LAFCO
Heritage Ranch Community Services District
Read the report at Local Agency Formation Commissions ↗
Heritage Ranch Community Services District
Municipal Service Review
and Sphere of Influence Study
Prepared by
the San Luis Obispo Local Agency Formation Commission
Adopted April 20, 2023
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Acknowledgments
San Luis Obispo LAFCO gratefully acknowledges the time and effort of officials and staff of the Heritage
Ranch Community Services District (CSD) in assisting in the preparation of this report and includes –
but not limited to – the following:
Scott B. Duffield, PE, Heritage Ranch CSD General Manager
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TABLE OF CONTENTS
About LAFCO ____________________________________________________ 5
Authority and Objectives _____________________________________________________ 5
Regulatory Responsibilities ___________________________________________________ 5
Planning Responsibilities _____________________________________________________ 6
LAFCO Decision-Making _____________________________________________________ 7
SLO LAFCO _______________________________________________________________ 9
District MSR & Sphere Study ________________________________________ 10
Overview _____________________________________________________________ 10
At A Glance ____________________________________________________________ 11
Boundary Map _________________________________________________________ 12
Sphere of Influence ______________________________________________________ 13
Accountability __________________________________________________________ 13
Population Profile _______________________________________________________ 14
Present and Planned Land Use ______________________________________________ 16
Services and Capacity ____________________________________________________ 18
Finance ______________________________________________________________ 29
Determinations & Recommendations _________________________________ 36
Service Review Determinations per Government Code Section 56430 ___________________ 36
Sphere of Influence Determinations per Government Code Section 56425 ________________ 41
MSR Conclusions _________________________________________________________ 42
Appendix ______________________________________________________ 45
Sources ________________________________________________________________ 45
Written Comments on the Draft Report _________________________________________ 46
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LIST OF FIGURES
Figure 1: Heritage Ranch Community Services District Boundary Map ................................................. 12
Figure 2: Heritage Ranch Community Services District Land Use Designations .................................... 17
Figure 3: Heritage Ranch Community Services District Revenue Sources ............................................. 31
Figure 4: Heritage Ranch Community Services District Revenue Sources by Year ................................ 31
Figure 5: Heritage Ranch Community Services District Proposed Boundary ......................................... 44
LIST OF TABLES
Table 1: Heritage Ranch Community Services District Summary Profile .......................................... 11
Table 2: Heritage Ranch Community Services District Board of Directors ....................................... 13
Table 3: Heritage Ranch Village Reserve Line Land Use Category Acreage ...................................... 16
Table 4: Nacimiento Water Entitlements .................................................................................... 20
Table 5: Heritage Ranch Community Services District Existing Water Demand ................................ 22
Table 6: Heritage Ranch Community Services District Future Water Demand ................................. 23
Table 7: Heritage Ranch Community Services District Existing Wastewater Demand ....................... 26
Table 8: Heritage Ranch Community Services District Future Wastewater Demand ........................ 27
Table 9: Heritage Ranch Community Services District Operating Expense ...................................... 30
Table 10: Heritage Ranch Community Services District Revenue .................................................. 30
Table 11: Heritage Ranch Community Services District Audited Assets .......................................... 33
Table 12: Heritage Ranch Community Services District Audited Liabilities ...................................... 34
Table 13: Heritage Ranch Community Services District Audited Net Position .................................. 35
Table 14: Summary of Heritage Ranch Community Services District Water Demand ....................... 37
Table 15: Heritage Ranch Community Services District Wastewater Capacity ................................. 38
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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.
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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 these,
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 (SOI)
A SOI is defined by G.C. 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 its 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.
SOI determinations have been a core planning function of LAFCOs since 1971. 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.
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Municipal Service Reviews (MSR)
MSRs 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 its 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 effects land use
density or intensity, property development, or subdivision requirements.
LAFCOs are generally governed by a board comprising of county supervisors, city councilmembers,
independent special district members, and representatives of the general public and an alternate
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member for each category. SLO LAFCO, specifically, is governed by a 7-member board comprising of
two county supervisors, two city councilmembers, two independent special district members, and one
representative of the general public. 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. All 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.
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SLO LAFCO
Regular Commissioners
Chair Ed Waage City Member
Vice Chair Debbie Arnold County Member
Jimmy Paulding County Member
Marshall Ochylski Special District Member
Robert Enns Special District Member
Steve Gregory City Member
Heather Jensen Public Member
Alternate Commissioners
Charles Bourbeau City Member
Dawn Ortiz-Legg County Member
Ed Eby Special District Member
David Watson Public Member
Staff
Rob Fitzroy Executive Officer
Imelda Marquez Analyst
Morgan Bing Clerk Analyst
Brian Pierik Legal Counsel
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.
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DISTRICT MSR & SPHERE STUDY
Overview
This report represents San Luis Obispo LAFCO’s scheduled municipal service review for the Heritage
Ranch Community Services District (HRCSD), located in northern San Luis Obispo County. The report
has been prepared by staff consistent with the requirements of the Cortese, Knox, Hertzberg Act. The
purpose of this report is to produce an independent assessment of municipal services in this area over
the next five years or as seen 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 municipal services within
the service areas of HRCSD directly 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 from
the last time the MSR was updated, in 2013. The financial analysis has been set to cover the last five
budgeted years and the last five audited fiscal year periods. The timeframe for the report has been
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 and recommendations have been included as
the concluding chapter of this document.
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At A Glance
Table 1: Heritage Ranch Community Services District Summary Profile
Agency Name Heritage Ranch Community Services District
Formation 1990
Legal Authority Government Code §61000- 61850
Office Location 4870 Heritage Rd, Paso Robles, CA 93465
Website https://heritageranchcsd.ca.gov/
General Manager Scott Duffield
Employees 9 Full-time Employees
Public Meetings HRCSD Board of Directors Meetings are held on the third Thursday of
each month at the Heritage Ranch Community Services District Board
Room, 4870 Heritage Road, Paso Robles, CA 93446. Meetings begin at
4:00 p.m. unless otherwise noticed. Special Meetings are held on an
as needed basis.
Board of Directors Five members elected to four-year terms
Active Powers 1. Water
2. Sewer
3. Solid Waste
4. Parks & Recreation
5. Gas Station Operation
District Service Area 5,361 acres
Population Estimate 2,956
Revenues $4,598,554 for FY 22-23
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Boundary Map
Figure 1: Heritage Ranch Community Services District Boundary Map
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Sphere of Influence
Current & Proposed SOI
HRCSD’s existing sphere is coterminous with the District’s existing boundary. The District does not wish
to make any SOI adjustments at this time; therefore no areas specifically requested by the District are
being studied for possible inclusion into the District.
Accountability
HRCSD is an independent special district governed by a five-member Board of Directors that are elected
to four-year terms. The Board holds meetings on the third Thursday of each month at the HRCSD Board
Room, 4870 Heritage Road, Paso Robles, CA 93446. Agendas are officially posted at the HRCSD office,
on the District’s website, and sent out to those subscribed via email at least 72 hours prior to a meeting.
Every agenda for a regular meeting provides opportunity for members of the public to directly address
the board. Directors receive $100.00 a day for a District Board, Committee, or any other meeting
attended for the purpose of conducting district business.
Table 2: Heritage Ranch Community Services District Board of Directors
Board Member Title Term Expiration
Bill Barker President 12/1/2022 – 12/1/2026
Dan Burgess Vice President 12/1/2022 – 12/1/2024
Devin Capps Director 12/1/2022 – 12/1/2026
Michael Camou Director 12/1/2022 – 12/1/2026
Masen Yaffee Director 12/1/2022 – 12/1/2026
The District currently employs 9 full-time staff including the general manager, office supervisor, district
engineer, operations manager, and 5 operators. Current staffing levels are considered adequate to
provide services within the District’s service area. The District reports that all Form 700 financial
disclosures are current and that the District maintains active memberships with several supportive
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associations including the California Special Districts Association, Special District Risk Management
Authority, American Water Works Association, and California Rural Water Association.
HRCSD maintains an up-to-date website in compliance with Senate Bill 929 which contains contact
information for the District, the current agenda, financial transaction reports, compensation reports,
and SB 272 Enterprise System Catalog.
Population Profile
According to 2020 US Census data, the Lake Nacimiento Census-designated Place (CDP), which largely
represents HRCSD, had a population of 2,9561. Total housing units is estimated to be 1932 units2. The
estimated build-out population within Heritage Ranch is estimated to be 4,274 with an approximate
build-out year of 20703. Following these projections, HRCSD is currently about 69% built-out.
Development of Heritage Ranch commenced in 1971 as a vacation and retirement home community
with recreational and commercial facilities provided for the residents. The County of San Luis Obispo’s
Land Use Element provides for substantial reduction in the extent of development originally authorized
by the specific plan. Re-evaluation of county water allocations for development around Lake
Nacimiento resulted in a maximum of 1,100 acre-feet a year being set aside for development of
Heritage Ranch Village Area. This allocation was expected to support the development of a maximum
4,000 residential units and other non-residential uses. (Amended 1986, Ord. 2270) In 1986, the
developer reduced the number of potential dwelling units further to 2,9004 to reflect a more realistic
development capability within the intended semi-rural character of the ranch. As a result, both the
physical area within the entire Heritage Ranch Village reserve line (including Lake Nacimiento Resort)
and the densities proposed for specific locations have been revised. To date, 20765 units have been
approved in the existing subdivisions.
1 US Census, 2020 Decennial Census, Lake Nacimiento CDP
2 Heritage Ranch Community Services District Staff, 2022
3 San Luis Obispo Council of Governments, 2050 Regional Growth Forecast for San Luis Obispo County, Figure 11. Buildout
Estimates for Communities and Villages in the Unincorporated Area by Planning Area (2010)
4 Heritage Ranch Village Plan, San Luis Obispo County, 2014
5 Heritage Ranch Community Services District Staff, 2022
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Disadvantaged Unincorporated Communities
SB 244 (Chapter 513, Statutes of 2011) made changes to the CKH Act related to “disadvantaged
unincorporated communities,” including the addition of SOI determination number five listed above.
Disadvantaged unincorporated communities, or “DUCs,” are inhabited territories (containing 12 or
more registered voters) where the annual median household income (MHI) is less than 80 percent of
the statewide annual median household income.
CKH Act Section 56375(a)(8)(A) prohibits LAFCO from approving a city annexation of more than 10 acres
if a DUC is contiguous to the annexation territory but not included in the proposal, unless an application
to annex the DUC has been filed with LAFCO. The legislative intent is to prohibit selective annexations
by cities of tax-generating land uses while leaving out under-served, inhabited areas with infrastructure
deficiencies and lack of access to reliable potable water and wastewater services. DUCs are recognized
as social and economic communities of interest for purposes of recommending SOI determinations
pursuant to Section 56425(c).
HRCSD is within Lake Nacimiento CDP which according to 2020 US Census Data had an estimated MHI
of $72,1016. This is approximately 92 percent of the estimated California MHI of $78,6727, therefore
the District does not qualify as a DUC. However, the census data is based on a small sample size and
may not accurately depict the income levels of the District.
Social or Economic Communities of Interest in the Area
There are no District relevant social or economic communities of interest in the area served.
6 US Census, American Community Survey 2020 5-year estimates, Lake Nacimiento CDP
7 US Census, California Quick Facts, 2022
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Present and Planned Land Use
Land use within the District is subject to the Heritage Ranch Village Plan which is Part III of the Land
Use and Circulation Elements (LUCE) of the County General Plan. Table 3 summarizes the acreage of
each land use category within Heritage Ranch Village Reserve Line. Rural Land Use acreage is
summarized in the North County Area Plan.
Table 3: Heritage Ranch Village Reserve Line Land Use Category Acreage
Land Use Category Acreage
Agriculture 0
Rural Lands 0
Recreation 1,453
Open Space 3,520
Residential Rural 1,533
Residential Suburban 0
Residential Single Family 1,194
Residential Multi-Family 325
Office and Professional 0
Commercial Retail 71
Commercial Service 0
Industrial 0
Public Facilities 166
Dalidio Ranch 0
Total 8,262
The map on the following page shows the Land Use Categories (zoning) for the community of Heritage
Ranch as established by the Heritage Ranch Village Plan.
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Figure 2: Heritage Ranch Community Services District Land Use Designations
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As previously stated, Heritage Ranch is currently about 69% built-out and has ample opportunity for
growth within the existing boundaries. HRCSD’s service area and sphere of influence boundaries are
coterminous, and no sphere of influence update is anticipated at this time. Additionally, no impacts to
agriculture or open space are expected at this time.
Services and Capacity
Services Currently Provided
In 2006, Senate Bill (SB) 135 revised the state laws governing community services districts (CSD).
Following such legislative changes, SLO LAFCO passed resolution No. 2006-03 recognizing active powers
for the County’s CSDs. Since January of 2006, LAFCO has not received any requests from HRCSD to
activate or divest any power. SB 135 requires an existing CSD to receive LAFCO approval to
authorize/activate a latent power. HRCSD’s active powers are listed below:
1. Water
2. Sewer
3. Solid Waste
4. Parks & Recreation
5. Gas Station Operation
An adequate supply of service capability should be documented to support areas in the sphere
envisioned for eventual annexation and service by a jurisdiction. In this case, the HRCSD SOI is
coterminous with the District’s service area boundary and no changes to the SOI are proposed. This
section analyzes present and long-term infrastructure demands and resource capabilities of HRCSD.
LAFCO reviews and evaluates 1) the resources and services that are currently available, and 2) the
ability of the CSD to expand such resources and services in line with increasing demands.
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Water
Water Treatment Facility
HRCSD operates a treatment plant that removes contaminates and treats the water to ensure a
healthful water supply for its residents. The treatment plant is regularly monitored by the State of
California for compliance with State and Federal standards and regulations. HRCSD also provides its
customers with an annual Consumer Confidence Report; this report is required by the California
Department of Drinking Water and becomes available to all HRCSD customers in April of each year.
HRCSD Board last approved a Five-Year Capital Improvement Program (CIP) on August 18, 2022, for
water and sewer operations. It is customary for the District to develop and project key capital
improvement projects anticipated to occur during 5-year time period increments. Some of the capital
improvement projects are required in part to serve future growth, while other CIPs are meant to serve
existing customer needs. The overall costs get incorporated into customer water and sewer rate
structure revisions. In the case where a capital project is needed to increase capacity to serve new
development, that cost will be paid for by the developer at the time of development. More discussion
about specific projects, impacts, financing, and implementation schedule is available in the HRCSD’s
approved 5-Year CIP dated August 18, 2022.
Existing Water Supply
HRCSD provided water treatment and distribution services to about 1,8798 residential units and 18
other units (commercial, public facilities, and irrigation) in 2017, in 2022 that number increased to
1,9329. To serve its residents, the HRCSD operates a water treatment plant (WTP) that sources water
from the Nacimiento River through an infiltration gallery well. HRCSD is located within the Nacimiento
Water Planning Area (WPA) 16 (Inland Sub-Region) as determined in the Master Water Report of 2012,
which includes agricultural and rural land users, as well as Heritage Ranch and Oak Shores residential
users. Similarly, WPA 16 receives water supply solely from the Nacimiento Reservoir. Table 4 is a
8 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
9 Heritage Ranch Community Services’ District Staff, 2022
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summary of San Luis Obispo’s total Nacimiento Water entitlements/allocations and allocation details
for the Heritage Ranch Area.
Table 4: Nacimiento Water Entitlements
Agency Existing Water Allocation (AFY)10
Heritage Ranch Community Services District 889
County of San Luis Obispo & Private Landowners
211
(within the Village of Heritage Ranch Reserve area)
Village of Heritage Ranch Area 1,100
Nacimiento Water Company (serves Oak Shores) 600
Other Lakeside Users 50
Other Nacimiento Reservoir Users 650
Nacimiento Water Pipeline 15,750
Total County of San Luis Obispo Entitlement 17,500
Emergency Water Supply
During dead pool conditions, the period when water can no longer be released through the dam &
reservoir elevation is below 670 feet, water can no longer be gravity fed to the lower outlet works of
the dam. At this reservoir elevation, the Nacimiento River is not capable of receiving gravity fed water
from the outlet works of the dam and HRCSD (gallery wells downstream of the dam) will be without a
water supply.
As of January 2016, HRCSD installed an emergency connection, with cooperation from the County of
San Luis Obispo to the Nacimiento Water Project (NWP) pipeline. This emergency connection would
provide the District with the ability to convey up to 491 acre-feet per year of Nacimiento raw lake water
directly to the WTP for processing. This would only occur when lake water cannot be released through
10 Chapter 4, Volume II of San Luis Obispo County Master Water Report, Carollo Engineers, 2012
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the dam to the District’s downstream gallery wells for river water intake to the WTP. This emergency
water project would only operate during drought years and would provide access to the District’s sole
potable water supply source through the Nacimiento Pipeline. Without this emergency connection
project, the District would not be able to provide water during drought conditions for the life, health
and safety of their residents. This supply of water is considered sufficient to meet the minimum needs
of the community during drought conditions and implementing water shortage restrictions per the
District’s water restriction codes/requirements.
It should be noted that any water taken from the emergency connection would remain within the
District’s current Nacimiento Water allocation and the District would not be able to draw from this
emergency connection such that they exceed their contractual water allocation.
Existing Water Demands
The District has four contracts with the County that allow the District an allocation of 889 acre-feet per
year (AFY). The remaining water allocation within the Village of Heritage Ranch (211 AFY) is held by
private landowners and the County. The District has allocated all its available contracted water supply
to 2,07611 approved residential lots. There is an additional 18 water meters12 serving a variety of
commercial, recreational, and public uses, and while these uses do add to the water demand, they do
not count against the build-out limit for residential lots.
As of 2017, of the 2,076 approved residential lots, 1,889 had active meters (400 AFY allocation) and
187 were vacant unmetered lots (45 AFY allocation); of the 1,889 lots 19 were locked/inactive meters
per the Updated Water Allocation Evaluation Report. As of 2022, HRCSD staff indicated that of the
2,076 approved residential lots, 1,932 have active meters (with an approximate demand of 464 AFY)
and 144 are vacant unmetered lots (estimated reserved demand of 35 AFY). The average water demand
per residential water meter is between 0.16 and 0.27 AFY/ lot13, with the lower amount occurring
11 Updated Water Allocation Evaluation Report, Wallace Group, 2017
12 Updated Water Allocation Evaluation Report, Wallace Group, 2017
13 Updated Water Allocation Evaluation Report, Wallace Group, 2017
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during extreme drought conditions and the standard amount being .24 AFY/lot14. The 5-year average
raw water intake between 2012-2015 was 505.8 AFY15 and potable water sales was 378.8 AFY16. In
2022, the amount of raw water intake was 547 AFY and potable water sales was 470 AFY17. Table 5
shows HRCSD’s existing water demand.
Table 5: Heritage Ranch Community Services District Existing Water Demand
Total
Connection Water Used Estimated
Number of Users Allocation
Type (AFY) Population18
(AFY)
1,914 – metered
547 - raw
Residential 144 -
(470 –
vacant/unmetered 889
potable of
Commercial/ 3,758
18 - misc. 547 raw)
Non-Residential
Total 2,076 889 547
Future Water Demands
The Nacimiento Area Plan limits the maximum number of build-out residential units within HRCSD to
2,900 units, including existing RV sites. To serve new development within the District service area,
beyond the approved 2,076, the District would require that developers transfer Nacimiento Reservoir
water rights to the District prior to approving/accepting new developments. New developments are
not approved until the District has reviewed the potential impacts to available water supply. Based on
14 Heritage Ranch Community Service’s District Staff, 2022
15 Updated Water Allocation Evaluation Report, Wallace Group, 2017
16 Updated Water Allocation Evaluation Report, Wallace Group, 2017
17 Heritage Ranch Community Service’s District Staff, 2022
18 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
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a future population of 5,200 persons19, and a per capita demand of 160 GPD or .18 AFY/lot20, the
estimated future water demand is assumed to be 0.83 million gallons per day (MGD) or 930 AFY21; that
number was later adjusted to 952 AFY22. The total amount of water needed to meet build-out demand
is 272 AFY23 of raw water needs to produce 680 AFY24 of potable water sales for a total of 952 AFY to
serve the existing and remaining lots. Table 6 below summarizes HRCSD’s future water demand.
Table 6: Heritage Ranch Community Services District Future Water Demand
Total
Number of Water Needed Estimated
Connection Type Allocation
Users (AFY) Population
(AFY)
Residential 2,900 lots
272 - raw
889
Commercial/ Non- 680 - potable
18 - misc. 5,200
Residential
Total 889 952
In summary, to accommodate for HRCSD’s future build-out water demand, it would require the
following:
- Water demand for 2,900 units, 680 AFY
- Raw Water Needs to Produce Potable Water, 272 AFY
- Total Nacimiento Water Allocation to Meet Future Build-out of 2,900 units, 952 AFY
- Current Contracted Nacimiento Water Allocation, 889 AFY
- Additional Allocation Required to Meet Future Demands, 63 AFY
19 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
20 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
21 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
22 Updated Water Allocation Evaluation Report, Wallace Group, 2017
23 Updated Water Allocation Evaluation Report, Wallace Group, 2017
24 Updated Water Allocation Evaluation Report, Wallace Group, 2017
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The District will require some additional water allocation beyond the current contractual 889 AFY
allocation, as was discussed previously, but ultimately can serve future growth for many years into the
future given current growth rates and available water supply. HRCSD should also keep in mind that the
number of permanent residents may increase over time, and other variables change over the years
that may impact this water demand forecast. HRCSD’s water demand review should be updated every
5 to 10 years as was recommended in the 2017 Water Allocation Evaluation Report.
The District is encouraged to continue with the planned facility improvements as outlined in the
approved CIP to ensure that there is continued reliable water service for existing and future residents.
District policy requires new development to bring in new water source (i.e. a portion of the remaining
211 AF), without increasing the full reserved Nacimiento water allocation of 1,100 AFY. To allow the
remaining 824 lots to be developed would require the District and future developers to address water
demands beyond the current 889 AFY contractual allocation with the County.
Additional recommendations, included in the MKN & Associates Recycled Water Study, determined the
feasibility of augmenting the District’s water resources portfolio by adding recycled water usage for
potential customers; the in-depth study included moving forward with the effort to include recycled
water to their portfolio which would help the District’s water supply to meet build out demands.
Other Water Providers in the Area
In addition to HRCSD, nine other private water purveyors/ Water Mutual Companies provide water
services to area residents but none of them overlap with HRCSD. The primary source for all of these
water providers is groundwater under the direct influence of surface water of Nacimiento Lake or River.
These include:
• South Shore Village Club • Laguna Vista Boat Club
• Christmas Cove Company • Northshore S&B Inc.
• Cal Shasta Club • Lake Nacimiento
• Nacimiento Water Company (Allocation of 600AFY) • Babe Ruth Oak View Mobile Home Park
• Tri-Counties Club
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Wastewater
Wastewater Treatment Facility
The sewer treatment plant is located on Heritage Road next to the District office. Heritage Ranch CSD
Water Reclamation Facility is an extended aeration facility. Aeration treatment relies on aerobic
bacteria to digest the sewage, which gets discharged to an unnamed ephemeral drainageway that is a
tributary to the Nacimiento River 4.2 miles downstream of the discharge point. HRCSD has an aging
secondary wastewater treatment pond system and must upgrade their Water Reclamation Facility
(WRF) for reasons that are described below.
The California Regional Water Quality Control Board (RWQCB), Central Coast Region, issues a Waste
Discharge permit for discharge of the treated effluent. A National Pollution Discharge Elimination
System (NPDES) permit is also required for the discharge of treated water. A NPDES permit is required
because the ephemeral creek discharges to the Nacimiento River during heavy rains and thus to a
“water of the United States” that is under Federal authority. Basic effluent limitations set by the
RWQCB are that the discharge must be treated to a degree that protects groundwater, streams and
riparian habitat.
HRCSD’s aging secondary wastewater treatment pond system must upgrade their facility to ensure
compliance with NPDES and Waste Discharge Requirements imposed by the RWQCB. According to
HRCSD WRF Upgrade design plans, the District’s NPDES Permit was revised, and the Regional Board
also issued a Time Schedule Order which acknowledges the District is unable to immediately comply
with the copper, un-ionized ammonia, and nitrate effluent limits.
HRCSD is working on major upgrades to comply with these effluent limits, and this WRF Upgrade
Project will be needed in order to meet these treatment objectives and requirements, the project will
also set the District up for recycled water programs. District staff anticipate the facility upgrades to be
completed by the end of 2027.
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In addition, as was mentioned in the water section of this report, the HRCSD Board last approved a
Five-Year CIP on August 18, 2022, for water and sewer operations. It is customary for the District to
develop and project key capital improvement projects anticipated to occur during 5-year time period
increments which helps keep the District’s facilities up to code.
Existing Wastewater Capacity
As of 2017, the District provided wastewater collection and disposal services to approximately 1,70125
residential units and 1126 other units (commercial and public facilities); in 2022 the number of service
connections slightly increased to 1,74827. The existing average daily flow was estimated at 0.13 MGD
or 145 AFY with a maximum monthly flow of 0.16 MGD or 179 AFY, according to the HRCSD 2017
Recycled Water Study. It is important to note that wastewater demand will differ from water demand
because there are residents within the HRCSD service area that are on septic. Table 7 below
summarizes the existing wastewater collection amounts.
Table 7: Heritage Ranch Community Services District Existing Wastewater Demand
Number of Estimated Existing Flows
Description
Connections Population28 (MGD)
Existing Wastewater
1,748 3,402 0.13
Collection
Future Wastewater Capacity
As mentioned in the water section, the HRCSD has allocated all of its available contracted water supply
to 2,087 residential and 18 miscellaneous approved units/parcels (school, commercial center,
HRHOA/public facilities) and buildout population served by the District’s wastewater facilities was
25 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
26 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
27 Heritage Ranch Community Service’s District Staff, 2022
28 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
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determined to be limited to 2,40029 connections. Based on a future population of 4,800 (for
wastewater needs) and a per capita flow of 55 gpd the estimated average daily flow was determined
to be 0.26 MGD or 291 AFY with a maximum monthly flow of 0.34 MGD or 381 AFY as was stated in the
2017 HRCSD Recycled Water Study. Future average daily flows to the WTP will be at 65% of the original
plant design hydraulic capacity (original design capacity of 0.4 MGD).
Once the District implements its CIP, last approved August 2022, to meet existing system deficiencies
and future flow and effluent requirements, the HRCSD would be able to better serve its existing and
build-out capacity and meet all regulatory requirements. Table 8 below recaps the future wastewater
collection amounts.
Table 8: Heritage Ranch Community Services District Future Wastewater Demand
Number of Future Flows
Description Estimated Population
Connections (MGD)
Future Wastewater
2,400 4,800 0.26
Collection
Solid Waste
HRCSD is the solid waste authority and has a Franchise Agreement with San Miguel Garbage Company
to provide solid waste services within the District. The current agreement expires January 31, 2032.
The agreement allows the San Miguel Garbage Company to include the furnishing of all labor,
supervision, equipment, materials, supplies, and all other items necessary to perform the services
(refuse collection, disposal and recycling activities). The District reserves the right to revise its laws and
regulations pertaining to solid waste collection and disposal in order to protect public health, safety
and welfare. Funding for solid waste collection and disposal activities comes primarily from fees
charged to residents.
29 Heritage Ranch Community Services District Recycled Water Study, MKN & Associates, 2017
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Parks & Recreation
Currently, HRCSD does not operate any parks and recreation facilities or activities. However, it does
lease property to the Heritage Village Senior Association, who built and owns a Senior Center for the
community since October 1, 1996, with a fifty-year term, which expires in the year 2046 with the option
to renew. The Senior Association funds all cost of operations.
The HRCSD does not plan to manage any parks and recreation operations as the Heritage Ranch Owners
Association (HROA) manages all these functions around the Heritage Ranch Area; the County does not
provide these services. The District is encouraged to deactivate this power which would require an
application from the District to LAFCO with Commission approval.
Gas Station
The District is authorized to provide gas station services but no longer provides the community that
service. HRCSD is encouraged to deactivate this power which would require an application from the
District to LAFCO with Commission approval.
Shared facilities
There are opportunities for continued shared relationships between agencies for services within the
HRCSD boundary. The County, the Homeowners Association, San Miguel Garbage Company, The
Nacimiento Water Project pipeline, and the District coordinate to provide services and avoid a
duplication of effort. At present, the distinction between District and County services in the area is
clear. The opportunities for more coordination may include:
• District and nearby private water purveyor
• District, County, & HROA coordination for parks and recreational facilities
• Coordinated open space preservation and development of trails & maintenance
• Under the Camp Roberts Joint Land Use Study (JLUS) policy (Policy IE-2A) supports regional
coordination on infrastructure such as combining water and wastewater treatment facilities
between San Miguel, Heritage Ranch, and Camp Roberts.
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Services provided by the District and the County are well delineated. The HROA provides for all roads
and streets maintenance within the District except for Nacimiento Lake Drive (NLD) and a short portion
of Heritage Loop Road from NLD to Holly Drive which is maintained by the County. The County provides
Sheriff Services, Fire Protection, Tax Collecting, and other general governmental services. The District
provides water, sewer, and solid waste. The HROA provides parks and recreation services.
Finance
District Budget
The District adopts the budget each year and it is used as the spending plan for the District. The budget
provides a framework for the District to address the following issues: reserves, revenues, expenditures,
transfer authority, fiscal management, investments, capital improvements, rates and fees. HRCSD’s
Information Manual provides more details on the budget, financial structure, and processes of the
District. The HRCSD Budget is divided into the following categories:
1. Capital and Equipment Budget: Any revenue and expense for specific HRCSD projects and/or
equipment is presented in its own spreadsheet.
2. Water Fund Budget: All Water related revenue and expenses are presented in a separate
spreadsheet.
3. Sewer Fund Budget: All Sewer related revenue and expenses are presented in a separate
spreadsheet.
4. Solid Waste Fund Budget: All Solid Waste related revenue and expense is presented in a
separate spreadsheet.
5. General Fund Budget: All miscellaneous revenue (transfer from other funds, miscellaneous
income, property tax) and miscellaneous expense (salaries and benefits and other District Office
expenses) are presented in its own spreadsheet.
6. Consolidated Budget: Primary District Budget - all District revenue and expenses are
summarized in a spreadsheet.
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The Consolidated Budget summarizes all of the District’s budget categories (listed as 1-5 above). The
table below shows the District’s operating total expenses for the 5 most recent adopted budgets. Data
was pulled from the consolidated budget for each corresponding FY.
Table 9: Heritage Ranch Community Services District Operating Expense30
Category FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23
Operating Total Expense $2,258,944 $2,552,867 $4,587,054 $4,830,802 $4,503,037
Revenues
The District is funded by a variety of revenue sources separated out into four separate budget
categories (Water Fund, Sewer Fund, Solid Waste Fund, & General Fund). Each budget fund receives
revenue from service fees, inspection fees, property taxes, interest, use of reserves etc. The total
revenue amounts for the 5 most recent adopted budgets are documented in the table below:
Table 10: Heritage Ranch Community Services District Revenue 31
Category FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23
Total All Revenue $2,354,121 $2,785,280 $4,695,895 $4,933,788 $4,598,554
LAFCO used HRCSD’s most recent adopted budgets to determine the average primary source of
revenue over the past 5-years. About 52% of the District’s revenues come from the Water Fund and
about 44% from the Sewer Fund, which combined is 96% of the District’s total revenue sources.
30 Heritage Ranch Community Service District Budgets for each corresponding Fiscal Year, FY 18/19 through FY 22/23
31 Heritage Ranch Community Service District Budgets for each corresponding Fiscal Year, FY 18/19 through FY 22/23
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Figure 3: Heritage Ranch Community Services District Revenue Sources
General Fund
Solid Waste Fund 2%
2% Water Fund
Sewer Fund
Solid Waste Fund
Sewer Fund Water Fund
44% 52% General Fund
Revenue Trend Analysis
The graph below represents revenue sources by year. As depicted, the water fund was the primary
source of revenue between FY 2018-19 through FY 2020-22. In FY 2021-22 through FY 2022-23 the
sewer fund became the primary source of revenue. The overall increase in revenue may be attributed
to increased water and sewer rates. The District plans to conduct another rate study in 2023.
Figure 4: Heritage Ranch Community Services District Revenue Sources by Year
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23
Water Fund Sewer Fund Solid Waste Fund General Fund
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Financial Statements / Audits
HRCSD hires an outside accounting firm to perform the annual audit in accordance with established
governmental accounting standards. This includes auditing HRCSD’s statements with respect to
verifying overall assets, liabilities, and net position. These audited statements provide quantitative
measurements in assessing HRCSD’s short and long-term fiscal health with specific focus on delivering
its active service functions. LAFCO has used the 5 most recent audited budgets to conduct its evaluation
of the District’s Financial Health; separated into three categories (Agency Assets, Agency Liabilities, and
Agency Net Position). Financial Conclusions have also been included, primarily based on the most
recent audited Fiscal Year ending on June 30, 2021.
Agency Assets
Agency assets provide current, future, or potential economic benefit for the entity. An agency asset is
therefore something that is owned by the agency, or something that is owed to the agency. In this
section agency assets will be reviewed in two separate categories as defined below:
1) Current Assets: cash and other assets that are expected to be converted to cash within a year.
2) Long-Term Assets: long-term investments that are not expected to become cash within an
accounting year.
HRCSD’s audited assets at the end of 2020-2021 totaled to $12.132 million and are 10.6% higher than
the average year-end amount of $10.912 million documented during the previous five-year audited
period. Assets classified as current, with the expectation they could be liquidated within a year,
represented 42% of the total amount, or $5.118 million, and primarily tied to cash and investments.
Assets classified as non-current make up the remainder of the total, $7.014 million, and primarily
attributed to property, plant and equipment capital. Overall, all assets for HRCSD have increased by
17% over the corresponding 5-year audited period.
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Table 11: Heritage Ranch Community Services District Audited Assets32
Category FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 5-yr % 5-yr
Change Average
Current Assets 3,037,941 3,392,698 3,780,018 5,268,449 5,118,055 68% 4,119,432
Non-Current 7,333,911 6,719,896 6,374,628 6,521,173 7,014,252 -4% 6,792,772
Assets
Total Assets 10,371,852 10,112,594 10,154,646 11,789,622 12,132,307 17% 10,912,204
Agency Liabilities
An agency 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:
1) Current Liabilities: an agency's short-term financial obligations due to be paid within a year.
2) Other Non-Current Liabilities: an agency’s long-term financial obligations that are due more
than a year away.
HRCSD’s audited liabilities at the end of FY 2020-2021 totaled $5.561 million and is 23.5% higher than
the average year-end amount of $4.392 million documented during the previous five-year audited
period. Liabilities classified as current and representing obligations owed in the near-term account for
5%, or $0.311 million, of the total and largely tied to current portion of loans payable and current
portion of capital lease payable. Non-current liabilities represent the remaining total, or $5.250 million,
and largely tied to payments on capital lease payable, loans payable and pension liability. Overall, all
liabilities have increased by 84% over the corresponding 5-year audited period.
32 Heritage Ranch Community Service District Basic Financial Statements for each corresponding Fiscal Year, FY 16/17
through FY 20/21
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Table 12: Heritage Ranch Community Services District Audited Liabilities33
Category FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 5-yr % 5-yr
Change Average
Current liabilities 430,194 317,830 280,313 206,155 311,110 -28% 309,120
Non-Current 2,592,069 3,530,975 3,598,384 5,447,231 5,250,142 103% 4,083,760
Liabilities
Total Liabilities 3,022,263 3,848,805 3,878,697 5,653,386 5,561,252 84% 4,392,881
Agency Net Position
The agency net position is the difference between (1) total assets, and (2) total liabilities. Net position
should be displayed in three categories which focus on the accessibility of the underlying assets:
• Net investment in capital assets
• Restricted for Debt Service
• Unrestricted (In this case it’s restricted by Resolution)
HRCSD’s audited net position or equity at the end of FY 2020-2021 totaled $6.804 million and
represents the difference between the District’s total assets and total liabilities. The most recent year-
end amount is 2.6% higher than the average year-end sum of $6.624 million documented during the
previous 5-year audited period. 60 percent of the ending net investment, or $4.087 million, is tied to
capital assets with the remainder categorized as restricted for debt service, at $0.113 million, and
$2.602 million as restricted by resolution. Overall, the net position for HRCSD has decreased by (6%)
through the corresponding 5-year audited period.
33 Heritage Ranch Community Service District Basic Financial Statements for each corresponding Fiscal Year, FY 16/17
through FY 20/21
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Table 13: Heritage Ranch Community Services District Audited Net Position34
Category FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 5-yr % 5-yr
Change Average
Net Investment 5,272,523 4,772,237 4,543,743 4,228,344 4,087,781 -22% 4,580,926
in Capital Assets
Restricted for 112,392 112,666 112,948 113,231 113,434 1% 112,934
Debt Service
Restricted by 1,874,721 1,346,430 1,729,157 2,101,198 2,602,903 39% 1,930,882
Resolution
Total Net 7,259,636 6,231,333 6,385,848 6,442,773 6,804,118 -6% 6,624,742
Position
Financial Conclusions
Statements made in this section are all sourced from the HRCSD Financial Audit for Fiscal Year Ending
June 30, 2021, and help explain financial trends that have been identified in the tables above. The
District was determined to be financially stable despite increasing costs, limited revenues, and new
regulatory requirements. The District remains dependent on both property taxes and standby charges
to fund the water and sewer operations. Cost increases are projected for labor, utilities, maintenance,
and supplies in future years. The District has increased its water and sewer rate charges in recent years,
the last time being in 2022 through the rate study and Capital Improvement Program that was
approved in conjunction back in 2017. The District has begun work on a new rate study and increases
are expected for FY 2023 with the most significant increase anticipated in the sewer fund to provide
for the major plant upgrade and other necessary projects to meet future operating stability; this would
be followed by complying with proposition 218 requirements if necessary. The District currently has
$3,181,324 in long-term debt due on two water treatment plant loans and the photovoltaic system
loan. It is anticipated that the District will apply for additional funding via loans, grants, or a
combination of both, for these major projects.
34 Heritage Ranch Community Service District Basic Financial Statements for each corresponding Fiscal Year, FY 16/17
through FY 20/21
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DETERMINATIONS & RECOMMENDATIONS
Service Review Determinations per Government Code Section 56430
As set forth in Section 56430(a) of the CKH Act, in order to prepare and update the SOI in accordance
with Section 56425, the commission shall conduct a service review of the municipal services provided
in the county or other appropriate area designated by the commission. The commission shall include
in the area designated for a service review the county, the region, the sub-region, or any other
geographic area as is appropriate for an analysis of the service or services to be reviewed, and shall
prepare a written statement of its determinations with respect to each of the following:
1. Growth and population projections for the affected area: Currently, the estimated population
of Heritage Ranch Community Services District is 2,956. The estimated build-out population is
4,274 with an approximate build-out year of 2070.
Recommendation: No action recommended.
2. The location and characteristics of any disadvantaged unincorporated communities within or
contiguous to the sphere of influence: According to 2020 US Census Data, the median
household income for Lake Nacimiento CDP is $72,101, which does not qualify it as a DUC.
Recommendation: The District may wish to consider conducting a community survey
that could, in part, more accurately determine the MHI. This information may be helpful
with regard to eligibility for grant funding and other planning efforts.
3. Present and planned capacity of public facilities and adequacy of public services, including
infrastructure needs or deficiencies:
a. Water | To serve existing and future service demand, the HRCSD Board approved a Five-
Year Capital Improvement Program (CIP) on August 18, 2022, for water and sewer
operations. HRCSD can serve its current 2,076 residential approved lots and the 18
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miscellaneous approved units/parcels (school, commercial center, & public facilities).
There is an approximate balance of 342 AFY water allocation for the 824 remainder lots.
To serve full future build-out, the District will require some additional water allocation
aside from the current contractual 889 AFY allocation. However, it is anticipated that
the District can serve some level of new development without new water allocations.
In context to the low growth rate of the District, water availability is expected to remain
adequate for the foreseeable future. Table 14 shows a summary of the HRCSD’s Water.
Table 14: Summary of Heritage Ranch Community Services District Water Demand
Water Balance
Total Water Demand
Description Lots Connections Supply (AFY)
(AFY)
(AFY)
Existing 2,076 1,932 547 - used 889 342
Future 2,900 2,900 952 - anticipated 889 -63
Recommendation: The District is encouraged to continue with the planned facility
improvements as outlined in the approved CIP to ensure that there is continued reliable
water service for the existing and future residents. With uncertainty as to the type and
size of the remaining 824 lots to develop in the future, the District and future developers
will need to address water demands beyond the current 889 AFY contractual allocation
with the County when timing necessitates. It is important to note that the number of
permanent residents may increase or decrease over time, and other variables change
over the years that may impact this water demand forecast. As stated in determination
#2 above, the District may wish to consider preparing a community wide survey to better
understand demographics.
b. Wastewater | To serve existing and future service demand, the HRCSD Board approved
a Five-Year CIP on August 18, 2022, for water and sewer operations as was previously
mentioned. The HRCSD has an aging secondary wastewater treatment pond system and
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must upgrade their Water Reclamation Facility to ensure compliance with NPDES and
Waste Discharge Requirements imposed by the RWQCB. Future average daily flows to
the WWTP facility will be at 65% of the original plant design hydraulic capacity (original
design facility capacity of 0.4 MGD). Table 15 summarizes the District’s existing and
future wastewater treatment flows.
Table 15: Heritage Ranch Community Services District Wastewater Capacity
Facility
Number of Estimated
Description Flow (MGD) Capacity
Connections Population
(MGD)
Existing Wastewater 1,748 3,402 0.13 0.4
Future Wastewater 2,400 4,800 0.26 0.4
Recommendation: The District is encouraged to continue with the approved CIP facility
improvements and comply with RWQCB requirements to ensure that there is continued
reliable wastewater treatment service.
c. Solid Waste | HRCSD is the solid waste authority and has a Franchise Agreement with
San Miguel Garbage Company to provide solid waste services. HRCSD reserves the right
to revise its laws and regulations pertaining to solid waste collection and disposal in
order to protect public health, safety and welfare. The current agreement expires
January 31, 2032.
Recommendation: No action recommended.
d. Parks & Recreation | HRCSD does not operate any parks and recreation facilities or
activities. However, it does lease property to the Heritage Village Senior Association,
who built and funds all costs associated with their Senior Center. The HROA manages all
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the parks and recreation functions around the Heritage Ranch Area; the County does
not provide these services.
Recommendation: The District is encouraged to deactivate this power which would
require an application from the District to LAFCO and ultimately Commission approval.
e. Gas Station Operation | The District is authorized to provide gas station services but no
longer provides the community that service.
Recommendation: The District is encouraged to deactivate this power which would
require an application from the District to LAFCO and ultimately Commission approval.
This could be done in tandem with the above recommendation to deactivate parks and
rec power.
4. Financial ability of agencies to provide services: The District is financially stable despite
increasing costs, limited revenues, and new regulatory requirements. The District remains
dependent on both property taxes and standby charges to fund the water and sewer
operations. The District increased its water and sewer rates charges in 2018 and expects a rate
study and increases for FY 2023.
Recommendation: The District is encouraged to continue to apply for additional funding via
loans, grants, or a combination of both, for these major improvement projects as well as
conduct rate studies and potential rate increases for services provided as seen necessary.
5. Status of and, opportunities for, shared facilities: The HRCSD installed an emergency
connection, with cooperation from the County of San Luis Obispo, to the Nacimiento Water
Project (NWP) pipeline. This emergency connection provides the District with the ability to
convey up to 491 acre-feet per year of Nacimiento raw lake water directly to the water
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treatment plant for processing in an emergency situation. Other opportunities for shared
facilities may include:
i. Coordination between the District and nearby private water purveyor
ii. District, County, & HROA coordination for parks and recreational facilities
iii. Coordinated open space preservation and development of trails
iv. Under the Camp Roberts Joint Land Use Study (JLUS) policy (Policy IE-2A) supports
regional coordination on infrastructure such as combining water and wastewater
treatment facilities between San Miguel, Heritage Ranch, and Camp Roberts.
Recommendation: Continue to coordinate with other agencies and parties to achieve District
goals.
6. Accountability for community service needs, including governmental structure and
operational efficiencies: HRCSD is governed by a five-member Board of Directors that are
elected to four-year terms. 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. HRCSD maintains an up-to-date website which
contains District information, documents, and updates. The District has demonstrated
accountability and transparency in its disclosure of information and cooperation during the
process of this MSR. The District responded to questionnaires and cooperated with document
requests.
Recommendation: Board of Directors contact information and audio/visual recordings could
be made available to improve transparency.
7. Any other matter related to effective or efficient service delivery: There are no other matters
related to delivery of services.
Recommendation: No action recommended.
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Sphere of Influence Determinations per Government Code Section 56425
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 city, as defined by G.C. Section 56036, and enact policies designed to promote the
logical and orderly development of areas within the sphere. In determining the sphere of influence of
each local agency, the commission shall consider and prepare a written statement of its determinations
with respect to the following:
1. Present and planned land uses in the area, including agricultural and open-space lands.
The HRCSD SOI is coterminous with the District’s service area boundary. The SOI is
o
expected to remain unchanged, with no expansions or reductions for HRCSD.
Land uses within the District's SOI are predominantly recreation, open space, residential
o
rural and residential single family. Other land uses include residential multi-family,
commercial retail, and public facilities.
HRCSD is currently 69% built-out, with the number of possible build-out units limited to
o
2,900 based on estimated future population projections and water supply constraints.
Therefore, the current District boundaries are sufficient to accommodate growth at this
time.
2. Present and probable need for public facilities and services in the area.
The HRCSD SOI is coterminous with the District’s service area boundary. The SOI is
o
expected to remain unchanged, with no expansions or reductions for HRCSD. The
current District boundaries are sufficient to accommodate growth at this time.
3. Present capacity of public facilities and adequacy of public services that the agency provides
or is authorized to provide.
San Luis Obispo LAFCO | Adopted 4/20/23
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The HRCSD SOI is coterminous with the District’s service area boundary. The SOI is
o
expected to remain unchanged, with no expansions or reductions for HRCSD; therefore,
this factor does not need to be addressed.
4. Existence of any social or economic communities of interest in the area if the commission
determines that they are relevant to the agency.
The HRCSD SOI is coterminous with the District’s service area boundary. The SOI is
o
expected to remain unchanged, with no expansions or reductions for HRCSD; therefore,
this factor does not need to be addressed.
5. For an update of a sphere of influence of a city or special district that provides public facilities
or services related to sewers, municipal and industrial water, or structural fire protection, the
present and probable need for those public facilities and services of any disadvantaged
unincorporated communities within the existing sphere.
The HRCSD SOI is coterminous with the District’s service area boundary. The SOI is
o
expected to remain unchanged, with no expansions or reductions for HRCSD.
Unincorporated territory surrounding the District may qualify as disadvantaged. Should
o
future annexations or service extensions be proposed, special consideration will be
given to any DUCs affected by the annexation consistent with GC §56375(8)(A) and
LAFCO policy.
MSR Conclusions
HRCSD is in a healthy state. The District is able to adequately deliver the services it is authorized to
provide. It maintains adequate financial records and controls. Anticipated growth within the
community is expected to be well within the service capacities and capabilities of the District within
the next 5-7 years.
Sphere of Influence Recommendation
San Luis Obispo LAFCO | Adopted 4/20/23
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Based on the aforementioned determinations, it is recommended that the SOI for HRCSD be reaffirmed
and remain coterminous with the District’s existing boundary as depicted on the following page in
Figure 5.
San Luis Obispo LAFCO | Adopted 4/20/23
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Figure 5: Heritage Ranch Community Services District Proposed Boundary
San Luis Obispo LAFCO | Adopted 4/20/23
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APPENDIX
Sources
General
1. Sphere of Influence Update and Municipal Service Review for Templeton CSD, San Miguel CSD
and Heritage Ranch CSD, 2013
Accountability
1. HRCSD Website
2. District Board Policies and Procedures
Population Profile
1. 2020 Census Data
2. San Luis Obispo Council of Governments, 2050 Regional Growth Forecast
3. Heritage Ranch Village Plan, 2014
Present and Planned Land Use
1. Heritage Ranch Village Plan, 2014
Water Section
1. Chapter 4, Volume II of San Luis Obispo County Master Water Report prepared by Carollo
Engineers, final report May 2012
2. Heritage Ranch Community Services District Recycled Water Study, Final January 2017
3. Heritage Ranch Community Service’s District Staff, 2022
4. Updated Water Allocation Evaluation Report, 2017
Wastewater
1. 5-Year Capital Improvement Program, HRCSD, August 18, 2022
2. Heritage Ranch Community Services District Recycled Water Study, Final January 2017
3. Heritage Ranch Community Service’s District Staff, 2022
4. Heritage Ranch Community Services District Wastewater Treatment Plant Improvements
Preliminary Engineering Memorandum, Rev. 1 April 16, 2021
Finance
1. HRCSD Approved Fiscal Year 18-19 Budget
San Luis Obispo LAFCO | Adopted 4/20/23
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2. HRCSD Approved Fiscal Year 19-20 Budget
3. HRCSD Approved Fiscal Year 20-21 Budget
4. HRCSD Approved Fiscal Year 21-22 Budget
5. HRCSD Approved Fiscal Year 22-23 Budget
6. HRCSD Basic Financial Statements June 30, 2021
7. HRCSD Basic Financial Statements June 30, 2020
8. HRCSD Independent Auditor’s Report and Financial Statements June 30, 2019
9. HRCSD Independent Auditor’s Report and Financial Statements June 30, 2018
10. HRCSD Independent Auditor’s Report and Financial Statements June 30, 2017
Written Comments on the Draft Report
A notice of Public Hearing was published in the newspaper (The Tribune) on March 30, 2023, 21-days
in advance of the hearing on April 20, 2023. The general public will have another opportunity to
comment on the draft MSR when the staff report is released, a week before the LAFCO Hearing. All
public comments received will be distributed to each Commissioner and become part of the official
record of the Commission hearing.
San Luis Obispo LAFCO | Adopted 4/20/23