MSR G1 7 Pixley Jan06

CHAPTER 7 – PIXLEY PUD MUNICIPAL SERVICE REVIEW EXECUTIVE SUMMARY This section provides an overview of the written determinations of the Pixley 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 Pixley PUD MSR identifies the following written determinations: Written Determinations 1) Growth and Population 1. The CDP Boundary for Pixley is not coterminous with the current District Boundary; however, both boundaries generally cover the densely populated area of the community. For this reason, Census 2000 population data is taken as being representative of the population of the District at that time. 2. Census 2000 data indicates that Pixley had a population of 2,586 as of January 2000. Between 1990 and 2000, Pixley experienced an annual population growth rate of approximately 0.5%, compared to 0.6% for the unincorporated areas of Tulare County. Information provided by the District indicates a population of 2,745 as of March 2004. Between 2000 and 2004, the District experienced an average annual growth rate of approximately 1.5%. 3. It is likely that the Pixley community will continue to grow at an average annual rate between 1% and 2% depending upon land use zoning and other policies established by the Tulare County General Plan and other factors. Using these rates, the Pixley community would reach an estimated year 2025 population between 3,300 and 4,250. 2) Infrastructure Needs and Deficiencies Domestic Water 1. Pixley’s water supply is derived from four existing deep underground wells. The four wells have a maximum production efficiency of approximately 2,700 GPM. 2. As indicated by the District’s Engineer, three of the existing four wells exceed the acceptable arsenic level for drinking water that became effective January 2006, and the water supply system will require treatment or replacement of wells to meet current water quality standards. 3. District staff indicated that there are slightly more than 800 hookups to the water system including 25 commercial connections. Approximately 320 of the residential connections are metered. Metered water rates promote water conservation. It is recommended that the Pixley Public Utility District MSR Page 7-1 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 District continue to install water meters as feasible (i.e. for all new development and when a transfer of ownership occurs). 4. Assuming 800 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards the Pixley PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,400 GPM (1,500 GPM fire flow, and 900 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 2,700 GPM, and includes pneumatic pressure tanks for storage, indicating that the system currently meets the requirements of the Tulare County Improvement Standards. 5. According to the District Engineer, there is only sufficient capacity in the water system to meet existing domestic demands without considering fire flow requirements. The District Engineer indicated that no additional connections could be supported by the water system when considering fire flows and the possibility of the maximum producing well being out of service. 6. As indicated by the District Engineer, a water master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the existing water system includes many 4-inch and 6-inch diameter lines, which may not be suitable for peak and fire flows. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on domestic water service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. Sanitary Sewer 1. District staff indicated that there are approximately 800 connections to the sewer system, which includes 25 commercial connections. 2. The District operates a WWTF located southwest of the community, just west of the Pixley airport. The WWTF is operated under the provisions of Order No. 5-00-096 issued by the Central Valley Regional Water Quality Control Board (RWQCB). 3. The District indicated that the WWTF is currently operating at or near its capacity, and is operating under a Cease and Desist Order. The permitted capacity is 0.29 MGD, and the current flow is approximately 0.284 MGD. 4. The Wastewater Treatment Facility Upgrade and Expansion Project – Project Feasibility Report (Provost & Pritchard, February 2005) outlines a major reconstruction proposal for the District’s WWTF. The improved WWTF would be capable of treating 0.5 MGD. 5. A 0.5 MGD WWTF may provide sufficient capacity for a 20-year planning period with reserve capacity for industrial/commercial growth. 6. As indicated by the District Engineer, a sewer master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the adequacy of the existing sewer system to accept additional flows is not known. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on sanitary sewer service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. Pixley Public Utility District MSR Page 7-2 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 3) Financing Constraints and Opportunities 1. The District prepares a line item budget that lumps together the anticipated expenditures for the upcoming fiscal year. The District had a fiscal year 2003-04 operating budget of $306,130, and a 2004-05 operating budget of $339,880. The District’s budget does not indicate cash reserves or contingency appropriations. 2. The District’s budget is unclear with relation to revenues and expenditures. It is recommended that the District refine its budget to show beginning cash balance, cash reserves, interest on reserves, projected revenues, anticipated expenditures, and contingency appropriations. 3. It is recommended that the District separate its budget into two separate funds in order to gauge the performance of each utility. This would assist the District in determining whether user fees and connection fees are adequate to maintain and improve each utility individually. 4. The District currently has no debt requiring repayment. Should the District receive the USDA grant and loan for improvements to its WWTF, the District would have a 30 to 40- year long term debt obligation. 5. Based upon the budget provided by the District, a determination of financial stability cannot be made. In general, existing customers should not be responsible (financially) through existing user fees for improvements that become necessary as a result of new development. Existing users would be required to help finance existing deficiencies including improvements to mitigate high arsenic levels and capital infrastructure replacement costs (i.e. wells, WWTF). 6. The District should work with local developers to help finance infrastructure improvements needed as a result of new development. 7. It is recommended that the District prepare water and sewer system master plans prior to any SOI amendment proposal. Master planned infrastructure would help identify funding mechanisms, and improvement schedules. The District could potentially obtain State and/or Federal funding assistance to complete master plans. 4) Cost Avoidance Opportunities 1. The District avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 2. The preparation of water and sewer master plans could help the District avoid unnecessary costs associated with the construction of emergency system improvements to meet demands. Master plans also identify funding sources for their implementation. 3. The District could avoid unnecessary costs associated with the construction of capital improvements by promoting development in infill areas and in areas where infrastructure is already in place. 4. Since the Pixley PUD is the only water and sewer purveyor in the area, the potential for duplication of services is not present. Pixley Public Utility District MSR Page 7-3 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 5) Opportunities for Rate Restructuring 1. The Pixley PUD charges monthly user fees and new connection fees for water and sewer. The District’s monthly base water rate of $20.00 covers a base usage up to 30,000 gallons. The District’s monthly flat rate for sanitary sewer is currently set at $15.00. 2. The District indicated that rate increases are likely in the near future as a result of the need to expand the wastewater capacity and upgrade the WWTF. 3. Water and sewer rates charged by the Pixley PUD are comparable (slightly below average) to other service providers in the County. 4. Substantial rate increases may not be feasible as Pixley is a low income area, and utility rates should remain affordable with respect to average household incomes. 5. Master plans/capital facilities plans are helpful in justifying rate increases necessary to maintain and expand the District’s infrastructure systems. Capital facilities planning would identify improvements for which existing users should be responsible for, and those for which the development community should be responsible for including appropriate user and connection fees to meet the existing and future capital facilities needs. 5) Opportunities for Shared Facilities 1. Since the location of the Pixley District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. 2. An opportunity for sharing resources includes splitting insurance premiums with nearby Districts that require related insurance coverage. Also the employment of a grant writer by two or more Districts could potentially benefit the District without incurring the sole cost of a full time employee. 7) Government Structure Options 1. There are no other service providers immediately adjacent to Pixley’s SOI indicating that the potential for duplication of services is not present. For this reason, it is logical that the Pixley PUD assume water and sewer service provisions within its SOI. 2. Currently 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 infrastructure planning – including master plans – to address the infrastructure needs of affected areas and funding mechanisms to meet those needs. 4. District staff indicated that they provide residential contract service outside of the current District Boundary. To create a more defined service area, where feasible, the District should consider expanding its District Boundary to include such property in which services are provided. The District Boundary should be expanded to include such properties in which services are provided (that are not currently within the District Boundary) only when such action would not create an “island” (or where the property is immediately adjacent to the current District Boundary). Pixley Public Utility District MSR Page 7-4 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 5. It is recommended that the District keep service provisions outside of the current District Boundary to a minimum (specifically for property that cannot feasibly be annexed into the District Boundary at the time of service connection). 8) Evaluation of Management Efficiencies 1. Based upon a review of information provided by the Pixley PUD, it appears as if the provisions of sanitary sewer service and domestic water service are currently meeting the needs of the community and ratepayers. 2. The District undergoes annual audits in compliance with auditing standards. 3. The District should consider restructuring its budget document so the general public can review and understand how District revenues are being spent. 4. The District currently operates with three full time staff members, one part time staff member, and contracts out for other services, including engineering, legal counsel, and other consulting services. 5. The District has one staff member on call during non-office hours to respond to emergency situations. 6. The District’s budget does not indicate a contingency appropriation. Contingency appropriations are necessary to fund emergency system improvements and/or unforeseen replacement or rehabilitation needs. 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. 2. 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. Pixley Public Utility District MSR Page 7-5 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.0 PIXLEY PUBLIC UTILITY DISTRICT 7.0.1 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 (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, the Tulare County Local Agency Formation Commission (LAFCO) Board adopted a Municipal Service Review (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 Pixley 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 Pixley, an unincorporated community in Tulare County, is located in the southwest portion of the County between the communities of Tipton and Earlimart along State Route (SR) 99. The Pixley PUD, formed in December 1946, 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 Pixley PUD that are subject to a MSR. Pixley is square in shape and is bisected in a north-south direction by SR 99, which runs east of and parallel to the Southern Pacific Railroad (S.P.R.R.) tracks. Local roads that provide access across SR 99 include East Court Avenue, Davis Avenue, and Terra Bella Avenue (interchange). Local railroad crossings are located at Davis Avenue and Terra Bella Avenue. Pixley is an agriculturally oriented service community surrounded on all sides by lands in agricultural production, scattered rural residential uses, and vacant land. There is also a public airport southwest of the community. Industrial development is present north and south of the community. Most of the commercial development within Pixley is located between the S.P.R.R. tracks and SR 99. Cities and communities surrounding Pixley include Porterville and Poplar to the northeast, Tulare and Tipton to the north, and Earlimart to the south. The current District Boundary and the currently adopted SOI for the Pixley PUD are illustrated on Figure 7-1. Pixley Public Utility District MSR Page 7-6 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 FIGURE 7-1 – PIXLEY PUD BOUNDARY AND SOI Source: Tulare County GIS Database (July 2004) Pixley Public Utility District MSR Page 7-7 Tulare County LAFCO MSR G1_7 Pixley 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. Pixley Public Utility District MSR Page 7-8 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.1 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 Pixley. 7.1.1 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 CDP Boundary for Pixley is not coterminous with the current District Boundary as depicted on Figure 7-1 obtained from the Tulare County GIS database (July 2004). Both boundaries, however, generally cover the densely populated area of the community. Census 2000 data indicates that Pixley had a population of 2,586 as of January 2000. Information provided by the District indicates a District population of 2,745 as of March 2004. Census 1990 data indicates that Pixley had a population of 2,457 in 1990, corresponding to an average annual growth rate between 1990 and 2000 of approximately 0.5%. 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%. Comparing Census 2000 data to information provided by the District indicates an annual average growth rate of approximately 1.5% between 2000 and 2004. It is likely that the Pixley community will continue to grow at an average annual rate between 1% and 2% 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 1% and 2%, the Pixley community would reach an estimated year 2025 population between 3,300 and 4,250. Information provided by the District indicates that there are two current development proposals within the community including a 61 unit subdivision and a middle school. 7.1.2 Written Determinations 1. The CDP Boundary for Pixley is not coterminous with the current District Boundary; however, both boundaries generally cover the densely populated area of the community. For this reason, Census 2000 population data is taken as being representative of the population of the District at that time. 2. Census 2000 data indicates that Pixley had a population of 2,586 as of January 2000. Between 1990 and 2000, Pixley experienced an annual population growth rate of approximately 0.5%, compared to 0.6% for the unincorporated areas of Tulare County. Information provided by the District indicates a population of 2,745 as of March 2004. Between 2000 and 2004, the District experienced an average annual growth rate of approximately 1.5%. 3. It is likely that the Pixley community will continue to grow at an average annual rate between 1% and 2% depending upon land use zoning and other policies established by the Tulare County General Plan and other factors. Using these rates, the Pixley community would reach an estimated year 2025 population between 3,300 and 4,250. Pixley Public Utility District MSR Page 7-9 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.2 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. 7.2.1 Domestic Water The Pixley PUD is responsible for providing domestic water service to customers within its District Boundary. Pixley’s water supply is derived from four deep underground wells. According to District staff, these four wells provide an ample excellent water supply requiring no chlorination or treatment. Based upon discussions with District staff, a well was abandoned some years ago due to a faulty seal and replaced with two other wells near the same area. The four wells in operation have a total maximum production efficiency of approximately 2,700 gallons per minute (GPM), or 3.88 million gallons per day (MGD). The District was unable to provide actual well production (water usage) data. As indicated by the District’s Engineer, three of the existing four wells exceed the acceptable arsenic level for drinking water that became effective January 2006, and the water supply system will require treatment or replacement of wells to meet current water quality standards. District staff indicated that there are slightly more than 800 hookups to the water system including 25 commercial connections. Approximately 320 of the residential connections are metered. Metered water rates promote water conservation. It is recommended that the District continue to install water meters as feasible (for instance for all new development and when a transfer of ownership occurs). The District also indicated that they currently provide water service to customers outside the current District Boundary, but within the SOI. 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. Pixley Public Utility District MSR Page 7-10 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 • 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 800 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards, the Pixley PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,400 GPM (1,500 GPM fire flow, and 900 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 2,700 GPM, and includes pneumatic pressure tanks for storage. According to the District Engineer, there is only sufficient water supply to meet existing domestic demands without considering fire flow requirements. The District Engineer indicated that no additional connections could be supported by the water system when considering fire flows and the possibility of the maximum producing well being out of service. For this reason, the District Engineer concluded that additional wells will be required in order to increase capacity, and that fire flows requirements could be met with storage tanks. The District does not currently have a water system master plan. As indicated by the District Engineer, a water master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the existing water system includes many 4-inch and 6-inch diameter lines, which may not be suitable for peak and fire flows. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on domestic water service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. A water master plan will increase the District’s preparedness when development within its SOI is proposed. 7.2.2 Sanitary Sewer The Pixley PUD is also responsible for providing sanitary sewer collection, treatment, and disposal services to residents within its Boundary. District staff indicated that there are approximately 800 connections to the sewer system which includes 25 commercial connections. Raw sewage is transported to a wastewater treatment facility (WWTF) owned and operated by the District. The District operates a WWTF located southwest of the community, just west of the Pixley airport. The WWTF is operated under the provisions of Order No. 5-00-096 issued by the Central Valley Regional Water Quality Control Board (RWQCB). The District’s WWTF provides secondary treatment of wastewater via a clarigester and two aerated lagoons. Treated wastewater is then stored in evaporation/percolation ponds and/or applied on 43 acres of pastureland that is owned and operated by the District. Non-milking cattle graze on the pastureland. Order No. 5-00-096 prescribes that the monthly average daily discharge shall not exceed 0.29 MGD. Based upon information contained in the Wastewater User Charge Survey Report FY 2004-05 (CalEPA – State Water Resources Control Board, May 2005), the average dry weather flow (ADWF) at the WWTF is approximately 0.284 MGD. The District indicated that the WWTF is currently operating at or near its capacity, and is operating under a Cease and Desist Order. Pixley Public Utility District MSR Page 7-11 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 The Wastewater Treatment Facility Upgrade and Expansion Project – Project Feasibility Report (Provost & Pritchard, February 2005) outlines a major reconstruction proposal for the District’s WWTF. The improved WWTF would be capable of treating 0.5 MGD. The District has applied for USDA grant and loan funding to implement the improvement plan. A 0.5 MGD WWTF may provide sufficient capacity for a 20-year planning period at the expected average population growth rate, and a small reserve capacity may be available for industrial/commercial growth. The District does not currently have a sewer system (for collection) master plan. As indicated by the District Engineer, a sewer master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the adequacy of the existing sewer system to accept additional flows is not known. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on sanitary sewer service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. A sewer master plan will increase the District’s preparedness when development within its SOI is proposed. 7.2.3 Written Determinations Domestic Water 1. Pixley’s water supply is derived from four existing deep underground wells. The four wells have a maximum production efficiency of approximately 2,700 GPM. 2. As indicated by the District’s Engineer, three of the existing four wells exceed the acceptable arsenic level for drinking water that became effective January 2006, and the water supply system will require treatment or replacement of wells to meet current water quality standards. 3. District staff indicated that there are slightly more than 800 hookups to the water system including 25 commercial connections. Approximately 320 of the residential connections are metered. Metered water rates promote water conservation. It is recommended that the District continue to install water meters as feasible (i.e. for all new development and when a transfer of ownership occurs). 4. Assuming 800 equivalent dwelling units (EDUs), in order to meet Tulare County Improvement Standards the Pixley PUD water system would need to be capable of delivering a combined flow rate (from all source and storage facilities) of 2,400 GPM (1,500 GPM fire flow, and 900 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 2,700 GPM, and includes pneumatic pressure tanks for storage, indicating that the system currently meets the requirements of the Tulare County Improvement Standards. 5. According to the District Engineer, there is only sufficient capacity in the water system to meet existing domestic demands without considering fire flow requirements. The District Engineer indicated that no additional connections could be supported by the water system when considering fire flows and the possibility of the maximum producing well being out of service. 6. As indicated by the District Engineer, a water master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the existing water system includes many 4-inch and 6-inch diameter lines, which may not Pixley Public Utility District MSR Page 7-12 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 be suitable for peak and fire flows. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on domestic water service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. Sanitary Sewer 1. District staff indicated that there are approximately 800 connections to the sewer system, which includes 25 commercial connections. 2. The District operates a WWTF located southwest of the community, just west of the Pixley airport. The WWTF is operated under the provisions of Order No. 5-00-096 issued by the Central Valley Regional Water Quality Control Board (RWQCB). 3. The District indicated that the WWTF is currently operating at or near its capacity, and is operating under a Cease and Desist Order. The permitted capacity is 0.29 MGD, and the current flow is approximately 0.284 MGD. 4. The Wastewater Treatment Facility Upgrade and Expansion Project – Project Feasibility Report (Provost & Pritchard, February 2005) outlines a major reconstruction proposal for the District’s WWTF. The improved WWTF would be capable of treating 0.5 MGD. 5. A 0.5 MGD WWTF may provide sufficient capacity for a 20-year planning period with reserve capacity for industrial/commercial growth. 6. As indicated by the District Engineer, a sewer master plan that includes a capital facilities plan needs to be developed to address current and future needs. The District Engineer noted that the adequacy of the existing sewer system to accept additional flows is not known. Since land within the District’s SOI that is zoned for development (by the Tulare County General Plan) will rely on sanitary sewer service from the Pixley PUD, the master planning boundary should be consistent with the District’s SOI. Pixley Public Utility District MSR Page 7-13 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.3 FINANCING OPPORTUNITIES AND CONSTRAINTS The purpose of this section is to evaluate the jurisdictions capability to finance needed improvements and services. 7.3.1 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 District prepares a line item budget that lumps together anticipated expenditures for the upcoming fiscal year. The District had a fiscal year 2003-04 operating budget of $306,130, and has a 2004-05 operating budget of $339,880. The District’s budget does not indicate cash reserves or contingency appropriations. The District’s budget is unclear with relation to revenues and expenditures. It is recommended that the District refine its budget to show beginning cash balance, cash reserves, interest on reserves, projected revenues, anticipated expenditures, and contingency appropriations. District financial personnel indicated that costs are typically divided equally between water and sewer except for special cases. It is recommended that the District separate its budget into two individual funds in order to gauge the performance of each utility. This would help the District determine whether user fees and connection fees are adequate to maintain and improve each utility individually. The District currently has no debt requiring repayment. Should the District receive the USDA grant and loan for improvements to its WWTF, the District would have a 30 to 40-year long term debt obligation. Based upon the budget provided by the District, a determination of financial stability cannot be made. In general, existing customers should not be responsible (financially) through existing user fees for improvements that become necessary as a result of new development. Existing user fees should only be utilized for the operation and maintenance of existing infrastructure. Existing users, however, would be required to help finance existing deficiencies for example, improvements to reduce arsenic levels to acceptable standards, WWTF deficiencies or replacement requirements, and infrastructure deficiencies including the possibility of replacement costs of wells and WWTF. The District should work with local developers to help finance infrastructure improvements needed as a result of new development. Master planned infrastructure would help identify funding mechanisms to build the infrastructure necessary to support new development. Master plans would also identify appropriate pipe sizing to accommodate the ultimate build-out of the plan, eliminating the need to make replacement improvements associated with capacity constraints. It is recommended that the District prepare water and sewer system master plans prior to any SOI amendment proposals. 7.3.2 Written Determinations 1. The District prepares a line item budget that lumps together the anticipated expenditures for the upcoming fiscal year. The District had a fiscal year 2003-04 operating budget of $306,130, and a 2004-05 operating budget of $339,880. The District’s budget does not indicate cash reserves or contingency appropriations. 2. The District’s budget is unclear with relation to revenues and expenditures. It is recommended that the District refine its budget to show beginning cash balance, cash Pixley Public Utility District MSR Page 7-14 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 reserves, interest on reserves, projected revenues, anticipated expenditures, and contingency appropriations. 3. It is recommended that the District separate its budget into two separate funds in order to gauge the performance of each utility. This would assist the District in determining whether user fees and connection fees are adequate to maintain and improve each utility individually. 4. The District currently has no debt requiring repayment. Should the District receive the USDA grant and loan for improvements to its WWTF, the District would have a 30 to 40- year long term debt obligation. 5. Based upon the budget provided by the District, a determination of financial stability cannot be made. In general, existing customers should not be responsible (financially) through existing user fees for improvements that become necessary as a result of new development. Existing users would be required to help finance existing deficiencies including improvements to mitigate high arsenic levels and capital infrastructure replacement costs (i.e. wells, WWTF). 6. The District should work with local developers to help finance infrastructure improvements needed as a result of new development. 7. It is recommended that the District prepare water and sewer system master plans prior to any SOI amendment proposal. Master planned infrastructure would help identify funding mechanisms, and improvement schedules. The District could potentially obtain State and/or Federal funding assistance to complete master plans. Pixley Public Utility District MSR Page 7-15 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.4 COST AVOIDANCE OPPORTUNITIES The purpose of this section is to identify practices or opportunities that may help to eliminate unnecessary costs. 7.4.1 Fiscal Structure 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 requires development projects to pay connection fees for domestic water and sanitary sewer service, which are currently set at $2,000 and $1,800, respectively. The preparation of water and sewer 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 improvements 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. The District could also avoid unnecessary costs associated with the construction of capital improvements by promoting development in infill areas and in areas where infrastructure is already in place. If the SOI were expanded in the future, the District would assume fiscal responsibilities to construct or maintain the 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’s SOI incorporates large areas north and east of the current District Boundary and it is not likely that the District will need to expand its SOI within the 20-year planning period. 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. Since the Pixley PUD is the only water and sewer purveyor in the area, the potential for duplication of services is not present. 7.4.2 Written Determinations 1. The District avoids unnecessary costs by contracting out professional services including engineering, legal services, and other consulting services. 2. The preparation of water and sewer master plans could help the District avoid unnecessary costs associated with the construction of emergency system improvements to meet demands. Master plans also identify funding sources for their implementation. 3. The District could avoid unnecessary costs associated with the construction of capital improvements by promoting development in infill areas and in areas where infrastructure is already in place. 4. Since the Pixley PUD is the only water and sewer purveyor in the area, the potential for duplication of services is not present. Pixley Public Utility District MSR Page 7-16 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.5 OPPORTUNITIES FOR RATE RESTRUCTURING The purpose of this section is to identify opportunities to positively impact rates without decreasing service levels. 7.5.1 Fee Structure The Pixley PUD adopted a revised rate schedule beginning October 1, 2001. The Pixley PUD water system is partially metered. A minimum size ¾” metered service is to be installed to multi-family, commercial or industrial lots and any single family residence constructed after July 1, 2001, or when property changes ownership. A base water rate of $20.00 per month covers a base usage up to 30,000 gallons. The Pixley PUD charges a monthly flat rate for sewer service. It is recommended that the District restructure its budget to show anticipated revenues generated from user fees and connection fees. Tables 7-1 and 7-2 show a comparison of water and sewer rates and connection fees, respectively, for other service providers throughout the County. 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 7-1 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 Pixley Public Utility District MSR Page 7-17 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 As indicated in Table 7-1, the Pixley PUD water rates are comparable (slightly below average) to the rates charged by other domestic water service providers throughout the County. The cost of domestic water service within Pixley equates to approximately 1.03% of the average household income within the community. The Pixley PUD water connection fee is slightly above average compared to that of other service providers in the County. TABLE 7-2 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 As indicated in Table 7-2, the Pixley PUD sewer rates are comparable (slightly below average) to the rates charged by other sanitary sewer service providers throughout the County. The cost of sanitary sewer service within Pixley equates to approximately 0.77% of the average household income within the community. The Pixley PUD sanitary sewer connection fee is above average compared to that of other service providers in the County. 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. Master plans/capital facilities plans are helpful in justifying rate increases necessary to maintain and expand the District’s infrastructure systems. Capital facilities planning would identify improvements for which existing users should be responsible for, and those for which the development community should be responsible for including appropriate user and connection fees to meet the existing and future capital facilities needs. The District indicated that rate increases are likely in the near future as a result of the need to expand the wastewater capacity and upgrade the WWTF. Pixley Public Utility District MSR Page 7-18 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 The following excerpt from the Revised Preliminary Engineering Report Wastewater Treatment Facilities for Pixley Public Utility District (Quad Knopf, May 2004) indicates the need to increase sewer rates for the construction of a new WWTF. “…If USDA were willing to consider a 55 to 75 percent grant for project funding, the monthly sewer service rates would be about $22.50 and $19.00 respectively. Considering 2000 Census figures for the poverty (43.2%), the high percentage of unemployment (14.7%) and the low annual median household income ($23,304) in Pixley, this community needs special assistance to make utility rates affordable.” If USDA does not provide grant funding for the project, residents of Pixley would need to pay as much as $30.00 per month for sewer service, which would not be considered feasible for the low income community. 7.5.2 Written Determinations 1. The Pixley PUD charges monthly user fees and new connection fees for water and sewer. The District’s monthly base water rate of $20.00 covers a base usage up to 30,000 gallons. The District’s monthly flat rate for sanitary sewer is currently set at $15.00. 2. The District indicated that rate increases are likely in the near future as a result of the need to expand the wastewater capacity and upgrade the WWTF. 3. Water and sewer rates charged by the Pixley PUD are comparable (slightly below average) to other service providers in the County. 4. Substantial rate increases may not be feasible as Pixley is a low income area, and utility rates should remain affordable with respect to average household incomes. 5. Master plans/capital facilities plans are helpful in justifying rate increases necessary to maintain and expand the District’s infrastructure systems. Capital facilities planning would identify improvements for which existing users should be responsible for, and those for which the development community should be responsible for including appropriate user and connection fees to meet the existing and future capital facilities needs. Pixley Public Utility District MSR Page 7-19 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.6 OPPORTUNITIES FOR SHARED FACILITIES The purpose of this section is to evaluate opportunities for a jurisdiction to share facilities and resources, thereby increasing efficiency. 7.6.1 Shared Facilities Since the location of the Pixley District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. Currently the Pixley 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 sole cost of a full time employee. 7.6.2 Written Determinations 1. Since the location of the Pixley District Boundary is immediately adjacent to existing rural lands, the opportunity for sharing infrastructure does not readily exist. 2. An opportunity for sharing resources includes splitting insurance premiums with nearby Districts that require related insurance coverage. Also the employment of a grant writer by two or more Districts could potentially benefit the District without incurring the sole cost of a full time employee. Pixley Public Utility District MSR Page 7-20 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.7 GOVERNMENT STRUCTURE OPTIONS The purpose of this section is to consider the advantages and disadvantages of various government structures to provide public services. 7.7.1 Development within SOI Areas One of the most critical elements of LAFCO’s responsibilities is in setting logical service boundaries for communities based 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 areas. District staff indicated that they provide residential contract service outside of the current District Boundary. All water services outside the Pixley PUD Boundary are subject to Board approval and customers shall pay the established monthly rate for the type of services provided; the rate being two and one half (2.5) times the regular rate. Any increase for the District is figured at the rate. To create a more defined service area, where feasible, the District should consider expanding its District Boundary to include such property in which services are provided. The District Boundary should be expanded to include such properties in which services are provided (that are not currently within the District Boundary) only when such action would not create an “island” (or where the property is immediately adjacent to the current District Boundary). It is recommended that the District keep service provisions outside of the current District Boundary to a minimum (specifically for property that cannot feasibly be annexed into the District Boundary at the time of service connection). There are no Boundary conflicts with surrounding service providers that would potentially result in a change in government structure. It is logical that the Pixley PUD adequately plan for and assume water and sewer service within its SOI Boundary. 7.7.2 Written Determinations 1. There are no other service providers immediately adjacent to Pixley’s SOI indicating that the potential for duplication of services is not present. For this reason, it is logical that the Pixley PUD assume water and sewer service provisions within its SOI. 2. Currently 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 infrastructure planning – including master plans – to address the infrastructure needs of affected areas and funding mechanisms to meet those needs. Pixley Public Utility District MSR Page 7-21 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 4. District staff indicated that they provide residential contract service outside of the current District Boundary. To create a more defined service area, where feasible, the District should consider expanding its District Boundary to include such property in which services are provided. The District Boundary should be expanded to include such properties in which services are provided (that are not currently within the District Boundary) only when such action would not create an “island” (or where the property is immediately adjacent to the current District Boundary). 5. It is recommended that the District keep service provisions outside of the current District Boundary to a minimum (specifically for property that cannot feasibly be annexed into the District Boundary at the time of service connection). Pixley Public Utility District MSR Page 7-22 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.8 EVALUATION OF MANAGEMENT EFFICIENCIES The purpose of this section is to consider the management structure of the jurisdiction. 7.8.1 Organizational Structure Based upon a review of information provided by the Pixley PUD, it appears as if the provisions of sanitary sewer service and domestic water service are currently meeting the needs of the community. The Pixley PUD has accounting and finance functions, current personnel regulations and resolutions. The District undergoes annual audits in compliance with auditing standards. The District should consider restructuring its budget document so the general public can review and understand how District revenues are being spent. Restructuring the budget document consistent with recommendations in the previous sections of this report could increase the efficiency of District staff and improve monetary management. The Pixley PUD is governed by a five-member Board of Directors who are elected at large from within its boundaries. The Board is responsible for setting policy and general administrative procedures. The District currently operates with three full time staff members, one part time staff member, and contracts out for other services, including engineering, legal counsel, and other consulting services. The District office operates between the hours of 7:30 A.M. and 4:30 P.M. Monday through Friday (excluding 11:30 A.M. to 1:00 P.M.) with full time personnel providing various functions of the District. The District has one staff member on call during non-office hours to respond to emergency situations. The District’s budget does not indicate a contingency appropriation. Contingency appropriations are necessary to fund emergency system improvements and/or unforeseen replacement or rehabilitation needs. As previously mentioned, restructuring the budget document could improve monetary management. 7.8.2 Written Determinations 1. Based upon a review of information provided by the Pixley PUD, it appears as if the provisions of sanitary sewer service and domestic water service are currently meeting the needs of the community and ratepayers. 2. The District undergoes annual audits in compliance with auditing standards. 3. The District should consider restructuring its budget document so the general public can review and understand how District revenues are being spent. 4. The District currently operates with three full time staff members, one part time staff member, and contracts out for other services, including engineering, legal counsel, and other consulting services. 5. The District has one staff member on call during non-office hours to respond to emergency situations. 6. The District’s budget does not indicate a contingency appropriation. Contingency appropriations are necessary to fund emergency system improvements and/or unforeseen replacement or rehabilitation needs. Pixley Public Utility District MSR Page 7-23 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01 7.9 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. 7.9.1 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 Pixley PUD has a five member Board of Directors who are 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 232 East Davis Avenue in Pixley. 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 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 Pixley 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. 7.9.2 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 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. Pixley Public Utility District MSR Page 7-24 Tulare County LAFCO MSR G1_7 Pixley Jan06.DOC/55-7301-01