CSA 3 Aptos Seascape

County Service Area 3 (Service & Sphere Review) Local Agency Formation Commission of Santa Cruz County Adopted Version – April 3, 2024 Table of Contents EXECUTIVE SUMMARY ................................................................................................ 2 Introduction .................................................................................................................. 2 CSA 3 (Aptos Seascape) Overview ............................................................................. 2 Legal Authority ............................................................................................................. 4 Key Findings ................................................................................................................ 5 Recommended Actions ................................................................................................ 6 DISTRICT OVERVIEW ................................................................................................... 7 History ......................................................................................................................... 7 Services & Operations ................................................................................................. 7 Population & Growth .................................................................................................... 9 Disadvantaged Unincorporated Communities ............................................................. 9 FINANCES .................................................................................................................... 10 Revenues .................................................................................................................. 11 Expenditures .............................................................................................................. 11 Fund Balance ............................................................................................................ 11 GOVERNANCE ............................................................................................................ 13 Challenges and Opportunities ................................................................................... 14 SPHERE OF INFLUENCE ............................................................................................ 16 Cortese-Knox-Hertzberg Act ...................................................................................... 16 Sphere Boundary ....................................................................................................... 17 DISTRICT SUMMARY .................................................................................................. 20 SERVICE AND SPHERE REVIEW DETERMINATIONS .............................................. 21 Service Provision Determinations .............................................................................. 21 Sphere of Influence Determinations........................................................................... 22 APPENDICES ............................................................................................................... 23 Appendix A: 1965 Formation Resolution ................................................................... 23 Appendix B: List of Boundary Changes (1965 to 2006) ............................................ 23 Appendix C: 1983 Sphere Adoption Resolution ......................................................... 23 Appendix D: 2006 Introduction of New Service (Expiration Condition) ...................... 23 CSA 3 (Aptos Seascape) Service & Sphere Review Page 1 of 23 EXECUTIVE SUMMARY Introduction This Service and Sphere of Influence Review provides information about the services and boundaries regarding County Service Area 3 (referred to as “CSA 3”). The report will be used by the Local Agency Formation Commission (LAFCO) to conduct a statutorily required review and update process. The Cortese-Knox-Hertzberg Act requires that LAFCO conduct periodic reviews and updates of Spheres of Influence for all cities and special districts in Santa Cruz County (Government Code Section 56425). It also requires LAFCO to conduct a review of municipal services before adopting sphere updates (Government Code Section 56430). The last service review conducted for CSA 3 was adopted on June 5, 2019. The service review process does not require LAFCO to initiate changes of organization based on service review conclusions or findings; it only requires that LAFCO make determinations regarding the delivery of public services in accordance with Government Code Section 56430. However, LAFCO, local agencies, and the public may subsequently use the determinations and related analysis to consider whether to pursue changes in service delivery, government organization, or spheres of influence. Service and sphere reviews are informational documents and are generally exempt from environmental review. LAFCO staff has conducted an environmental review of the District’s existing sphere of influence pursuant to the California Environmental Quality Act (CEQA) and determined that this report is exempt from CEQA. Such an exemption is due to the fact that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment (Section 15061[b][3]). CSA 3 (Aptos Seascape) Overview County service area 3 was formed in 1965 to provide a series of services to the Seascape community in Aptos. A total of five services are allowed to be offered under CSA 3, as shown in Table 1. Table 1: CSA 3 Services Type of Service Year of Activation 1. Beach Access Maintenance 1965 2. Road Median Landscaping Maintenance 1965 3. Street Sweeping 1965 4. Beach Litter Control 1994 5. Beach Patrol 1994 The County’s Community Development & Infrastructure Department (previously known as the Planning and Public Works Departments) is responsible for providing financial oversight of all funds collected and disbursed, as well as procurement oversight. All CSAs are formed and operate in accordance with the County Service Area Law (Government Code Section 25210 et seq.). Figure 1 on page 3 provides a vicinity map showing the location of the CSA in the southern portion of Santa Cruz County near the coast. CSA 3 (Aptos Seascape) Service & Sphere Review Page 2 of 23 Figure 1: Vicinity Map CSA 3 (Aptos Seascape) Service & Sphere Review Page 3 of 23 Legal Authority CSA 3 is governed by the County Service Area Law (Government Code Section 25210 et seq.). The Legislature finds and declares the following: a) Population growth and development in unincorporated areas result in new and increased demands for public facilities and services that promote the public peace, health, safety, and general welfare. b) The residents and property owners in unincorporated areas should have reasonable methods available so that they can finance and provide these needed public facilities and services. c) The residents and property owners in some unincorporated areas may propose the incorporation of new cities or annexations to existing cities as a way to fulfill these demands for public facilities and services. d) In other unincorporated areas, independent special districts with directly elected or appointed governing boards can fulfill these demands for public facilities and services. e) County boards of supervisors need alternative organizations and methods to finance and provide needed public facilities and services to the residents and property owners of unincorporated areas. f) In enacting the County Service Area Law by this chapter, it is the intent of the Legislature to continue a broad statutory authority for county boards of supervisors to use county service areas as a method to finance and provide needed public facilities and services. g) Further, it is the intent of the Legislature that county boards of supervisors, residents, and property owners use the powers and procedures provided by the County Service Area Law to meet the diversity of local conditions, circumstances, and resources. CSA Zones of Benefit State law indicates that LAFCOs have purview over cities and special districts, including county services areas. However, in accordance with Government Code Section 56036(b)(10), LAFCOs do not have authority over a zone of any special district. This service review is intended to provide information about CSA 3 only. The creation, modification, or dissolution of future zones can only be implemented by the County through official action from the Board of Supervisors. It is LAFCO’s understanding that there are no zones of benefits within CSA 3, however, there is interest in forming a potential zone(s) in the near future – if residents support this new funding source option. Further discussion about this opportunity is discussed later in the report (refer to page 16). CSA 3 (Aptos Seascape) Service & Sphere Review Page 4 of 23 Key Findings The following are key findings of the 2024 Service and Sphere of Influence Review for County Service Area 3 (Aptos Seascape): 1. CSA 3 provides municipal services to a coastal community. The CSA’s service area encompasses approximately 376 acres of unincorporated territory and includes approximately 45,000 residents within the Seascape community. CSA 3 has been given the legal authority by LAFCO to provide five service provisions: Beach Access Maintenance, Road Median Landscaping Maintenance, Street Sweeping, Beach Litter Control, and Beach Patrol. 2. CSA 3 added a new service but was never implemented. The County submitted an application in 2006 to expand the list of services under CSA 3 to include “open space maintenance services.” The LAFCO at that time approved the new provision with the condition that the County begin providing the service no later than December 6, 2008. Based on staff’s analysis, the service was never implemented within the two-year deadline, and therefore, not an official service under CSA 3. No official LAFCO action is required but staff is recommending that the Commission formally make this determination as part of this service review. 3. CSA 3 is financially stable at this time. The CSA’s primary source of revenue is from service charges. CSA 3’s fund balance ended with approximately $47,000 in FY 2022-23, an increase of 34% from the previous fiscal year. Financial statements indicate that the CSA ended with a surplus each year from 2019 to 2023. However, the surplus is a result of the County reducing, or in some cases, discontinuing certain services to ensure that enough revenue was available to cover annual expenses. The cutback in service delivery is also a result of the CSA’s benefit assessments being stagnant for almost 30 years. 4. CSA 3 requires improvement in governmental transparency. State law now requires all independent special districts to maintain and operate a website by January 1, 2020. CSA 3 is a dependent special district, and therefore, not subject to this statutory requirement. However, LAFCO encourages the County to offer more information about CSA 3 on their website to ensure residents have the opportunity to participate in the CSA’s decision-making process and future actions. 5. CSA 3’s sphere of influence goes beyond its jurisdictional boundary. The Commission adopted CSA 3’s original sphere of influence in February 1983 which went beyond the jurisdictional boundary to include 96 additional parcels. The intent was for the County to annex this area, most residential, to provide the same services as the rest of the Seascape community. However, the sphere boundary has been in place for over 40 years without a single annexation. Therefore, staff is recommending that the Commission reduce the sphere boundary to be coterminous with the current service area. CSA 3 (Aptos Seascape) Service & Sphere Review Page 5 of 23 Recommended Actions Based on the analysis and findings in the 2024 Service and Sphere of Influence Review for County Service Area 3, the Executive Officer recommends that the Commission: 1. Find that pursuant to Section 15061(b)(3) of the State CEQA Guidelines, LAFCO determined that the sphere of influence review is not subject to the environmental impact evaluation process because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and the activity is not subject to CEQA; 2. Determine, pursuant to Government Code Section 56425, the Local Agency Formation Commission of Santa Cruz County is required to develop and determine a sphere of influence for County Service Area 3, and review and update, as necessary; 3. Determine, pursuant to Government Code Section 56430, the Local Agency Formation Commission of Santa Cruz County is required to conduct a service review before, or in conjunction with an action to establish or update a sphere of influence; and 4. Adopt a Resolution (LAFCO No. 2024-08) approving the 2024 Service and Sphere of Influence Review for County Service Area 3 with the following conditions: a. Amend CSA 3’s sphere of influence to coincide with its current jurisdictional boundary; b. Determine that the “open space maintenance service,” initially approved on December 6, 2006, was never implemented before LAFCO’s two-year deadline of December 6, 2008 and therefore not an official service under CSA 3; and c. Direct the Executive Officer to distribute a copy of the adopted service and sphere review to CSA 3 representatives and any other interested or affected parties, including but not limited to the County of Santa Cruz. CSA 3 (Aptos Seascape) Service & Sphere Review Page 6 of 23 DISTRICT OVERVIEW History County Service Area 3 was formed on December 14, 1965 and its service area encompasses 1,663 parcels (totaling 530 acres), as shown in the map on page 3. Appendix A provides a copy of the 1965 formation resolution adopted by the County1. CSA 3’s original purpose was to provide beach access maintenance, road median landscaping maintenance, and street sweeping services to the Seascape community. In 1994, LAFCO activated two latent powers (beach litter control and beach patrol) as additional services for CSA 3. In 2006, LAFCO activated one more latent power for CSA 3 – this time for open space landscaping maintenance services to mitigate fire hazard. CSA 3’s original sphere of influence boundary was established on February 2, 1983, and extended beyond the service area as shown in Appendix B. The sphere boundary has remained the same for over 40 years. Appendix C provides a timeline of all the boundary changes approved by LAFCO since its inception. Only eight LAFCO actions were taken since 1965, and all but one was completed between 1965-1983. The last LAFCO action involving the CSA was in October 2006 when LAFCO approved the new service for open space maintenance (more information about this expired service is on page 14). Services & Operations CSA 3 provides multiple services to the Seascape community and these services are funded through benefit assessments. The assessed parcels are classified as follows: (1) Residential, (2) Duplex, (3) Three-Unit Condo, (4) Fourplex, (5) Retirement Home, and (6) Minor Commercial, Affordable Housing, Hotel, Swim/Tennis Club. Figure 2 on page 8 shows the current land use designation within CSA 3. The current benefit assessments are based on flat fees that have not changed or been adjusted for inflation since 1996. It is LAFCO’s understanding that attempts were made to increase the rates in FY 2002-23, FY 2021-22, and FY 2023-24, but the residents ultimately voted down the proposed rate changes. It is important to note that the CSA representatives were the ones who initiated the process for an election to increase not the County specifically. The purpose of the failed rate increase was to provide necessary funding for road median maintenance, street utility facilities, and beach access maintenance, patrol, and litter control services for the beach area below Via Palo Alto and extending south to the resort (all within CSA 3).Table 2 provides an overview of the current rates along with the proposed rate adjustment, which failed via mailed-in ballots in March 2023. Table 2: Annual Charges Current Rates Proposed Rates Benefit Assessment Structure (since 1996) (failed in 2023) Residential, Vacant $50 $150 Duplex $100 $300 Three-Unit Condo $150 $450 Fourplex, Retirement Home $200 $600 Minor Commercial, Affordable Housing, Hotel, $400 $1,200 Swim/Tennis Club Footnote: Rates have remained the same for almost 30 years without any changes or adjustments 1 LAFCO Reso No. 198 officially created CSA 3, however, a copy of the resolution was not available CSA 3 (Aptos Seascape) Service & Sphere Review Page 7 of 23 Figure 2: Land Use Map CSA 3 (Aptos Seascape) Service & Sphere Review Page 8 of 23 Population & Growth Based on staff’s analysis, the population of CSA 3 in 2020 was estimated to be 24,000. The Association of Bay Area Governments (ABAG) and the Association of Monterey Bay Area Governments (AMBAG) provide population projections for cities and counties in the Coastal Region. Official growth projections are not available for special districts. In general, the Coastal Region is anticipated to have a slow growth over the next fifteen years. Table 3 shows the anticipated population for the CSA. The average rate of change within CSA 3 is 0.86%. Population Projection Based on the projections for Santa Cruz County, LAFCO staff was able to develop a population forecast for CSA 3 by increasing the CSA’s 2020 population amount by 0.86% for the next fifteen years. Under this assumption, LAFCO staff projects that the entire population of the CSA will be approximately 25,000 by 2040. Table 3: Projected Population 2020 2025 2030 2035 2040 Unincorporated County Territory 136,891 137,896 139,105 140,356 141,645 CSA 3 (Aptos Seascape) 23,974 24,179 24,387 24,596 24,807 Disadvantaged Unincorporated Communities In accordance with Senate Bill 244, which became effective on January 1, 2012, state law requires the identification and description of all “disadvantaged unincorporated communities” (DUCs) located within or contiguous to the existing spheres of influence of cities and special districts which provide fire protection, sewer, and/or water services (Government Code Section 56046). DUCs are defined as inhabited unincorporated areas with an annual median household income that is 80% or less than the statewide annual median household income. In 2020, the California statewide annual median household income was $78,672, and 80% of that was $62,938. LAFCO staff utilized the ArcGIS mapping program to locate potential DUCs in Santa Cruz County. Based on the criteria set forth by SB 244, in conjunction with further evaluation of these areas, staff determined that there are no disadvantaged unincorporated communities within CSA 3 at this time. CSA 3 (Aptos Seascape) Service & Sphere Review Page 9 of 23 FINANCES This section will highlight the CSA’s audited financial performance during the most recent fiscal years. Fiscal Year 2022-23 is the latest audited financial statement publicly available. A comprehensive analysis of the CSA’s financial performance during the past six years is shown in Table 7 on page 12. At the end of FY 2022-23, the total revenue collected by the CSA was approximately $80,400, representing a 1% increase from the previous year ($79,700 in FY 2021-22). Total expenses for FY 2022-23 were approximately $68,400, which increased from the previous year by 22% ($56,300 in FY 2021-22). As shown in Figure 3, the CSA’s total revenues have been more than total expenditures each year since FY 2019-20. The positive balance is a result of the County’s action to reduce or in some cases discontinue provisions of certain services due to its inability to increase the current benefit assessment rates. These rates have not changed for almost 40 years even though annual costs and inflation have increased during the same time period. That is why total revenue from charges for services has been restricted to $79,695 each fiscal year as shown in the following tables on pages 11 and 12. Figure 3: Statement of Revenues & Expenditures $90,000 $80,611 $82,429 $79,702 $79,727 $79,626 $79,567 $79,703 $80,402 $80,000 $74,893 $75,215 $68,426 $70,000 $60,000 $56,258 $50,000 $40,000 $30,000 $20,000 $10,000 $- FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) TOTAL REVENUE TOTAL EXPENDITURE CSA 3 (Aptos Seascape) Service & Sphere Review Page 10 of 23 Revenues CSA 3’s primary source of revenue is charges for services. Since rates have not changed since 1996, CSA 3 is limited to receiving the same amount each year ($79,596). Less than one percent comes from the Interest made from their account balance, which has only earned between $30 to $700 in the last six years. Table 4 highlights the limited revenue sources since 2017. Table 4: Total Revenue FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 REVENUE Charges for Services $79,596 $79,596 $79,596 $79,478 $79,596 $79,695 Change (%) 0.0% 0.0% -0.1% 0.1% 0.1% Interest $106 $131 $30 $89 $107 $707 Change (%) 23.6% -77.1% 196.7% 20.2% 560.7% Total Revenue $79,702 $79,727 $79,626 $79,567 $79,703 $80,402 Change (%) 0.0% -0.1% -0.1% 0.2% 0.9% Expenditures CSA 3’s total expenditures involve landscape maintenance, street sweeping, beach patrol, utilities, accounting, and other miscellaneous costs. However, all these expenses are shown under one budget line item in the County’s audited financial statements as “Service & Supplies.” Table 5 distinguishes the cost and percentage since 2017. Table 5: Total Expenditure FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 EXPENDITURE Services & Supplies $ 80,611 $ 82,429 $ 74,893 $ 75,215 $ 56,258 $ 68,426 Change (%) 2.3% -9.1% 0.4% -25.2% 21.6% Total Expenditure $ 80,611 $ 82,429 $ 74,893 $ 75,215 $ 56,258 $ 68,426 Change (%) 2.3% -9.1% 0.4% -25.2% 21.6% Fund Balance As of June 30, 2023, the total fund balance was approximately $47,000. The following table highlights the net position balance from 2017 to 2023. As shown in the table below, CSA 3’s fund balance has fluctuated over the years, recently experiencing significant increases during the most recent years. It is LAFCO’s understanding that since 2018, the County has reduced or in some cases discontinued the provision of certain services to ensure that enough revenue was available to cover anticipated expenses each year. Table 6: Fund Balance/Net Position FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 Net Position $4,908 $2,206 $6,939 $11,292 $34,736 $46,712 (Ending Balance) Change in ($) from -$2,702 $4,733 $4,353 $23,445 $11,975 previous year Change in (%) -55% 215% 63% 208% 34% from previous year CSA 3 (Aptos Seascape) Service & Sphere Review Page 11 of 23 Table 7: Total Revenues & Expenditures COUNTY SERVICE AREA 3 (APTOS SEASCAPE) FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 (Audited) (Audited) (Audited) (Audited) (Audited) (Audited) REVENUE Charges for Services $ 79,596 $ 79,596 $ 79,596 $ 79,478 $ 79,596 $ 79,695 Interest $ 106 $ 131 $ 3 0 $ 8 9 $ 107 $ 707 TOTAL REVENUE $ 79,702 $ 79,727 $ 79,626 $ 79,567 $ 79,703 $ 80,402 EXPENDITURE Services & Supplies $ 80,611 $ 82,429 $ 74,893 $ 75,215 $ 56,258 $ 68,426 TOTAL EXPENDITURE $ 80,611 $ 82,429 $ 74,893 $ 75,215 $ 56,258 $ 68,426 Surplus / (Deficit) $ (909) $ (2,702) $ 4,733 $ 4,352 $ 23,445 $ 11,976 FUND BALANCE Ending Balance $ 4,908 $ 2,206 $ 6,939 $ 11,292 $ 34,736 $ 46,712 Change ($) $ ( 2,702) $ 4,733 $ 4,353 $ 23,445 $ 11,975 Change (%) -55% 215% 63% 208% 34% CSA 3 (Aptos Seascape) Service & Sphere Review Page 12 of 23 GOVERNANCE CSA 3 is a dependent special district governed by the County Board of Supervisors. All CSAs are formed and operate pursuant to the County Service Area Law (Government Code Section 25210 et seq.). County Supervisors receive no additional compensation for their CSA responsibilities. The County’s Community Development & Infrastructure Department (previously known as the Planning and Public Works Departments) manages the services related to CSA 3. The Board of Supervisors holds public hearings when considering any annual charges and/or work programs overseen by the Board. Local Accountability & Structure The current Board is as follows: Table 8: Board of Directors Board Member Supervisorial District Term of Office First District (Live Oak, Soquel, Summit, First Elected: 2020 Manu Koenig Santa Cruz Gardens, Next Election: Primary 2024 Carbonera, and parts of Scotts Valley & Capitola) Second District (Aptos, Freedom, Corralitos, First Elected: 2012 Zach Friend La Selva Beach, and parts of Next Election: Primary 2024 Capitola & Watsonville) Third District First Elected: 2022 Justin Cummings (Santa Cruz, Bonny Doon, Next Election: Primary 2026 North Coast) Fourth District First Elected: 2022 Felipe Hernandez (Pajaro Valley, Watsonville) Next Election: Primary 2026 Fifth District (San Lorenzo Valley, most of First Elected: 2012 Bruce McPherson Scotts Valley, parts of Santa Next Election: Primary 2024 Cruz, and Paradise Park) CSA 3 (Aptos Seascape) Service & Sphere Review Page 13 of 23 Challenges and Opportunities Both independent and dependent special districts are tasked with operating in an efficient and transparent manner on a regular basis. LAFCO staff has taken the position that public agencies should always prepare and consider future opportunities and potential challenges in order to properly provide and sustain adequate services to their constituents. The following section explores possible actions that should be considered by the CSA. Financial Transparency CSA 3 has the legal authority to provide five service provisions. While the adopted annual budgets and actual expenses on the County website do not breakout the “Services & Supplies” expense more specifically, the CSA 3 representatives are provided financial reports twice annually which do breakout the costs for specific types of services. These detailed financial documents are not publicly available at this time. It may be beneficial to include these financial documents on the County’ website for further transparency.. LAFCO Staff Recommendation: The CSA should consider having financial statements accessible online for more transparency. Financial Stability / Zones of Benefit As previously stated, CSA 3 has been given the legal authority to provide five different services; however, certain services have been reduced or discontinued by the County due to lack of proper funding. It is LAFCO’s understanding that the community has expressed interest in forming a zone of benefit to adequately provide funding towards beach maintenance and patrol. While LAFCOs have no purview over the formation of zones of benefit, creating a zone or several zones may address the current financial structure which is currently outdated and not sustainable. LAFCO Staff Recommendation: The County should explore forming one or several zones to adequately fund the existing services based on location and/or need. Open Space Maintenance Service In 2006, the County submitted an application to activate a new service under CSA 3: Open Space Landscaping Maintenance. LAFCO approved the activation of this new provision in December 2006 with the condition that the County begin providing this service by December 2008 (two-year deadline). The service was not initiated or implemented within the two-year period, and therefore, not an official service responsibility under CSA 3. The Commission should formally make this determination as part of this service review. Appendix D provides more background information on the 2006 effort and expiration deadline. LAFCO Staff Recommendation: The Commission should formally determine that the two-year deadline passed without the implementation of the open space maintenance service. Therefore, this service is officially not under CSA 3’s scope of work. CSA 3 (Aptos Seascape) Service & Sphere Review Page 14 of 23 Website Requirements Senate Bill 929 was signed into law in September 2018 and requires all independent special districts to have and maintain a website by January 1, 2020. SB 929 identifies several components that must be found within an agency’s website. Additionally, the Special District Leadership Foundation (SDLF), an independent, non-profit organization formed to promote good governance and best practices among California’s special districts, has also outlined recommended website elements as part of its District Transparency Certificate of Excellence. This program was created as an effort to promote transparency in the operations and governance of special districts to the public. Based on SB 929’s criteria and the recommendations set by the SDLF; LAFCO conducted a thorough review of the CSA’s website even though said law only applies to independent special districts. Table 9 summarizes staff’s findings on whether the website is meeting the statutory requirements. At present, the CSA does not meet the statutory requirements under SB 929 and SDLF’s website transparency criteria. In fact, LAFCO could not find any reference to CSA 3 on the County’s website. The financial information used to conduct LAFCO’s analysis for this service review was available within the County’s budget and audit webpages, but were retrieved after a thorough examination of the fiscal documentations. There is currently no financial information available exclusively for CSA 3 at this time. It is LAFCO’s recommendation that the County provide more information for CSA 3. This recommendation is consistent with previous requests for other CSAs within Santa Cruz County. Table 9: Website Transparency Website Components Checkmark (Yes) Required Items (SB 949 Criteria and SDLF Benchmarks) 1. Names and Contact Information of Board Members* 2. Board Member Term Limits 3. Names of Key Staff, including General Manager 4. Contact Information for Staff 5. Election/Appointment Procedure & Deadlines 6. Board Meeting Schedule* 7. Mission Statement 8. Description of District's Services/Functions and Service Area 9. Authorizing Statute/Enabling Act 10. Adopted District Budgets* 11. Financial Audits* 12. Archive of Board Meeting Agendas & Minutes* 13. Link to State Controller's Webpages for District's reported Board Member and Staff Compensation 14. Link to State Controller's Webpages for District's reported Financial Transaction Report 15. Reimbursement & Compensation Policy / Annual Policies 16. Home Page Link to Agendas/Board Packets 17. SB 272 - Compliance-Enterprise Catalogs 18. Machine Readable/Searchable Agendas 19. Recipients of Grant Funding or Assistance 20. Link or Copies of LAFCO’s Service & Sphere Reviews Total Score (out of a possible 20) 0 (0%) CSA 3 (Aptos Seascape) Service & Sphere Review Page 15 of 23 Additional Items (SDLF’s Recommended Elements) 1. Board Member Ethics Training Certificates 2. Picture, Bio, and Email Addresses of Board Members 3. Last Three Years of Audits 4. Financial Reserves Policy 5. Online/Downloadable Public Records Act Request Form 6. Audio or Video Recordings of Board Meetings 7. Map of District Boundaries/Service Area 8. Link to CSDA Mapping Program 9. General Description of Special Districts or Link to www.districtmakethedifference.org 10. Link to Most Recently Filed to FPPC Forms Total Score (out of a possible 10) 0 (0%) *Footnote: Senate Bill 929 Statutory Requirements LAFCO Staff Recommendation: While CSA 3 is not subject to SB 929, LAFCO encourages more transparency from CSA 3 by sharing online information on how residents can participate in the CSA’s decision-making process and future actions. SPHERE OF INFLUENCE Cortese-Knox-Hertzberg Act City and special district spheres of influence define the probable physical boundaries and service area of a local agency, as determined by the Commission (Government Code Section 56076). The law requires that spheres be updated at least once every five years either concurrently or subsequently in preparation of Municipal Service Reviews. Spheres are determined and amended solely at the discretion of the Commission. In determining the sphere of influence for each local agency, the Commission is required by Government Code Section 56425(e) to consider certain factors, including: ➢ The present and planned uses in the area, including agricultural and open space lands; ➢ The present and probable need for public facilities and services in the area; ➢ The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide; ➢ The existence of any social or economic communities of interest in the area if the commission determines that they are relevant to the agency; and ➢ 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. CSA 3 (Aptos Seascape) Service & Sphere Review Page 16 of 23 Sphere Boundary CSA 3’s original sphere was adopted on February 2, 1983 and includes 96 parcels (totaling 67 acres) beyond the CSA’s jurisdictional boundary, as shown in Figure 1 on page 3 and Figure 4 on page 18. Since then, the sphere has remained unchanged for over 40 years without a single annexation. The intent of this sphere boundary was for the County to eventually annex these parcels, most residential, and provide the same services as the rest of the Seascape community. Due to the lack of activity to add territory into the CSA based on the sphere boundary, staff is recommending that the sphere of influence be reduced and be coterminous with the CSA’s current service area, as shown in Figure 5 on page 19. CSA 3 (Aptos Seascape) Service & Sphere Review Page 17 of 23 Figure 4: Current Sphere Map CSA 3 (Aptos Seascape) Service & Sphere Review Page 18 of 23 Figure 5: Proposed Sphere Map CSA 3 (Aptos Seascape) Service & Sphere Review Page 19 of 23 DISTRICT SUMMARY CSA 3 (Aptos Seascape) California Government Code, Section 25210 et seq. Formation (County Service Area Law) County Board of Supervisors; five members; elected at-large to Board of Trustees a four-year term Matt Machado, Deputy Chief Administrative Officer and Director Contact Person of Community Development & Infrastructure Employees Zero full-time employees Facilities N/A District Area 376 acres (0.59 square miles) Sphere of The sphere boundary goes beyond the jurisdictional boundary. Influence Total Revenue = $80,402 FY 2022-23 Audit Total Expenditure = $68,426 Projected Net Position (Ending Balance) = $46,712 Mailing Address: 701 Ocean Street, Room 410 Santa Cruz CA 95060 Phone Number: 831-454-2160 Contact Information Email Address: dpwcsa@santacruzcountyca.gov Website: https://www.dpw.co.santa-cruz.ca.us/Home/CSAs.aspx (no website/webpage currently dedicated to CSA 3) Annual public meeting is held by the Board of Supervisors to Public Meetings adopt annual charges. Mission N/A Statement CSA 3 (Aptos Seascape) Service & Sphere Review Page 20 of 23 SERVICE AND SPHERE REVIEW DETERMINATIONS The following service and sphere review determinations fulfill the requirements outlined in the Cortese-Knox-Hertzberg Act. Service Provision Determinations Government Code Section 56430 requires LAFCO to conduct a municipal service review before, or in conjunction with, an action to establish or update a sphere boundary. Written statements of determination must be prepared with respect to each of the following: 1. Growth and population projections for the affected area. CSA 3 encompasses the community of Seascape within Aptos (unincorporated county territory). It is estimated that approximately 24,000 residents currently live within the CSA’s jurisdiction. LAFCO staff projects that the CSA’s population may reach 25,000 by 2040. 2. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. In 2020, the California statewide median household income was $78,672, and 80% of that was $62,938. Based on LAFCO’s analysis, there are no disadvantaged unincorporated communities within or contiguous to the District’s sphere boundary. 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. CSA 3 does not provide water, sewer, or fire protection to the Seascape community. 4. Financial ability of agencies to provide services. CSA 3’s primary source of revenue is from service charges. CSA 3’s fund balance ended with approximately $47,000 in FY 2022-23. The CSA is currently solvent; however, benefit assessments have not changed since 1996, which has limited the amount of revenue collected to cover annual expenses. 5. Status of, and opportunities for, shared facilities. The County should consider utilizing its existing website to promote and share more information about CSA 3’s finances, activities, and governance. 6. Accountability for community service needs, including governmental structure and operational efficiencies. LAFCO encourages more transparency from CSA 3 by sharing online information on how residents can participate in the CSA’s decision-making process and future actions. 7. Any other matter related to effective or efficient service delivery, as required by commission policy. No additional local LAFCO policies are specifically relevant to this service review. CSA 3 (Aptos Seascape) Service & Sphere Review Page 21 of 23 Sphere of Influence Determinations Government Code Section 56425 requires LAFCO to periodically review and update spheres of influence in concert with conducting municipal service reviews. Spheres are used as regional planning tools to discourage urban sprawl and encourage orderly growth. Written statements of determination must be prepared with respect to each of the following: 1. The present and planned land uses in the area, including agricultural and open- space lands. The present and planned land uses are based on the general plan from the County, which range from urban to rural uses. The general plan anticipates growth centered on existing urban areas and the maintenance of agricultural production, rural residential uses, and environmental protection in rural areas. 2. The present and probable need for public facilities and services in the area. It is LAFCO’s understanding that the residents within CSA 3 have expressed interest in forming a zone of benefit to adequately fund beach maintenance and patrol. However, the last several attempts to increase rates have failed. The County should coordinate with the community to jointly determine what services are most needed within CSA 3. 3. The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. CSA 3 has the legal authority to provide five service provisions: (1) Beach Access Maintenance, (2) Road Median Landscaping Maintenance, (3) Street Sweeping, (4) Beach Litter Control, and (5) Beach Patrol. Open Space Landscaping Maintenance was approved as a new service in 2006 but it was never implemented within the two- year deadline and therefore not an official service under CSA 3. It is also LAFCO’s understanding that the County has reduced or discontinued certain services due to lack of proper funding. Benefit assessments have not increased since 1996. 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. CSA 3 has a governing board comprised of residents as well as a homeowner’s association. These bodies should continue coordinating with the County to educate the community about its current financial restrictions and service provisions. 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. In 2020, the California statewide median household income was $78,672, and 80% of that was $62,938. Based on LAFCO’s analysis, there are no disadvantaged unincorporated communities within or contiguous to the District’s sphere boundary. CSA 3 (Aptos Seascape) Service & Sphere Review Page 22 of 23 APPENDICES Appendix A: 1965 Formation Resolution Appendix B: List of Boundary Changes (1965 to 2006) Appendix C: 1983 Sphere Adoption Resolution Appendix D: 2006 Introduction of New Service (Expiration Condition) CSA 3 (Aptos Seascape) Service & Sphere Review Page 23 of 23 APPENDIX A: 1965 Formation Resolution APPENDIX B: Past Boundary Changes (1965 to Present) Project Action Proposal Title Number Date 198 Formation of Aptos Seascape CSA 3 12/14/1965 158 Seascape Beach Estates No. 4 Annexation to CSA 3 4/16/1969 159 Aptos Seascape / Leonard Annexation to CSA 3 4/16/1969 126 Seascape Beach Estates Annexation to Aptos Seascape CSA 3 3/20/1968 639 Aptos Seascape Unit 16 Annexation to CSA 3 2/2/1983 651 Aptos Seascape CSA 3 SOI 2/2/1983 Benchlands / Seascape Greens / School Site Annexation 749 6/7/1989 to Aptos Seascape CSA 3 912 Extend Scope of Services CSA 3 Aptos Seascape 12/6/2006 APPENDIX C: 1983 Sphere Adoption Resolution APPENDIX D: 2006 Introduction of New Service (Expiration Date)