MSR G1 4 Goshen Jan06

CHAPTER 4 – GOSHEN CSD MUNICIPAL SERVICE REVIEW EXECUTIVE SUMMARY This section provides an overview of the written determinations of the Goshen Community Services District Municipal Service Review (MSR). As part of its review of municipal services, the Tulare County Local Agency Formation Commission (LAFCO) is required to prepare a written statement of its determination with respect to each of the following: 1) Growth and population projections for the affected area; 2) Infrastructure needs and deficiencies; 3) Financing constraints and opportunities; 4) Cost avoidance opportunities; 5) Opportunities for rate restructuring; 6) Opportunities for shared facilities; 7) Government structure options; 8) Evaluation of management efficiencies; and 9) Local accountability and governance. These requirements are established by AB 2838, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. The Goshen CSD MSR identifies the following written determinations: Written Determinations 1) Growth and Population 1. The Census Designated Place (CDP) Boundary for Goshen is generally (with minor exceptions) coterminous with the current District Boundary. 2. Census 2000 data indicates that Goshen had a population of 2,394 as of January 2000, while the Goshen Community Plan, adopted in 1978, projected a year 2000 population between 3,625, and 3,840, which was based upon an annual growth rate of 5%. 3. Between 1990 and 2000, Goshen experienced an average annual population growth rate of approximately 1.4%, compared to 0.6% for the unincorporated areas of Tulare County. 4. It is anticipated that over the next twenty years (approximately year 2025) Goshen will experience a higher growth rate than as indicated by historical trends. This is a result of development within the nearby City of Visalia as it continues to expand towards Goshen thereby increasing development pressures in Goshen. 5. With an annual growth rate between 2% and 3%, the Goshen CSD could expect a year 2025 District population between 3,900 and 5,000. 6. The Tulare County RMA is having a comprehensive update to the Goshen Community Plan prepared to address the future needs of the community relating to growth, land use, housing, and public services. The update of the Goshen Community Plan should be coordinated and consistent with the Tulare County General Plan Update, and any Sewer Master Planning being completed by the District. 2) Infrastructure Needs and Deficiencies 1. The main sewer system for the Goshen community is comprised of a collection system which was constructed in the mid to late 1990s. The construction of the District’s sewer system was funded through a United States Department of Agriculture, Rural Economic and Community Development Grant, and Small Community Grant. Goshen Community Service District MSR Page 4-1 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 2. Pursuant to obtaining funding for the Goshen Sewer Project, the Goshen CSD entered into a Wastewater Service Agreement with the City of Visalia for treatment of the District’s wastewater. 3. The District’s wastewater collection system dumps into a lift station (owned and operated by the District) near the intersection of Avenue 305 and Effie Drive, which in turn, pumps the wastewater into a 24-inch line in Camp Drive (that is owned and maintained by the City of Visalia). The sewer lift station operates with two pumps, and has a design capacity of 500,000 GPD. 4. The Wastewater Service Agreement between City of Visalia and the Goshen CSD allows for a current contracted average daily discharge to the City’s treatment plant of 335,000 GPD. The Wastewater Service Agreement does provide for the purchase of additional capacity which would be charged on a percentage increase basis. 5. As of November 2005, the District was contributing an average daily flow of approximately 315,000 GPD of raw sewage to the City’s WWTF. Assuming the District can accommodate up to 500,000 GPD based upon the limitations of the lift station, it can be concluded that the District’s sewer system is operating at approximately 65% of its capacity. 6. The District is currently working towards the adoption of a Sewer System Master Plan, which will assist the District in expanding its collection system in line with development trends and the needs of the community. The Sewer System Master Plan should be consistent with and coordinated with the Tulare County General Plan Update and the Goshen Community Plan update to provide for a sound connection between land zoned for development and the sanitary sewer infrastructure that will serve such development. The Master Plan should also identify funding sources to construct future capital improvements. 3) Financing Opportunities and Constraints 1. The District prepares a comprehensive and thorough annual budget that clearly describes the services provided to residents and the funds expended for those services. 2. The District generally requires new development projects to construct the necessary sewer infrastructure to serve their development. A program of developer-obligated infrastructure improvements will provide for installation of physical infrastructure to serve development sites and therefore will not become an obligation of the District. 3. The District’s budget for fiscal year 2003-04 included contingency funds of $27,008. As of July 1, 2003 the District had a cash balance of $167,000, of which $100,000 was allocated towards capacity purchases and $67,000 was allocated towards system replacement. 4. The District has two long term debts; one that includes principal and interest bond payments totaling $162,328 during the FY 2003-04 budget cycle and a separate loan in which the District paid $10,000 during the FY 2003-04 budget cycle. 4) Cost Avoidance Opportunities 1. The District avoids excessive overhead costs by operating with a part-time staff, which provides adequate levels of service to the small community. The District also avoids Goshen Community Service District MSR Page 4-2 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 2. The District should continue to work with the development community to fund the construction of capital infrastructure improvements that would serve new development sites. 5) Opportunities for Rate Restructuring 1. In July 2004, the Goshen CSD increased rates charged for sewer service to $38 per EDU for commercial uses, and to $32 per EDU for residential service. 2. The Goshen CSD charges one of the highest monthly rates for sewer service compared to other sewer service providers throughout the County. The cost of sanitary sewer service within Goshen equates to approximately 1.36% of the average household income within the community. 3. The Goshen CSD monthly rates are currently among the highest compared to other service providers throughout the County making it difficult to justify further rate increases. The District’s connection fee is below average compared to other sanitary sewer service providers in the County. 4. The District should periodically review its monthly user and connection fees to ensure that quality service will continually be provided to existing and future residents. 6) Opportunities for Shared Facilities 1. Currently, the Goshen CSD contracts with the City of Visalia for wastewater treatment services, as the Goshen CSD does not own or operate an independent WWTF. 2. At present, there is a clear distinction between the sewer infrastructure of the District, and the sewer infrastructure of the City. To eliminate the potential for duplication of services, a clear distinction between District and City infrastructure and associated service areas should remain in tact. 3. The Wastewater Service Agreement between the District and the City outlines specific cases in which interagency coordination is to occur. 4. Since the Goshen sewer system is generally located in roads owned and maintained by Tulare County, the District should work closely with the County on proposed sewer improvements that would impact County roadways. 5. The District currently takes advantage of sharing staff and equipment with other service providers on an as needed basis. 7) Government Structure Options Development within SOI Areas 1. The Goshen CSD is currently working toward the adoption of a Sewer System Master Plan which will help guide expansions of and improvements to the District’s sewer system. The Goshen Community Service District MSR Page 4-3 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 Master Plan will plan infrastructure improvements to accommodate the build-out of the Goshen CSD SOI. 2. Other than potential boundary conflicts with the City of Visalia, there are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. 3. Tulare County LAFCO has adopted specific policies for reviewing proposals for a change in organization, reorganization, incorporations, dissolution and other proposals processed by Tulare County LAFCO. Any changes in organization should be in accordance with the Polices and Procedures of Tulare County LAFCO. Boundary Conflicts 1. The governmental structure of the Goshen CSD could be affected by the potential overlapping of boundaries with the City of Visalia. In addition to overlapping SOI’s, the Visalia UGB generally encompasses the entire area currently serviced by the Goshen CSD. 2. The Goshen CSD has a Wastewater Service Agreement with the City of Visalia, which sets forth specific criteria with regard to wastewater collection and treatment services within the boundary of each agency. 3. Boundary conflicts and service provisions should ultimately be resolved between the City of Visalia, the Goshen CSD, and Tulare County LAFCO. 8) Evaluation of Management Efficiencies 1. Based upon information made available, it appears that the provision of sanitary sewer collection is managed in an efficient manner and meets the needs of the community and ratepayers. 2. The Goshen CSD is governed by a five member Board of Directors elected at large from within its boundaries and is responsible for setting policy and general administrative procedures. 3. The District currently operates with a part-time staff and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. 4. The District’s part time personnel provides many functions of the District, which will likely continue in the future since funding for full-time staff is neither needed nor cost effective for a small CSD. 5. The District’s answering message does not provide contact information in case of emergencies. To more promptly and efficiently respond to emergency situations, it is recommended that the District provide an emergency contact number on its answering message. 9) Local Accountability and Governance 1. The District complies with the Brown Act open meeting law by holding regularly scheduled meetings in which the public is invited. Regularly scheduled meetings are held on the fourth Goshen Community Service District MSR Page 4-4 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 Thursday of each month at 6:00 p.m. at the District office, except for November. Agendas for Board meetings are posted on-site at the District office. 2. The District adopts budgets and rate changes at hearings where the public is notified and invited. 3. The District should work with the Tulare County Resource Management Agency (RMA) and/or Tulare County LAFCO to have information regarding District affairs posted on the Tulare County RMA and/or LAFCO website. The District could provide information such as meeting times and locations, budgets, rates, ordinances, agendas, completed/upcoming projects, and other District affairs to Tulare County for posting on the County’s (RMA and/or LAFCO) website. Goshen Community Service District MSR Page 4-5 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.0 GOSHEN COMMUNITY SERVICE DISTRICT 4.0.1 Background The requirement for LAFCO to conduct reviews of local municipal services was established with the passage of AB 2838 known as the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. The bill passed the legislature, and was signed by Governor Davis on September 26, 2000. MSRs provide LAFCOs with an additional tool to fulfill their statutory responsibilities of promoting orderly growth and development, preserving the States finite open space and agricultural land resources, and working to ensure that high quality public services are provided to all Californians in the most efficient and effective manner. MSRs are a requirement of State annexation law and are required to be completed before the consideration of a Sphere of Influence (SOI) amendment or once every five years when a SOI amendment is not being considered. In July 2003 Tulare County LAFCO adopted a MSR exemption policy that identifies the agencies that would be subject to a review and the extent of that review. The agencies in Tulare County were divided into three (3) categories: agencies subject to a full comprehensive study; agencies subject to a questionnaire study; and agencies exempt from a MSR study. The Goshen Community Services District (CSD) is subject to a full comprehensive study. The policy further identifies that the services subject to review shall be: • Police protection • Fire protection • Water and wastewater • Solid waste collection and disposal • Streets and traffic circulation • Power generation and distribution • Health Care Goshen, an unincorporated community in Tulare County, is located in the northwest portion of the County and northwest of the City of Visalia. The Goshen CSD which was formed in January 1958 has the authority to provide the following services: recreation and park services, street lighting, and collect, treat or dispose of sewerage and wastewater. Sanitary sewer collection is the primary service provided by the Goshen CSD that is subject to a MSR. In the November 2004 elections voters within the Goshen District voted to expand the powers of the Goshen CSD to include recreation including but not limited to aquatic parks and recreational harbors, equestrian trails, playgrounds, golf courses, and swimming pools, and for street lighting. These services are not subject to a MSR. Goshen is located approximately 1 ½ miles north of the Visalia Municipal Airport, portions of which are situated within the approach and departure area of the airport. It lies one tenth of a mile northwest of the City Limits of Visalia, 6 ½ miles from the downtown shopping area of Visalia, and immediately west of the Visalia Industrial Park. The community is square in shape, and is bisected in a northwest- southeasterly direction by State Route (SR) 99 and the Southern Pacific Railroad tracks, which divides the community into three approximately equal sized areas. Goshen is an agriculturally oriented service community surrounded on the north, west and south by lands in agricultural production and on the east by scattered residential, light industrial, agricultural and vacant land. Although primarily an agriculturally related service center, Goshen’s industrial base is rapidly increasing, providing new employment opportunities for residents of the community. Goshen Community Service District MSR Page 4-6 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 Cities and communities surrounding Goshen include Visalia to the east; Tulare to the south; the communities of London and Traver to the north and northwest, respectively; and the community of Tagus to the southeast (along SR 99 north of Tulare). The Tulare County/Kings County Line is located approximately 5 miles west of Goshen. The current District Boundary and the currently adopted SOI for Goshen are illustrated on Figure 4-1. The following excerpt from the Tulare County LAFCO website (www.co.tulare.ca.us/lafco/info.asp) defines a SOI and the purpose it serves. A “Sphere of Influence” is the physical boundary and service area that a local governmental agency is expected to serve. Establishment of this boundary is necessary to determine which governmental agencies can provide services in the most efficient way to the people and property in any given area. The Sphere of Influence requirement also works to discourage urban sprawl by preventing overlapping of jurisdictions and duplication of services. The following discussions address the nine legislative factors required by the Cortese-Knox-Hertzberg Act; 1) Growth and population, 2) Infrastructure needs and deficiencies, 3) Financial constraints and opportunities, 4) Cost avoidance opportunities, 5) Opportunities for rate restructuring, 6) Opportunities for shared facilities, 7) Government structure options, 8) Evaluation of management efficiencies, and 9) Local accountability and governance. Goshen Community Service District MSR Page 4-7 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 FIGURE 4-1 – GOSHEN CSD BOUNDARY AND SOI Source: Tulare County GIS Database (July 2004) Goshen Community Service District MSR Page 4-8 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.1 GROWTH AND POPULATION The purpose of this section is to present historical and projected growth patterns and population projections to establish a baseline for the evaluation of the service needs of Goshen. 4.1.1 Historical Data The Census Bureau, on a decennial basis, identifies and provides detailed information on all incorporated Cities along with several smaller unincorporated communities (termed Census Designated Places – CDPs). In each Census, community profiles are developed and provide a wide range of information pertaining to population, demographics, housing information, household data, education and employment, income and poverty, and historical trends. The CDP Boundary for Goshen is generally (with minor exceptions) coterminous with the current District Boundary. Census 2000 data indicates that Goshen had a population of 2,394 as of January 2000. The Goshen Community Plan (Tulare County Planning Department, 1978) projected a population between 3,625 and 3,840 for the year 2000, which was based upon on annual growth rate of 5%. However Census 2000 data indicates that the projections contained in the Goshen Community Plan were significantly higher than the actual growth which has occurred in the community. Census 1990 data indicates that Goshen had a population of 2,095 corresponding to an average annual growth rate between 1990 and 2000 of approximately 1.4%. The unincorporated areas of Tulare County grew from a population of 133,222 in 1990 to a population of 141,150 in 2000, corresponding to an average annual growth rate of approximately 0.6%. It is anticipated that over the next twenty years (approximately year 2025) Goshen will experience a higher growth rate than as indicated by historical trends. This is a result of development within the nearby City of Visalia as it continues to expand towards Goshen thereby increasing development pressures in Goshen. Using an estimated annual growth rate between 2% and 3%, the Goshen CSD could expect a year 2025 District population between 3,900 and 5,000. The Tulare County Resource Management Agency (RMA) is having a comprehensive update to the Goshen Community Plan (initially adopted in 1978) prepared to address the future needs of the community relating to growth, land use, housing, and public services. 4.1.2 Written Determinations 1. The Census Designated Place (CDP) Boundary for Goshen is generally (with minor exceptions) coterminous with the current District Boundary. 2. Census 2000 data indicates that Goshen had a population of 2,394 as of January 2000, while the Goshen Community Plan, adopted in 1978, projected a year 2000 population between 3,625, and 3,840, which was based upon an annual growth rate of 5%. 3. Between 1990 and 2000, Goshen experienced an average annual population growth rate of approximately 1.4%, compared to 0.6% for the unincorporated areas of Tulare County. 4. It is anticipated that over the next twenty years (approximately year 2025) Goshen will experience a higher growth rate than as indicated by historical trends. This is a result of development within the nearby City of Visalia as it continues to expand towards Goshen thereby increasing development pressures in Goshen. 5. With an annual growth rate between 2% and 3%, the Goshen CSD could expect a year 2025 District population between 3,900 and 5,000. Goshen Community Service District MSR Page 4-9 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 6. The Tulare County RMA is having a comprehensive update to the Goshen Community Plan prepared to address the future needs of the community relating to growth, land use, housing, and public services. The update of the Goshen Community Plan should be coordinated and consistent with the Tulare County General Plan Update, and any Sewer Master Planning being completed by the District. Goshen Community Service District MSR Page 4-10 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.2 INFRASTRUCTURE NEEDS AND DEFICIENCIES The purpose of this section is to evaluate the infrastructure needs and deficiencies of a jurisdiction in terms of availability of resources, capacity to deliver services, condition of facilities, service quality, and levels of service. 4.2.0 Sanitary Sewer Collection The Goshen CSD is responsible for the planning and construction of a sewage collection system. The main sewer system for the Goshen community is comprised of a collection system that was constructed in the mid to late 1990s. The construction of the District’s sewer system was funded through a United States Department of Agriculture Rural Economic and Community Development Grant and a Small Community Grant. Pursuant to obtaining funding for the Goshen Sewer Project, the Goshen CSD entered into a Wastewater Service Agreement with the City of Visalia for treatment of the District’s wastewater. Connection from the District’s sewer system to the City of Visalia’s sewer system is through a 24-inch gravity sewer under Camp Drive. The 24-inch line connects to the existing City SR198-Airport lift station. The District constructed the 24-inch line as a part of the Goshen Sewer Project, although the line is part of the City’s Master Planned Sewer System. After the line was placed in operation, the City assumed responsibility for maintenance of the line as a part of the City conveyance system. The City is responsible for improvements to its lift station and conveyance facilities downstream of the point of connection. The 24-inch line is planned to provide full capacity for the ultimate build-out of the Goshen CSD SOI. The District is responsible for the costs of construction and installation of any and all sewer line(s) from the District’s collection system, and for any flow meters, automated sampling, or odor control devices. Other key issues identified in the Wastewater Service Agreement, between the Goshen CSD and the City of Visalia, are identified below. • The District agrees to make a good faith effort to notify the City of any potential increases in effluent flow, biochemical oxygen demand, suspended solids and other potential pollutant levels indicated by any commercial and/or industrial development inquiries that would significantly affect the quantity and/or quality of the District’s discharge to the City system as soon as such potential impacts are made known to the District. • The City shall not contract, agree or otherwise create wastewater collection treatment and disposal service with any entity, corporation or individual which resides, does business within or requests service for any parcel, building, street or property within the boundary of the District. • The Goshen Sewer Project included several 18-inch lines and the 24-inch line that are part of the City’s Master Planned Sewer System. The City credited the District with the estimated cost of the lines as set forth in the City Master Plan. • The City has identified areas of the City that sewer services may be provided by connection to the District facilities. The District agrees to consider such connections on a case by case basis. Such requests by the City shall be submitted in writing and shall indicate the point of proposed connection and the anticipated flows and pollutant loadings. Approval of such connections shall be at the sole discretion and decision of the District. The City shall make no connections to the District facilities without the prior written approval of the District. • The District shall have the right to an amount of reclaimed water not to exceed the yearly total flow the District conveys to the City for treatment and disposal. The District shall be Goshen Community Service District MSR Page 4-11 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 entitled to the reclaimed water without payment to the City other than the pro-rata share of the expense of transmission facilities and related operation and maintenance costs of the City facilities used to convey the reclaimed water. The District shall be responsible for the cost of the connection to the City reclaimed water system and conveyance facilities from the City system to the District point of use. The District’s wastewater collection system dumps into a lift station (owned and operated by the District) near the intersection of Avenue 305 and Effie Drive, which in turn pumps the wastewater into the 24-inch line in Camp Drive. The sewer lift station operates with two pumps, and has a design capacity of 500,000 gallons per day (GPD). The Wastewater Service Agreement between City of Visalia and the Goshen Community Services District allows for a current contracted average daily discharge to the City’s treatment plant of 335,000 GPD. The Wastewater Service Agreement does provide for the purchase of additional capacity to be charged on a percentage increase basis. Table 4-1 below outlines the District’s flow contributions to the City’s WWTF in 2003 (CA Yearly Report, Goshen 2003). TABLE 4-1 GOSHEN COMMUNITY SERVICES DISTRICT DISTRICT FLOW CONTRIBUTIONS FOR YEAR 2003 Flow Totals (Million Month Gallons, MG) January 8.1 February 7.5 March 8.2 April 7.8 May 7.8 June 7.9 July 7.9 August 8.3 September 7.9 October 8.3 November 8.4 December 8.1 Total Annual Flow 96.2 MG Source: CA Yearly Report, Goshen CSD, 2003 Based upon the above information, the District contributed an average daily flow of approximately 264,000 gallons per day of raw sewage to the wastewater treatment plant maintained and operated by the City of Visalia in 2003. Service data provided by the Goshen CSD included the following information: • Current (2004) Demands: 270,000 gallons per day • 2025 Demands: Study in Progress • Current Facility Capacity: Estimated 500,000 gallons per day • Maximum Service without Expansion: 500,000 gallons per day • Maximum Facility Capacity at Master Plan Build-out: Study in Progress As of November 2005, the District was contributing an average daily flow of approximately 315,000 GPD of raw sewage to the City’s WWTF. Assuming the District can accommodate up to 500,000 GPD based upon the limitations of the lift station, it can be concluded that the District’s sewer system is operating at approximately 65% of its capacity. Goshen Community Service District MSR Page 4-12 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 The District is working towards the adoption of a Sewer System Master Plan, which will assist the District in expanding its collection system in line with development trends, and the needs of the community. The Sewer System Master Plan should be consistent with and coordinated with the Tulare County General Plan Update and the Goshen Community Plan update, to provide a sound connection between land zoned for development and the infrastructure (sanitary sewer in the case of Goshen CSD) that will serve such development. The Sewer System Master Plan should identify funding sources for the construction of capital sewer improvements including an evaluation of the feasibility of implementing a developer impact fee program consistent with the requirements of AB 1600. The Master Plan should also consider whether current connection fees are adequate to support the construction of future capital improvements. 4.2.1 Written Determinations 1. The main sewer system for the Goshen community is comprised of a collection system which was constructed in the mid to late 1990s. The construction of the District’s sewer system was funded through a United States Department of Agriculture, Rural Economic and Community Development Grant, and Small Community Grant. 2. Pursuant to obtaining funding for the Goshen Sewer Project, the Goshen CSD entered into a Wastewater Service Agreement with the City of Visalia for treatment of the District’s wastewater. 3. The District’s wastewater collection system dumps into a lift station (owned and operated by the District) near the intersection of Avenue 305 and Effie Drive, which in turn, pumps the wastewater into a 24-inch line in Camp Drive (that is owned and maintained by the City of Visalia). The sewer lift station operates with two pumps, and has a design capacity of 500,000 GPD. 4. The Wastewater Service Agreement between City of Visalia and the Goshen CSD allows for a current contracted average daily discharge to the City’s treatment plant of 335,000 GPD. The Wastewater Service Agreement does provide for the purchase of additional capacity which would be charged on a percentage increase basis. 5. As of November 2005, the District was contributing an average daily flow of approximately 315,000 GPD of raw sewage to the City’s WWTF. Assuming the District can accommodate up to 500,000 GPD based upon the limitations of the lift station, it can be concluded that the District’s sewer system is operating at approximately 65% of its capacity. 6. The District is currently working towards the adoption of a Sewer System Master Plan, which will assist the District in expanding its collection system in line with development trends and the needs of the community. The Sewer System Master Plan should be consistent with and coordinated with the Tulare County General Plan Update and the Goshen Community Plan update to provide for a sound connection between land zoned for development and the sanitary sewer infrastructure that will serve such development. The Master Plan should also identify funding sources to construct future capital improvements. Goshen Community Service District MSR Page 4-13 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.3 FINANCING OPPORTUNITIES AND CONSTRAINTS The purpose of this section is to evaluate the jurisdictions capability to finance needed improvements and services. 4.3.1 Annual Budget LAFCO should consider the ability of the District to pay for improvements or services associated with annexed sites. This planning could begin at the SOI stage by determining what opportunities there are to identify infrastructure and maintenance needs associated with future annexation and development and by identifying limitations on financing such improvements and opportunities that exist to construct and maintain those improvements. Based upon a review of the Goshen CSD budget for FY 2003-04 the District appears to be in sound financial condition. The fiscal year 2003-04 budget is well organized, thorough, and clearly articulates the District’s financial plans for the upcoming year. The District prepares a typical line item budget that is divided into the following categories: • Available Resources • Estimated Revenues • Estimated Expenditures o Salaries and Employee Benefits o Services and Supplies o Appropriations 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, investments, and rates and fees. Using the fiscal year 2003-04 budget as a basis for this discussion, the District has an operating budget of $508,888, which covers salaries and employee benefits for part time staff totaling $40,367, outside services and supplies totaling $123,586, other charges totaling $317,928, and a contingency fund of $27,008. “Other charges” include bond agent fees, repayment of long term debts (bonds and other) including interest and principal, and treatment fees paid to the City of Visalia. As of July 1, 2003, the District had a cash balance of $167,000, of which $100,000 was allocated towards capacity purchases, and $67,000 was allocated towards system replacement. The District generally requires new development projects to construct the necessary sewer infrastructure to serve their development. A program of developer-obligated infrastructure improvements will provide for installation of physical infrastructure to serve development sites and therefore will not become an obligation of the District. In some situations, developers could also work out reimbursement agreements with the District whereby a developer is reimbursed for a portion of the infrastructure costs when intermediate development occurs. Since new development pays the cost of additional infrastructure and the District infrastructure is in very good condition, the District does not have a management system in place to replace deteriorated sewer lines on a scheduled basis. Instead, infrastructure is replaced on an as needed basis. The District’s financial constraints involve the governmental structure and the desires of the people in the community to fund certain activities by establishing assessment districts or fees. The laws under which a Community Service District is governed provide the structure for funding activities. Key revenue sources for the Goshen CSD include property taxes, sewer service/connection fees, interest on reserves, annual Goshen Community Service District MSR Page 4-14 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 contributions from the Tulare County Redevelopment Agency, and pass through monies. One-time revenues or pass-through funds, account for the increases and decreases in revenue from year to year. On the expenditures side, the District budgets for the services paid for by residents and provides for other expenses using property tax, and if appropriate, restricted reserve accounts. Key expenditures include personnel, services and supplies, pass through revenues for projects, and principal and interest payments for long term debt. As indicated in the 2003-04 budget, the District has two long term debts; one that includes principal and interest bond payments totaling $162,328; and one that included a payment of $10,000 on a separate loan. 4.3.2 Written Determinations 1. The District prepares a comprehensive and thorough annual budget that clearly describes the services provided to residents and the funds expended for those services. 2. The District generally requires new development projects to construct the necessary sewer infrastructure to serve their development. A program of developer-obligated infrastructure improvements will provide for installation of physical infrastructure to serve development sites and therefore will not become an obligation of the District. 3. The District’s budget for fiscal year 2003-04 included contingency funds of $27,008. As of July 1, 2003 the District had a cash balance of $167,000, of which $100,000 was allocated towards capacity purchases and $67,000 was allocated towards system replacement. 4. The District has two long term debts; one that includes principal and interest bond payments totaling $162,328 during the FY 2003-04 budget cycle and a separate loan in which the District paid $10,000 during the FY 2003-04 budget cycle. Goshen Community Service District MSR Page 4-15 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.4 COST AVOIDANCE OPPORTUNITIES The purpose of this section is to identify practices or opportunities that may help to eliminate unnecessary costs. 4.4.1 Fiscal Structure The Districts budget process is designed to screen out unnecessary costs. A base budget is completed by the General Manager for review and discussion by the Board of Directors. The District has adequate staff resources and administrative capabilities to provide the needed level of services to the residents within its boundaries. The District avoids excessive overhead costs by operating with a part-time administration, which provides adequate levels of service to the small community of less than 3,000 people. The District also avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. The District should continue to work with the development community to fund the construction of capital infrastructure improvements that would serve new development sites. The District requires development projects to pay administrative and connection fees, currently set at $125, and $975 per equivalent dwelling unit (EDU). If the SOI were expanded in the future, the District would assume fiscal responsibilities to construct or maintain the sewer infrastructure associated with the SOI and any territories that were annexed. LAFCO should consider the relative burden of new annexations to the District when it comes to its ability to provide sewer service, as well as capital maintenance and replacements required as a result of expanding the District Boundary. Opportunities exist at the time of annexation and development to introduce alternative methods of construction and maintenance of public or semi-public infrastructure to serve the future SOI/annexation areas. 4.4.2 Written Determinations 1. The District avoids excessive overhead costs by operating with a part-time staff, which provides adequate levels of service to the small community. The District also avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 2. The District should continue to work with the development community to fund the construction of capital infrastructure improvements that would serve new development sites. Goshen Community Service District MSR Page 4-16 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.5 OPPORTUNITIES FOR RATE RESTRUCTURING The purpose of this section is to identify opportunities to positively impact rates without decreasing service levels. 4.5.1 Fee Structure The Goshen CSD recently (July 2004) increased rates charged for sewer service to $38 per equivalent dwelling unit (EDU) for commercial uses, and to $32 per EDU for residential service. Table 4-2 shows a comparison of sewer rates, and connection fees for surrounding sewer service providers. The table also shows the relationship between monthly service charges and the average household income within the Goshen community. TABLE 4-2 COMPARISON OF SEWER RATES Average Monthly Sewer Connection Service Provider Household Rate/Income Ratio3 User Fee (1 EDU)1 Fee1 Income2 Goshen CSD $32.00 $975 $2,359/mo. 1.36% Earlimart PUD $7.50 $1,000 $1,775/mo. 0.42% Ivanhoe PUD $9.50 $1,890 $2,171/mo. 0.44% Pixley PUD $15.00 $1,800 $1,942/mo. 0.77% Tipton CSD $8.00 $1,050 $2,198/mo. 0.36% Cutler PUD $22.00 $3,520 $2,028/mo. 1.08% Orosi PUD $22.97 $1,745 $2,533/mo. 0.91% Lemon Cove SD $4.50 $500 $2,361/mo. 0.19% London CSD $21.00 $1,990 $1,807/mo. 1.16% Poplar CSD $25.00 $1,300 $2,043/mo. 1.22% Richgrove CSD $18.00 $750 $1,907/mo. 0.94% Springville PUD $35.06 $3,900 $2,023/mo. 1.73% Strathmore PUD $14.70 $500 $2,096/mo. 0.70% Terra Bella SMD $21.00 $500 $2,109/mo. 1.00% Woodville PUD $17.25 $700 $2,123/mo. 0.81% Average $18.23 $1,475 $2,098/mo. 0.87% 1) Source: Wastewater User Charge Survey Report FY 2004-05 (CalEPA – SWRCB, May 2005) 2) Source: Census 2000 data 3) Ratio is calculated by dividing the monthly sewer user fee by the corresponding average household income. As indicated in Table 4-2, the Goshen CSD charges one of the highest monthly rate for sewer service compared to other sewer service providers throughout the County. The cost of sanitary sewer service within Goshen equates to approximately 1.36% of the average household income within the community. The Goshen CSD connection fee is below average compared to other sanitary sewer service providers throughout the County. User fees are used for the operation and maintenance costs of the Goshen CSD sewer system. Existing customers should not be responsible for costs associated with installing and/or upgrading infrastructure to serve new development. Goshen Community Service District MSR Page 4-17 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 The District should periodically review its monthly user and connection fees to ensure that quality service will continually be provided to existing and future residents. The Goshen CSD rates are currently the highest among surrounding service providers making it difficult to justify further rate increases. The District should review its connection fees to determine if they are adequate to support infrastructure required for new development, including future capacity purchases from the Visalia WWTP. Connection fees should generally be used for constructing new infrastructure and not for the operation and maintenance of existing infrastructure. 4.5.2 Written Determinations 1. In July 2004, the Goshen CSD increased rates charged for sewer service to $38 per EDU for commercial uses, and to $32 per EDU for residential service. 2. The Goshen CSD charges one of the highest monthly rates for sewer service compared to other sewer service providers throughout the County. The cost of sanitary sewer service within Goshen equates to approximately 1.36% of the average household income within the community. 3. The Goshen CSD monthly rates are currently among the highest compared to other service providers throughout the County making it difficult to justify further rate increases. The District’s connection fee is below average compared to other sanitary sewer service providers in the County. 4. The District should periodically review its monthly user and connection fees to ensure that quality service will continually be provided to existing and future residents. Goshen Community Service District MSR Page 4-18 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.6 OPPORTUNITIES FOR SHARED FACILITIES The purpose of this section is to evaluate opportunities for a jurisdiction to share facilities and resources, thereby increasing efficiency. 4.6.1 Shared Facilities Since the location of the Goshen District Boundary is immediately adjacent to the existing City Limits of Visalia, opportunities for shared facilities and/or resources exist. Currently, the Goshen CSD contracts with the City of Visalia for wastewater treatment services, as the Goshen CSD does not own or operate an independent WWTF. At present, there is a clear distinction between the sewer infrastructure of the District, and the sewer infrastructure of the City. As prescribed by the Wastewater Service Agreement between the City of Visalia and the Goshen CSD, “The City shall not contract, agree or otherwise create wastewater collection, treatment and disposal service with any entity, corporation or individual which resides, does business within or requests service for any parcel, building, street or property within the boundary of the District.” It is recommended that the District continue to coordinate with the City of Visalia with regard to sewer planning and related issues. To eliminate the potential for duplication of services, a clear distinction between District and City infrastructure and associated service areas should remain in tact. The Wastewater Service Agreement between the District and the City outlines specific cases in which interagency coordination is necessary. Since the Goshen sewer system is generally located in roads owned and maintained by Tulare County, it is recommended that the District work closely with the County on proposed sewer improvements that would impact County roadways. The District currently takes advantage of sharing staff and equipment with other service providers on an as needed basis. 4.6.2 Written Determinations 1. Currently, the Goshen CSD contracts with the City of Visalia for wastewater treatment services, as the Goshen CSD does not own or operate an independent WWTF. 2. At present, there is a clear distinction between the sewer infrastructure of the District, and the sewer infrastructure of the City. To eliminate the potential for duplication of services, a clear distinction between District and City infrastructure and associated service areas should remain in tact. 3. The Wastewater Service Agreement between the District and the City outlines specific cases in which interagency coordination is to occur. 4. Since the Goshen sewer system is generally located in roads owned and maintained by Tulare County, the District should work closely with the County on proposed sewer improvements that would impact County roadways. 5. The District currently takes advantage of sharing staff and equipment with other service providers on an as needed basis. Goshen Community Service District MSR Page 4-19 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.7 GOVERNMENT STRUCTURE OPTIONS The purpose of this section is to consider the advantages and disadvantages of various government structures to provide public services. 4.7.1 Development within SOI Areas One of the most critical elements of LAFCO’s responsibilities is in setting logical service boundaries for communities based upon their capability to provide services to affected lands. The Goshen CSD is currently working toward the adoption of a Sewer System Master Plan that will help guide expansions of and improvements to the District’s sewer system. The Master Plan will outline infrastructure improvements to accommodate the build-out of the Goshen CSD SOI. There are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. There are, however, potential boundary conflicts with the City of Visalia that could affect the governmental structure of the Goshen CSD. The implications of potential boundary conflicts are discussed in the following section. Tulare County LAFCO has adopted specific policies for reviewing proposals for a change in organization, reorganization, incorporations, dissolution and other proposals processed by Tulare County LAFCO. Tulare County LAFCO policy C-1 identifies factors and standards to be considered in review proposals including additional requirements for City annexations, standards for annexation to special districts, standards for the formation of special districts, and standards for City incorporation. Tulare County LAFCO policy C-2 outlines general procedures for changes in boundaries or organization to be processed by LAFCO. Generally, proposals for changes in boundaries, formations, or changes of organization can be submitted for the consideration of LAFCO by petition of the registered voters or affected landowners; however, prior to the circulation of any petition, a “Notice of Intent to Circulate” must be presented to the LAFCO Executive Officer. A proposal may also be initiated by a resolution adopted by the governing body of any related public body (county, city or special district). The proposal must be submitted on forms available from the LAFCO staff office, or on the LAFCO website, along with the applicable number of maps, legal descriptions, and filing fees to cover the proposal submitted. Tulare County LAFCO policies C-3 and C-4 outline specific criteria for petitions for change in organization, and protest hearings, respectively. Tulare County LAFCO policy C-5 sets forth specific criteria for establishing, and reviewing amendment proposals to, Spheres of Influence. Policy C-5 contains criteria regarding the following items: Existing boundaries, conflicting boundaries, initial implementation, scheduled updates – Cities, scheduled updates – Special Districts, Exceptions, separation of communities, municipal service reviews, and also contains an MSR exemption policy. SOI amendments shall be processed in accordance with the policies and procedures set forth by Tulare County LAFCO. 4.7.2 Boundary Conflicts The Goshen CSD governmental structure could be affected by the potential overlapping of boundaries with the City of Visalia. Existing boundary conflicts between the Goshen CSD and the City of Visalia are illustrated on Figure 4-2. The Goshen CSD has a Wastewater Service Agreement with the City of Visalia, which sets forth specific criteria with regard to wastewater collection and treatment services within the boundary of each agency. Goshen Community Service District MSR Page 4-20 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 FIGURE 4-2 – CITY OF VISALIA & GOSHEN CSD BOUNDARY CONFLICTS Source: Tulare County GIS Database Goshen Community Service District MSR Page 4-22 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 The Wastewater Service Agreement between the Goshen CSD and the City of Visalia, which may only be terminated upon the written consent of all parties, states the following with regard to sanitary sewer service within the Goshen CSD Boundary. “The City shall not contract, agree or otherwise create wastewater collection, treatment and disposal service with any entity, corporation or individual which resides, does business within or requests service of any parcel, building, street or property within the boundary of the District. The City shall not renew any current contract with any entity, corporation, industry or property for wastewater service within the District at expiration thereof.” The agreement does not appear to address wastewater collection services within the Goshen CSD SOI, which in some areas overlaps with the City of Visalia SOI (refer to Figure 4-2). Boundary conflicts and service provisions would ultimately be resolved between the City of Visalia, the Goshen CSD, and Tulare County LAFCO. 4.7.3 Written Determinations Development within SOI Areas 1. The Goshen CSD is currently working toward the adoption of a Sewer System Master Plan which will help guide expansions of and improvements to the District’s sewer system. The Master Plan will plan infrastructure improvements to accommodate the build-out of the Goshen CSD SOI. 2. Other than potential boundary conflicts with the City of Visalia, there are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. 3. Tulare County LAFCO has adopted specific policies for reviewing proposals for a change in organization, reorganization, incorporations, dissolution and other proposals processed by Tulare County LAFCO. Any changes in organization should be in accordance with the Policies and Procedures of Tulare County LAFCO. Boundary Conflicts 1. The governmental structure of the Goshen CSD could be affected by the potential overlapping of boundaries with the City of Visalia. In addition to overlapping SOI’s, the Visalia UGB generally encompasses the entire area currently serviced by the Goshen CSD. 2. The Goshen CSD has a Wastewater Service Agreement with the City of Visalia, which sets forth specific criteria with regard to wastewater collection and treatment services within the boundary of each agency. 3. Boundary conflicts and service provisions should ultimately be resolved between the City of Visalia, the Goshen CSD, and Tulare County LAFCO. Goshen Community Service District MSR Page 4-23 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.8 EVALUATION OF MANAGEMENT EFFICIENCIES The purpose of this section is to consider the management structure of the jurisdiction. 4.8.1 Organizational Structure Based upon a review of information provided by the Goshen CSD, it appears that the provision of wastewater collection is managed in an efficient manner, meeting the needs of the community and ratepayers. The Goshen CSD has accounting and finance functions, current personnel regulations and resolutions. The District undergoes annual audits in compliance with auditing standards. The Goshen CSD is governed by a five-member Board of Directors elected at large from within its boundaries that is responsible for setting policy and general administrative procedures. The District currently operates with a part-time staff and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. The District has the following hours of operation: • Monday – Tuesday: 2:00 p.m. – 6:30 p.m. • Wednesday – Thursday: 8:00 a.m. – 12:00 Noon • Friday: 6:00 p.m. – 8:00 p.m. The District’s part time personnel provides many functions of the District, which will likely continue in the future because funding for full-time staff is neither needed nor cost effective for a small CSD. The District’s answering message provides the public with the operational hours of the District; however it does not provide contact information in case of emergencies. To make District personnel available to the public in case of emergencies, it is recommended that the District provide an emergency contact number on its answering message to more promptly and efficiently respond to emergency situations. It is recommended that the District be available to respond to emergency situations during non office hours. Based upon the District’s 2003-04 budget approximately $27,000 was appropriated for contingencies. Contingency funds can be used for emergency improvements and/or unforeseen replacement or rehabilitation costs. 4.8.2 Written Determinations 1. Based upon information made available, it appears that the provision of sanitary sewer collection is managed in an efficient manner and meets the needs of the community and ratepayers. 2. The Goshen CSD is governed by a five member Board of Directors elected at large from within its boundaries and is responsible for setting policy and general administrative procedures. 3. The District currently operates with a part-time staff and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. 4. The District’s part time personnel provides many functions of the District, which will likely continue in the future since funding for full-time staff is neither needed nor cost effective for a small CSD. Goshen Community Service District MSR Page 4-24 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 5. The District’s answering message does not provide contact information in case of emergencies. To more promptly and efficiently respond to emergency situations, it is recommended that the District provide an emergency contact number on its answering message. Goshen Community Service District MSR Page 4-25 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01 4.9 LOCAL ACCOUNTABILITY AND GOVERNANCE The purpose of this section is to evaluate the accessibility and levels of public participation associated with the Goshen CSD’s decision-making processes. 4.9.1 Public Access and Information Methods LAFCO may consider the agency’s record of local accountability in its management of community affairs as a measure against the ability to provide adequate services to the SOI and annexation areas. The Goshen CSD has a five member Board of Directors elected by voters residing within the Districts Boundary. Regularly scheduled Board meetings, which are open to the public, are held on the fourth Thursday of each month (except in November) at 6:00 p.m. at the District office located at 6678 Avenue 308 in Goshen. Agendas for Board meetings are posted and notices provided consistent with public meeting requirements (i.e., the Brown Act) including posting on-site. The District adopts budgets and rate changes at hearings where the public is notified and invited. The District should work with the Tulare County Resource Management Agency (RMA) and/or Tulare County LAFCO to have information regarding District affairs posted on the Tulare County RMA and/or LAFCO website. The District could provide information such as meeting times and locations, budgets, rates, ordinances, agendas, completed/upcoming projects, and other District affairs to Tulare County for posting on the County’s (RMA and/or LAFCO) website. It would make sense to post information regarding District affairs on the County websites, since Goshen is an unincorporated community within Tulare County, and there is a mutual interest in the community. The internet is a relatively low-cost yet powerful method of involving the general public/customers/ratepayers in District affairs. Greater dissemination of information can lead to greater interest in attending Board meetings and participating in elections. It also allows the public, some of whom are not physically able to attend Board meetings, to follow District activities remotely from their home or business. 4.9.2 Written Determinations 1. The District complies with the Brown Act open meeting law by holding regularly scheduled meetings in which the public is invited. Regularly scheduled meetings are held on the fourth Thursday of each month at 6:00 p.m. at the District office, except for November. Agendas for Board meetings are posted on-site at the District office. 2. The District adopts budgets and rate changes at hearings where the public is notified and invited. 3. The District should work with the Tulare County Resource Management Agency (RMA) and/or Tulare County LAFCO to have information regarding District affairs posted on the Tulare County RMA and/or LAFCO website. The District could provide information such as meeting times and locations, budgets, rates, ordinances, agendas, completed/upcoming projects, and other District affairs to Tulare County for posting on the County’s (RMA and/or LAFCO) website. Goshen Community Service District MSR Page 4-26 Tulare County LAFCO MSR G1_4 Goshen Jan06.DOC/55-7301-01