Gustine MSR

Final Report City of Gustine Municipal Service Review Prepared for: Merced County Local Agency Formation Commission Prepared by: Economic & Planning Systems, Inc. August 2014 EPS #141025 Note: A version of this report titled “Draft Report” was approved by LAFCO on August 20, 2014. No changes have been made to this version other than updating the report’s title to “Final Report” and a minor typographical correction. Table of Contents 1. INTRODUCTION .................................................................................................... 1 Background and Purpose ........................................................................................... 1 Approach and Methodology ........................................................................................ 2 Reorganization & Service Issues ................................................................................. 2 Other Issues ............................................................................................................ 3 Projected Growth and Development ............................................................................ 4 City of Gustine Governance ........................................................................................ 8 2. POLICE DEPARTMENT ............................................................................................. 9 3. FIRE DEPARTMENT .............................................................................................. 10 4. STORM DRAINAGE ............................................................................................... 12 5. WASTEWATER ................................................................................................... 13 6. WATER ........................................................................................................... 14 7. DETERMINATIONS ............................................................................................... 15 List of Figures Figure 1 Existing City Limits and General Plan Land Use Designations .................................. 6 Figure 2 City of Gustine Sphere of Influence ..................................................................... 7 1. INTRODUCTION This Report updates the Municipal Service Review (MSR) prepared for the City of Gustine in 2005.1 The MSR presents revised findings and conclusions along with updated research. This MSR addresses the City of Gustine and includes the required data and analysis linked to organizational issues facing the City. Gustine, situated in west Merced County, is located near the crossroads of three major trucking routes: State Route 33, Interstate 5, and State Route 152 (which connects to both Highway 99 to the east and Highway 101 to the west). In general, issues involved in this MSR include the City’s potential annexation of unincorporated territory into the City, and the City’s ability to provide adequate and efficient governmental services for existing and future residents. Background and Purpose In 1997, the State Legislature convened a special commission to study and make recommendations about how to accommodate California’s rapidly accelerating growth. The Commission on Local Governance for the 21st Century focused on empowering the already existing County LAFCOs governed by the Cortese-Knox Local Government Reorganization Act of 1985. The Commission’s final report, Growth within Bounds, recommended various changes to local land use laws and LAFCO statutes to allow LAFCOs more influence in shaping California’s growth. Assembly Speaker Robert Hertzberg encompassed the recommendations of the Commission in Assembly Bill 2838, which passed into the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. The law endows LAFCO with both more responsibilities and more influence to direct growth in California. One of LAFCO’s responsibilities requires regional studies of municipal services (or MSRs) every five years, in conjunction with reviews of city and district spheres of influence (SOIs). Government Code Section 56425 directs LAFCOs to review and update agencies’ SOIs, as necessary, every five years. Section 56430 requires MSRs to be conducted before or in conjunction with the sphere updates. The Local Government Reorganization Act requires that this MSR address the following 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 and adequacy of public services, including infrastructure needs or deficiencies 4. Financial ability of agencies to provide services 1 Final Report, City of Gustine Municipal Service Review, Prepared for Merced County LAFCO by Economic and Planning Systems, approved by LAFCO April 28, 2005. Economic & Planning Systems, Inc. 1 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 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 service delivery, as required by commission policy Approach and Methodology Economic & Planning Systems, Inc. (EPS) has been retained by LAFCO to update the MSR for the City of Gustine in Merced County. EPS reviewed the various plan documents provided by LAFCO and City staff, the City’s current budget, the prior MSR document, and other readily available information to prepare this Report. The Report was reviewed by the City and subsequently published for public comment before adoption by the Commission. The Report presents a summary of service issues and trends, and provides details of each service in subsequent sections of the report. The seven State-mandated issue areas are reviewed for each service category examined in the Report. Reorganization & Service Issues The prior 2005 MSR identified a number of issues. Following is a summary of the current status or resolution of those issues. 1) Housing Element – The City completed its 2009 Housing Element update, adopted by the City in 2011, and certified by the State Dept. of Housing and Community Development (HCD).2 Certification enables the City to qualify for a range of funding programs. 2) Capacity of water system and projected demand – The City is in the process of implementing its Water System Improvement Project to address issues of water quality and fire flow requirements, however the City requires additional funding in order to complete the improvements. Slower rates of development will reduce revenues available from development impact fees. 3) Wastewater System Capacity and projected demand – The City has been undertaking a range of improvements to its wastewater treatment plant consistent with its 2005 Wastewater Treatment Facilities Master Plan Update to improve compliance with regulatory standards and to increase capacity for future development. Slower rates of development will reduce future demands through 2020, however, development impact fee revenue will also be reduced. 4) Stormwater System – The City revised its Storm Drain Master Plan in 2008 to consider the use of detention basins to address capacity issues of its drainage ways. The timing of the improvements depends in part on the timing of new development, which will help to construct improvements onsite and pay development impact fees. 2 Letter from Glen A. Campora, HCD, to Margaret Silveira, City of Gustine, August 3, 2011. Economic & Planning Systems, Inc. 2 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 Other Issues The City of Gustine is expecting an annexation application for approximately 200 acres. The vast majority of the annexation would be residential (single family, with 32 acres of that property taken up by the existing Middle and Elementary School (which were built just outside of City limits but receive some City services, water, Police, Fire, etc.) Water lines are already installed along one of the main thoroughfares of the annexation (put in to serve the schools).3 Since the prior MSR, Gustine has completed its negotiations with Merced County for tax revenue sharing. Gustine secured LAFCO’s approval of its General Plan with respect to proposed changes to its Sphere of Influence (SOI), with conditions imposed to protect agricultural lands included within the expanded SOI.4 Those conditions include: Condition 1: Before the Commission will consider annexation of any area designated “Agricultural/Commercial”, and outside the Phase I and Phase II growth areas, the City will need to have policies and/or ordinances in place that accomplish the following: a) Address the agricultural protection measures consistent with the General Plan, such as adoption of the Williamson Act and use of conservation easements. b) Adopt an Agricultural/Commercial zoning designation with standards clearly identifying the uses allowed and their agricultural and commercial compatibility. c) Identify the level and types of services the City intends to supply the territory (such as police and fire protection) and how other public services will be provided. d) Clarify any mutual policies agreed to with Merced County that protect the agricultural character of the area implemented through a County General Plan amendment or amendment to the City/County tax sharing agreement pertaining to land use designations. Condition 2: If the City proposes to annex any lands outside their Phase I and Phase II growth areas for urban land uses, the City shall first amend the General Plan, adopt appropriate urban pre zoning designation, complete a plan for necessary urban services, and complete environmental review in compliance with CEQA. 3 City of Gustine Response to Data Request, received by EPS 6/2/14. 4 Resolution No. 1064B, Local Agency Formation Commission of Merced, Making Determinations and Orders Approving the City of Gustine Sphere of Influcence Revision No.2, September 27, 2007. Economic & Planning Systems, Inc. 3 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 Projected Growth and Development As of January 1, 2014, Gustine’s population was estimated to be 5,648.5 This population is about eight percent higher than the 2004 population cited in the prior MSR, an average annual compounded growth rate slightly under 0.8 percent per year. The prior MSR had reported a Merced County Association of Governments (MCAG) 2015 population forecast of 6,800 residents compared to the current DOF 2014 estimate of 5,648. The recession significantly reduced growth relative to the 2.3 percent annual increase predicted in 2004 by MCAG, and the 2.5 percent assumed in Gustine’s 2002 General Plan. By 2020, Gustine’s population is more likely to be closer to 5,900 residents assuming the slower 0.8 growth rate compared to the 7,500 total residents reported in the prior MSR, and 7,000 total residents projected by the 2008 Public Facilities Fee Study6. A strengthening economy and new development activity would increase population growth above current rates. As of the prior MSR, the City of Gustine encompassed 1.55 square miles, or 993.1 acres, and the city is still the same size with the exception of a discontiguous 9.9 acre parcel that was omitted in the previous MSR. The 2002 General Plan identified 1,722 acres of various urban land uses and 1,612 acres designated “Agricultural Commercial” which was designated for agricultural support uses without full city services. The General Plan contained an area totaling 3,193 acres, but it no longer included the isolated airport and sewer plant area located east of town on Highway 140, even though this area is within the city limit. while the City’s SOI encompassed an additional 1.7 square miles, or 1,088.7 acres. LAFCO approved the addition of 1,932 acres to the City’s SOI in 2007.7, and the total area within the SOI contains approximately 3,663 acres based on GIS mapped boundaries. At buildout, the City will be more than four times its current geographical size. FIGURE 1 shows the City’s General Plan land use designations and city limits. The airport and sewer plant properties do not presently have General Plan designations, so these areas are shown as white. The City will include these areas in their next General Plan update. FIGURE 2 shows the City’s adopted SOI. Approximately 42 percent of the City is dedicated to residential uses (primarily single-family dwellings). According to the City’s Housing Element, there exists vacant land suitable for development of 344 residential units, including 100 units pre-zoned in the City’s SOI.8 The rest of the City is composed of commercial and industrial land, which encompasses approximately one square mile (640 acres). 5 Cal. Dept. of Finance, E-1: City/County Population Estimates, http://www.dof.ca.gov/research/demographic/reports/estimates/e-1/view.php 6 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. 7 Merced LAFCO Resolution No. 1064B, September 27, 2007. 8 Current Adequate Sites Inventory, Housing Element, 2009 (certified 2011). Economic & Planning Systems, Inc. 4 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 Gustine's predominant industries are agriculture, manufacturing, and food processing, although a large percentage (40 percent) of residents commute to various areas outside the County and in the South Bay. The high percentage of commuting residents demonstrates that Gustine has already become home to the spillover Bay Area population. The housing crisis in the Bay Area is causing prospective home buyers to consider outlying areas, and transportation improvements (Highway 152 over Pacheco Pass has undergone extensive widening to connect Highway 101 near the coast with Interstate 5 in the Central Valley) have improved the commute for this type of overflow. Economic & Planning Systems, Inc. 5 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx ÄÆÄ 33 R-E R-1 ÄÆÄ 140 R-4 M R-3 R-4 PC C-2 R-1 R-4 P R-3 C-1 C-2 R-3 E V A T S A M E C-2 R-3 R-4 R-1 R-3 C-N C-N R-3 C-2 R-3 R-3 A-C R-1 PC R-3 R-3 C-H R-3 M-T ÄÆÄ R-4 140 SULLIVAN RD D R T N U H ÄÆÄ 33 GUN CLUB RD DR HTROWTIHW S A N T A F E G R D D D R N E S D R T N R S E B E N E U H IN J K FENTEM RD NORTH AVE E V A N E D N 2 IL N D D E R 6 T 5 T S T C H H N S S RI T T P 7 T 4TH AVE H S T 5TH AVE E V A L E R U E A V L A GAY ST E SOUTH AVE CARNATION RD R O M A C Y S E V A M L E R A IL E R V O A A E D V A O V R E G LEE AVE D R S L L MI BORBA RD NOBLE RD D R O D E V E Z A EVA ENYAP WORTHINGTON RD 1ST AVE VIA MILANO VIA ALBERTI R A L A S R A M A IV O M R E L A P A IV IL L E R R O B A IV T N O M D E IP A IV D ID O J A IV 2ND AVE 3 R D S T P R IV A T E R 1 S T S T D VIA DEL PETTORUTO VIA ITALIANO CATA ASILI HALES DR VIA B R D EDITH DR D O O W R E VERDE DR S H 6TH AVE OLSON DR 8 4 T T H H S S T T SOUTH AVE E W V A A H L N S U A T D R WALLIS AVE T S E R T V E S E A L L A MANOR AVE VI A L W L E Y E S T S FAIRVIEW AVE E V A E L A V E BRENTWOOD AVE T N IO P ASHLEY CT S O PORTSMOUTH LN U T A Y ARBOR POINTE AVE H W BONTA AVE P O L E R L T A W S POINTE LOUROSE AVE A A Y ASHMOUNT LN L NL YLLEK EVA ETSEO ETNIOP 2ND AVE 4TH AVE WALLIS AVE EVA EROMACYS P R IV A T E R D D R S E B E NI K Legend Sphere of Influence City Limits Zoning General Plan Designations AG-COM RE SFR MFR MHP HDR PD MU GSC µ NC HC OC RBD CI M PARK 0 500 1,000 1,500 2,000 PATH Scale in Feet SCHOOL September 19, 2012 City of Gustine: Zoning/General Plan Comparison Map S A N T A D F R D E N E S R T N G R D N U E H J E V A FENTEM RD VIA MILANO NORTH AVE T S E W 2ND AVE 4 T H S T 3 R D S T 2 N D S P R IV A T 140 TE LUCERNE AVE R D HALES DR 5 T E 7 H V A T H S OLSON DR E S T R T SOUTH AVE O CARNATION RD E M R V E A A D R A N E M A V C Y S E WALLIS AVE IL R O E C N IR D N IL E L V A E N Y A D A V E P LEE AVE A P BONTA AVE SULLIVAN RD D S R NOBLE RD L L MI GUN CLUB RD DR SEBEINK D R S E B E IN K E V A E L V E A GAY ST R U T S A A L E E V A E V D O R R H G T R O W T IH W BORBA RD D R T N U H Sphere of Influnce City Limits O Source: LAFCO RESOLUTION 1064 B Adopted 9/27/2007 0 500 1,000 2,000 3,000 Feet Of Merced County Date: 7/10/2014 City of Gustine Municipal Service Review Update Final Report 8/20/14 City of Gustine Governance The City of Gustine is a general law city incorporated in 1915 and operates under a Council- Manager form of government. The five-member City Council appoints the City Manager, the City Attorney, the City Clerk and the City Treasurer. The City Manager is the chief administrative officer of the City and is accountable to the City Council for the day-to-day operations of the City and its departments. The City Manager appoints the department heads and manages the City’s operating departments, and is responsible for ensuring that City services are performed in accordance with Council policies and within the City's resources. Gustine employs 24 full-time personnel and 5 part-time staff, in addition to other seasonal staff that vary.9 The City contracts for its city attorney functions. The City administers a General Fund of approximately $1.7 million.10 The City Manager advises the City Council on policy options concerning the organization and activities of the departments under her/his supervision. The City Manager is responsible for submission of the City's budget and Capital Improvement Plan and is responsible for their administration and implementation after Council adoption. The City Manager advises the Council on the City's financial condition and the future needs of the City. The City owns over 8,000 square feet of building space for city administration and maintenance facilities. These existing facilities house the City Council chambers, the City Manager and City Clerk’s offices, and other governance and administrative functions such as Finance, Human Resources, and Community Development. The City’s planned facilities include 2,100 square feet of building space and 2.16 acres of land for a public works yard and expansion of building space for city hall to accommodate growth to 2020.11 9 City of Gustine Response to Data Request, received by EPS 5/21/14. 10 City of Gustine Budget 2013-14 (file: BUDGET FY1314 11052013.pdf) 11 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. Economic & Planning Systems, Inc. 8 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 2. POLICE DEPARTMENT Gustine has nine sworn police personnel, including a chief, one sergeant, and seven patrol officers, plus a code enforcement/animal control officer and one clerk/records supervisor.12 Various part-time and reserve part-time staff provide additional services; the number varies depending on a number of factors. The Police Department occupies approximately 2,900 square feet, including 800 square feet of Gustine’s City Hall.13 Equipment includes four recently- purchased patrol cars and 3 reserve patrol cars, one animal control vehicle, one school resource officer vehicle, and one command vehicle. This equipment is adequate to meet current demand. The prior MSR reported that the City’s General Plan estimated a need for a total of 22 officers, as well as 8 additional fully-marked patrol cars, by 2010. However, reduced growth due to the recession and a slow recovery have mitigated the need for significant staff increases. At growth rates comparable to the last ten years (0.8 percent annually), or even at General Plan assumptions (2.5 percent annually), an additional 1 to 2 officers may be required by 2020 assuming current levels of service are to be maintained. The actual need could be greater if current service levels are insufficient to serve the type and location of new development, i.e., greater distances may require an additional increase in service in order to maintain acceptable response times. Additional supervisory staff may also be necessary, depending on increases in patrol officers. The 2008 Fee Report indicated a potential need for approximately 1,600 square feet of additional space to address existing space deficiencies as well as to accommodate future growth.14 Since the 2004 MSR, the City has updated its impact fee and service fee schedules.15 The City collects development impact fees from new development, a portion of which goes towards police protection capital needs. The current fee is $548 and $502 per single-family and multi-family unit, respectively. Commercial development also pays a fee ranging from $89 to $240 per 1,000 square feet depending on the type of new development. The City has examined the possibility of sharing facilities, such as vehicle maintenance yards or office space, with the Gustine School District. However, no formal plan for joint use facilities or operations has been developed at this time. The City continues to look for efficiencies where mutually beneficial. 12 City of Gustine 5/7/14 response to Initial Data Request 13 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. 14 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. 15 City of Gustine Impact Fee Schedule, Resolution No. 2008- 2109 Adopted November 4, 2008 and Effective January 5, 2009 Economic & Planning Systems, Inc. 9 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 3. FIRE DEPARTMENT No changes in operation have occurred since the 2004 MSR.16 Fire protection service in Gustine is provided by the Gustine Volunteer Fire Department (GVFD) and the County of Merced, which together operate under an informal joint response agreement. The County Fire Department, in turn, contracts with the California Department of Forestry for its administration and suppression personnel. Emergency medical transport and paramedic services are provided by the Westside Health Care District in cooperation with the GVFD and the County. The GVFD has a staff of 16 volunteer firefighters, 2 firefighters paid by the County, and 1 chief paid by the County and the City; there is at least one County-paid firefighter on duty at all times.17 The City has a 1996 engine which is the first out for City fire calls and the County houses (in the City/County firehouse) a newer fire truck as a second out vehicle for in City calls and first out for County calls. There are also two other backup vehicles if needed.18 The Department responds to about 700-800 calls for service on a yearly basis, about 500 of those calls are for inside City limits with the remainder being the surrounding County area also served by the Department.19 Response time from the fire station is approximately four minutes to all parts of the City, though this time may increase depending on the location of apparatus and volunteers, as well as other circumstances such as the need to respond to multiple simultaneous incidents. The Gustine fire station is located on Third Street, next to City Hall, in a building that is jointly owned and operated by the City and the County. The Fire Department occupies approximately 7,000 square feet.20 While this station is currently considered adequate, the Department anticipates that another station may be necessary in the future, depending on population growth. The City’s 2004 fire services study concluded that the existing station is not suitable for expansion or major improvements; the study concurred with the Department’s prediction that this station may prove inadequate if annexations and development increase the demand for services. The 2008 Fee Report estimated a need for future additional space, however, did not describe the specific requirements since there was no fire master plan to provide guidance.21 16 City of Gustine 5/7/14 response to Initial Data Request 17 City of Gustine 5/7/14 response to Initial Data Request 18 City of Gustine 5/7/14 response to Initial Data Request 19 Email from Sean Scully, City of Gustine, to EPS, June 10, 2014 20 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. 21 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. Economic & Planning Systems, Inc. 10 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 The 2004 MSR identified inadequate water infrastructure as a particular challenge to Gustine’s fire service providers. Since that time, the City of Gustine completed the design phase of an overall water project (funded through the USDA) meant to address fire flow issues, as well as make upgrades to the older parts of the system. 22 The project is described in greater detail in the “Water” chapter. Since the 2004 MSR, the City has updated its impact fee and service fee schedules. The City collects development impact fees from new development, a portion of which goes towards fire protection capital needs. The current fee is $1,796 and $1,643 per single-family and multi- family unit, respectively. Commercial development also pays a fee ranging from $547 to $1,472 per 1,000 square feet depending on the type of new development.23 22 City of Gustine 5/7/14 response to Initial Data Request 23 City of Gustine Impact Fee Schedule, Resolution No. 2008- 2109 Adopted November 4, 2008 and Effective January 5, 2009 Economic & Planning Systems, Inc. 11 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 4. STORM DRAINAGE The City of Gustine completed its Storm Drain Master Plan in March 2003. The focus of this document was to plan the most cost-effective way to collect, convey and discharge storm water runoff from lands proposed to be developed by the City’s 2002 General Plan, excluding agriculture/commercial land uses surrounding the City. The City revised its Storm Drain Master Plan in 2008 to consider the use of detention basins to address capacity issues of the existing drainage ways. The City’s existing storm drainage system conveys storm water runoff by two pipelines east of the City and three earth ditch systems northeast of the City. The storm drain pipelines discharge to wetlands and Los Banos Creek in the vicinity of the Gustine Airport. Earthen ditch systems carry the storm water runoff to sloughs that discharge to Los Banos Creek north of Highway 140. The Revised Storm Drain Master Plan proposed nine detention basins for temporary storage of storm drainage runoff. The basins would be designed as an integral system of new development. The costs for the improvements totaled an estimated $21.3 million, including land cost; the costs for collection pipelines to convey runoff to the basins are considered a normal subdivision improvement cost and are not included in the total.24 The current Gustine impact fees include a total of $26.9 million of buildout capital improvement costs in the fee amounts.25 The Revised Storm Drain Master Plan address levels of runoff associated with buildout of its General Plan, described as an additional 1,000 acres (increasing the City to 280% of its current size) which would nearly triple the magnitude of current storm runoff. The City anticipates the need to revise its Storm Drain Master Plan well before buildout is achieved, and will revise its infrastructure needs as appropriate to address the amount and type of development at that time.26 24 See Table XII-3, Revised Storm Drain Master Plan, City of Gustine, Amended August 19, 2008. 25 City of Gustine Impact Fee Schedule, Resolution No. 2008- 2109 Adopted November 4, 2008 and Effective January 5, 2009 26 Sean Scully, City of Gustine, correspondence with EPS on 7/3/14. Economic & Planning Systems, Inc. 12 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 5. WASTEWATER Gustine provides sanitary sewer collection and wastewater treatment for City residents and businesses, including major agricultural and dairy processing operations. The City’s sewer collection system is composed of 22.3 miles of trunk and lateral sewers.27 The treatment plant, rated to 1.5 mgd, currently operates at 0.8 mgd; this level is reduced compared to the data in the 2004 MSR due to a cheese plant that no longer operates in the City. In 2009 the City began managing all water/wastewater and storm drain systems in-house, rather than contracting with outside providers.28 An expansion of the City’s wastewater treatment plant was completed in 1999 to increase capacity to 1.5 million mgd. Subsequent improvements included additions and replacements to influent screening, pumping and metering and aeration equipment. A 2005 Wastewater Treatment Facilities Master Plan Update29 recommended expansion of the existing aerated lagoon aeration system, and improved biosolids handling. Expansion of the existing Effluent Transfer Pumping Station was also recommended, as well as additional irrigation land and pumping facilities. The City recently purchased property for future irrigation expansion, which the Master Plan Update recommended be phased as necessary to meet the needs of new development. Capital costs for treatment plant improvements and expanded capacity will be partially offset by the City’s development impact fee. A Sewer System Master Plan was completed in 2003. This Plan addresses the capacity of the City’s sewer lines to meet current and future demand, based on General Plan Phase 1 and Phase 2 development. This Plan recommended more frequent cleaning and maintenance activities as well as the construction of new sewer lines. The new sewer lines are needed to serve planned residential development. Capital costs for new lines will be offset partially by the City’s development impact fee. Planned industrial and commercial development will not require additional sewer collection capacity because it is generally located downstream in areas where existing capacity is available, and impacts only a small portion of the system. The developer of these areas may be required to construct some on-site sewer lines to connect to the City’s sewer system. The planned sewer line expansions and realignments would occur as phased development occurs within the City. 27 City of Gustine Final Revised Sanitary Sewer System Master Plan, April 2003. P. 3. 28 City of Gustine 5/7/14 response to Initial Data Request. 29 City of Gustine Wastewater Treatment Facilities Master Plan Update, Larry Walker Associates, March 25, 2005. Economic & Planning Systems, Inc. 13 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 6. WATER The City of Gustine relies upon groundwater obtained through wells for its drinking water. The 2002 Water Master Plan described a number of deficiencies of existing wells.30 The City of Gustine completed the design phase of a Water System Improvement Project (funded through the USDA) meant to address fire flow issues, as well as make upgrades to the older parts of the system. The project includes a new 1 million gallon storage tank, booster pump, line replacement, valve and hydrant replacement and a new well. Due to funding constraints the first construction phase included a new well site (completed in April, 2014) and a robust valve and hydrant replacement project. The tank, booster pump and line replacement (while engineered and designed) will need to be funded under a future (USDA) project; the City will re-evaluate this project after another year to review the most financially responsible way to complete the remainder of the project.31 The City periodically reviews and updates its water rates. The most recent review was completed in June 2013, and recommended annual rates increases of 5 percent. With the increase, water rates for a typical single-family home would be comparable to rates in the City of Merced.32 The increases were determined to be necessary to avoid potential annual structural deficits. The rate review was also completed to determine whether rates would not only be sufficient for operations, but would also adequately fund debt service for 2012 Certificates of Participation issued for the Water System Improvement Project. The City collects development impact fees from new development, a portion of which goes towards water system capital needs. The current fees, calculated in the 2008 Fee Report,33 are based on the City of Gustine Year 2002 Water Master Plan, by Environmental Management Systems. The rates vary depending on the size and type of connection.34 30 City of Gustine Year 2002 Water Master Plan, by Environmental Management Systems 31 City of Gustine 5/7/14 response to Initial Data Request 32 See Pg. 2, City of Gustine Water Rate Study, ClearSource Financial Consulting, June 2013 33 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. 34 City of Gustine Impact Fee Schedule, Resolution No. 2008- 2109 Adopted November 4, 2008 and Effective January 5, 2009 Economic & Planning Systems, Inc. 14 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx 7. DETERMINATIONS 1. Growth and population projections for the affected area Population growth has slowed to about 0.8 percent annual growth rate since 2004, compared to the General Plan forecast of 2.5 percent annual growth. Although this growth rate is likely to increase with the economic recovery, impact fee-funded infrastructure programs will receive significantly less revenue. To the extent that slower growth requires less infrastructure, the reduced impact fees will have less of an adverse impact. The City’s projected growth and development area is oriented to the Phase I and Phase II areas within the City’s SOI, and not to the “Agricultural Commercial” designated areas consistent with LAFCO’s conditions of approval (referenced on Page 3 under the heading “Other Issues” earlier in this MSR). 2. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence No disadvantaged unincorporated communities (DUCs) have been identified by the City or by LAFCO staff. A report prepared in 2013 which analyzed DUCs in the San Joaquin Valley did not identify any DUCs in the immediate vicinity of Gustine.35 3. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies The City has the capacity to service current levels of demand, but has been making a range of improvements to water and wastewater infrastructure to address regulatory standards and to provide capacity for future new development. 4. Financial ability of agencies to provide services The City has reviewed and updated its user fees in 2008 to assure that the fees sufficiently cover the costs of services.36 The City also calculated development impact fees in 2008 to assign funding responsibility to new development.37 5. Status of, and opportunities for, shared facilities The Police Department and the Gustine Unified School District investigated the possibility of shared maintenance yards or office space, but have not adopted a formal plan for joint use facilities or developed operations at this time. The City continues to look for efficiencies where mutually beneficial. 35 California Unincorporated: Mapping Disadvantaged Unincorporated Communities in the San Joaquin Valley, 2013, PolicyLink 36 City of Gustine Comprehensive User Fee and Rate Study Final Draft, July 10, 2008, Willdan Financial Services 37 Public Facilities Fee Study, City of Gustine, Willdan Financial Services, September 23, 2008. Economic & Planning Systems, Inc. 15 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx City of Gustine Municipal Service Review Update Final Report 8/20/14 6. Accountability for community service needs, including governmental structure and operational efficiencies The City adheres to generally accepted accounting practices, prepares audit reports, and provides information to the public through its website. No changes in governmental structure are pending or proposed. 7. Any other matter related to effective service delivery, as required by commission policy No other matters have been identified at this time. Economic & Planning Systems, Inc. 16 P:\141000s\141025Gustine\Report\141025GustineMSR_2014-08-20.docx