Upper Salinas - Las Tablas Resource Conservation District

IN THE LOCAL AGENCY FORMATION COMMISSION COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA Thursday, February 19, 2026 RESOLUTION NO. 2026- RESOLUTION APPROVING THEUPPER SALINAS – LAS TABLAS RESOURCE CONSERVATION DISTRICT MUNICIPAL SERVICE REVIEW AND SPHERE OF INFLUENCE STUDY The following R RECITALS WHEREAS are within San WHEREAS the Upper Salinas – Las Tablas 56430, No. 2-S-24 Upper Salinas – District B of the February 19, 2026 Report WHEREAS 56425, hereby incorporated by reference as 2-S-24 Upper Salinas – District B of the February 19, 2026 WHEREAS, WHEREAS, 56425 6- Page 2 or powers WHEREAS, the district WHEREAS WHEREAS WHEREAS February 19, 2026 WHEREAS sphere of 56430(a) and 56425(e) and adopts as Upper Salinas – District included in WHEREAS , prepared pursuant to 15062, is adequate as under 15306 and the 15061(b)(3), for the municipal NOW, THEREFORE, BE IT RESOLVED AND ORDERED 1. and are hereby incorporated by reference. 2. Upper Salinas – Las District Study es nd is 15306 . 3. , and is hereby determined A . 6- Page 3 4. 5. hibit B of this n. 6. the included in B of this 7. That the sphere of i the district be adopted pursuant to the map in of this r . 8. D a number of general powers when District as allowed under 9401-9420. 9. That the Upper Salinas – Study 1. – -S-24), - Upper Salinas – Las - - n the Fiscal Year 2021-2022 and Fiscal Year 2022-2023 audits. 2. the conclusion of the 12- period on the status of th 3. - District. , 6- Page4 Heather Moreno Date ATTEST 2/25/26 Date APPROVED AS TO FORM AND LEGAL EFFECT: February 24, 2026 Date Notice of Exemption To:v' Office of Planning and Research From: San Luis Obispo LAFCO PO Box 3044, 1400 Tenth Street, Room 222 Rob Fitzroy, Executive Officer Sacramento, CA 95812-3044 1042 Pacific St. Suite A San Luis Obispo, CA 93401 (805)781-5795 � County Clerk rfitzroy@slo.lafco.ca.gov County of San Luis Obispo County Government Center San Luis Obispo, CA 93408 Project Title: LAFCO File No. 2-S-24 I Upper Salinas -Las Tablas Resource Conservation District Municipal Service Review and Sphere of Influence Study Project Location: Upper Salinas - Las Tablas Resource Conservation District (US-LTLRCD) covers more than 1,859,700 acres in San Luis Obispo County, including the City of Paso Robles, the City of Atascadero, and other unincorporated communities in Northern San Luis Obispo County. Description of Nature, Purpose, & Beneficiaries of Project: The Local Agency Formation Commission (LAFCO) has prepared a Municipal Service Review (MSR) and Sphere of Influence (SOI) Study for the US-LTRCD pursuant to Government Code Section 56430 and Section 56425. The SOI is a 20-year growth boundary that includes areas that may be served by the District in the future. State law requires the MSR to be completed either prior to or concurrent with the SOI study. The MSR evaluates the public services provided by the District and is used as the basis for any changes to the SOI. The Commission took action to reaffirm US-LTRCD's SOI to remain coterminous to the service area boundary as depicted in Attachment A, Exhibit C of the LAFCO February 19, 2026, staff report found on the LAFCO website at https://slo.lafco.ca.gov/. The Commission also established that US-LTRCD exercises a number of general powers when operating the District as allowed under Public Resources Code Sections 9401- 9420. Name of Public Agency Approving Project: The San Luis Obispo County LAFCO conducted a noticed public hearing on February 19, 2026, at 9:00 a.m. in the Board of Supervisors Chambers in San Luis Obispo at the County Government Center. Additional information is available on the LAFCO website at https://slo.lafco.ca.gov/. Exemption Status: (check one) D Ministerial (Sec. 21080(b)(l); 15268); [gl Categorical Exemption: Section 15306 D D Declared Emergency (Sec. 21080(b)(3); 15269(a)); Statutory Exemptions: State code number D Emergency Project (Sec. 21080{b)(4); 15269 (b)(c)); [gl Other: General Rule Exemption, Section 15061(b)(3) Reasons Why Project is Exempt: It has been determined with certainty that the MSR and SOI Study is categorically exempt under Class 6, Section 15306, and the MSR and SOI Study also qualifies for a general rule exemption under Section 15061(b)(3). There is no possibility that this MSR and SOI Study may have a significant effect on the environment because there are no land use changes associated with the documents; therefore, the US-LTRCD MSR and SOI Study is found to be exempt from CEQA pursuant to Section 15306 and Section 15061(b)(3) of the State Guidelines. LAFCO will file this Notice of Exemption upon appro_val of the MSR and SOI Study. I Rob Fitzroy, Executive Officer Date ..... Exhibit B | Resolution No. 2026 - 04 Page 1 of 5 Municipal Service Review Determinations per Government Code Section 56430 for the US-LTRCD 1. Growth and population projections for the affected area Based on available data, the total population within the US-LTRCD was estimated at 109,594 in 2020. By 2050, the population is projected to reach approximately 123,034, reflecting a modest annual growth rate of 0.41%. As such, service demands related to natural resource conservation and land stewardship are expected to increase incrementally but remain manageable within the District’s current operational capacity. 2. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence US-LTRCD’s SOI and service area boundary includes ten areas that meet the criteria for a DUC as defined in Government Code Section 56033.5. The location and characteristics of the ten DUCs are described in Table 3 and Figure 1 of the DUC section of this report. While US-LTRCD does not provide water, sewer, or structural fire protection—typical focus areas for DUC evaluations—the District's conservation and land stewardship services may still support these communities by promoting resource sustainability, soil health, and watershed protection. 3. Present and planned capacity of public facilities and adequacy of public services, including 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. US-LTRCD provides programs which fall under three general categories: education, natural resources management, and regulatory assistance. These services are implemented through voluntary, collaborative efforts between the District, landowners, local municipalities, state and federal agencies, and the broader community. The District currently maintains adequate staffing and operational capacity to support its Exhibit B | Resolution No. 2026 - 04 Page 2 of 5 programmatic responsibilities. Its team includes an Executive Director, a Conservancy Steward, a Forestry Project Manager, a Conservation Project Manager, and technicians as needed, depending on project funding. Additionally, US-LTRCD owns and manages the 375-acre Willow Creek Conservancy, which serves as a living laboratory for regenerative agriculture, sustainable land practices, and climate resilience innovation. While at this time the District demonstrates sufficient capacity to deliver its services, it does not provide water, sewer, or fire protection services. Therefore, the District is not responsible for ensuring that these services are adequately provided to the communities within the District’s boundaries. 4. Financial ability of agencies to provide services As of the adoption of this report, US-LTRCD remains out of compliance with California Government Code Section 26909 due to an outstanding audit for FY 2023-24. In the absence of this audit, LAFCO relied on the five most recent audited financial statements (FY 2018-19 through FY 2022-23) to evaluate the District’s financial health. However, audits for FY 2021-22 and FY 2022-23 were issued with Disclaimers of Opinion due to the auditor’s inability to obtain sufficient records for testing, preventing a basis for an audit opinion. Despite the limitations in available financial data, analysis of three key fiscal indicators, including Operating Ratio, Liquidity Ratio, and Net Position, was used to assess the District’s financial health. Operating Ratio, which compares annual operating revenues to operating expenses, indicated the District operated at a deficit in three of the five years reviewed. Liquidity Ratio, which measures current assets relative to current obligations, showed the District generally maintained sufficient short-term resources to cover obligations in four of the five years. The District's Net Position, representing the difference between total assets and total liabilities, declined by 85% over the five-year period, signaling significant financial deterioration. However, due to the disclaimers for FY 2021-22 and FY 2022-23 and the absence of audited data for FY 2023-24, this assessment may not accurately reflect the District’s current financial position. Exhibit B | Resolution No. 2026 - 04 Page 3 of 5 LAFCO determines that US-LTRCD is noncompliant with California Government Code Section 26909, and the District’s current financial health is unknown due to incomplete data. Upon adoption of the US-LTRCD MSR and SOI Study, a 12-month remediation will commence for the District to complete audits for FY 2023-24 and FY 2024-25. At the conclusion of the 12-month period, LAFCO staff will report back to the Commission with an update and potential options for further action, including consideration of a change of organization if remediation efforts are deemed unsatisfactory. 5. Status of and opportunities for shared facilities The US-LTRCD has a long-standing history of maintaining partnerships with local, state, and federal agencies to support the implementation of community-based conservation projects. Continued coordination with other Resource Conservation Districts, the County of San Luis Obispo, and state and federal entities presents ongoing opportunities for shared use of facilities, equipment, and technical staff to expand program reach and reduce operational redundancies. 6. Accountability for community service needs, including governmental structure and operational efficiencies US-LTRCD is governed by a five-member Board of Directors that is appointed to four- year terms by the County Board of Supervisors. Regularly scheduled monthly Board meetings are held, and all meetings are open to the public and are publicly posted a minimum of 72 hours prior to the meeting in accordance with the Brown Act. US-LTRCD maintains an up-to-date website that contains District information, documents, and updates. 7. Any other matter related to effective or efficient service delivery There are no other matters related to the efficiency of services. Exhibit B | Resolution No. 2026 - 04 Page 4 of 5 Sphere of Influence Determinations per Government Code Section 56425 for the US-LTRCD 1. Present and planned land uses in the area, including agricultural and open-space lands. The present and planned land uses with the service area of US-LTRCD are guided by the general plans of the three land use authorities whose jurisdictions overlap the District’s boundaries. These include San Luis Obispo County, the City of Atascadero, and the City of Paso Robles. There are no planned changes to the District’s SOI at this time, and reaffirmation of the existing, coterminous SOI is recommended. 2. Present and probable need for public facilities and services in the area. US-LTRCD provides a unique and vital service to North San Luis Obispo County. The District provides technical assistance, education, and resources to help agricultural, rural, and urban communities preserve their natural resources while supporting robust land productivity. US-LTRCD works with many private and public stakeholders in accomplishing local conservation projects. There is a clear present and probable continued need for these services within the District’s coterminous SOI and service area, and reaffirmation of the District’s SOI is recommended. 3. Present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. At present, the US-LTRCD appears to have adequate staffing to provide service within the District's service area boundary; however, the District’s financial capacity is unknown. In addition, the District has successfully developed partnerships with local, state, and federal agencies to assist in accomplishing locally developed projects and priorities. Reaffirmation of the District’s SOI is recommended. 4. Existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. There are no social or economic communities of interest within the District service area boundary. Reaffirmation of the District’s SOI is recommended. Exhibit B | Resolution No. 2026 - 04 Page 5 of 5 5. For an update of the sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere. Ten DUCs were identified within the US-LTRCD service area boundary, as seen in Figure 1. Although these DUCs were identified, US-LTRCD does not provide public facilities or services related to wastewater, municipal or industrial water, or structural fire protection, and therefore, no infrastructure deficiencies to a DUC would result from changes to the US-LTRCD’s SOI or service area boundary. Reaffirmation of the District’s SOI is recommended. Upper Salinas – Las Tablas Resource Conservation District 1 MSR & SOI Study Upper Salinas – Las Tablas Resource Conservation District Municipal Service Review and Sphere of Influence Study Prepared by The San Luis Obispo Local Agency Formation Commission Adopted February 19, 2026 Resolution No. 2026 - 04 Upper Salinas – Las Tablas Resource Conservation District 2 MSR & SOI Study TABLE OF CONTENTS About LAFCO _________________________________________________________ 4 Authority and Objectives ___________________________________________________________ 4 Regulatory Responsibilities _________________________________________________________ 4 Planning Responsibilities ___________________________________________________________ 5 LAFCO Decision-Making ____________________________________________________________ 6 SLO LAFCO ______________________________________________________________________ 7 Acknowledgments ________________________________________________________________ 8 District MSR & Sphere of Influence Study ___________________________________ 9 Overview _____________________________________________________________________ 9 At A Glance __________________________________________________________________ 10 Background __________________________________________________________________ 10 Population Profile _____________________________________________________________ 11 Present and Planned Land Use ___________________________________________________ 14 Accountability ________________________________________________________________ 14 Services & Capacity ____________________________________________________________ 15 Finance ______________________________________________________________________ 19 Sphere of Influence ____________________________________________________________ 25 Determinations ______________________________________________________ 27 Municipal Service Review Determinations ____________________________________________ 27 Sphere of Influence Determinations _________________________________________________ 30 Upper Salinas – Las Tablas Resource Conservation District 3 MSR & SOI Study List of Figures Figure 1: Countywide Disadvantaged Unincorporated Communities Map ........................................... 13 Figure 2: US-LTRCD Revenues and Expenditures ................................................................................... 21 Figure 3: Operating Ratios ...................................................................................................................... 22 Figure 4: Liquidity Ratios ........................................................................................................................ 24 Figure 5: US-LTRCD Boundary Map ........................................................................................................ 26 List of Tables Table 1: District Profile ........................................................................................................................... 10 Table 2: Population Projections (Medium Scenario) .............................................................................. 12 Table 3: Disadvantaged Unincorporated Communities with US-LTRCD ................................................ 14 Table 4: US-LTRCD Board of Directors .................................................................................................... 15 Table 5: US-LTRCD Programs .................................................................................................................. 17 Table 6: Assets ........................................................................................................................................ 23 Table 7: Audited Liabilities ...................................................................................................................... 24 Table 8: Audited Net Position ................................................................................................................. 25 Upper Salinas – Las Tablas Resource Conservation District 4 MSR & SOI Study ABOUT LAFCO Authority and Objectives Local Agency Formation Commissions (LAFCOs) were established in 1963 and are considered regional subdivisions of the State of California responsible for providing regional growth management services in all 58 counties. LAFCOs’ authority is currently codified under the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 (CKH), with principal oversight provided by the Assembly Committee on Local Government. LAFCOs are comprised of locally elected and appointed officials with regulatory and planning powers delegated by the Legislature to coordinate and oversee the establishment, expansion, and organization of cities, towns, and special districts, as well as their municipal service areas. Regulatory Responsibilities LAFCOs’ principal regulatory responsibility involves approving or disapproving all jurisdictional changes involving the establishment, expansion, and reorganization of cities, towns, and most special districts in California. CKH defines “special district” to mean any agency of the State formed pursuant to general law or special act for the local performance of governmental or proprietary functions within limited boundaries. All special districts in California are subject to LAFCO oversight, with the following exceptions: school districts, community college districts, assessment districts, improvement districts, community facilities districts, and air pollution control districts. LAFCOs are also tasked with overseeing the approval process for cities, towns, and special districts to provide new or extended services beyond their jurisdictional boundaries by contracts or agreements, or annexation. LAFCOs also oversee special district actions to either activate new service functions and service classes or divest existing services. LAFCOs generally exercise their regulatory authority in response to applications submitted by affected agencies, landowners, or registered voters. Recent amendments to CKH also authorize and encourage LAFCOs to initiate jurisdictional changes to form, consolidate, and dissolve special districts consistent with community needs. Upper Salinas – Las Tablas Resource Conservation District 5 MSR & SOI Study Planning Responsibilities LAFCOs inform their regulatory actions, in part, through two central planning responsibilities: (a) making sphere of influence determinations and (b) preparing municipal service reviews. With this and other relevant information in the record, LAFCO makes decisions on a variety of matters, including but not limited to annexations to cities and special districts, city incorporations, activation of powers for special districts, dissolutions of special districts, etc. Sphere of Influence A Sphere of Influence (SOI) is defined by Government Code Section 56425 as a plan for the probable physical boundary and service area of a local agency or municipality. A SOI is generally considered a 20- year, long-range planning tool. LAFCOs establish, amend, and update spheres for all applicable jurisdictions in California every five years, or as necessary. When updating the SOI, LAFCOs are required to consider and prepare a written statement of their determinations with respect to each of the following 5 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 subdivision (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. The intent in preparing the written statements is to orient LAFCOs in addressing the core principles underlying the sensible development of local agencies consistent with the anticipated needs of the affected communities. Upper Salinas – Las Tablas Resource Conservation District 6 MSR & SOI Study Municipal Service Reviews Municipal Service Reviews (MSR), in contrast, are intended to inform, among other activities, SOI determinations. LAFCOs also prepare MSRs regardless of making any specific sphere determinations in order to obtain and furnish information to contribute to the overall orderly development of local communities. When updating an MSR, LAFCOs are required to consider and prepare written statements of their determinations with respect to each of the following 7 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. LAFCO Decision-Making LAFCO decisions are legislative in nature and, therefore, are not subject to an outside appeal process; only courts can overturn LAFCO decisions. LAFCOs also have broad powers with respect to conditioning regulatory and planning approvals, so long as not establishing any terms that directly affect land use density or intensity, property development, or subdivision requirements. LAFCOs are generally governed by a board comprising of county supervisors, city council members, independent special district members, and representatives of the general public, and an alternate member for each category. SLO LAFCO is governed by a 7-member board comprising of two county supervisors, two city council members, two independent special district members, one representative Upper Salinas – Las Tablas Resource Conservation District 7 MSR & SOI Study of the general public, and an alternate member for each category. All members serve four-year terms and must exercise their independent judgment on behalf of the interests of residents, landowners, and the public as a whole. LAFCO members are subject to standard disclosure requirements and must file annual statements of economic interests. LAFCOs are independent of local government, with their own staff. All LAFCOs, nevertheless, must appoint their own Executive Officers to manage agency activities and provide written recommendations on all regulatory and planning actions before the Commission. In addition, all LAFCOs must also appoint their own legal counsel. SLO LAFCO Regular Commissioners Chair Heather Moreno County Member Vice Chair David Watson Public Member Dawn Ortiz-Legg County Member Ed Waage City Member Steve Gregory City Member Ed Eby Special District Member Navid Fardanesh Special District Member Alternate Commissioners Bruce Gibson County Member Carla Wixom City Member Vacant Special District Member Michael Draze Public Member Staff Rob Fitzroy Executive Officer Imelda Marquez-Vawter Senior Analyst Morgan Bing Analyst Melissa Morris Commission Clerk Holly Whatley Legal Counsel Upper Salinas – Las Tablas Resource Conservation District 8 MSR & SOI Study Contact Information San Luis Obispo LAFCO’s office is located at 1042 Pacific St, Suite A, in the City of San Luis Obispo. The LAFCO office is open by appointment to discuss proposals or other matters and can be scheduled by calling 805-781-5795. Additional information is also available online by visiting slo.lafco.ca.gov. Acknowledgments San Luis Obispo LAFCO gratefully acknowledges the time and effort of staff with the Upper Salinas – Las Tablas Resource Conservation District in assisting in the preparation of this report, including – but not limited to – the following individuals: Drew Loganbill, Executive Director Spencer Gordon, Project Manager Hailey Leurck, Project Manager Marina Washburn, Financial Officer Upper Salinas – Las Tablas Resource Conservation District 9 MSR & SOI Study DISTRICT MSR & SPHERE OF INFLUENCE STUDY Overview This report represents San Luis Obispo LAFCO’s scheduled municipal service review for the Upper Salinas – Las Tablas Resource Conservation District (US-LTRCD or District), located in the northern portion of the County of San Luis Obispo (County). The report has been prepared by staff in accordance with the requirements of the Government Code. The purpose of this report is to produce an independent assessment of municipal services in this area over the next five years or as necessary, relative to the Commission’s regional growth management duties and responsibilities as established by the State Legislature. This includes evaluating the current and future relationship between the availability, demand, and adequacy of services within the service areas of the US-LTRCD, subject to the Commission’s oversight. Information generated as part of the report will be used by the Commission in (a) guiding subsequent sphere of influence updates, (b) informing future boundary changes, and – if merited – (c) initiating government reorganizations, such as special district formations, consolidations, and/or dissolutions. The period for collecting data to inform the Commission’s analysis and related projections on population growth and service demands has been set to cover any major updates and changes since the last time the MSR was updated in 2014. The financial analysis has been set to cover the last five- year audited fiscal year period. The timeframe for the report has been generally oriented to cover the next five to seven-year period, with the former (ten years) serving as the analysis anchor as contemplated under State law. The document outline serves to inform all the state-mandated requirements outlined in Government Code Sections 56430 and 56425. Written determinations have been included as the concluding chapter of this document. Upper Salinas – Las Tablas Resource Conservation District 10 MSR & SOI Study At A Glance Table 1: District Profile Agency Name Upper Salinas – Las Tablas Resource Conservation District Formation 1951 Legal Authority Public Resources Code Division 9 Office Location 5905 Capistrano Ave, Suite F, Atascadero, CA 93422 Website https://www.us-ltrcd.org/ Executive Director Drew Loganbill Employees 5 Public Meetings The Board of Directors holds its regular meetings on the fourth Thursday of the month from 4:00 – 6:00 PM. Board of Directors Five members appointed to four-year terms by the County of San Luis Obispo Board of Supervisors. District Service Area 1,859,700 acres Population Estimate 109,594 Background In 1935, the federal government enacted the Soil Conservation Act in response to the environmental devastation caused by the Dust Bowl. This landmark legislation created the Soil Conservation Service – now known as the Natural Resources Conservation Service – to assist farmers, ranchers, and other private landowners in implementing soil and water conservation practices. However, conservationists and federal policymakers soon recognized that a centralized federal agency could not effectively address the diverse and site-specific needs of local landowners. To bridge this gap, state-based Soil Conservation Districts – now known as Resource Conservation Districts (RCDs) – were formed under state law, governed by locally elected or appointed boards of directors. Public Resources Code Division 9 authorizes the establishment of RCDs as independent special districts tasked with conserving soil and water, controlling runoff, preventing and controlling soil erosion, managing watersheds, protecting water quality, and developing water storage and distribution. RCDs Upper Salinas – Las Tablas Resource Conservation District 11 MSR & SOI Study across California serve as local hubs for conservation and natural resource management, connecting landowners and land managers with technical, financial, and educational assistance. RCDs are a vital link between federal, state, and local programs, helping these agencies meet their conservation goals. The Upper Salinas-Las Tablas Resource Conservation District (US-LTRCD) was established in 1951 and is made up of three previously separate districts - the Upper Salinas Resource Conservation District, the Parkfield–Cholame Resource Conservation District, and the Las Tablas Resource Conservation District. The District provides technical assistance, education, and resources to help agricultural, rural, and urban communities preserve natural resources while supporting robust land productivity. The US- LTRCD has established an assortment of services and programs to serve the needs of every land manager in the region. Population Profile US-LTRCD serves a broad geographic area in northern San Luis Obispo County, encompassing a mix of cities, unincorporated communities, and rural lands. Population projections for the communities within the District’s service boundaries provide insight into potential future service needs and resource demands. Based on the medium-growth scenario, the estimated total population within the US-LTRCD in 2020 was 109,594. By 2050, this population is projected to increase to approximately 123,034, representing a 12.26% total increase over 30 years. This equates to an average annual growth rate of approximately 0.41%, indicating moderate, steady growth across the region. Upper Salinas – Las Tablas Resource Conservation District 12 MSR & SOI Study Table 2: Population Projections (Medium Scenario)1 Local Agencies 2020 2030 2040 2050 Percent Annual Percent within US-LTRCD Change in Change in Population Population (2020 to 2050) (2020 to 2050) Atascadero 31,384 33,043 34,063 34,538 10.05% 0.33% Paso Robles 32,755 35,582 37,130 37,858 15.58% 0.52% Cambria 6,043 6,090 6,117 6,217 2.88% 0.10% San Simeon 451 454 456 463 2.66% 0.09% Heritage Ranch 2,458 2,640 2,763 2,808 14.24% 0.47% San Miguel 2,490 3,039 3,420 3,476 39.60% 1.32% Santa Margarita 1,297 1,357 1,420 1,444 11.33% 0.38% Templeton 7,892 8,477 8,872 9,017 14.25% 0.48% Cayucos 2,618 2,739 2,867 2,914 11.31% 0.38% California Valley 367 394 404 411 11.99% 0.40% Other 21,839 22,928 23,525 23,888 9.38% 0.31% Unincorporated Total 109,594 116,743 121,037 123,034 12.26% 0.41% Disadvantaged Unincorporated Communities LAFCO is required to evaluate Disadvantaged Unincorporated Communities (DUCs) as part of this MSR, including the location and characteristics of any such community. Per California Senate Bill 244, a DUC is defined as any area with 12 or more registered voters where the median household income (MHI) is less than 80 percent of the statewide MHI.2 The legislative intent is to prohibit selective annexations by cities of tax-generating land uses while leaving out underserved, inhabited areas with infrastructure deficiencies and a lack of access to reliable potable water, wastewater, and fire protection services. To identify the MHI for locations within the unincorporated areas of the County, and to identify those that meet the DUC MHI threshold, LAFCO used U.S. Census American Community Survey (ACS) five- year reports for Census Block Groups (CBG) and Census Designated Places (CDP) data. Once a CBG or a 1San Luis Obispo Council of Governments 2050 Regional Growth Forecast (Figure 116 & Figure 118) 2 California’s MHI is $84,097; 80% of the state’s MHI is $67,277. Therefore, the threshold for a DUC is an MHI less than $67,277. Upper Salinas – Las Tablas Resource Conservation District 13 MSR & SOI Study CDP meets the DUC MHI threshold, LAFCO then verifies that those areas are inhabited as specified in Government Code Section 56033.5 using registered voter data from the County Clerk-Recorder. Using this methodology, ten DUCs were identified within the US-LTRCD service area boundary as seen in Figure 1. Although these DUCs were identified, US-LTRCD does not provide public facilities or services related to wastewater, municipal or industrial water, or structural fire protection, and therefore, no infrastructure deficiencies to a DUC would result from changes to the US-LTRCD’s SOI or service area boundary. Table 3 below contains additional information about each DUC within the District’s boundary. Figure 1: Countywide Disadvantaged Unincorporated Communities Map Upper Salinas – Las Tablas Resource Conservation District 14 MSR & SOI Study Table 3: Disadvantaged Unincorporated Communities with US-LTRCD DUC MHI 3 Registered Voters4 San Simeon DUC Area No. 1 $50,486 200 Cambria DUC Area No. 1 $51,875 529 Cayucos DUC Area No. 1 $67,273 505 Cayucos DUC Area No. 2 $59,444 686 San Miguel DUC Area No. 1 $66,496 1,268 Paso Robles – Templeton DUC Area No. 1 $54,797 955 Paso Robles DUC Area No. 2 $61,513 59 Northeast Unincorporated County DUC $61,526 1,009 Area No. 1 Atascadero DUC Area No. 1 $59,559 354 Santa Margarita DUC Area No. 1 $50,625 1,189 Social or Economic Communities of Interest in the Area There are no District relevant social or economic communities of interest in the area served. Present and Planned Land Use The present and planned land uses with the service area of US-LTRCD are guided by the general plans of the three land use authorities whose jurisdictions overlap the District’s boundaries. These include San Luis Obispo County, the City of Atascadero, and the City of Paso Robles. Each of these jurisdictions maintains its own general plan and zoning ordinances, which establish long- term land use policies and development patterns. US-LTRCD operates within these planning frameworks, providing conservation and natural resource management services that are compatible with and supportive of local land use policies. Accountability US-LTRCD’s governance authority is established under the Resource Conservation District Law, established in Division 9 of the California Public Resources Code and codified under Public Resources Code Sections 9001 – 9972. Governance of US-LTRCD is independently provided by a five-member 3 American Community Survey Data from 2016-2020 in 2021 inflation/adjusted dollars 4 County of San Luis Obispo Clerk Recorder GIS Data from October 2023 Upper Salinas – Las Tablas Resource Conservation District 15 MSR & SOI Study Board of Directors appointed to four-year terms by the County Board of Supervisors. The Board of Directors meets on the fourth Thursday of each month from 4:00 – 6:00 PM in the Atascadero Library at 6555 Capistrano Avenue. Agendas are officially posted on the US-LTRCD website 72 hours prior to the meeting, in compliance with the Brown Act. Every agenda for a regular meeting provides an opportunity for members of the public to directly address the board. Table 4: US-LTRCD Board of Directors Board Member Title Term Expiration Tom Mora President October 2028 Steve Carter Board Treasurer October 2028 Mike Bonnheim Director October 2028 Chris Smith Director October 2028 Eric Michielssen Director October 2029 US-LTRCD maintains an up-to-date website that contains district contact information, the current agenda, approved minutes, compensation reports, and an enterprise system catalog in compliance with Senate Bill 272. Services & Capacity Authorized Services Public Resources Code Division 9 established RCDs to conserve soil and water, control runoff, prevent and control soil erosion, manage watersheds, protect water quality, and develop water storage and distribution. The Public Resources Code identifies a range of services that an RCD may provide, and a complete listing of the powers afforded to RCDs is located in Public Resources Code Sections 9401 - 9420. Authorized services granted to RCDs under current law include, but are not limited to: • Conducting surveys and research, disseminating information, and partnering • Accepting grants and gifts for conservation work • Acquiring lands, easements, and property • Contracting, accepting contributions, and using contributions • Making improvements and conducting operations of public/private lands Upper Salinas – Las Tablas Resource Conservation District 16 MSR & SOI Study • Performing education, outreach, and demonstration projects • Developing annual and long-range plans • Accepting and managing projects within districts • Maximizing funding opportunities by working with Federal/State/Private Sources, cooperating with other districts, an association of districts, or other regional area groups • Provide coordinated representation of districts before Federal, State, and Local Government Agencies Under Government Code Section 56425(i), when LAFCO adopts, updates, or amends a sphere of influence (SOI) for a special district, it must also determine the nature, location, and extent of the functions or services the district is authorized to provide. In accordance with Government Code Section 56050.5, any service authorized by the district’s principal act that is not currently being exercised is considered a latent power and requires LAFCO approval to be activated in the future. In the case of US- LTRCD, the District currently exercises all of the powers authorized under Sections 9401-9420 of the Public Resources Code. Therefore, no services are considered latent. This Municipal Service Review (MSR) and Sphere of Influence (SOI) study evaluates both: 1. The current services and resources available through US-LTRCD, and 2. The District’s capacity to expand services to meet future needs. While no changes to the SOI are being proposed at this time, LAFCO has considered the District’s long- term ability to provide services to additional areas if needed. Should future changes be pursued, such as annexation, consolidation, or reorganization, this review provides a foundation for those discussions. Service Delivery & Performance US-LTRCD provides programs which fall under three general categories: education, natural resources management, and regulatory assistance. Programs are collaborative efforts between the US-LTRCD, landowners, municipalities, agencies, and the community at large. Participation in programs is entirely voluntary. Table 5 below highlights some of the District’s recent projects, project partnerships, and funding sources. Additional information on the District’s projects, programs, and services is available on their website. Upper Salinas – Las Tablas Resource Conservation District 17 MSR & SOI Study Table 5: US-LTRCD Programs Program Summary Partners Funders Centennial The overall goal of this project is to restore the • City of Paso Creek Stream natural ecology and hydrologic function of Robles • City of Paso Restoration Centennial Creek, which is a highly visible • California Robles Project waterway flowing alongside a community Department of • Caltrans greenbelt trail in Paso Robles. US-LTRCD Transportation • US Fish and recontoured and revegetated 400 feet of (Caltrans) Wildlife Service streambank, which has improved the riparian • National Fish habitat along the creek corridor, decreased creek and Wildlife channel cutting and erosion, and improved Foundation stormwater management through community awareness of low-impact design methodologies. Three Bridges Implementation of a fuel reduction project at • Atascadero Land California Oak Preserve Three Bridges Oak Preserve with the goal of Preservation Department of Fuels Reduction enhancing forest health and mitigating wildfire Society Forestry and Fire Project risks to the community. Treatment units are • Atascadero Fire Protection strategically located near home and in high fire Department hazard severity zones and are focused on • SLO County Fire reducing dead vegetation and some live Safe Council vegetation that serves as wildfire fuel, both in the • CALFIRE preserve and along roadways. Sustainable Using a data-driven approach and innovative • CA Association of California Land Initiative software, RCDs can more effectively and Resource Department of Food efficiently assist landowners in identifying, Conservation and Agriculture funding, and implementing climate-smart Districts projects on their land. These practices can • Cal Poly San Luis improve land productivity and achieve Obispo sustainability by sequestering carbon, reducing water consumption, restoring soil health, and more. Wildlife & The US-LTRCD provides technical guidance to • Xerces Society Wildlife Conservation Pollinator landowners to improve monarch habitat through • US Fish and Board Habitat site-specific plans and native species Wildlife Service Improvement recommendations. • CA State Parks • CA Dept of Fish and Wildlife Technical The US-LTRCD works with landowners to • Coastal San Luis • California Assistance integrate best management practices to enhance RCD Department of habitat for fish and wildlife, restore water quality • Central Coast Food and and quantity, stabilize stream channels or roads, Soil Hub Agriculture improve trails, and solve erosion problems. • CA Association Typical projects include Permit Coordination and of Resource • USDA Natural Assistance, Conservation Planning, Riparian Conservation Resources Management, Habitat Management- Debris Districts Conservation Removal and Vegetation Management, Water Service (NRCS) Quality Monitoring, Environmental Studies and Reports, Irrigation Audits (Mobile Irrigation Lab), Conservation Education and Outreach. Upper Salinas – Las Tablas Resource Conservation District 18 MSR & SOI Study In addition to the programs and projects discussed above, US-LTRCD partners with the County to offer agricultural grading permits through the Alternative Review Program (ARP). ARP is a low-cost alternative to obtaining a County grading permit and includes engineering and environmental review, an Agricultural Grading Permit, and post-project erosion control monitoring. The District cites infrequency in utilization of this program and difficulty in recruiting a District engineer to help deliver these services. Staffing & Personnel The US-LTRCD employs an Executive Director who runs the day-to-day operations of the RCD. The Executive Director reports to the Board of Directors at the monthly board meetings. The District also employs additional personnel, such as a Conservancy Steward, a Forestry Project Manager, a Conservation Project Manager, and technicians as needed to support various grants and projects dependent on available funding. Capital Facilities and Equipment The Willow Creek Conservancy is 375 acres of unique coastal ranchland, owned and maintained by the US-LTRCD. The Conservancy aims to support a regenerative agricultural economy while educating and inspiring the northern San Luis Obispo County community to adopt sustainable land management practices. Serving as a living laboratory, the Conservancy provides a space where community members can explore and apply best practices, test integrated technologies, and collaborate on innovative solutions addressing climate change and water conservation. Shared Services and Facilities As illustrated in Table 5, US-LTRCD has established a strong history of collaboration with local, state, and federal partners. These partnerships are critical to the District’s ability to deliver a wide range of conservation programs across its expansive service area and to ensure efficient, non-duplicative use of public resources. US-LTRCD continues to engage in interagency partnerships and is encouraged to maintain or expand the following collaborative relationships: • Coordination with Neighboring RCDs, including the Coastal San Luis Resource Conservation District. These neighboring districts share similar goals and environmental priorities, and over Upper Salinas – Las Tablas Resource Conservation District 19 MSR & SOI Study time, the respective Boards of Directors have explored the potential benefits and drawbacks of district consolidation. While each district currently remains separate and autonomous, collaboration on shared regional issues remains a best practice. • Coordination with the County of San Luis Obispo and Local Agencies • Coordination between US-LTRCD and state entities/agencies such as the State Water Resource Control Board and the California Department of Parks and Recreation Finance Background In alignment with the Commission’s FY 2025-26 Work Plan, staff prepared the MSR and SOI Study for the US-LTRCD and presented the report at the Commission’s regular meeting on September 18, 2025. At that meeting, the Commission expressed significant concerns regarding the determinations made in the report, specifically related to the District’s financial transparency, noncompliance with audit requirements, and findings identified in the District’s FY 2021-22 audit. As a result, the Commission deferred action on the MSR and SOI Study pending receipt of additional information. As directed at the LAFCO meeting held on December 18, 2025, LAFCO staff provided a status update on the District’s outstanding financial audits and outlined governance structure options, including potential LAFCO-initiated consolidation with Coastal San Luis Resource Conservation District (CSLRCD). LAFCO staff reported that since the September 18, 2025, LAFCO meeting, the District had completed the audit for FY 2022-23. Similar to the District’s FY 2021-22 audit, the audit for FY 2022-23 resulted in another disclaimer of opinion due to the auditor being unable to obtain auditable records to enable testing to provide a basis for an audit opinion. In addition, LAFCO staff reported that the District had recently adopted new Fiscal Policies and Procedures in an effort to correct deficiencies. Based on this information, the Commission directed staff to return with an updated US-LTRCD MSR and SOI Study for approval, incorporating determinations that document the District’s financial deficiencies and a condition of approval requiring a 12-month remediation period for the District to complete financial audits for FY 2023-24 and FY 2024-25. As such, the following section provides a general overview of the District’s financial health, summarizes recent audit findings, and establishes the context for LAFCO’s financial determinations. Upper Salinas – Las Tablas Resource Conservation District 20 MSR & SOI Study Budget The District Board of Directors adopts an annual budget on a basis consistent with generally accepted accounting principles and utilizes an encumbrance system as a management control technique to assist in controlling expenditures and enforcing revenue provisions. Under this system, the current fiscal year expenditures and encumbrances are charged against the budgeted appropriation. Encumbrances outstanding at year-end are reported as reservations of fund balance for subsequent fiscal year expenditures, as they do not constitute expenditures or liabilities. Audited Financial Statements Pursuant to Government Code Section 26909, all special districts are required to complete an annual independent audit of their financial accounts and records. These audits must be filed with the California State Controller’s Office (SCO), the County Auditor, and LAFCO within 12 months following the end of the fiscal year. The SCO enforces audit compliance through reporting requirements, audit standards, and funding restrictions. Additionally, the County Auditor has the authority to appoint an independent auditor to conduct a full audit if a district fails to comply. To evaluate the District’s overall financial condition, LAFCO utilizes three key financial indicators, including Operating Ratio, Liquidity Ratio, and Net Position. The primary data sources for this evaluation are typically audited financial statements from the five most recent fiscal years. As of the adoption of this report, US-LTRCD has not completed a financial audit for FY 2023-24. The District attributes the delay to staff turnover, changes in accounting systems, and ongoing litigation, as well as the limited availability of Certified Public Accountants (CPAs) willing to audit special districts. The District stated that the FY 2023-24 audit has commenced, and a timeline for completion has not been identified. Due to the absence of recent audit data, LAFCO’s financial evaluation relied on the five most recently completed audits (FY 2018-19 through FY 2022-23). However, both the FY 2021-22 and FY 2022-23 resulted in disclaimers of opinions due to a lack of proper record keeping, leaving the auditors unable to obtain auditable records to enable testing to provide a basis for an audit opinion. Specifically, the FY 2022-23 audit stated the following: • Documentation supporting revenues and expenditures was incomplete Upper Salinas – Las Tablas Resource Conservation District 21 MSR & SOI Study • Bank reconciliations were not performed for major funds • Supporting schedules for capital assets and liabilities were not available • Internal controls were absent Data from the five most recently completed audits (FY 2018-19 through FY 2022-23) is provided below. However, due to the findings in the FY 2021-22 and FY 2022-23 audits, LAFCO cannot confirm the accuracy of the financial indicators. As a result, a definitive financial determination cannot be made at this time. Revenues and Expenditures US-LTRCD’s principal sources of revenue are from grants and program income. The District also receives funding through interest income; however, the District does not receive any property tax funding. As shown in Figure 2 below, the District experienced an overall increase in revenues from FY 2018-19 through FY 2022-2023 primarily due to increases in grant funding. Similarly, the District’s total expenditures experienced an overall increase from FY 2018-19 to FY 2022-23. The District’s principal expenses are for salaries and benefits, professional fees, software expenses, and office expenses. Figure 2: US-LTRCD Revenues and Expenditures $1,400,000.00 $1,200,000.00 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $- FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Revenues Expenditures Upper Salinas – Las Tablas Resource Conservation District 22 MSR & SOI Study To assess the District’s ability to meet its financial obligations, Figure 3 displays the Operating Ratio for the past five audited fiscal years. This ratio—calculated as annual operating expenses divided by annual operating revenues—serves as a basic indicator of financial performance: • A ratio below 1.0 indicates the agency is operating at a surplus • A ratio above 1.0 indicates the agency is operating at a deficit Although informative, these indicators are based on incomplete, historical data and do not accurately reflect the District’s current financial status, given the absence of recent audits and the disclaimer opinions on the last two. Figure 3: Operating Ratios FY 22-23 1.12 FY 21-22 1.08 FY 20-21 0.93 FY 19-20 0.93 FY 18-19 1.07 0.00 0.20 0.40 0.60 0.80 1.00 1.20 Assets and Liabilities An agency’s assets represent resources that provide current, future, or potential economic benefits. These assets may include items the agency owns or amounts owed to the agency. In this section, agency assets will be reviewed in two separate categories as defined below: • Current Assets: Cash and other assets that are expected to be converted to cash within a year • Capital Assets: Long-term investments that are not expected to become cash within an accounting year Upper Salinas – Las Tablas Resource Conservation District 23 MSR & SOI Study At the end of FY 2022-23, US-LTRCD’s audited assets totaled $269,242, which is about 19% lower than the five-year average of $333,226. Current assets constituted 88% of total assets, primarily in cash, investments, and accounts receivable. The remaining assets are classified as capital assets, mainly representing equipment and vehicles. Overall assets increased 3.9% over the five-year audited period. Table 6: Assets Category FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Current $259,126 $246,232 $466,402 $407,212 $237,902 Assets Capital - - - $17,916 $31,340 Assets Total Assets $259,126 $246,232 $466,402 $425,128 $269,242 An agency’s liability is something the agency owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits, including money, goods, or services. In this section, agency liabilities will be reviewed in two separate categories as defined below: • Current Liabilities: are an agency's short-term financial obligations due to be paid within a year. • Non-Current Liabilities: are an agency’s long-term financial obligations that are due more than a year away. US-LTRCD’s audited liabilities totaled $259,387 at the end of FY 2022-2023, about a 11% increase over the five-year average of $232,749, mainly related to accrued expenses and unearned revenue. Current liabilities comprised 94% of total liabilities at $266,423, while non-current liabilities accounted for $14,783, related primarily to office lease obligations. Overall, liabilities grew about 33% over the five- year audited period. Upper Salinas – Las Tablas Resource Conservation District 24 MSR & SOI Study Table 7: Audited Liabilities Category FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Current $187,131 $130,631 $281,808 $266,423 $244,604 Liabilities Non-Current $7,779 $10,141 - $20,446 $14,783 Liabilities Total $194,910 $140,772 $281,808 $286,869 $259,387 Liabilities Figure 4 illustrates the District’s Liquidity Ratios over the last five audited fiscal years. This ratio measures the District’s ability to meet its short-term financial obligations by comparing unrestricted current assets to current liabilities. • A ratio above 1.0 indicates that the District has sufficient short-term resources to cover its liabilities, reflecting strong financial health. • A ratio below 1.0 signals potential liquidity concerns, suggesting short-term resources may be insufficient to meet immediate obligations. The District has maintained liquidity ratios above 1.0 during four of the five years analyzed. However, without recent audited data beyond FY 2022–23 and due to the disclaimer opinions issued for the two most recent audits, current liquidity conditions remain uncertain. Figure 4: Liquidity Ratios FY 22-23 0.97 FY 21-22 1.53 FY 20-21 1.66 FY 19-20 1.88 FY 18-19 1.38 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 Upper Salinas – Las Tablas Resource Conservation District 25 MSR & SOI Study Agency Net Position The government-wide financial statements utilize a net position presentation to assess the District’s financial position at a specific point in time. Net position is defined as the difference between total assets and total liabilities and is a critical measure of an agency’s financial health. • A positive net position indicates that the District possesses more assets than liabilities, reflecting fiscal health • A negative net position may suggest fiscal distress or an inability to meet long-term obligations US-LTRCD’s audited net position at the end of FY 2022-23 totaled $9,855, which represents an 85% decrease over the five-year audited period. This figure is also 90% lower than the five-year average net position of $100,476, suggesting poor fiscal performance over the longer term. However, the reliability of this data is limited due to the inconclusive audits for FY 2021-22 and FY 2022-23. Additionally, without recent audited data beyond FY 2022-23, the District’s current net position remains uncertain. Table 8: Audited Net Position Category FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Net Investment - - - $48,921 $38,345 in Capital Assets Unrestricted $64,216 $105,460 $184,594 $89,338 $(28,490) Total Net $64,216 $105,460 $184,594 $ 138,259 $9,855 Position Sphere of Influence US-LTRCD’s existing SOI is coterminous with its service area boundary and is depicted in the boundary map in Figure 5 below. The District spans more than 1,859,700 acres in Northern San Luis Obispo County. The District’s boundaries overlap the cities of Atascadero, Morro Bay, and Paso Robles; nine Community Services Districts, 6 Special Districts, and 10 cemetery districts. US-LTRCD is partially within Monterey County to the north, and bounded by Kern County to the east, the Coastal San Luis Resource Conservation District to the south, and by the Pacific Ocean to the West. At this time, US-LTRCD has not requested any changes to its SOI, and no potential SOI amendments are under evaluation in this Upper Salinas – Las Tablas Resource Conservation District 26 MSR & SOI Study MSR and SOI Study. The District has expressed its intention to maintain its current boundaries for the foreseeable future. Figure 5: US-LTRCD Boundary Map Upper Salinas – Las Tablas Resource Conservation District 27 MSR & SOI Study DETERMINATIONS Municipal Service Review Determinations Pursuant to Government Code Section 56430(a), in order to amend an SOI in accordance with Government Code Section 56425, the Commission is required to conduct a service review of the municipal services provided in the county or other appropriate area designated by the Commission. The Commission shall include in the area designated for a service review the county, the region, the sub-region, or any other geographic area as is appropriate for an analysis of the service or services to be reviewed, and shall prepare a written statement of its determinations with respect to each of the following: 1. Growth and population projections for the affected area Based on available data, the total population within the US-LTRCD was estimated at 109,594 in 2020. By 2050, the population is projected to reach approximately 123,034, reflecting a modest annual growth rate of 0.41%. As such, service demands related to natural resource conservation and land stewardship are expected to increase incrementally but remain manageable within the District’s current operational capacity. 2. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence US-LTRCD’s SOI and service area boundary includes ten areas that meet the criteria for a DUC as defined in Government Code Section 56033.5. The location and characteristics of the ten DUCs are described in Table 3 and Figure 1 of the DUC section of this report. While US-LTRCD does not provide water, sewer, or structural fire protection—typical focus areas for DUC evaluations—the District's conservation and land stewardship services may still support these communities by promoting resource sustainability, soil health, and watershed protection. 3. Present and planned capacity of public facilities and adequacy of public services, including 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. Upper Salinas – Las Tablas Resource Conservation District 28 MSR & SOI Study US-LTRCD provides programs which fall under three general categories: education, natural resources management, and regulatory assistance. These services are implemented through voluntary, collaborative efforts between the District, landowners, local municipalities, state and federal agencies, and the broader community. The District currently maintains adequate staffing and operational capacity to support its programmatic responsibilities. Its team includes an Executive Director, a Conservancy Steward, a Forestry Project Manager, a Conservation Project Manager, and technicians as needed, depending on project funding. Additionally, US- LTRCD owns and manages the 375-acre Willow Creek Conservancy, which serves as a living laboratory for regenerative agriculture, sustainable land practices, and climate resilience innovation. While at this time the District demonstrates sufficient capacity to deliver its services, it does not provide water, sewer, or fire protection services. Therefore, the District is not responsible for ensuring that these services are adequately provided to the communities within the District’s boundaries. 4. Financial ability of agencies to provide services As of the adoption of this report, US-LTRCD remains out of compliance with California Government Code Section 26909 due to an outstanding audit for FY 2023-24. In the absence of this audit, LAFCO relied on the five most recent audited financial statements (FY 2018-19 through FY 2022-23) to evaluate the District’s financial health. However, audits for FY 2021-22 and FY 2022-23 were issued with Disclaimers of Opinion due to the auditor’s inability to obtain sufficient records for testing, preventing a basis for an audit opinion. Despite the limitations in available financial data, analysis of three key fiscal indicators, including Operating Ratio, Liquidity Ratio, and Net Position, was used to assess the District’s financial health. Operating Ratio, which compares annual operating revenues to operating expenses, indicated the District operated at a deficit in three of the five years reviewed. Liquidity Ratio, which measures current assets relative to current obligations, showed the District generally maintained sufficient short-term resources to cover obligations in four of the five years. The District's Net Position, representing the difference between total assets and total liabilities, declined by 85% over the five-year period, signaling significant financial deterioration. However, due to the disclaimers for FY 2021-22 and FY 2022-23 and the absence of audited Upper Salinas – Las Tablas Resource Conservation District 29 MSR & SOI Study data for FY 2023-24, this assessment may not accurately reflect the District’s current financial position. LAFCO determines that US-LTRCD is noncompliant with California Government Code Section 26909, and the District’s current financial health is unknown due to incomplete data. Upon adoption of the US-LTRCD MSR and SOI Study, a 12-month remediation will commence for the District to complete audits for FY 2023-24 and FY 2024-25. At the conclusion of the 12-month period, LAFCO staff will report back to the Commission with an update and potential options for further action, including consideration of a change of organization if remediation efforts are deemed unsatisfactory. 5. Status of, and opportunities for, shared facilities The US-LTRCD has a long-standing history of maintaining partnerships with local, state, and federal agencies to support the implementation of community-based conservation projects. Continued coordination with other Resource Conservation Districts, the County of San Luis Obispo, and state and federal entities presents ongoing opportunities for shared use of facilities, equipment, and technical staff to expand program reach and reduce operational redundancies. 6. Accountability for community service needs, including governmental structure and operational efficiencies US-LTRCD is governed by a five-member Board of Directors that is appointed to four-year terms by the County Board of Supervisors. Regularly scheduled monthly Board meetings are held, and all meetings are open to the public and are publicly posted a minimum of 72 hours prior to the meeting in accordance with the Brown Act. US-LTRCD maintains an up-to-date website that contains District information, documents, and updates. 7. Any other matter related to effective or efficient service delivery There are no other matters related to the efficiency of services. Upper Salinas – Las Tablas Resource Conservation District 30 MSR & SOI Study Sphere of Influence Determinations In order to carry out its purposes and responsibilities for planning and shaping the logical and orderly development of local governmental agencies to advantageously provide for the present and future needs of the county and its communities, the Commission shall develop and determine the Sphere of Influence of each local agency, as defined by Government Code Section 56036, and enact policies designed to promote the logical and orderly development of areas within the sphere. In determining the Sphere of Influence of each local agency, the Commission shall consider and prepare a written statement of its determinations with respect to the following: 1. Present and planned land uses in the area, including agricultural and open-space lands. The present and planned land uses with the service area of US-LTRCD are guided by the general plans of the three land use authorities whose jurisdictions overlap the District’s boundaries. These include San Luis Obispo County, the City of Atascadero, and the City of Paso Robles. There are no planned changes to the District’s SOI at this time, and reaffirmation of the existing, coterminous SOI is recommended. 2. Present and probable need for public facilities and services in the area. US-LTRCD provides a unique and vital service to North San Luis Obispo County. The District provides technical assistance, education, and resources to help agricultural, rural, and urban communities preserve their natural resources while supporting robust land productivity. US- LTRCD works with many private and public stakeholders in accomplishing local conservation projects. There is a clear present and probable continued need for these services within the District’s coterminous SOI and service area, and reaffirmation of the District’s SOI is recommended. 3. Present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. At present, the US-LTRCD appears to have adequate staffing to provide service within the District's service area boundary; however, the District’s financial capacity is unknown. In addition, the District has successfully developed partnerships with local, state, and federal Upper Salinas – Las Tablas Resource Conservation District 31 MSR & SOI Study agencies to assist in accomplishing locally developed projects and priorities. Reaffirmation of the District’s SOI is recommended. 4. Existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency. There are no social or economic communities of interest within the District service area boundary. Reaffirmation of the District’s SOI is recommended. 5. For an update of the sphere of influence of a city or special district that provides public facilities or services related to sewers, municipal and industrial water, or structural fire protection, the present and probable need for those public facilities and services of any disadvantaged unincorporated communities within the existing sphere. Ten DUCs were identified within the US-LTRCD service area boundary, as seen in Figure 1. Although these DUCs were identified, US-LTRCD does not provide public facilities or services related to wastewater, municipal or industrial water, or structural fire protection, and therefore, no infrastructure deficiencies to a DUC would result from changes to the US-LTRCD’s SOI or service area boundary. Reaffirmation of the District’s SOI is recommended.