appendix is not intended to be a comprehensive reference list or to
substitute legal advice from a qualified attorney. Feel free to contact the Mendocino LAFCo office at (707)
463-4470 to make suggestions of additional resources that could be added to this appendix.
The websites listed below provide information regarding the following open government laws: (1) Public
Records Act (Government Code §6250 et seq.), (2) Political Reform Act – Conflict-of-Interest regulations
(Government Code §81000 et seq.), (3) Ethics Principles and Training (AB 1234 and Government Code
§53235), (4) Brown Act – Open Meeting regulations (Government Code §54950 et seq.), and (5) Online
Compliance regulations (Section 508 of the US Rehabilitation Act and Government Code §11135).
o Refer to the State of California Attorney General website for information regarding public access
to governmental information and processes at the following link: https://oag.ca.gov/government.
o Refer to the State of California Attorney General website for information regarding Ethics Training
Courses required pursuant to AB 1234 at the following link: https://oag.ca.gov/ethics.
o The Fair Political Practices Commission (FPPC) is primarily responsible for administering and
enforcing the Political Reform Act. The website for the Fair Political Practices Commission is
available at the following link: http://www.fppc.ca.gov/.
o Refer to the California Department of Rehabilitation website for information regarding Section
508 of the US Rehabilitation Act and other laws that address digital accessibility at the following
link: http://www.dor.ca.gov/DisabilityAccessInfo/What-are-the-Laws-that-Cover-Digital-
Accessibility.html.
o Refer to the Institute for Local Government (ILG) website to download the Good Governance
Checklist form at the following link: www.ca-ilg.org/post/good-governance-checklist-good-and-
better-practices.
o Refer to the Institute for Local Government (ILG) website to download the Ethics Law Principles
for Public Servants pamphlet at the following link: www.ca-ilg.org/node/3369.
o Refer to the Institute for Local Government (ILG) website for information regarding Ethics Training
Courses required pursuant to AB 1234 at the following link: http://www.ca-ilg.org/ethics-
education-ab-1234-training.
o Refer to the California Special Districts Association (CSDA) website for information regarding
online and website compliance webinars at the following link:
http://www.csda.net/tag/webinars/.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-5
7.3 Appendix C – Website Compliance Handout
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
California Website
Compliance Checklist
Use this checklist to keep your district's website compliant with
State and Federal requirements.
Public Records Act
SB 929 SB 272 AB 2853 (optional):
Our district has created and Our Enterprise System Catalog is We post public records to our
maintains a website posted on our website website
Passed in 2018, all independent special All local agencies must publish a catalog This bill allows you to refer PRA requests
districts must have a website that listing all software that meets specific to your site, if the content is displayed
includes contact information (and all requirements—free tool at getstream- there, potentially saving time, money,
other requirements) by Jan. 2020 line.com/sb272 and trees
The Brown Act State Controller Reports
AB 392: AB 2257: Financial Transaction Report: Compensation Report:
Agendas are posted to A link to the most recent A link to the Controller’s A link to the Controller’s
our website at least 72 agenda is on our home “By the Numbers” PublicPay website is
hours in advance of page, and agendas are website is posted on posted in a conspicuous
regular meetings, 24 searchable, machine- location on our website
our website
hours in advance of readable and platform
Report must be submitted by
special meetings independent Report must be submitted
April 30 of each year—you
within seven months after the
This 2011 update to the Act, Required by Jan. 2019— close of the fiscal year—you can also add the report to
originally created in 1953, text-based PDFs meet this can add the report to your your site annually, but
added the online posting requirement, Microsoft Word site annually, but posting a posting a link is easier
requirement docs do not link is easier
Healthcare District Section 508 ADA
Websites Open Data Compliance
AB 2019: AB 169: CA gov code 7405:
If we’re a healthcare district, we Anything posted on our website State governmental entities
maintain a website that includes that we call “open data” meets the shall comply with the accessibility
all items above, plus additional requirements for open data requirements of Section 508
requirements of the federal Rehabilitation Act
Defined as “retrievable, downloadable,
of 1973
Including budget, board members, indexable, and electronically searchable;
Municipal Service Review, grant policy platform independent and machine Requirements were updated in 2018—if
and recipients, and audits readable” among other things you aren't sure, you can test your site for
accessibility at achecker.ca
Website compliance made easy
csda.net getstreamline.com
The Brown Act: new agenda requirements
Tips for complying with AB 2257 by January, 2019
Placement:
What it says: An online posting of an agenda shall be posted on the primary Internet Web site
homepage of a city, county, city and county, special district, school district, or political subdivision
established by the state that is accessible through a prominent, direct link to the current agenda.
What that means: Add a link to the current agenda directly to your homepage. It cannot be in a
menu item or otherwise require more than a single click to open the agenda.
Exception:
What it says: A link to the agenda management platform may be added to the home page instead of a
link directly to the current agenda, if the agency uses an integrated agenda management platform that
meets specified requirements, including, among others, that the current agenda is the first agenda
available at the top of the integrated agenda management platform.
What that means: If you use an agenda management system, you may add a link to that system
directly to your homepage (again, not in a menu item), if the format of the agenda meets the
requirements below, and if the current agenda is the first at the top of the list.
Format:
What it says: [agenda must be] Retrievable, downloadable, indexable, and electronically searchable by
commonly used Internet search applications. Platform independent and machine readable. Available
to the public free of charge and without any restriction that would impede the reuse or redistribution of
the agenda.
What that means: You cannot add Word Docs or scanned (image-based) PDFs of your agenda to your
website–Word Docs are not platform independent (the visitor must have Word to read the file), and
scanned PDFs are not searchable. Instead, keep your agenda separate from the packet and follow
these steps:
1. From Word or other document system: Export agenda to PDF
2. Add that agenda to your website (or to your agenda management system), and include a link to
that agenda on your homepage
3. Then, you can print the agenda, add it to your pile of documents for the packet, and scan that
to PDF - just keep the packet separate from the agenda (only the agenda must meet AB 2257)
4. Keep the link on the homepage until the next agenda is available, then update the link
Questions? Contact sloane@getstreamline.com or dillong@csda.net
California 2024 Web Accessibility Checklist
UpdatedMay1,2024.Downloadthelatestatgetstreamline.com/ada
Congratulationsonyourcommitmenttoensuringthatyourdistrict’swebsiteisaccessibletoyourentirecommunity,
includingthosewithdisabilities.ThischecklistwillhelpyouensurecompliancewithTheUnruhActandAB434.
Before you begin
Performaninitialscantocheckforknownissuesusingcheckmydistrict.orgoranothertool
Haveyourwebsiteprovider'scontactinformationtoreportanyissues
One-time actions
-examplesavailableathttps://getstreamline.com/accessibility-policy
1. Designateanaccessibilityofficer-Wehavedesignatedonestaffmemberastheaccessibilityofficerwho
willbethego-tocontactforaccessibilityissues.
2. Approveanaccessibilitypolicy-Ourboardhasapprovedanaccessibilitypolicythatincludesthelevelof
accessibilityyouareadheringto,likeWCAG2.1AA.
3. Createandpostanaccessibilitypage-Wehavecreatedadedicatedaccessibilitywebsitepagetohouse
allaccessibility-relatedcontent,includingthepolicyandplan.Ifwehavecomponentsthatarenotyet
compliant,wehaveaddedinformationaboutourremediationplanandtimelinetogetcompliant.
4. Createaprocessforcommunityconcerns-Wehaveaprocessinplacewhereacommunitymembercan
submitaconcernviaform,phonenumber,and/oremailaddress.
5. Enableclosedcaptionsonyourvideos-Ourvideosallhaveclosedcaptions,andwehaveaprocessfor
includingclosedcaptionsinfuturevideos.(YouTubeincludesthisforfreewhenenabled.Learnhow.Itis
importantthatahumanverifiesthegeneralaccuracyofthecaptions.)
Ongoing actions
-recommendedoncepermonth
6. Scanyourwebsitepageseachmonth-Wehavescannedeverypageofourwebsite,everypagehasa
scoreandlistofissuestoremediate. Freetoolsincludecheckmydistrict.org,GoogleChromeLighthouse
(F12willactivate),andwave.webaim.org.Demandyourwebdeveloperaddressanyissuesthatarise.
7. Checkyourattachments.Wehavecheckedallofourattachmentsandwehaveremovedoraddeda
writtenadisclaimerforanythird-partyattachmentsthatweareunabletoremediate.
8. Performremediations-Wehavetakenactiontofixissuesdetectedbyascan/reportedbyourcommunity
Other actions to consider
● Third-partyADAaudit-largerdistrictsshouldconsiderhiringanoutsidefirmtoconductanaudit.Manual
testingbyuserswithdisabilitiesisthegoldstandardtoensureaccess.
● Indemnification-Choosingaplatformorinsurancethatindemnifiesorinsuresyouagainsttheriskoffines
*Remember,Streamlineisonlyasoftwarecompany,andStreamline'stemplatesandguidesarenotasubstituteforgettingyourown
competentlegaladvice.
California 2024 Web Accessibility Checklist
UpdatedMay1,2024.Downloadthelatestatgetstreamline.com/ada
Congratulationsonyourcommitmenttoensuringthatyourdistrict’swebsiteisaccessibletoyourentirecommunity,
includingthosewithdisabilities.ThischecklistwillhelpyouensurecompliancewithTheUnruhActandAB434.
Before you begin
Performaninitialscantocheckforknownissuesusingcheckmydistrict.orgoranothertool
Haveyourwebsiteprovider'scontactinformationtoreportanyissues
One-time actions
-examplesavailableathttps://getstreamline.com/accessibility-policy
1. Designateanaccessibilityofficer-Wehavedesignatedonestaffmemberastheaccessibilityofficerwho
willbethego-tocontactforaccessibilityissues.
2. Approveanaccessibilitypolicy-Ourboardhasapprovedanaccessibilitypolicythatincludesthelevelof
accessibilityyouareadheringto,likeWCAG2.1AA.
3. Createandpostanaccessibilitypage-Wehavecreatedadedicatedaccessibilitywebsitepagetohouse
allaccessibility-relatedcontent,includingthepolicyandplan.Ifwehavecomponentsthatarenotyet
compliant,wehaveaddedinformationaboutourremediationplanandtimelinetogetcompliant.
4. Createaprocessforcommunityconcerns-Wehaveaprocessinplacewhereacommunitymembercan
submitaconcernviaform,phonenumber,and/oremailaddress.
5. Enableclosedcaptionsonyourvideos-Ourvideosallhaveclosedcaptions,andwehaveaprocessfor
includingclosedcaptionsinfuturevideos.(YouTubeincludesthisforfreewhenenabled.Learnhow.Itis
importantthatahumanverifiesthegeneralaccuracyofthecaptions.)
Ongoing actions
-recommendedoncepermonth
6. Scanyourwebsitepageseachmonth-Wehavescannedeverypageofourwebsite,everypagehasa
scoreandlistofissuestoremediate. Freetoolsincludecheckmydistrict.org,GoogleChromeLighthouse
(F12willactivate),andwave.webaim.org.Demandyourwebdeveloperaddressanyissuesthatarise.
7. Checkyourattachments.Wehavecheckedallofourattachmentsandwehaveremovedoraddeda
writtenadisclaimerforanythird-partyattachmentsthatweareunabletoremediate.
8. Performremediations-Wehavetakenactiontofixissuesdetectedbyascan/reportedbyourcommunity
Other actions to consider
● Third-partyADAaudit-largerdistrictsshouldconsiderhiringanoutsidefirmtoconductanaudit.Manual
testingbyuserswithdisabilitiesisthegoldstandardtoensureaccess.
● Indemnification-Choosingaplatformorinsurancethatindemnifiesorinsuresyouagainsttheriskoffines
*Remember,Streamlineisonlyasoftwarecompany,andStreamline'stemplatesandguidesarenotasubstituteforgettingyourown
competentlegaladvice.
APPENDICES 7-6
7.4 Appendix D – Housing Legislation Trends and Results
Mendocino County and ADUs
In response, the County of Mendocino has taken a number of steps to facilitate ADU construction and
operation in an attempt to address the local housing crisis. This includes adopting an ADU ordinance which
outlines specific development standards. Another General Plan update was adopted on 11/9/2021 which
amended the Coastal Zoning Code component of the Local Coastal Plan to establish and revise standards
for Accessory Dwelling Units in the Coastal Zone.
Because Anchor Bay is located in the Coastal Zone of the County it is subject to coastal specific ADU
regulations. The number of permitted ADUs within the Coastal Zone of Mendocino County (excluding the
Gualala Town Plan area) is limited to 500 units. Junior Accessory Dwelling Units (JADU), which are
accessory structures typically limited to 500 square feet in an existing space, are exempted from this cap.
Any change to the cap on the number of ADUs shall require a Local Coastal Program amendment.
Per Section 20.458.040 - Public Health and Safety Requirements, of the County’s Municipal Code, both an
adequate water supply and sewage capacity must be available to serve the proposed new residence as
well as existing residences on the property. Most notably, if the property is located in a service district
(such as Pacific Reefs), the property owner must provide written approval from the service district
specifically authorizing the connection of the ADU.
With respect to coastal resource protections, ADUs and JADUs are subject to additional requirements that
impact the viability of their development. Some of the most pertinent requirements can be found in
Section 20.458.045 of the County’s Municipal Code.
The Larger Picture
As for how ADUs fit into the larger picture of the Mendocino County population trends, the housing data
provided in the County’s General Plan Annual Progress Report (APR) provides a reliable snapshot.
Required by the Governor’s Office of Planning and Research (OPR) and the State’s Department of Housing
and Community Development (HCD), every jurisdiction is required to provide an annual report detailing
the progress made towards implementing their housing element and meeting their RHNA allocations.
The data provided in the most recent APR for Unincorporated Mendocino County (adopted June 6TH, 2023
by the Board of Supervisors) suggests that despite strict development regulations in some places, ADUs
are certainly a factor in local housing development trends. Out of the 143 housing development
applications received in the 2022 reporting year, 38 were for ADUs; in 2021 a total of 102 housing
development applications were received, of which 35 were for ADUs. This small number of ADUs
compared to single-family home applications suggests that there could continue to be some limited
development of ADUs throughout the unincorporated areas of the County. This kind of development
could very slightly increase demand for wastewater services provided by MCWD2 in Anchor Bay. However,
any new development requires written approval from the service provider to authorize services.
Regional Housing Needs Allocation (RHNA)
It is worth noting that in response to statutory requirements, policy direction from the State of California
Department of Housing and Community Development (HCD), and mandated deadlines for delivery of
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-7
housing need allocation numbers to local jurisdictions within Mendocino County, the Mendocino Council
of Governments (MCOG) adopted a Regional Housing Needs Plan in 2018.
Although MCOG does not typically deal with housing issues, they have been designated by HCD as the
appropriate regional agency to coordinate the housing need allocation process. The political jurisdictions
that comprise the region consist of the Mendocino County unincorporated area and the Cities of Ukiah,
Fort Bragg, Willits and Point Arena.
The Regional Housing Needs Plan went through numerous iterations prior to being adopted which took
into account different allocation factors for the methodology. Throughout the process, each member
jurisdiction provided statements of constraints to HCD which detailed the land-constraints that challenge
residential development in unincorporated Mendocino County. Water resources and availability was
cited by multiple MCOG member jurisdictions as a constraint and contributed to the adjustments made
by the state on the region’s required housing allocations.
The RHNA allocations for Unincorporated Mendocino County are projected for a planning period between
8/15/2019 and 8/17/2027. Since adopting the Regional Housing Needs Plan in 2018 the County has made
progress across all income levels; the number of housing units developed and how many remain with
respect towards its RHNA allocation are detailed below broken down by income level and deed restricted
versus non-deed restricted.
Table 7-1: Mendocino County RHNA Allocations
Projection Total
RHNA Period - Units to Total Remaining
Income Level 2019 2020 2021 2022
Allocation 01/01/2019- Date (All RHNA
08/14/2019 Years)
Deed
-- -- 39 -- 21
Restricted
Very Low 291 125 166
Non-Deed
-- -- -- 65 --
Restricted
Deed
-- -- -- -- --
Restricted
Low 179 21 158
Non-Deed
-- - -- 21
Restricted
Deed
-- -- -- -- --
Restricted
Moderate 177 156 21
Non-Deed
4 -- -- -- --
Restricted
Above
702 46 40 67 51 58 262 440
Moderate
Total RHNA 1,349
Total Units 50 60 149 186 119 564 785
*Progress toward extremely low-income housing need, as determined pursuant to Government
Code 65583(a)(1).
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-8
Extremely
Low-
145 15 26 21 62 83
Income
Units*
(HCD, 2023)
With respect to how RHNA requirements may affect Anchor Bay, the State continues to push for more
housing across the state including in communities located on the coast such as Anchor Bay. While these
coastal communities are subject to additional regulation and governing bodies (i.e., the Coastal
Commission), housing mandates can affect these areas just the same as more inland communities. While
there is not currently much left to develop under current regulations in Anchor Bay, evolving legislation
could allow for increased development potential that supports the State’s housing goals.
Additional Recent State Housing Legislation
While the state legislator has made a concerted effort to progress ADU development throughout the
state, there have been numerous other housing bills passed in recent years aimed at addressing the
housing affordability crisis.
• SB9 - Authorizes a property owner to split a single-family lot into two lots and place up to two
units on each new lot. Therefore, the bill permits up to four units on properties currently limited
to single-family houses. SB 9 also mandates that local agencies approve development projects
that meet specified size and design standards.
• SB10 - Establishes a process for local governments to increase the density of parcels in transit-
rich areas or on urban infill sites to up to 10 residential units per parcel. Such an ordinance must
be adopted between Jan. 1, 2021, and Jan. 1, 2029, and is exempt from the California
Environmental Quality Act (CEQA).
• SB35 - Applies in cities that are not meeting their Regional Housing Need Allocation (RHNA) goal
for construction of above-moderate income housing and/or housing for households below 80%
area median income. SB-35 amends Government Code Section 65913.4 to require local entities
to streamline the approval of certain housing projects by providing a ministerial approval
process.
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
APPENDICES 7-9
7.5 Appendix E – District Financial Audits
Gualala Community Services District | 2024 Municipal Service Review and Sphere of Influence Update
GUALALA COMMUNITY SERVICES DISTRICT
FINANCIAL STATEMENTS
JUNE 30, 2022 AND 2021
GUALALA COMMUNITY SERVICES DISTRICT
FINANCIAL STATEMENTS
JUNE 30. 2022 AND 2021
TABLE OF CONTENTS
Independent Auditor's Report 3
Financial Statements
Statement of Net Position 6
Statement of Activities
And Changes in Net Position 8
Statement of Cash Flows 9
Notes to the Financial Statements 11
MICHAEL A. CELENTANO
Certified Public Accountant
12204 E Camino Loma Vista
707-367-9729 Yuma AZ 85367 maccpa@pacific.net
Board of Directors
Gualala Community Services District
Gualala CA 95445
IndependentA uditor's Report
Opinions
I have audited the accompanyingf inancial statements of the business-typea ctivities Gualala Community
ServicesD istrict as of and for the years ended June 30, 2022 and 2021, and the related notes to the financial
statements,w hich collectivelyc ompriset he Gualala CommunityS ervicesD istrict'sb asicf inancials tatements
as listed in the table of contents. In my opinion, except for the effects of the matter described in the "Basis for
QualifiedO pinion" paragraph,t he financial statementsr eferredt o abovep resentf airly, in all materialr espects,
the respectivef inancial position of the business-typea ctivities of Gualala Community Services District as of
June 30, 2022 and 2021 and the respectivec hanges in financial position and cash flows thereof for the years
then ended in accordancew ith accounting principles generally accepted in the United States of America.
Basis for Qualified Opinion
Managementh as not adopted GASB Statement6 8 "Accountinga nd Financial Reporting of Pension Plans."
and amendmentst o GASB 68". Accounting principles generally accepted in the United States of America
require that Deferred Inflows/Outflowsa nd Adjusted Pension Expense be recorded currently which would
increaset he assets and liabilities and change the pensione xpense. The effect on Deferred Inflows/Outflows
and payroll and employee benefits expenses has not been determined. See Footnote 9 for more detail.
Basis for Opinions
I conducted my audit in accordancew ith auditing standards generally accepted in the United States of
America. My responsibilitiesu nder those standards are further described in the Auditor's Responsibilities
for the Audit of the Financial Statements section of my report. I am required to be independento f the
Gualala Community Services District, and to meet my other ethical responsibilities,i n accordancew ith the
relevant ethical requirementsr elating to my audit. I believe that the audit evidence I have obtained is
sufficient and appropriate to provide a basis for my audit opinions.
Responsibilities of Management for the Financial Statements
Managementi s responsiblef or the preparationa nd fair presentationo f the financials tatementsi n accordance
with accounting principles generally accepted in the United States of America, and for the design,
implementation,a nd maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement,w hether due to fraud or error.
3
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about Gualala Community
Services District's ability to continue as a going concern for twelve months beyond the financial statement
date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audlit of the Financial Statements
My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, I:
'" Exercise professional judgment and maintain professional skepticism throughout the audit.
o Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
e Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Gualala Community Services District's internal control. Accordingly, no such
opinion is expressed.
o Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
" Conclude whether, in my judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Gualala Community Services District's ability to continue as a going
concern for a reasonable period of time.
I am required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
4
Required Supplementary Information
The District has not presented Management's Discussion and Analysis that accounting principles generally
accepted in the United State has determined is necessaryt o supplement,a lthough not required to be part of
the basic financial statements.
Michael A Celentano
Certified Public Accountant
Novembe2r 2, 2022
5
GUALALA COMMUNITY SERVICES DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2022 AND 2021
ASSETS 2022 2021
Current Assets
Cash in bank - Note 2 $ 131,157 $ 224,466
Accounts receivable - net 71,859 55,577
Grant receivable 95,354 204,008
Current portion of special
assessments receivable - Note 4 49,432 47,932
Total Current Assets 347,802 531,983
Non Current Assets
Restricted
Cash in banks - Note 3 233,241 99,693
Cash in county treasury - Note 3 127,463 135,907
Special assessments receivable -
long-term portion - Note 4 433,137 482,568
Total Non Current Assets 793,841 718,168
CapitaAl ssets- Note5 4,166,871 4,351,472
Total Assets $ 5 308 514 $ 5 601,623
The accompanying notes are an integral part of these statements
6 '
GUALALA COMMUNITY SERVICES DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2022 AND 2021
LIABILITIES 2022 2021
Current Liabilities
Accounts payable $ 164,373 $ 144,335
Accrued payroll and payroll liabilities 6,161 9,483
Accrued vacation 20,906 16,254
Interest payable 7,501- 8,289
Current portion of long term liabilities 112,770 105,935
Total Current Liabilities 311,711 284,296
Long Term Liabilities
Net Pension Liability 135,556 - 164,904
Special assessment bonds payable - Note 6 390,000 - 425,000
CoBank Loan Payable - Note 7 338,401 - 408,194
Less current portion shown above (112,770) (105,935)
Total Long Term Liabilities 751,187 892,163
Total Liabilities $1,062 898 $1,176,459
Net Position
Investment in capital assets 3,438,270 3,518,278
Restricted for debt service 127,463 135,907
Restricted for equipment replacement 223,241 99,693
Unrestricted 456,642 671,286
Total Net Position $4,245,616 $4,425,164
The accompanyingn otes are an integral part of these statements
7
GUALALA COMMUNITY SERVICES DISTRICT
STATEMENT OF ACTIVITIES AND CHANGES IN NET POSITION
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
2022 2021
Operating Revenues
Charges for services $ 493,949 $ 532,825
Other operating income 199,174 188,732
Total Operating Revenue 693,123 721,557
Operating Expenses
Salaries 328,105 294,725
Employee benefits 114,501 109,171
Collection system 51,317 47,751
Treatment plant 161,577 132,482
Utilities 7,153 43,224
Vehicle expense 19,246 10,794
Legal and other professional services 29,420 31,520
Office expense 2,703 2,878
Insurance 22,646 22,723
Other administrative expenses 26,280 28,455
Depreciation 260,303 263,328
Total Operating Expenses 1,023,251 987,051
Operating Income (Loss) (330, 128)- (265,494)
Non-Operating Revenues (Expenses}
Interest income - bank and county treasury 1,546 - 1,031
Federal and State funding 195,549..,
Grant income 66,405 327,340
Grant expense (105,815) (345,596)
Gain/(Loss) on sale of capital assets 19,202 -
PERS actuarial assumption changes 7,267 (23,862)
Interest expense (33,574)- (38,547)
Total Non-Operating Revenues (Expenses) 150,580 (79,634)
Net Income( Loss) (179,548) (345,128)
Net Position, Beginning of Year 4,425,164 4,770,292
Net Position, Ending of Year ;Ji 4 245 616 :ii 4 425164
The accompanying notes are an integral part of these statements
8
GUALALA COMMUNITY SERVICES DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
2022 2021
Cash Flows From Operating Activities
Cash received from customers $ 696,043 $ 716,527
Payments to suppliers for goods and services (312,260) (233,857)
Payments to employees and related items (441,276) (399,274)
Net Cash Provided by Operating Activities (57,493) 83,396
Cash Flows From Capital and Related Financing Activities
Proceeds from special assessments 47,931 49,123
Acquisition of capital assets (75,702)
(Increase) decrease in restricted cash - County Treasury 8,444 3,860
•P rincipal payments on the bond (35,000) (30,000)
Principal payments on the loan (69,793) (67,938)
Interest paid (34,362) (38,310)
Net Cash Flows (Used) by Capital
and Related Financing Activities (158,482) (83,265)
Cash Flows From Investing Activities
Interest income 1,546 1,031
Federal and State funding 195,549
Grant income (expense) 81,200 (175,359)
Payment of unfunded pension liablilty (22,081) (14,365)
Net Cash Flows Provided by Investing Activities 256,214 (31,590)
Net Change in Cash and Cash Equivalents 40,239 (188,562)
Cash and Cash Equivalents, Beginning of Year 324,159 512,721
Cash and Cash Equivalents, End of Year $ 364,398 $ 324,159
Supplemental Disclosures:
Interest Paid During the Year $ 34 362 $ 38 3m
The accompanying notes are an integral part of these statements
9
GUALALA COMMUNITY SERVICES DISTRICT
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2022 AND 2021
2022 2021
Reconciliation of Operating Income (Loss)
to Net Cash Provided by Operating Activities
Operating income (loss) $ (330,128) $ (265,494)
Adjustments to reconcile operating income
to net cash from operating activities:
Depreciation 260,303 263,328
(Increase) decrease in current assets:
Accounts receivable 2,920 (5,030)
Grant receivable
Prepaid expenses 6,559
Increase (decrease) in current liabilities
Accounts payable excluding grant expenses 8,082 79,411
Accrued payroll, vacation and payroll liabilities 1,330 4,622
Net Cash Provided by Operating Activities ~ (57.493) 3i 831396
The accompanying notes are an integral part of these statements
10
GUALALA COMMUNITY SERVICES DISTRICT
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022 AND 2021
Note 1 - Summary of Significant Accounting Policies
Reporting Entity
The Gualala Community Services District is an entity which consists of the District
as the primary government. Status as a primary government is determined by such
criteria as financial interdependency, legal separation, and type of governing
authority.
The Gualala Community Services District was organized on August 5, 1986, by
resolution of the Board of Supervisors of Mendocino County. The District is
governed by five directors, all registered voters of Mendocino County. The District is
not included in any other governmental reporting entity since Board members are
elected by the public and have decision making authority, the power to designate
management, the responsibility to significantly influence operations and primary
accountability for fiscal matters.
The District was organized for the purpose of providing the services of collection,
treatment or disposal of sewage and waste of the District and of its inhabitants, in
accordance with Government Code Section 61600(b). The District began operating
the treatment plant in October, 1992 and is limited to providing sewage collection,
treatment and disposal services to the geographic area located in the immediate
vicinity of Gualala, California.
Accounting Policies
The District's accounting and reporting policies conform to the generally accepted
accounting principles as applicable to state and local governments.
The following is a summary of the more significant policies:
Basis of Presentation
The Statement of Net Position and Statement of Activities display information about
the reporting District as a whole.
The District is comprised of only one fund, the Enterprise Fund. Enterprise funds
are accounted for using the economic resources measurement focus and the
accrual basis of accounting. The accounting objectives are determinations of net
income, financial position and cash flows. All assets and liabilities are included on
the Statement of Net Position.
Basis of Accounting
The District Statement of Net Position and Statement of Activities are presented
using the accrual basis of accounting. Under the accrual basis of accounting,
revenues are·r ecognized when earned and expenses are recorded when the liability
is incurred or economic asset is used. Revenues, expenses, gains, losses, asset
and liabilities resulting from an exchange are recognized when the exchange takes
place.
When an expense is incurred for the purpose for which both restricted and
unrestricted net position are available, the District's policy is to apply restricted net
position first.
Budget
The annual budget is prepared in accordance with the basis of accounting
utilized by the District. The budget is amended from time-to-time as the need
arises and is approved by the Board of Directors. The budget is not legally
required and therefore budget to actual information has not been presented.
Deposits and Investments
It is the District's policy for deposits and investments to either be insured by the
FDIC or collateralized. The District's deposits and investments are categorized to
give an indication of the level of risk assumed by the District as of June 30, 2022
and 2021. The categories are described as follows:
Category 1 Insured, registered or collateralized, with securities held by the
entity or its agent in the entity's name.
Category 2 Uninsured and unregistered or collateralized, with securities held by
the counter party's trust department or agent in the entity's name.
Category 3 Uninsured and unregistered, or uncollateralized, with securities held
by the counter party, or its trust department or agent but not held in
the entity's name.
Deposits and investments as of June 30, 2022 and 2021 consisted of Category 1
type only.
Receivables
Bad debts associated with accounts receivable for services are provided for by use
of the direct write off method. Other receivables, if any, are shown at the anticipated
recoverable amount, unless otherwise noted.
12
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost or estimated cost if actual cost is
not available. Donated assets are valued at their fair market value on the date
donated. Assets with a value of $1,000 or less are expensed in the year acquired.
Depreciation of plant, property and equipment is recorded as an expense in the
Statement of Activities, with accumulated depreciation reflected in the Statement of
Net Position. Depreciation is provided over the estimated useful lives using the
straight-line method of accounting. The range of estimated useful lives is as follows:
Treatment plant 5-75 years
General plant assets 5-40 years
Assessments
The County of Mendocino and not the District is responsible for collection of the
assessments. The District recognizes assessments when received from or collected
by the county.
Proprietary Fund Financial Statements
The District has a sole fund which is considered a proprietary fund.
Proprietary Fund Financial Statements include a Statement of Net Position, A
Statement of Activities and Changes in Net Position, and a Statement of Cash
Flows for each proprietary fund.
Proprietary funds are accounted for using the "economic resources"
measurement focus and the accrual basis of accounting. Accordingly, all assets
and liabilities (whether current or non-current) are included on the Statement of
Net Position. The Statement of Activities and Changes in Net Position presents
increases (revenues) and decreases (expenses) in total net position. Under the
accrual basis of accounting, revenues are recognized in the period in which they
are earned while expenses are recognized in the period in which the liability is
incurred. In these funds, receivables have been recorded as revenue and
provisions have been made for uncollectible amounts
Operating revenues in the proprietary fund are those revenues that are generated
from the primary operations of the fund. All other revenues are reported as non
operating revenues. Operating expenses are those expenses that are essential
to the primary operations of the fund. All other expenses are reported as non
operating expenses.
13
Note 2- Cash
As of June 30, 2022 and 2021 cash consisted as follows:
Cash
General operations $ 56,876 $130,447
Money market/Savings accounts 74.281 94,019
$131,157 $224 466
The deposits approximate fair market value and are considered for purposes of the
Statement of Cash Flows as cash and cash equivalents. The deposits approximate
fair market value.
Note 3 - Cash - Restricted
As of June 30, 2022 and 2021 cash of restricted assets consisted as follows:
2022 2021
Cash in banks
Money market/Savings accounts $233,241 $99,693
$233,24:l $ 99 693
Cash in county treasury
Bond reserve fund $ 127.463 $135,907
$ 127 463 $135,907
All above deposits are either insured or collaterized and are considered for purposes
of the Statement of Cash Flows as cash and cash equivalents, except for the cash
and county treasury. The deposits approximate fair market value.
Note 4 - Special Assessments Receivable
As discussed in Note 6, the District issued special assessment debt to facilitate the
construction of a sewage plant for the District. The debt is being paid back by the
land owners that benefit from the treatment plant within the District in accordance
with their individual share of the debt. The bonds are collateralized by a lien on the
property located within the District and annual assessments of principal, interest and
collection costs are made. The amount of the assessment has been recorded as a
receivable and is reduced by principal payments made by the property owners to the
District. Property owners can pay the full amount of the lien before the scheduled
due date. The amount that is due within one year from the balance sheet date is
shown as a current asset.
14
Note 5 - Property, Plant and Equipment
The following is a summary of the changes in property, plant and equipment for the
fiscal year:
Balance Balance
7/1/21 Additions Retirements 6/30/22
Land and
land improvements $ 481,300 $ $ $ 481,300
Treatment plant,
structures and
improvements 10,884,185 75,702 10,959,887
Buildings 94,556 94,556
Equipment
and vehicles 573,540 (25,984) 547,556
Construction
in progress 0 0 0 0
Total Cost 12,033,581 75,702 (25,984) 12,083,299
Less accumulated
depreciation (7,682,109) (260,328) 25,984 (7,916,428)
Net Book Value :J4i ,351,472 :ii (18~60:tl ~ 0 ~ ~.166,8I1
1
Depreciation expense of $260,303 and $263,328 were recorded as operating
expense for the years ended June 30, 2022 and 2021, respectively.
Note 6 - Special Assessment Bonds Payable
The District issued special assessment debt to help finance the acquisition and
construction costs of the land, structures, water treatment plant, and equipment.
The bonds are issued upon and are secured by paid and unpaid assessments
lawfully levied pursuant to the Improvement Bond Act of 1915 (Division 10 of the
California Streets and Highways Code). The bonds are described as: Gualala
Community Services District Sewer System Assessment District 1987-1; originally
issued on March 12, 1991 for $973,118.18; maturing in various amounts on
September 2; bearing interest rate of 5% per annum with interest paid semi-annually
on March 2 and September 2 each year; principal payments are scheduled to be
paid annually in various amounts on September 2 each year. The bonds are subject
to redemption on any March 2 or September 2 in advance of maturity date upon
thirty days prior notice and upon payment of accrued interest and principal plus a
redemption premium of three percent (3.0%)o f the principal amount redeemed.
Required with the bond issuance was the establishment of a Bond Reserve Fund in
case the District became delinquent on its bond payments. The funds are
maintained in the County treasury and are restricted for that use only. The County
of Mendocino has no other payment obligation for these bonds except to advance
funds from the reserve fund to the bond redemption fund as needed.
15
Future minimum principal and interest payments are as follows:
Year ended
June 30, Principal Interest
2023 $ 35,000 $ 18,625
2024 35,000 16,875
2025 40,000 15,000
2026 40,000 13,000
2027 45,000 10,875
2028-2031 195,000 19,875
390,000 $ 94 250
Less current portion 35,000
$355,000
Interest expense of $20,375 and $22,000 was incurred and was recorded as a non
operating expense for the years ended June 30, 2022 and 2021 respectively.
Note 7 - CoBank Loan Payable
The District borrowed $700,000 to fund improvements on November 17, 2016.
Terms of the loan include variable monthly payments which was$ 7,166.28 in June
2017 which included an annual interest rate of 3.51% which varies based
with the LIBOR Index Rate and is fully amortized on December 20, 2026. Security
for the loan is pledged revenues.
Future minimum principal and interest payments are as follows:
Year ended
June 30. Principal Interest
2023 $ 77,770 $ 13,194
2024 73,804 10,663
2025 75,835 8,043
2026 77,906 5,329
2027 33,086 2,518
338,401 $ 39.946
Less current portion 77 770
$260,631
Interest expense of $13,324 and $16,211 was incurred and was recorded as a non
operating expense for the years ended June 30, 2022 and 2021 respectively.
16
Note 8 - Changes in Long Term Debt
The following is a summary of long term debt for the year ended June 30, 2022:
Type of Balance Balance Due within
Debt 07/01/21 Additions Reductions 06/30/22 one year
Special
Assessment
Bond $ 425,000 $ 0 $390,000 $35,000
CoBank Loan 408,194 0 338,401 77,770
$833,194 ==$==0 $104,793 $ 728.401 $112,770
Note 9 - Defined Benefit Pension Plan (Unaudited)
Effective January 1, 1997, the District entered into the Public Employees Retirement
System (PERS). Qualified employees are covered under a multiple-employer
defined benefit pension plan maintained by an agency of the State of California.
Employees are members of the Public Employees' Retirement System.
Plan Description: The District contributes to the PERS, an agent multiple
employer public employee defined benefit plan. PERS provides retirement and
disability benefits, annual cost-of-living adjustments, and death benefits to plan
members and beneficiaries. PERS acts as a common investment and
administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and
district ordinance. Copies of PERS' annual financial report may be obtained from
their Executive Office, 400 P Street, Sacramento, CA 95814.
Funding Policy: Participants are required to contribute 6.92% for classic plan
and 6.75% for PRPRA of their annual covered salary. The District makes the
contributions required of District employees on their behalf and for their account.
The District is required to contribute at an actuarially determined rate; the current
rate for June 30, 2022 was 8.65% for non-safety employees and 7.59% for
PEPRA of annual covered payroll plus an employer payment of $22,801 for
unfunded liability The rate for June 30, 2023 will be· 8.63% for the classic plan
and 7.47% for PEPRA plus an employer payment of$ 15,877 for non-safety
employees and $271 for PEPR for unfunded liability. The contribution
requirements of plan members and the District are established and may be
amended by PERS.
Annual Pension Cost: For June 30, 2022 the District's annual pension cost of
$14,093 for PERS was equal to the District's required and actual contributions.
The required contribution was determined as part of the June 30, 2019 actuarial
valuation using the entry age normal actuarial cost method. The actuarial
assumptions included (a) 7.00% investment rate return of (net of administrative
expenses), (b} projected annual salary increases that vary by duration of service,
and (c) 2.75% per year cost:-of-living adjustments. Both (a) and (b) included an
inflation component of 2.50%. The actuarial value of PERS assets was
17
determined by an amortization and smoothing policy that will pay for all gains and
losses over a fixed 20-year period. The required and actual contribution rate for
June 30, 2022 was determined as part of the June 30, 2019 actuarial valuation in
which PERS using the same assumptions as the previous year
Three-Year Trend Information For PERS
Fiscal Annual Pension Cost Percentage of Net Pension
Year (APC) APC Contributed Obligation
6/30/20 23,617 100% 0
6/30/21 21,172 100% 0
6/30/22 14,093 100% 0
The table below shows a three-year analysis of the actuarial accrued liability, the
plan's share of the pool's market value of assets, plan's share of the pool's
unfunded liability, funded ratio and the annual covered payroll as of June 30:
Valuation Accrued Shared Mkt Unfunded Funded Covered
Date Liability Value/Assets Liability Ratio Payroll
Classic
6/30/19 784,671 617,680 166,991 78.7% 149,313
6/30/20 520,388 343,461 176,927 66.0% 91,270
6/30/21 475,700 332,558 143,142 69.9% 104,998
PEPRA
6/30/19 22,343 20,924 1,419 93.6% 89,424
6/30/20 39,575 37,233 2,342 94.1% 123,692
6/30/21 74,481 82,067 (7,586) 110.2% 133,751
Note 10 - Joint Power Agreement
The District participates in a joint venture under a joint powers agreement (JPA) with
the Special District Risk Management Authority (SDRMA) for insurances purposes.
The SDRMA is a joint powers agency formed pursuant to Section 6500 et. seq.,
California Government Code, is comprised of California special districts, and
agencies including such districts. The relationship between the District and JPA is
such that the JPA is not a component unit of the District for financial reporting
purposes. The SDRMA's purpose is to jointly fund and develop programs to
provide stable, efficient and long term risk financing for special districts. These
programs are provided through collective self-insurance; the purchase of insurance
coverage's; or a combination thereof.
18
Note 11 - Subsequent Events
Subsequent events are those events or transactions that occur subsequent to the
effective date of the financial statements, but prior to the issuance of the final
reports, which may have a material effect on the financial statement or disclosures
therein.
There are no subsequent events that have occurred through November 22, 2022
2022 that meet the above definition.
19