MSR G1 6 Ivanhoe Jan06

CHAPTER 6 – IVANHOE PUD MUNICIPAL SERVICE REVIEW EXECUTIVE SUMMARY This section provides an overview of the written determinations of the Ivanhoe Public Utility District (PUD) 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 Ivanhoe PUD MSR identifies the following written determinations: Written Determinations 1) Growth and Population 1. The Ivanhoe CDP Boundary generally covers a larger area than the current District Boundary and SOI. The additional land covered by the CDP Boundary is considered to be sparsely populated at this time. 2. Census 2000 data indicates that Ivanhoe had a population of 4,474 as of January 2000. According to District staff, approximately 1,000 residents work as transient agricultural workers and leave Ivanhoe during the summer for northern California to pick fruit, etc. 3. Between 1990 and 2000, Ivanhoe experienced an average annual population growth rate of approximately 3.1%, compared to 0.6% for the unincorporated areas of Tulare County. 4. It is likely that the Ivanhoe community will continue to grow at an average annual rate between 2% and 3% depending upon land use zoning and other policies established by the Tulare County General Plan and other factors. Using an average annual growth rate between 2% and 3%, the Ivanhoe community would reach an estimated year 2025 population between 7,350 and 9,350. 5. The District’s approach to growth has been slow as they have historically turned down service requests that require annexation of additional territory. The District has no plans to expand its SOI at this time. 6. A development proposal submitted to the District in November 2003 resulted in the Board approving the issuance of a letter of intent to serve approximately 75 new affordable housing units. The proposed development is within the District Boundary and will not require the annexation of additional land into the District. Ivanhoe Public Utility District MSR Page 6-1 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 2) Infrastructure Needs and Deficiencies Domestic Water 1. Ivanhoe’s water supply is derived from six existing deep underground wells that provide an ample, excellent water supply requiring no chlorination or treatment. The six wells have a total maximum production efficiency of approximately 3,600 GPM. 2. In 1990, the District lost one of its seven wells due to DBCP contamination, which resulted in an $800,000 settlement being awarded to the District. 3. The Ivanhoe PUD water system supports 1,114 single and multi family connections. The District was unable to provide a breakdown of commercial and industrial connections, but estimated that there are approximately 1,200 total connections to the system. 4. Water consumption data indicated that there was an immediate decrease in domestic water usage as a result of metering, which began in 1991. Since then, the District has billed customers based upon a metered usage. 5. Well production data indicates that three of the six wells had comparably lower productions indicating that they are used as needed to meet fire flow and/or peak flow demands. The District’s wells produced 287.611 million gallons in 2003, with a maximum monthly production of 38.181 million gallons occurring in June, corresponding to a maximum day demand of 1.28 MGD. 6. Assuming 1,200 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards the Ivanhoe PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,800 GPM (1,500 GPM fire flow, and 1,600 GPM domestic demand) for a period of two hours while maintaining a minimum pressure of 25 PSI to each lot served. The District’s water system is capable of delivering a source flow of 3,600 GPM, and includes pneumatic pressure tanks for storage, indicating the system currently meets the requirements of the Tulare County Improvement Standards. 7. Based upon a calculation performed in accordance with General Order 103, published by the California Public Utilities Commission, it is estimated that the District’s current water system could support approximately 1,200 additional EDUs. 1. In 2004, the District received a $2 million State Revolving Fund (SRF) loan, a portion of which was used to replace old water lines with new water lines and relocate the lines from alleys to streets. Approximately $1.4 million in water line replacements has been completed. The remaining $600,000 was to be used to bring one new well online. Since the District’s water system has sufficient capacity, the Board voted not to drill a new well at this time. It is anticipated that the $600,000 that was to be used for a new well will be returned to the State. Sanitary Sewer 1. The sanitary sewer system for the Ivanhoe community currently supports 1,114 single and multi-family residential connections. District staff was unable to provide a breakdown of commercial and industrial connections but estimated that there are approximately 1,200 total connections to the system. Ivanhoe Public Utility District MSR Page 6-2 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 2. The District operates a WWTF that provides secondary treatment of wastewater and is located southwest of the community. The WWTF is operated under the provisions of Order No. 98-090 issued by the California RWQCB, which prescribes that the monthly average daily discharge shall not exceed 0.56 MGD. 3. Treated effluent from the WWTF is recycled on 61.2 acres of pasture land south of the plant, which is leased by the District for grazing of non-milking cattle. 4. The average dry weather flow at the WWTF is approximately 0.36 MGD resulting in an excess capacity of approximately 200,000 GPD. Based upon the available capacity at the WWTF (200,000 GPD), it is estimated that approximately 650 additional connections (EDUs) to the system could be supported. 5. Based upon a review of monthly monitoring reports submitted to the RWQCB, the District’s wastewater inflows are typically higher during summer months than during winter months indicating that there is no significant inflow and infiltration into the collection system during the winter months. This is an indication that the collection system is in adequate operating condition. 6. The District will need to increase the capacity of its WWTF to support projected growth through year 2025. It is recommended that the District research State and Federal grants and/or loans that may be available to help finance improvements to the District’s WWTF. Clean Water Grants, State Revolving Fund Loans, and Small Community Grants are examples. 3) Financing Constraints & Opportunities 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’s operating budgets (excluding reserve funds) for fiscal year 2004-05 totaled $370,472 for sanitary sewer and $2,529,609 for water service. The District’s budget included contingency funds of $25,000 and $50,000 for sanitary sewer and domestic water service, respectively. 3. A review of the District’s budget indicates that the District is in stable financial condition. The District’s annual revenues cover the annual operating expenses of the District including reserve allocations and contingency appropriations. 4. It is likely that development within the District’s SOI will rely on infrastructure available from the District. To increase its preparedness when such development is proposed, it is recommended that the District prepare and implement water and sewer system master plans. 5. The District generally requires new development projects to construct the necessary infrastructure to serve their development. A program of developer obligated infrastructure improvements provides for the installation of physical infrastructure to serve development sites and therefore relieves the financial obligation of the District. Ivanhoe Public Utility District MSR Page 6-3 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6. Developers are also required to pay fees for rights to water and sewer capacity, which are ultimately used by the District for capital capacity improvements. These fees are set by the Board of Directors by resolution, and are allocated to a restricted reserve account. 7. The District also generates revenue by investing its cash reserves in interest bearing accounts. Interest earnings are not projected for the upcoming F.Y. budget, but instead are reported in the beginning cash balance for the next F.Y. budget. 8. A major capacity expansion of the WWTF would increase the operation and maintenance costs to current residents and Board does not consider this a desirable alternative. For this reason operation and maintenance costs associated with increasing the capacity of the WWTF is considered a significant financial constraint of the District. 4) Cost Avoidance Opportunities 1. Each year, the District’s budget is reviewed with the district Board, District Engineer, and General Manager to ensure that the District continues to operate within the limits of its financial resources. 2. The District avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 3. The District should continue to work with the development community to fund the construction of water and sewer infrastructure improvements that would serve new development sites. The District requires development projects to pay fees for water and sewer capacity rights, which are currently set at $1700 and $1890 per EDU, respectively. 5) Opportunities for Rate Restructuring 1. The Ivanhoe PUD charges monthly user fees and new connection fees for water and sewer. The District’s fiscal year 2004-05 budget estimates revenues of $234,000 and $152,000 to be generated from water and sewer customer sales, respectively. 2. The Ivanhoe PUD rates are currently among the lowest compared to other service providers throughout the County, which is indicative of the District’s ability to provide efficient and affordable utility services to residents in the community. 3. The District’s budget is structured to segregate costs associated with the construction of infrastructure to accommodate new development. Fees paid by developers are placed into a restructured reserve account, funds which are ultimately used by the District to construct capital capacity improvements to the District’s water and sewer systems. User fees are used for the operations of the District and the operation and maintenance of the District’s infrastructure. 6) Opportunities for Shared Facilities 1. Since the location of the Ivanhoe District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. 2. Opportunities for sharing resources include splitting insurance premiums with nearby Districts requiring related insurance coverage. Also the employment of a grant writer by two Ivanhoe Public Utility District MSR Page 6-4 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 or more Districts could potentially benefit the District without incurring the cost of a full time employee. 7) Government Structure Options 1. There are no other service providers immediately adjacent to Ivanhoe’s SOI indicating that the potential for duplication of services is not present. For this reason, it is logical that the Ivanhoe PUD adequately plan for and assume water and sewer service within its SOI Boundary. 2. There are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. 3. Prior to development within its SOI area the District should complete master planning to address the infrastructure needs of affected areas and funding mechanisms to meet those needs. The District and/or County could also require developers to prepare specific plans prior to approving development within the District’s SOI. 4. The District will need to continually expand and improve its water and sewer infrastructure to accommodate development within its current District Boundary and SOI expansion areas. 5. The City of Visalia Urban Area Boundary encompasses an area that is currently part of the Ivanhoe District Boundary southwest of the community that includes the application area for reclaimed water from the Ivanhoe PUD WWTF. The Ivanhoe PUD governmental structure would not likely be affected by this realization, as a City’s UAB is used only as a preliminary planning mechanism and has little to no implications with regard to State or Federal Law. 8) Evaluation of Management Efficiencies 1. Based upon information made available, it appears as if the provisions of sanitary sewer and domestic water service are managed in a cost effective, efficient manner, meeting the needs of the community and ratepayers. 2. The Ivanhoe PUD 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 full time staff, and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. 4. The District’s 2004-05 budgets appropriated approximately $75,000 for contingencies that could be used for emergency improvements and/or unforeseen replacement or rehabilitation costs. 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 first Monday of each month at 7:00 p.m. at the District office. Agendas for Board meetings are posted on-site at the District office. Ivanhoe Public Utility District MSR Page 6-5 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 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. Ivanhoe Public Utility District MSR Page 6-6 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.0 IVANHOE PUBLIC UTILITY DISTRICT 6.0.1 Background The requirement for Local Agency Formation Commissions (LAFCO) to conduct reviews of local municipal services was established with the passage of AB 2838, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. The bill passed the legislature and was signed into law by Governor Davis on September 26, 2000. Municipal Service Reviews (MSR) 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 the Tulare County Local Agency Formation Commission (LAFCO) Board adopted a MSR exemption policy, which 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 Ivanhoe Public Utility District (PUD) 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 Ivanhoe, an unincorporated community in Tulare County, is located in the northwest portion of the County, northeast of Visalia. The Ivanhoe PUD, formed in October 1951, has a primary function of providing domestic water and sanitary sewer service to residents within the community. Domestic water and sanitary sewer collection, treatment, and disposal are the primary services provided by the Ivanhoe PUD that are subject to a MSR. Ivanhoe is located along State Route (SR) 216 approximately 7 ½ miles northeast of downtown Visalia. The community is rectangular in shape and is bisected in a northwest-southeasterly direction by the San Joaquin Valley railroad tracks. North-south railroad crossings exist along Road 156, Road 159, and Road 160 (Depot Drive). East-west railroad crossing exist along Avenue 332, Avenue 330, and SR 216. Ivanhoe is an agriculturally oriented service community surrounded on all sides by lands in agricultural production, scattered rural residential uses and vacant land. Cities and communities surrounding Ivanhoe include Visalia to the southwest, Woodlake to the northeast, and the communities of Yettem and Seville to the north. The current District Boundary and the currently adopted SOI for the Ivanhoe PUD are illustrated on Figure 6-1. Ivanhoe Public Utility District MSR Page 6-7 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 FIGURE 6-1 – IVANHOE PUD BOUNDARY AND SOI Source: Tulare County GIS Database (July 2004) Ivanhoe Public Utility District MSR Page 6-8 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 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. Ivanhoe Public Utility District MSR Page 6-9 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.1 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 Ivanhoe. 6.1.1 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). 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 Ivanhoe CDP Boundary, as established by the Census Bureau, generally covers a larger area than the current District Boundary and SOI as depicted on Figure 6-1 obtained from the Tulare County GIS Database (July 2004). The additional area covered by the CDP generally consists of undeveloped land or land in agricultural production (areas which are considered to be sparsely populated at this time). Census 2000 data indicates that Ivanhoe had a population of 4,474 as of January 2000. District staff estimates that approximately 1,000 residents work as transient agricultural workers and leave Ivanhoe during the summer for northern California to pick fruit, etc. Census 1990 data indicates that Ivanhoe had a population of 3,293 in 1990, corresponding to an annual average growth rate between 1990 and 2000 of approximately 3.1%. 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 likely that the Ivanhoe community will continue to grow at an average annual rate between 2% and 3% depending upon land use zoning, and other policies established by the Tulare County General Plan and other factors. Using an average annual growth rate between 2% and 3%, the Ivanhoe community would reach an estimated year 2025 population between 7,350 and 9,350. The District’s approach to growth has been slow as they have historically turned down service requests that require annexation of additional territory. The Board supports infill development on existing vacant lots within the District Boundary first. There are no plans to expand the SOI at this time, as the wastewater treatment facility capacity is limited. A development proposal submitted to the District in November 2003 resulted in the Board approving the issuance of a letter of intent to serve approximately 75 new affordable housing units. The proposed development is within the District Boundary and will not require the annexation of additional land into the District. 6.1.2 Written Determinations 1. The Ivanhoe CDP Boundary generally covers a larger area than the current District Boundary and SOI. The additional land covered by the CDP Boundary is considered to be sparsely populated at this time. 2. Census 2000 data indicates that Ivanhoe had a population of 4,474 as of January 2000. According to District staff, approximately 1,000 residents work as transient agricultural workers and leave Ivanhoe during the summer for northern California to pick fruit, etc. 3. Between 1990 and 2000, Ivanhoe experienced an average annual population growth rate of approximately 3.1%, compared to 0.6% for the unincorporated areas of Tulare County. Ivanhoe Public Utility District MSR Page 6-10 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 4. It is likely that the Ivanhoe community will continue to grow at an average annual rate between 2% and 3% depending upon land use zoning and other policies established by the Tulare County General Plan and other factors. Using an average annual growth rate between 2% and 3%, the Ivanhoe community would reach an estimated year 2025 population between 7,350 and 9,350. 5. The District’s approach to growth has been slow as they have historically turned down service requests that require annexation of additional territory. The District has no plans to expand its SOI at this time. 6. A development proposal submitted to the District in November 2003 resulted in the Board approving the issuance of a letter of intent to serve approximately 75 new affordable housing units. The proposed development is within the District Boundary and will not require the annexation of additional land into the District. Ivanhoe Public Utility District MSR Page 6-11 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.2 INFRASTRUCTURE NEEDS AND DEFICIENCIES The purpose of this section is to evaluate the infrastructure needs and deficiencies of the Ivanhoe PUD in terms of availability of resources, capacity to deliver services, condition of facilities, service quality, and levels of service. 6.2.1 Domestic Water The Ivanhoe PUD is responsible for providing domestic water service within the District’s Boundary. Ivanhoe’s water supply is derived from six deep underground wells that pump at a consistent water level between 250 and 350 feet. According to District staff, the six wells provide an ample excellent water supply requiring no chlorination or treatment. District staff indicated that the production efficiency of the wells ranges between 500 and 1,000 gallons per minute (GPM) and that the six wells have a total maximum production efficiency of approximately 3,600 GPM, or 5.18 MGD. Wells are located throughout the community at locations identified below. • Well No. 1 – Southeast corner of the Azalea Avenue and Manzanita Road intersection • Well No. 2 – Southeast corner of the Fuchsia Avenue and Manzanita Road intersection • Well No. 3 – Northwest corner of the Avenue 332 and Road 160 intersection (closed) • Well No. 4 – Northwest corner of the Jasmine Avenue and Road 158 intersection • Well No. 5 – East of the Aspen Avenue and Manzanita Road intersection • Well No. 6 – Northeast corner of the Road 156 and Avenue 330 intersection • Well No. 7 – East of the Lantana Avenue and Road 160 intersection As previously indicated, only six of the seven wells are in operation, as Well No. 3 was lost in 1990 after DBCP contamination (from grape chemicals) was found. The loss of the well resulted in an $800,000 settlement being awarded to the District. The District indicated that the community water system (as of August 2004) supports 1,114 single and multi-family residential connections. The District was unsure exactly how many commercial connections were on the system, but estimated that there is approximately 1,200 total connections to the system. The Ivanhoe PUD water system has been fully metered since 1991. Since then the District has billed customers based upon a metered usage. Water consumption data indicated that there was an immediate decrease in domestic water usage as a result of metering. The total water production for each groundwater well by month (for year 2003) is contained in Table 6-1 below. TABLE 6-1 IVANHOE PUD GROUNDWATER WELL PRODUCTIONS Monthly Month Well No. 1 Well No. 2 Well No. 4 Well No. 5 Well No. 6 Well No. 7 Production January 8.103 mg 0.004 mg 4.767 mg 0.006 mg 0.011 mg 1.428 mg 14.319 mg February 12.184 mg 0.017 mg 1.739 mg 0.013 mg 0.025 mg 0.091 mg 14.069 mg March 10.285 mg 0.008 mg 6.800 mg 0.004 mg 0.141 mg 0.523 mg 17.761 mg April 8.960 mg 0.008 mg 3.534 mg 4.835 mg 0.036 mg 0.350 mg 17.723 mg May 12.669 mg 0.006 mg 8.227 mg 4.767 mg 0.098 mg 1.802 mg 27.569 mg June 13.759 mg 0.025 mg 16.757 mg 1.720 mg 0.101 mg 5.819 mg 38.181 mg July 4.088 mg 0.167 mg 18.542 mg 4.693 mg 0.022 mg 10.516 mg 38.028 mg August 6.045 mg 0.012 mg 18.326 mg 0.740 mg 0.084 mg 9.718 mg 34.925 mg September 2.036 mg 0.080 mg 10.712 mg 6.680 mg 0.013 mg 11.340 mg 30.861 mg October 3.969 mg 0.009 mg 15.886 mg 0.008 mg 0.157 mg 4.634 mg 24.663 mg November 4.689 mg 0.015 mg 3.799 mg 0.007 mg 0.007 mg 6.175 mg 14.692 mg December 8.039 mg 0.004 mg 0.010 mg 0.005 mg 0.006 mg 6.756 mg 14.820 mg Annual Production 95.826 mg 2.355 mg 113.099 mg 28.478 mg 6.701 mg 66.152 mg 287.611 mg Notes: 1) mg = million gallons 2) Source: Ivanhoe PUD Ivanhoe Public Utility District MSR Page 6-12 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 As indicated in Table 6-1, each of the six wells in operation produced water during each month of the year; however, well nos. 2, 5, and 6 had comparably lower productions indicating that they are used as needed to meet fire flow and/or peak flow demands. District staff indicated that typically only three wells are on line in the summer and maintain a tank pressure of 40 lbs./inch2 (PSI); the pressure system triggers additional wells to come on line as needed. Tulare County Improvement Standards require that the construction of water source facilities shall comply with the requirements of Bulletin No. 74, “Water Well Standards” prepared by the State of California Department of Water Resources. The Tulare County Improvement Standards also establish specific requirements for quantity and quality of water to be delivered to a system. Some of these requirements are summarized below. • The quantity of water delivered to the distribution system within a subdivision from all source and storage facilities for a period of two hours shall be the maximum domestic demand plus a fire flow quantity of not less than 500 GPM for single family residential, 1,500 GPM for multi-family residential, commercial, and light manufacturing, and 2,500 GPM for heavy manufacturing. • For systems up to 625 customer units (equivalent dwelling units) the domestic quantity shall not be less than Q = 100 + 25 * √N, and Q = 100 + N for more than 625 customer units at sufficient pressure to provide a minimum pressure of 25 PSI to each lot served; where Q equals the rate of flow in GPM delivered from the combined source facilities to the distribution system, and N equals the total number of customer units where each customer unit is equivalent to one for a single family dwelling on a normal subdivision lot. Other types of development shall be assigned appropriate customer unit values by the Engineer as experience with the distribution system or locality indicates. • The minimum source and domestic demand storage design requirements shall be in accordance with Plate No. WS-11 of Section IV of the Tulare County Improvement Standards. • The quality of water supplied for human consumption shall conform to Sections 3, 4 and 5 of the latest United States Public Health Service Drinking Water Standards. Samples will be taken and tests made by the County Department of Health Services for bacteriological determination of potability. • Chemical and physical tests for potability shall be performed by a commercial laboratory certified by the State Department of Health Services for performance of chemical and physical analysis and the costs thereof shall be borne by the sub-divider. Assuming 1,200 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards the Ivanhoe PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,800 GPM (1,500 GPM fire flow, and 1,300 GPM domestic demand) for a period of two hours while maintaining a minimum pressure of 25 PSI to each lot served. The District’s water system is capable of delivering a source flow of 3,600 GPM, and includes pneumatic pressure tanks for storage. Wells are set to come online when the pneumatic tank pressures fall to 40 PSI. An estimate of water system capacity can be calculated by using General Order 103, published by the California Public Utilities Commission. For the estimated water system capacity, the total supply source available is compared to a calculated total supply source required. Other factors that may affect the capacity of water systems, including but not limited to, water quality, low pressures, required storage, age Ivanhoe Public Utility District MSR Page 6-13 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 of system, and pipeline restrictions, are not considered. The estimated supply source required is calculated using the following equation, Q = (N)*(C)*(F) where, Required N = Number of customers served C = Gallon per minute constant: 5 to 9 for flat rate systems, 2 to 5 for metered systems F = Factor to reflect diversity (inversely proportional to the number of customers) Using an N value of 1,200, a C factor of 5.0, and an F factor of 0.30, the estimated total supply source required is calculated to be 1,800 GPM. With a total supply source available of 3,600 GPM, it is estimated that the water system could support approximately 1,200 additional equivalent dwelling units. These calculations indicate that the District’s water system is operating at approximately 50% of its capacity. District staff indicated that leaks in the system are minimal and almost simultaneously detected by comparing the flows from the well pumps with flows into the District’s Wastewater Treatment Facility (WWTF). Another safeguard against leaks is when customers come into the District with unusually high bills. Staff will go to the customer’s residence and help them to find the leak. In 2004, the District received a $2 million State Revolving Fund (SRF) loan, a portion of which was used to replace old water lines with new water lines and relocate the lines from alleys to streets. Approximately $1.4 million in water line replacements has been completed. The remaining $600,000 was to be used to bring one new well online. Since the District’s water system has sufficient capacity, the Board voted not to drill a new well at this time. It is anticipated that the $600,000 that was to be used for a new well will be returned to the State. 6.2.2 Sanitary Sewer The Ivanhoe PUD is also responsible for providing sanitary sewer collection, treatment, and disposal services to residents within its Boundary. The District indicated that as of August 2004 there were 1,114 single and multi-family residential connections to the sewer system managed by the Ivanhoe PUD. District staff estimated that there are approximately 1,200 total connections to the system. Raw sewage is collected in a series of collection pipes ranging in size from 4 to 15 inches (including Vitrified Clay Pipe and Polyvinyl Chloride Pipe) and then transported to a WWTF that is owned and operated by the Ivanhoe PUD. The District operates a WWTF located southwest of the community west of the Avenue 324/Road 156 intersection. The WWTF is operated under the provisions of Order No. 98-090 issued by the California Regional Water Quality Control Board (RWQCB). The District’s WWTF provides secondary treatment of wastewater via a clarigester, three stabilization ponds, and a sludge drying bed. Treated effluent from the third stabilization pond is recycled on 61.2 acres of pasture land south of the WWTF, which is leased by the District for grazing of non-milking cattle. Industrial developments discharging to the WWTF are primarily citrus packing plants. Order No. 98-090 prescribes that the monthly average daily discharge shall not exceed 0.56 MGD. Based upon information contained in the Wastewater User Charge Survey Report FY 2004-05 (Cal EPA – State Water Resources Control Board, May 2005), the average dry weather flow at the WWTF is approximately 0.36 MGD. Based upon the available capacity at the WWTF (200,000 GPD), it is estimated that approximately 650 additional connections (EDUs) to the system could be supported. Ivanhoe Public Utility District MSR Page 6-14 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 Based upon a review of monthly monitoring reports submitted to the RWQCB, the District’s wastewater inflows are typically higher during summer months than during winter months indicating that there is no significant inflow and infiltration into the collection system during the winter months. This is an indication that the collection system is in adequate operating condition. The above evaluations indicate that the District will need to increase the capacity of its WWTF to support projected growth through year 2025. Based upon information contained in the Wastewater User Charge Survey Report FY 2004-05 (Cal EPA – State Water Resources Control Board, May 2005), the District has not received any grants for the construction of wastewater facility improvements for at least the past thirty years. It is recommended that the District research State and Federal grants and/or loans that may be available to help finance improvements to the District’s WWTF. Potential grants and loans include US-EPA Clean Water Construction Grants (CWG), State Revolving Fund Loans (SRF), and State Small Community Grants (SCG). 6.2.3 Written Determinations Domestic Water 1. Ivanhoe’s water supply is derived from six existing deep underground wells that provide an ample, excellent water supply requiring no chlorination or treatment. The six wells have a total maximum production efficiency of approximately 3,600 GPM. 2. In 1990, the District lost one of its seven wells due to DBCP contamination, which resulted in an $800,000 settlement being awarded to the District. 3. The Ivanhoe PUD water system supports 1,114 single and multi family connections. The District was unable to provide a breakdown of commercial and industrial connections, but estimated that there are approximately 1,200 total connections to the system. 4. Water consumption data indicated that there was an immediate decrease in domestic water usage as a result of metering, which began in 1991. Since then, the District has billed customers based upon a metered usage. 5. Well production data indicates that three of the six wells had comparably lower productions indicating that they are used as needed to meet fire flow and/or peak flow demands. The District’s wells produced 287.611 million gallons in 2003, with a maximum monthly production of 38.181 million gallons occurring in June, corresponding to a maximum day demand of 1.28 MGD. 6. Assuming 1,200 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards the Ivanhoe PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,800 GPM (1,500 GPM fire flow, and 1,600 GPM domestic demand) for a period of two hours while maintaining a minimum pressure of 25 PSI to each lot served. The District’s water system is capable of delivering a source flow of 3,600 GPM, and includes pneumatic pressure tanks for storage, indicating the system currently meets the requirements of the Tulare County Improvement Standards. 7. Based upon a calculation performed in accordance with General Order 103, published by the California Public Utilities Commission, it is estimated that the District’s current water system could support approximately 1,200 additional EDUs. Ivanhoe Public Utility District MSR Page 6-15 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 8. In 2004, the District received a $2 million State Revolving Fund (SRF) loan, a portion of which was used to replace old water lines with new water lines and relocate the lines from alleys to streets. Approximately $1.4 million in water line replacements has been completed. The remaining $600,000 was to be used to bring one new well online. Since the District’s water system has sufficient capacity, the Board voted not to drill a new well at this time. It is anticipated that the $600,000 that was to be used for a new well will be returned to the State. Sanitary Sewer 1. The sanitary sewer system for the Ivanhoe community currently supports 1,114 single and multi-family residential connections. District staff was unable to provide a breakdown of commercial and industrial connections but estimated that there are approximately 1,200 total connections to the system. 2. The District operates a WWTF that provides secondary treatment of wastewater and is located southwest of the community. The WWTF is operated under the provisions of Order No. 98-090 issued by the California RWQCB, which prescribes that the monthly average daily discharge shall not exceed 0.56 MGD. 3. Treated effluent from the WWTF is recycled on 61.2 acres of pasture land south of the plant, which is leased by the District for grazing of non-milking cattle. 4. The average dry weather flow at the WWTF is approximately 0.36 MGD resulting in an excess capacity of approximately 200,000 GPD. Based upon the available capacity at the WWTF (200,000 GPD), it is estimated that approximately 650 additional connections (EDUs) to the system could be supported. 5. Based upon a review of monthly monitoring reports submitted to the RWQCB, the District’s wastewater inflows are typically higher during summer months than during winter months indicating that there is no significant inflow and infiltration into the collection system during the winter months. This is an indication that the collection system is in adequate operating condition. 6. The District will need to increase the capacity of its WWTF to support projected growth through year 2025. It is recommended that the District research State and Federal grants and/or loans that may be available to help finance improvements to the District’s WWTF. Clean Water Grants, State Revolving Fund Loans, and Small Community Grants are examples. Ivanhoe Public Utility District MSR Page 6-16 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.3 FINANCING OPPORTUNITIES AND CONSTRAINTS The purpose of this section is to evaluate the capability of the Ivanhoe PUD to finance needed improvements and services. 6.3.1 Annual Budget LAFCO should consider the ability of the District to pay for improvements or services associated with annexed sites. This planning can begin at the SOI stage by identifying what opportunities there are to identify infrastructure and maintenance needs associated with future annexation and development, and identifying limitations on financing such improvements, as well as the opportunities that exist to construct and maintain those improvements. The fiscal year 2004-05 budget for the Ivanhoe PUD is organized into two separate funds: one for sanitary sewer and the other for domestic water. Based upon a review of the District’s fiscal year 2004- 05 budget the District is in sound financial condition. The District’s budget is well organized, thorough, and clearly articulates the District’s future financial performance plans. The District prepares a traditional line item budget for each fund (sewer and water) that is divided into the following categories. • Fund Balances • Revenues • Reserve Funds • Expenses o Salaries and Employee Benefits o Services and Supplies o Other o Fixed Assets o Contingencies 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. The District’s sanitary sewer budget for fiscal year 2004-05 identifies a beginning cash balance of $898,005 and anticipated revenues of $152,000 to be generated from customer sales, resulting in a total beginning balance of $1,050,005. Of the total resources available, $679,533 is in restricted reserves leaving an operating budget of $370,472. Restricted reserves are established by depreciation of equipment and facilities owned and operated by the District. Restricted reserves are not necessarily used annually, but instead they are used when specific equipment has depreciated to the point of needing replacement. The specific items for which restricted reserves are allocated are identified below. • Treatment Plant • Backhoe • Dump Truck • Miscellaneous Equipment • 4 Pick-up Trucks • Air Compressor • Grinder • Jetting Machine • 3 Pond Site Fences Ivanhoe Public Utility District MSR Page 6-17 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 • Line Replacement • Standby Generator • Manhole Replacement After accounting for restricted reserves from the District’s budget, the remaining operating budget of $370,472 covers salaries and employee benefits totaling $115,200; services and supplies totaling $117,050; fixed assets totaling $69,222; and a contingency appropriation of $25,000. The District’s water budget for fiscal year 2004-05 identifies a beginning cash balance of $2,989,083 and anticipated revenues of $2,234,000 [$234,000 generated from customer sales and a $2,000,000 State Revolving Fund (SRF) loan resulting in a total beginning balance of $5,223,083]. Of the total resources available $2,693,474 is in restricted reserves leaving an operating budget of $2,529,609. Restricted reserves include SRF reserve, specified reserves (established by depreciation of equipment and facilities owned and operated by the District), and general reserves. Specified restricted reserves are not necessarily used annually, but instead they are used when specific equipment has depreciated to the point of needing replacement. The specific items for which specified restricted reserves are allocated are identified below. • Seven Wells • Backhoe • Dump Truck • Miscellaneous Equipment • 4 Pick-up Trucks • Air Compressor • Eight Well Site Fences • Line Replacement After accounting for restricted reserves from the District’s budget, the remaining operating budget of $2,529,609 covers salaries and employee benefits totaling $115,200; services and supplies totaling $156,900; fixed assets totaling $2,131,509; and a contingency appropriation of $50,000. In addition to customer sales, the District also generates revenue from property tax increments, interest on reserves, late charges and hand delivered fees, rental of a ranch house, and connection fees. Although the District does not specifically include these additional revenue sources as a part of their proposed budget, revenues generated from these sources are reported at the end of the fiscal year. Reviewing the District’s budget for the current and previous fiscal years indicates that the District is financially stable with regard to its sewer and water funds. The District’s annual revenues cover the annual operating expenses of the District including reserve allocations and contingency appropriations. It is likely that development within the SOI will rely on infrastructure available from the District. For this reason the District should be prepared to accommodate such growth. The preparation of water and sewer master plans would increase the District’s preparedness when development within its SOI is proposed. The District generally requires new development projects to construct the necessary infrastructure to serve their development. A program of developer obligated infrastructure improvements provides for the installation of physical infrastructure to serve development sites and therefore relieves the financial obligation of the District. Developers are also required to pay fees for rights to water and sewer capacity, which are ultimately used by the District for capital capacity improvements including, but not limited to, additional wells, storage facilities, or capital WWTF improvements. These fees are set by the Board of Directors by resolution, and are allocated to a restricted reserve account. Ivanhoe Public Utility District MSR Page 6-18 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 Based upon discussions with the District Engineer, the District will not expand capacity of current WWTF even through developers have offered to the pay the costs associated with a major capacity expansion. A major capacity expansion of the WWTF would increase the operation and maintenance costs to current residents and Board does not consider this a desirable alternative. For this reason operation and maintenance costs associated with increasing the capacity of the WWTF is considered a significant financial constraint of the District. Growth within the Ivanhoe community would result in additional utility customers, and could ultimately help offset unreasonable operation and maintenance cost increases to existing customers associated with expanding the capacity of the existing WWTF. 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 Public Utility District is governed provide the structure for funding activities. Key revenue sources for the Ivanhoe PUD include property taxes, monthly sewer and water fees, connection fees, interest on reserves, and pass through monies. One-time revenues, that are 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. 6.3.2 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’s operating budgets (excluding reserve funds) for fiscal year 2004-05 totaled $370,472 for sanitary sewer and $2,529,609 for water service. The District’s budget included contingency funds of $25,000 and $50,000 for sanitary sewer and domestic water service, respectively. 3. A review of the District’s budget indicates that the District is in stable financial condition. The District’s annual revenues cover the annual operating expenses of the District including reserve allocations and contingency appropriations. 4. It is likely that development within the District’s SOI will rely on infrastructure available from the District. To increase its preparedness when such development is proposed, it is recommended that the District prepare and implement water and sewer system master plans. 5. The District generally requires new development projects to construct the necessary infrastructure to serve their development. A program of developer obligated infrastructure improvements provides for the installation of physical infrastructure to serve development sites and therefore relieves the financial obligation of the District. 6. Developers are also required to pay fees for rights to water and sewer capacity, which are ultimately used by the District for capital capacity improvements. These fees are set by the Board of Directors by resolution, and are allocated to a restricted reserve account. 7. The District also generates revenue by investing its cash reserves in interest bearing accounts. Interest earnings are not projected for the upcoming F.Y. budget, but instead are reported in the beginning cash balance for the next F.Y. budget. Ivanhoe Public Utility District MSR Page 6-19 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 8. A major capacity expansion of the WWTF would increase the operation and maintenance costs to current residents and Board does not consider this a desirable alternative. For this reason operation and maintenance costs associated with increasing the capacity of the WWTF is considered a significant financial constraint of the District. Ivanhoe Public Utility District MSR Page 6-20 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.4 COST AVOIDANCE OPPORTUNITIES The purpose of this section is to identify practices or opportunities that may help to eliminate unnecessary costs. 6.4.1 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. Each year, the District’s budget is reviewed with the District Board, District Engineer, and General Manager to ensure that the District continues to operate within the limits of its financial resources. 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 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 water and sewer infrastructure improvements that would serve new development sites. The District requires development projects to pay fees for water and sewer capacity rights, which are currently set at $1700 and $1890 per EDU, respectively. The preparation of water and sewer system master plans could help the District avoid unnecessary costs associated with the construction of emergency system improvements to meet demands. Master plans identify infrastructure improvements that will be needed in the future, including an improvement timeline that would allow the District adequate time to set aside and/or obtain funding for those future improvements before the absence of such improvements begins to delay or halt proposed development. Master plans also identify funding sources for their implementation. If the SOI were expanded in the future, the District would assume fiscal responsibilities to construct or maintain the water and 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 water and sewer service, as well as capital maintenance and replacements required as a result of expanding the District Boundary. The District indicated that it currently has no plans to expand its SOI. 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. 6.4.2 Written Determinations 1. Each year, the District’s budget is reviewed with the district Board, District Engineer, and General Manager to ensure that the District continues to operate within the limits of its financial resources. 2. The District avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 3. The District should continue to work with the development community to fund the construction of water and sewer infrastructure improvements that would serve new development sites. The District requires development projects to pay fees for water and sewer capacity rights, which are currently set at $1700 and $1890 per EDU, respectively. Ivanhoe Public Utility District MSR Page 6-21 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.5 OPPORTUNITIES FOR RATE RESTRUCTURING The purpose of this section is to identify opportunities to positively impact rates without decreasing service levels. 6.5.1 Fee Structure The Ivanhoe PUD installed and started billing under a metered water system in 1991. Water consumption data shows that there was an immediate decrease in water usage as a result of metering; therefore it also serves as a water conservation measure. The Ivanhoe PUD charges a monthly flat rate for sewer service. The District’s fiscal year 2004-05 budget estimates revenues of $234,000 and $152,000 to be generated from water and sewer customer sales, respectively. Tables 6-2 and 6-3 show a comparison of water and sewer rates and connection fees, respectively, for surrounding service providers. The tables also show the relationship between monthly service charges and average household incomes within the respective communities. Since some of the service providers charge a metered rate for water, it is necessary to calculate an average monthly bill based upon a specific amount of usage taken as 2,005 cubic feet, or approximately 15,000 gallons, per month for this analysis. TABLE 6-2 COMPARISON OF WATER RATES Average Service Provider Sample Monthly Bill Connection Fee Household Rate/Income Ratio Income Earlimart PUD $12.50 $1,500 $1,775/mo. 0.70% Ivanhoe PUD $9.50 $1,700 $2,171/mo. 0.44% Pixley PUD $20.00 $2,000 $1,942/mo. 1.03% Teviston CSD $30.00 $800 $2,014/mo. 1.49% Tipton CSD $24.00 $2,800 $2,198/mo. 1.09% Alpaugh JPA $55.00 $1,500 $1,974/mo. 2.79% Cutler PUD $18.00 $1,500 $2,028/mo. 0.89% Orosi PUD $19.08 $2,400 $2,533/mo. 0.75% Lemon Cove SD $10.01 $500 $2,361/mo. 0.42% London CSD $18.00 $1,400 $1,807/mo. 1.00% Lindsay-Strathmore ID $14.187 T&M $2,096/mo. 0.68% Poplar CSD $25.00 $1,750 $2,043/mo. 1.22% Richgrove CSD NA NA $1,907/mo. NA Springville PUD $23.42 $2,800 $2,023/mo. 1.16% Strathmore PUD $43.30 $1,150 $2,096/mo. 2.06% Terra Bella ID $12.438 $2,908 $2,109/mo. 0.59% Woodville PUD $27.28 $2,000 $2,123/mo. 1.28% Average $23.17 $1,780 $2,080/mo. 1.11% Notes: 1) Fee information obtained from service providers 2) Average household income based upon Census 2000 data 3) Rate/Income ratio calculated by dividing sample monthly bill by average household income 4) Sample monthly bill is calculated for a typical single family dwelling 5) NA=Not Available 6) T&M=Time and Material basis 7) Based on an average of four separate rates charged by the Lindsay-Strathmore Irrigation District 8) Based on potable water service provided by the Terra Bella Irrigation District 9)Richgrove CSD and Lindsay-Strathmore ID were omitted from the average calculations Ivanhoe Public Utility District MSR Page 6-22 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 As indicated in Table 6-2, the Ivanhoe PUD charges among the lowest monthly rates for domestic water service compared to other service providers throughout the County. The cost of domestic water service with Ivanhoe equates to approximately 0.44% of the average household income within the community. The Ivanhoe PUD water connection fee is also below average compared to other domestic water service providers throughout the County. TABLE 6-3 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 As indicated in Table 6-3, the Ivanhoe PUD charges among the lowest monthly rates for sewer service compared to other sewer service providers throughout the County. The cost of sanitary sewer service within Ivanhoe equates to approximately 0.44% of the average household income within the community. The Ivanhoe PUD sanitary sewer connection fee is above average compared to other service providers throughout the County. The District should periodically review its monthly user fees and connection fees to ensure that quality service will continually be provided to existing and future residents. The Ivanhoe PUD rates are currently among the lowest compared to surrounding service providers, which is indicative of the District’s ability to provide efficient and affordable utility services to residents in the community. The District’s budget is structured to segregate costs associated with the construction of infrastructure to accommodate new development. Fees paid by developers are placed into a restructured reserve account, funds which are ultimately used by the District to construct capital capacity improvements to the District’s water and sewer systems. User fees are used for the operations of the District and the operation and maintenance of the District’s infrastructure. Ivanhoe Public Utility District MSR Page 6-23 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.5.2 Written Determinations 1. The Ivanhoe PUD charges monthly user fees and new connection fees for water and sewer. The District’s fiscal year 2004-05 budget estimates revenues of $234,000 and $152,000 to be generated from water and sewer customer sales, respectively. 2. The Ivanhoe PUD rates are currently among the lowest compared to other service providers throughout the County, which is indicative of the District’s ability to provide efficient and affordable utility services to residents in the community. 3. The District’s budget is structured to segregate costs associated with the construction of infrastructure to accommodate new development. Fees paid by developers are placed into a restructured reserve account, funds which are ultimately used by the District to construct capital capacity improvements to the District’s water and sewer systems. User fees are used for the operations of the District and the operation and maintenance of the District’s infrastructure. Ivanhoe Public Utility District MSR Page 6-24 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.6 OPPORTUNITIES FOR SHARED FACILITIES The purpose of this section is to evaluate opportunities for the Ivanhoe PUD to share facilities and resources, thereby increasing efficiency. 6.6.1 Shared Facilities Since the location of the Ivanhoe District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. Currently the Ivanhoe PUD is the only water and sewer service provider in the immediate area. Opportunities for sharing resources include splitting insurance premiums with nearby districts requiring related insurance coverage. Also the employment of a grant writer by two or more districts could potentially benefit the District without incurring the cost of a full time employee. 6.6.2 Written Determinations 1. Since the location of the Ivanhoe District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. 2. Opportunities for sharing resources include splitting insurance premiums with nearby Districts requiring related insurance coverage. Also the employment of a grant writer by two or more Districts could potentially benefit the District without incurring the cost of a full time employee. Ivanhoe Public Utility District MSR Page 6-25 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.7 GOVERNMENT STRUCTURE OPTIONS The purpose of this section is to consider the advantages and disadvantages of various government structures to provide public services. 6.7.1 Development within SOI Area One of the most critical elements of LAFCO’s responsibilities is in setting logical service boundaries for communities based on their capability to provide services to affected lands. According to the LAFCO Municipal Service Review Guidelines, elimination of overlapping boundaries that confuse the public and cause service inefficiencies should be considered to avoid unnecessary increases in the cost of infrastructure. Currently there are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. Prior to development within its SOI area, the District should complete infrastructure planning – including master plans – to address the infrastructure needs of affected areas and funding mechanisms to meet those needs. The District and/or County could also require developers to prepare specific plans prior to approving development within the District’s SOI. The District will need to continually expand and improve its water and sewer infrastructure to accommodate development within its current District Boundary and SOI expansion areas. 6.7.2 Boundary Conflicts The City of Visalia Urban Area Boundary (UAB) encompasses an area that is currently part of the Ivanhoe District Boundary southwest of the community that includes the application area for reclaimed water from the Ivanhoe PUD WWTF. The Ivanhoe PUD governmental structure would not likely be affected by this realization, as a City’s UAB is used only as a preliminary planning mechanism and has little to no implications with regard to State or Federal Law. The existing boundary conflict between the Ivanhoe PUD District Boundary and the City of Visalia UAB is illustrated on Figure 6-2. As indicated on Figure 6-2 on the following page, the City’s UAB conflicts with the Ivanhoe PUD District Boundary in areas south of State Route 245, southwest of the community. More precisely, the Visalia UAB encompasses the entire wastewater application area currently used by the Ivanhoe PUD for wastewater reclamation. Ivanhoe Public Utility District MSR Page 6-26 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 FIGURE 6-2 – POTENTIAL BOUNDARY CONFLICT Ivanhoe Public Utility District MSR Page 6-27 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.7.3 Written Determinations 1. There are no other service providers immediately adjacent to Ivanhoe’s SOI indicating that the potential for duplication of services is not present. For this reason, it is logical that the Ivanhoe PUD adequately plan for and assume water and sewer service within its SOI Boundary. 2. There are no foreseeable conditions that would indicate that development within the District’s SOI would result in a change in government structure. 3. Prior to development within its SOI area the District should complete master planning to address the infrastructure needs of affected areas and funding mechanisms to meet those needs. The District and/or County could also require developers to prepare specific plans prior to approving development within the District’s SOI. 4. The District will need to continually expand and improve its water and sewer infrastructure to accommodate development within its current District Boundary and SOI expansion areas. 5. The City of Visalia Urban Area Boundary encompasses an area that is currently part of the Ivanhoe District Boundary southwest of the community that includes the application area for reclaimed water from the Ivanhoe PUD WWTF. The Ivanhoe PUD governmental structure would not likely be affected by this realization, as a City’s UAB is used only as a preliminary planning mechanism and has little to no implications with regard to State or Federal Law. Ivanhoe Public Utility District MSR Page 6-28 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.8 EVALUATION OF MANAGEMENT EFFICIENCIES The purpose of this section is to consider the management structure of the Ivanhoe PUD. 6.8.1 Organizational Structure Based upon a review of information provided by the Ivanhoe PUD, it appears as if the provisions of sanitary sewer service and domestic water service are managed in a cost effective, efficient manner, meeting the needs of the community and ratepayers. The Ivanhoe PUD has accounting and finance functions, current personnel regulations and resolutions. The District undergoes annual audits in compliance with auditing standards. The Ivanhoe PUD 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 full time staff and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. The District office operates between the hours of 7 A.M. and 5 P.M. Monday through Friday, with full time personnel providing various functions of the District. Also, the District’s answering message provides the public with the operational hours of the District and contact information in case of emergencies. Based upon the District’s 2004-05 budget, approximately $75,000 was appropriated for contingencies. Contingency funds can be used for emergency improvements and/or unforeseen replacement or rehabilitation costs. 6.8.2 Written Determinations 1. Based upon information made available, it appears as if the provisions of sanitary sewer and domestic water service are managed in a cost effective, efficient manner, meeting the needs of the community and ratepayers. 2. The Ivanhoe PUD 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 full time staff, and contracts out for other services, including engineering, legal counsel, accounting, and other consulting services. 4. The District’s 2004-05 budgets appropriated approximately $75,000 for contingencies that could be used for emergency improvements and/or unforeseen replacement or rehabilitation costs. Ivanhoe Public Utility District MSR Page 6-29 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01 6.9 LOCAL ACCOUNTABILITY AND GOVERNANCE The purpose of this section is to evaluate the accessibility and levels of public participation associated with the agency’s decision-making processes. 6.9.1 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 Ivanhoe PUD has a five member Board of Directors elected by voters residing within the District Boundary. Regularly scheduled Board meetings, which are open to the public, are held on the first Monday of each month at 7:00 p.m. at the District office located at 15859 Azalea in Ivanhoe. 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 Ivanhoe 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. 6.9.2 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 first Monday of each month at 7:00 p.m. at the District office. 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. Ivanhoe Public Utility District MSR Page 6-30 Tulare County LAFCO MSR G1_6 Ivanhoe Jan06.DOC/55-7301-01