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FINALDRAFT
PLAN FOR SERVICES & FEASIBILITY STUDY
LOS OLIVOS WATER RECLAMATION
PreparedfortheLosOlivosWaterReclamationSteeringCommittee
PreparedbyBerksonAssociates
October22,2016
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TABLE OF CONTENTS
CHAPTER1.INTRODUCTIONANDSUMMARY.................................................................................1 SummaryofFindings
CHAPTER2.OVERVIEWOFTHECOMMUNITY................................................................................9DemographicsandLandUseAssessedValueandExistingTaxes
CHAPTER3.GOVERNANCEOPTIONS............................................................................................14StatusQuo................................................................................................................................14
FormaCommunityServicesDistrict(CSD)...............................................................................14FormaCounty–dependentSpecialDistrict..............................................................................19
AnnextoSantaYnezCSD(SYCSD)............................................................................................24 SantaYnezWaterConservationDistrictID-1...........................................................................29
CHAPTER4.WASTEWATERSYSTEM..............................................................................................30PreliminarySystemCapitalCostsOperatingCosts
CHAPTER5.DISTRICTBUDGET......................................................................................................35 OperatingExpenditures OperatingRevenuesandRates
CHAPTER6.CAPITALEXPENDITURESANDFUNDING....................................................................38 CapitalFinancing
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TABLE OF CONTENTS (CONT’D)
FIGURESANDTABLES
Figure1LosOlivosSpecialProblemsArea.....................................................................................3
Figure2ComponentsofaMembraneBioreactorSystem...........................................................30
TableS-1EstimatedOverheadandAdministrativeCosts-NewLosOlivosCSD...........................5
TableS-2EstimatedAnnualAssessmentsforSystemConstruction(FullBuildout)......................6
TableS-3TotalAnnualCostsbyOrganizationalOption(w/NewDevelopment)............................7
Table1SummaryofAssessedValueinLosOlivos......................................................................12
Table2ExistingBasic1%PropertyTaxandAdditionalBonds....................................................13
Table3EstimatedOverheadandAdministrativeCosts-LosOlivosCSD....................................17
Table4EstimatedOverheadandAdministrativeCosts-CSA/County-dependentSpecial
District.............................................................................................................................23
Table5EstimatedOverheadandAdministrativeCosts–SYCSDAnnexation.............................27
Table6EstimatedCapitalCostsandAllocationsforaCommunityWastewaterSystem............32
Table7EstimatedAnnualSystemOperatingCostsandAllocations...........................................34
Table8EstimatedOverheadandAdministrativeCosts–LosOlivosCSD...................................35
Table9EstimatedTotalAnnualAdmin.andOperatingCostsandRates–LosOlivosCSD.........37
Table10EstimatedCapitalCostAllocations–LosOlivosCSD......................................................39
Table11EstimatedAnnualAssessments–LosOlivosCSD...........................................................41
APPENDICES
A.SummaryofSewerRatesintheRegion
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1. INTRODUCTION AND SUMMARY ThisStudyevaluatesthefinancialfeasibilityandgovernanceoptionsofonepotentialcommunitywastewatersystemsolutionforLosOlivos.TheStudycomparesthecostsandbenefitsofthreedifferentgovernanceoptions:formationofaLosOlivosCommunityServicesDistrict(CSD);annexationtotheSantaYnezCommunityServicesDistrict(SYCSD);andthecreationofaCounty-dependentspecialdistrictgovernedbytheBoardofSupervisors.
ThewastewatertreatmentsystemcostsusedinthisStudyarefromtheSeptember2016studyupdatetoa2013Countysponsoredfeasibilitystudy.1The2016studyanalyzedaMembraneBioreactorsystem(MBR)thatwouldservetheentirecommunityandaccommodatesomeexpansionofexistingusesanddevelopmentofvacantlotsinthecommercialcore,or“downtown”.The2016studyalsodescribedcostsforindividualonsiteadvancedtreatmentsystems.Unlikethe2013study,the2016studydidnotevaluatea“Phase1”systemthatwouldbelimitedtothecommercialcoreandsmalllotresidences,andwhichcouldcostsignificantlyless.Asnotedinthisfinancialfeasibilitystudy,a“downtown”MBRsystemshouldbeanalyzedasonemethodtoprovideamorefinanciallyfeasiblesystem,inadditiontootherpotentialcostreductions;thisapproachassumesthatresidentialpropertiesoutsidethecorecouldbeservedbyonsiteadvancedtreatmentsystemsuntilexpansionofthecoresystembecomesviable.
CostestimatesforgovernanceoptionsweredevelopedbyBerksonAssociates(BA)basedonreviewofbudgetsforsimilardistricts;discussionswithSYCSD,CountyPublicWorks,andotherdistricts;andBAexperiencewithsimilaranalyses.Itisanticipatedthatthesecostestimateswillberefinedastheprocessmovesforward.
In1974,SantaBarbaraCountydesignatedaLosOlivosSpecialProblemsArea(SPA),withboundariesasshowninFigure1,duetopotentialadverseimpactsofwastewatertreatmentanddisposalinthearea.AdditionalCountyreviewisrequiredfordevelopmentprojectswithintheSPAtomitigateanypotentialimpactstopublichealth.PropertyuseisfurtherlimitedbywastewaterflowrestrictionsthatmaybeimposedbytheCentralCoastRegionalWaterQualityControlBoard(RWQCB).
In2010,theCountyadoptedaWastewaterManagementPlan(WWMP)toaddressonsitewastewaterissuesintheSPA.Theseissuesincludeaseasonallyhighgroundwatertablethat
1RevisionstoLosOlivosWastewaterSystemPreliminaryEngineeringReport,September13,2016,AECOM
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allowsdischargeofsomesepticeffluentdirectlyintothewatertable;manysmalllotsofinsufficientsizetoproperlyaccommodateanonsitesepticsystem;manyexistingsepticsystemsthatdonotmeetcurrentcoderequirements,andduetoageorfailurenolongertreateffluentproperly.WellandgroundwatertestingdocumentedintheWWMPconfirmshighgroundwaternitratelevelsinareasoftheSantaYnezValley.
InJanuaryof2016theSantaBarbaraCountyOnsiteWastewaterTreatmentSystemLocalAreaManagementPlan(LAMP)2wentintoeffect,andincludespermit,inspectionandreportingelements.ApermitissuedbyEHSisrequiredfortheconstructionofanewOnsiteWastewaterTreatmentSystem(OWTS)aswellastherepair,modificationorabandonmentofexistingsystems.InspectionandapprovalofallworkbyEHSisrequiredpriortobackfillinganycomponentsorputtingthesystemintoservice.3
TheCountyWWMPidentifiedacommunitywastewatertreatmentsystemasonepossiblemethodtotreatwastewaterandprovideanoptionforreplacingfailingsystems,particularlyonsmalllotsthatcannolongersupportanonsitesystemthatmeetscurrentcodes.Acommunitysystemwouldalsoenableredevelopmentandmodestexpansionofcurrentuses,aswellasnewdevelopmentonvacantlotswithintheconstraintsimposedbythearea’scommunityplan.Currently,thereisinsufficientrestroomaccessinthetown’scommercialcoretoaccommodatevisitorsontheweekendyear-round;portablerestroomsareprovidedtoservevisitorsrestrictedfromuseofbusinessrestrooms.
In2013,theCountysponsoredaPreliminaryFeasibilityStudy(PFS)ofwastewatertreatmentanddisposaloptions4inresponsetothe2013enactmentofStateWaterResourcesControlBoard’sWaterQualityControlPolicyregulatingonsitesystems.5ThisStatepolicyaffectsbothcommercialandresidentialsystems.AFocusedFeasibilityStudy(“FFS”)datedSeptember2016providesamoredetailedanalysisofonetreatmentsystemreviewedinthe2013study,6althoughdidnotevaluatealowercostsystemlimitedtothedowntownasafirstphase.
2cosb.countyofsb.org/uploadedFiles/phd/EHS/CH%20EHS%20LAMP%20Plan%20Document.pdf3cosb.countyofsb.org/phd/default_all.aspx?id=19274&menu2id=174&pghead=18958&footer=189604LosOlivosWastewaterSystemPreliminaryEngineeringReport(PreliminaryFeasibilityStudy,or”PFS”),AECOM,January8,2013
5AdoptedpursuanttoAssemblyBill885.6RevisionstoLosOlivosWastewaterSystemPreliminaryEngineeringReport(“FFS”),AECOM,September13,2016
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SUMMARY OF FINDINGS
1.UNDERTHESTATUSQUO,THEABILITYOFSMALLLOTHOMEOWNERSTOUPGRADETHEIRSYSTEMTOMEETTODAY’SMORERESTRICTIVESTANDARDSMAYBECONSTRAINED.Withoutanewcommunitywastewatersystem,propertyownerswillberesponsible,attheirowncost,fortheinstallation,upgrade,maintenanceandrepair/replacementofindividualadvancedonsitetreatmentsystemstomeetCountyandStatewaterqualitystandardsiftheirsystemsfailortheyproposearemodelornewdevelopment.Thecommunitywouldalsobeexposedtoadditionalregulatoryactionifgroundwaterqualityconcernspersist.Stategrantsorlowinterestloansmaybeavailabletofundonsitesystems,however,alocalgovernanceentityisneededtoadministertheprogramandmanagepotentialclusteredsystems.
The2016FFSdescribesmodificationstoexistinghouseholdsepticsystemstoprovideincreasedtreatmentofwasteusingapeatfilter.Thesystemrequirestheadditionofapumpvault,peatfilteranddrainfieldatanestimatedcostof$17,640perhouseholdandannualmaintenancecostof$895.7However,the2016FFSstatesthat“..manyhousesmaynothavetherequiredspacetoinstallthepeatfilterwhichwouldresultintheneedforamorecompactandhighercostsystem”.Costscouldvarydependingondesign,providerandpotentialclustering.
2.ADMINISTRATIVECOSTSVARYMODESTLYBETWEENTHEGOVERNANCEOPTIONS.Theoveralladministrativecostsofthethreegovernanceoptionsstudiedvaryby$75,000annuallywhenatreatmentsystemisinplace.AnnexationtotheSYCSDorcreationofaCounty-dependentspecialdistrict(e.g.,aCountyServiceAreaorsanitationdistrict),arelikelytohaveloweradministrativecoststhananewCommunityServicesDistrict(CSD),rangingfromanestimated$114,000to$124,000annuallybecauseofeconomiesofscale.TheSYCSDandCounty-dependentspecialdistrictoptionscouldprovideaccesstotechnicalandfinancialresourcesnototherwisereadilyavailabletoaCSD.
ALosOlivosCSDisestimatedtocostfrom$110,000annuallypriortosystemoperation,to$189,000annuallywhenasystemisinplaceasshowninTableS-1.TheCSDwillhaveitsown
72016FFS,AECOM,Section3.2.1.Otherestimatesofonsitesystemsindicatecostscouldbecloserto$25,000.
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board,elections,officespaceandequipmentandwillberequiredtoprepareannualfinancialauditsandreports,andmaintainitsownwebsite;theseexpensescontributetothegreatercostsestimatedforthisoption.ItmaybepossibleforaCSDtocontractorsharestaffwithotheragenciestoachievesavings.Chapter5describesCSDcostassumptionsinmoredetail.
TableS-1EstimatedOverheadandAdministrativeCosts-NewLosOlivosCSD
3.CONSTRUCTIONANDOPERATINGCOSTSFORAWASTEWATERSYSTEMCOULDBEPROHIBITIVEFORANYGOVERNANCEOPTIONUNLESSCOSTSAVINGSCANBEACHIEVED,ADDITIONALREVENUESOBTAINED,ORTHESYSTEMISPHASED.CoststoplanandconstructthecommunitywastewatersystemservingallofLosOlivoswouldtotalnearly$21million,orabout$40,500to$45,700persingle-familyunit(orcommercialequivalent)dependingontheamountofexistingandnewdevelopmentthatconnectstothesystem.8Thissystemwouldservetheentirecommunityincludingnewdevelopment;the2013AECOMstudyanalyzedamorelimitedsystemservingonlythecommercialcoreandadjacentsmallerparcelhomes,withtheabilitytoexpandtoserveotherareas,atlessthanhalfthetotal
8RevisionstoLosOlivosWastewaterSystemPreliminaryEngineeringReport,September13,2016,AECOM
Item FirstYear
AdministrationBoard 6,000
Legal 20,000
Accounting/Finance 15,000
OfficeSpace,Utilities 0
Equip/Supplies/Internet 2,500
Memberships 3,000
OtherOverhead/Admin. 10,000
Subtotal(exc.Staff) 56,500
Admin.StaffSalaries/Benefits $54,000
TOTALExpenditures $110,500perResidentialUnitEquivalent(RUE) $283
perRUEpermonth $24
AnnualAmountBuildout
6,000
20,000
15,000
15,000
5,000
3,000
17,000
81,000
$108,000
$189,000$376
$31
AnnualAmount
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cost.9The2016studyonlyanalyzedacommunity-widebuildoutscenario;aphasedapproachwhichprovidesalowertotalcostsystemforthedowntownshouldbeanalyzedasonemeans,inconjunctionwithadditionalgrantorotherfunding,andsystemcostrefinements,toimprovefinancialfeasibility.
Constructioncostreductionsof25percentormorearepossiblewithcarefulplanning,resultingincostsof$33,500to$37,800.10TableS-2summarizesannualassessmentsforconstructionandfinanceofacommunitywastewatersystem,whichareassumedtobethesameforallgovernanceoptions.Theannualassessmentassumesalow-interest,40-yearUSDAloanthatiscommonforsimilarsmallsystems.Thetotalcostsarespreadtoallexistingandnewdevelopment.Atargetcostreductionscenariodescribedinthe2013AECOMstudyassumes$1.5millioningrantsandareductionin“Engineering,Admin.&Legal”costfactorfrom35%to20%.
TableS-2EstimatedAnnualAssessmentsforSystemConstruction(FullBuildout)
Costreductionswillbeparticularlyimportanttoreduceadministrationandsystemoperationscoststoapointwhereratesarecomparabletoothertertiarytreatmentsystemsintheregion.Includingpossiblesavingssuggestedinthe2013PFS,upto50%operatingcostreductionsmaybepossibledependingonfinalsystemdesignandwhetheroperationscanbecontractedtoa
9Largerresidentiallotsoutsidethecommercialcorepotentiallycouldbeservedbyonsitesystems.10Basedontargetcapitalcostreductionscenariosandpotentialoperatingcostreductionsindicatedinthe2013AECOMfeasibilitystudy.
Item CSD CSASYCSD
Annexation
SYSTEMCONSTRUCTION
TOTALImprovementCosts $21,019,000 $21,019,000 $21,019,000
AnnualAssessmentforConstructionperRUE $1,809 $1,809 $1,809AnnualAssessmentper1,000Com'lSq.Ft. $2,601 $2,601 $2,601
AnnualAssessmentforConstructionw/savingsAnnualAssessmentforConstructionperRUE $1,461 $1,461 $1,461AnnualAssessmentper1,000Com'lSq.Ft. $2,100 $2,100 $2,100
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larger,lowercostagency.Asnotedpreviously,aphasedapproachthatservesonlythedowntowncouldresultinalower-costsystem.
Ifoperatingcostreductionscanbeachieved,annualratesforadministrationandsystemoperationscouldrangebetween$910to$1,060orabout$76to$88permonth,dependingonnewdevelopmentconnectingtothesystem,governanceoption,andmannerofcontractingforservices,asshowninTableS-3.Theseoperatingchargesaregenerallyconsistentwithotherwastewaterratesintheregionfortertiarytreatment.11TableS-3alsoshowstotalannualcostsincludingadministration,operations,andassessmentsforsystemconstruction.
TableS-3TotalAnnualCostsbyOrganizationalOption(w/NewDevelopment)
Theactualrateswilldependonthefinalsystemdesignandwhetheritservesthedowntownonlyortheentirecommunityatbuildout,furtherengineeringanalysis,anddecisionstobemadebyafuturegoverningboard.Theestimatedcostallocationsinthisanalysisassumeagreatereffluent“strength”fromcommercialwastewaterandthereforecostallocationstocommercialusesareproportionatelygreater.Forexample,theSYCSDchargesrestaurantsahigherrate(6timesaresidentialrate)for“dirtier”wastewater,inadditiontogreaterflows.Certain
11SeeAppendixA.
Item CSD CSASYCSD
Annexation
OPERATIONS(inc.Administration)AnnualO&MperResidentialUnitEquivalent(RUE) $1,741 $1,611 $1,592AnnualO&Mper1,000Com'lSq.ft. $830 $768 $759
AnnualO&Mw/savingsAnnualO&MperRUE $1,058 $929 $909AnnualO&Mper1,000Com'lSq.ft. $504 $443 $433
TOTALANNUALCOSTSFOROPERATIONS+CONSTRUCTIONASSESSMENTSTotalperResidentialUnitEquivalent $3,550 $3,420 $3,401Annualper1,000Com'lSq.Ft. $3,431 $3,369 $3,360
TotalCostsw/savingsTotalperResidentialUnitEquivalent $2,519 $2,390 $2,370Annualper1,000Com'lSq.Ft. $2,605 $2,543 $2,534
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equipmentneededtohandlepeaktouristflowscanalsobeallocatedtocommercialuses,whichwouldreducethecapitalandoperatingcostsbornebyresidentialuses.
4.ACSDOFFERSTHEGREATESTDEGREEOFLOCALCONTROLOVERTYPE,LEVEL,ANDCOSTOFWASTEWATERTREATMENTSERVICES.AnindependentCommunityServicesDistrict(CSD)wouldbegovernedbyaboardofdirectorselectedbytheresidentsofLosOlivostomanagetheplanning,constructionandoperationofacommunitywastewatersystem.TheCSDwouldalsoprovidealocalgovernanceentitythatcouldrepresentthecommunityinnegotiationswithotherserviceproviders,forexample,tocontractforadministrativeand/oroperationalserviceswithanotherentitysuchastheCountyorSYCSD.Ifconnectiontoaregionalwastewatersystemprovestobeamoreviableoptionthanacommunitysystem,theCSDcouldrepresentthecommunity’sinterestsinregionalplanningandimplementationefforts.
Whiletheonlyserviceconsideredatthistimeistheprovisionofwastewater-relatedservices,theCSDcouldexpanditsservices,withSantaBarbaraLocalAgencyFormationCommission(“LAFCO”)12approvalandsubjecttoprotestproceedingsoflocalvoters.AlltaxesandassessmentswouldbesubjecttoapprovalbyvotersorpropertyownerswithintheCSD.
Unlikeothergovernanceoptions,aLosOlivosCSDwouldcontroldecisionsaboutthesystem,itscostandcapacitytoallownewdevelopment.Incontrast,theothergovernanceoptionswouldresultinaboardrepresentingabroaderconstituencycontrollingservicesandrates.Forexample,inthecaseofannexationtotheSYCSD,theSYCSDboardwouldvoteondecisionsaffectingLosOlivos,andLosOlivoswouldconstituteaminorityofvoterswithintheexpandeddistrict.
12Statelawcreatesalocalagencyformationcommissionineverycountytoconsiderannexations,cityincorporations,andspecialdistrictformations.TheSantaBarbaraLAFCOismadeupoftwomembersoftheBoardofSupervisors,twomembersfromthecounty’sspecialdistricts,twomembersfromthecounty’scities,andapublicmemberchosenbytheremainderoftheboard.
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2. OVERVIEW OF THE COMMUNITY
DEMOGRAPHICS AND LAND USE ThecensuspopulationoftheLosOlivosCensusDesignatedPlace(CDP)is1,132residents.13TheCDPencompassesaslightlylargerareacomparedtotheSpecialProblemsArea(SPA)andtheTownship.The2016FFSbaseditssystemdesignonthehigherpopulation,andassumedminimalgrowthovertime;thisapproachhelpstoassurethatadequatecapacitywillexistforpotentialdemandoverthenexttwentyyears.
AccordingtotheSantaYnezValleyCommunityPlanEIR,thereare228,990squarefeetofdevelopedcommercialfloorareainLosOlivos.14Thecommercialspaceconsistsofamixofhotel,retail,restaurantsandofficespace.Thereareapproximately25smalllotresidentialpropertiesinthecommercialcore.
POTENTIALNEWDEVELOPMENTAsaresultofrestrictivestandardsadoptedbytheRegionalWaterQualityControlBoardin1991,commercialprojectsinLosOlivosarelimitedtoverylowwaterusesandmanyproposedprojectsareeventuallywithdrawn.15AcommunitywastewatersysteminLosOlivos,inadditiontoaddressingexistingthreatstosurfaceandgroundwaterresources,willalsoenablesomelevelofcommercialexpansionintheLosOlivoscore.
The2016FFSassumesapproximately120,500squarefeetofnewcommercialdevelopmentinthecommunity.Thisassumptionprovidesforsomeexpansionofexistingusestoincluderestroomfacilities,andconversionofofficeusestomorewater-intensiveusessuchasrestaurants,aswellasdevelopmentofvacantparcelsinthecommercialcore.Additionaldevelopmentwouldreducecapitalandoperatingcoststoexistingpropertyowners.
TheMBRwastewatersystemanalyzedbythe2016FFScanadjustitscapacityifneededtoaccommodateadditionalnewdevelopmentbeyondthe120,500squarefeet.ThegoverningbodyoftheLosOlivoswastewatersystemwoulddeterminetheamountandtimingofwastewatercapacityexpansion.132010census.14Table4.9-24,EIR,pg.4.9-26.15SantaYnezCommunityPlan,October9,2009,pg.115.
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Mattei'sTavernInnDevelopmentPlanThedevelopmentandexpansionofMattei’sTavernInncouldparticipateinthenewcommunitywastewatersystem;however,thecurrenttimelineforfinalapprovalanddevelopmentofMattei’sisuncertainatthistime,anditisnotknownwhetherthestartofitsconstructionwillcorrespondwiththetimingofacommunitywastewatersystem.
Theproject,approvedbytheCountyPlanningCommissiononJanuary30,2013,consistsofa64-guestroomcottagehotel,agym,spa,swimmingpoolandameeting/banquetroomlocatedadjacenttotheexistingMattei'sTavernInn.TheProject’sapprovalsrequireittoconnecttoacommunitywastewatersystem,ifoneisavailableatthetimeofconstruction;otherwise,theProjectwillneedtoconstructitsownonsitesystemwithnofurtherobligationtoconnecttoafuturecommunitysystem.16TheProjectisanticipatedtogenerateabout10,000gpdofwastewaterthatwouldreceivetertiary-leveltreatmentandbeusedforonsiteirrigation.17
Afterreceivingitsapprovals,thepropertysubsequentlywassold,andthenewownerisintheprocessofrevisingthePlanandgoingthroughareviewprocess.Changesincludeaddingtwomoreroomsandreconfiguringthesiteplan,andreducingchangestointeriorsofexistinghistoricstructures.TheCountyhasnotyetdeemedtheapplicationcomplete;oneoftheoutstandingissuesisthestatusoftheProject’swastewatersystem,whichneedsconceptualapprovalbytheRegionalWaterQualityControlBoard(RWQCB).Someoftheconcernsregardingthewastewatersystem,whichdiffersfromtheoriginalapprovedPlan,arewhetherlandscapeirrigationisanappropriateuseforthetreatedeffluent,whetheralldisposalcouldoccuronsite,andifnot,whatoptionsexistforoffsitedisposal.DependingontheoutcomeofRWQCBreview,additionalenvironmentaldocumentationmayberequiredaswellasaPlanningCommissionhearing.IftheProjectisdeemedtohavenoadditionalenvironmentalimpacts,itisanticipatedthatitcouldbeapprovedatastafflevelwithnofurtherpublichearingsrequired.Thepossibilityexiststhatthepropertyownercouldreverttotheoriginalapproveddevelopment.18
16CountyofSantaBarbaraPlanningandDevelopment,http://sbcountyplanning.org/projects/09DVP-00019/index.cfm
17CountyofSantaBarbaraPlanningandDevelopment,http://sbcountyplanning.org/projects/09DVP-00019/index.cfm
18R.BerksondiscussionwithJoyceGerber,Planner,CountyofSantaBarbaraPlanningandDevelopmentDepartment
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SantaYnezValleyCommunityPlanTheSantaYnezValleyCommunityPlanEIRanalysisofwastewatergenerationindicatesthepotentialforatotalof1millionsquarefeetofcommercialusessplitbetweenretailandnon-retailuses.19However,thislevelofdevelopmentwouldrequiresignificantincreasesindensitythatmayrequire20yearsormorebeforeeconomicconditionsjustifyincreasedmulti-storydensity.
TheCommunityPlandiscussesanumberofapproachestoaddresswastewaterissuesinthearea,includingacommunitywastewaterfacilitysuchasthesystemevaluatedbyAECOM,andapublicsewerextensiontoLosOlivossuchasasewerextensionandconnectionfromtheCityofSolvangortheChumashtreatmentfacilitytoserveBallardandLosOlivos.
TheCommunityPlannotedthatasewerextensionfromtheCityofSolvangortheChumashtreatmentfacilityraisessignificantpolicyconcernsandpotentialenvironmentalimpactsassociatedwithextendingurbanservicesthroughagriculturallands.20ComprehensivePlanpoliciesintheLandUseandAgriculturalElements,aswellasLocalAgencyFormationCommission(LAFCO)policiesdiscourageextendingsewerservicetoruralareasbecausesuchextensionscanencouragedevelopmentintensificationthatisincompatiblewithinagriculturalareas.TheCommunityPlanalsonotesthat“sewerextensionalongtheAlamoPintadocorridorwouldalsobeinconsistentwithSantaYnezValleyCommunityPlanpolicies,whichrecognizeandsupporttheSantaYnezValleyCommunityPlanpolicieswhichrecognizeandsupportpreservationofdistinct,andseparateurbantownships,andthepreservationandenhancementofagricultureasavitalcomponentoftheValley’seconomyandruralcharacter.”
19Table4.9-20,EIR,pg.4.9-24.20SantaYnezValleyCommunityPlan,October6,2009,pg.118.
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ASSESSED VALUE AND EXISTING TAXES Table1indicatestheassessedvalueintheLosOlivosarea.Thistotalvalueprovidesameasureoffeasibilitywhencomparedtothedebtissuancerequiredforawastewatersystem,andtotheannualassessmentpayments.ThesecomparisonsarediscussedinChapter6.
Table1SummaryofAssessedValueinLosOlivos
LandUse Parcels AssessedValue
ResidentialRuralResidential 49 naSingleFamilyResidence 282 $133,328,000ResidentialIncome2-4Units 5 $4,277,000
Total 336 $137,605,000
Commercial 57 $63,390,000
Vacant 23 $4,184,000
Other(non-taxable) 6 $0
TOTAL 422 $205,179,000
Source:SantaBarbaraCountyAssessorsOffice,OnlineParcelDetails,2016.
ParcellistprovidedbyLosOlivosReclamationCommittee.
BoundariescorrespondtoSpecialProblemsArea.Ruralresidentialexcluded.
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EXISTINGTAXESANDASSESSMENTSInLosOlivos,propertyownerspayforseveralschoolbondsinadditiontotheirbasic1%ofassessedvalue.ThepaymentsareshowninTable2.Thebondsincreasethebasicpropertytaxbillbyabout7.5%,foracombinedrateof1.075%ofassessedvalue.
Table2ExistingBasic1%PropertyTaxandAdditionalBonds
Theserelativelylowexistingtaxoverridesprovideadditionalfinancialcapacityforwastewatersystemassessments.Industrystandardsgenerallimitcombinedadvaloremandtaxoverridestoamaximumof1.8to2.0%oftotalassessedvalue.
Fund Rate
0000Basic1%(Prop13/AB8)Taxes 1.00000%
7251-LosOlivosElemBond1996 0.01974%
7255LosOlivosElemBond2006 0.03000%
9421AllanHancockCCBond2006 0.02500%
Total 1.07474%
Source:CountyofSantaBarbara,Auditor-Controller'sOffice
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3. GOVERNANCE OPTIONS
Construction,managementandoperationofanewwastewatersysteminLosOlivosrequireagovernmentagency.Thecharacteristics,advantagesanddisadvantagesofseveralprimaryoptionsunderconsiderationaredescribedbelow.
STATUS QUO Withoutanewwastewatersystem,propertyownerswillberesponsible,attheirowncost,fortheinstallation,upgrade,maintenanceandrepair/replacementofindividualsystemstomeetCountyandStatewaterqualitystandardsiftheirsystemsfailortheyproposenewdevelopment.Thecommunitywouldalsobeexposedtoadditionalregulatoryactionifgroundwaterqualityconcernspersist.Stategrantsorlowinterestloansmaybeavailabletofundadvancedonsitetreatmentsystems,however,alocalgovernanceentityisneededtoadministertheprogramandmanagepotentialclusteredsystems.
The2016FFSdescribesmodificationstoexistinghouseholdsepticsystemstoprovideincreasedtreatmentofwasteusingapeatfilter.Thesystemrequirestheadditionofapumpvault,peatfilteranddrainfieldatanestimatedcostof$17,640perhouseholdandannualmaintenancecostof$895.21However,the2016FFSstatesthat“..manyhousesmaynothavetherequiredspacetoinstallthepeatfilterwhichwouldresultintheneedforamorecompactandhighercostsystem”.Costscouldvarydependingondesign,providerandpotentialclustering.
FORM A COMMUNITY SERVICES DISTRICT (CSD) ACommunityServicesDistrict(CSD)isaspecialdistrictformedunderCalifornialaw.22SincetheenactmentoftheCommunityServicesDistrictLawinthe1950s,morethan300communitieshaveformedcommunityservicesdistrictstoachievelocalgovernance,provideneededpublicfacilities,andsupplypublicservices.23ThecurrentstudyassumesthataCSDwouldbelimitedtowastewaterandrecycledwater-relatedservices,butitcouldprovideagovernanceframeworkforotherservicesinthefuture.AnynewserviceswouldrequireSantaBarbaraLAFCOapproval
212016FFS,AECOM,Section3.2.1.22Gov.CodeSec.61000-61250.23Gov.CodeSec.61001(a)(4).
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andpotentiallyvoterapprovalofanytaxorassessmentrequiredtofundtheservices,andwouldbesubjecttoaprotestvote(greaterthan50%protestwouldstoptheproceedings).
FORMATIONANDGOVERNANCECSDformationmaybeinitiatedbyresolutionoftheCountyBoardofSupervisors,24orbyapetitionsignedbynolessthan25percentofregisteredvoterslivingwithintheproposeddistrictboundaries.25LAFCOapprovalisrequired.Eithermajorityvoterapprovalorvoterorpropertyownerapprovalof,respectively,aspecialtaxorassessmentmaybenecessarytogeneratesufficientrevenuetocarryoutitspurposes.26
TheCSD’selectedBoardofDirectorswouldestablishpoliciesfortheoperationofthedistrict.An“independent”CSDelectsitsfiveboardmembersfromresidentsofthedistrict.
SERVICESThisStudyassumesthataCSDwouldprovideservicesthatincludethecollection,treatmentanddisposalofwastewaterandrecycledwater.CSDsalsomayprovideabroadrangeofotherfacilitiesandservices,forexample,parksandrecreation,landscapemaintenanceandlighting.27Otherservicesthatmaybeactivatedatafuturetime(“latent”services)wouldbesubjecttoapprovalbyLAFCO28andaprotestvote(greaterthan50%protestwouldstoptheproceedings).WiththeexceptionoffundinganAreaPlanningCommission,aCSDhasnoauthorityoverlandusedecisions;thispowerremainswiththeCounty.
ZONESWhenevertheboarddeterminesthatitisinthepublicinteresttoprovidedifferentservices,providedifferentlevelsofservice,providedifferentfacilities,orraiseadditionalrevenueswithinspecificareasofthedistrict,itmayformoneormorezones.Azonemaybeapplicabletothe
24Gov.CodeSec.61013(a).Itcouldalsobeinitiatedbyotherspecialdistricts,suchasSantaYnezRiverWaterConservationImprovementDistrictNo.1,buttheCountyisconsideredthemostlogicalagencytoinitiateaproposal.
25Gov.CodeSec.61011.26Gov.CodeSec.61014(e)(2).27SeeGov.CodeSec.61100,whichliststheservicesthatCSDsareauthorizedtoprovide.28Gov.CodeSec.61106.
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extentthatadditionalservicesareconsideredfortheLosOlivoscommercialcore,whichwouldpayforthoseserviceswithouttaxingotherareas.
REVENUESANDEXPENDITURESACSDhasbroadauthority.Itcanestablishratesandchargesforservices29andreceivegrantandotherrevenuesfromotherpublicagencies.30Thedistrictmaylevyspecialtaxesorbenefitassessments.31Adistrictmaycharge“standbycharges”forsewerthatallowsforthecollectionofaservicechargeorassessmentbasedonthebenefitderivedfromtheavailabilityofsewer,whetherornottheserviceisutilized.32AdistrictmayissueGeneralObligationbonds(nottoexceed15percentofthedistrict’sassessedvalue),33revenuebonds,andMello-RoosCommunityFacilitiesDistrictbonds.34Allchargesandfeesarerequiredtoequalthecostoftheserviceorfacility;utilityservicechargesmaybeadoptedandincreasedthroughtheProposition218majorityprotestprocess.Alltaxesrequirevoterapprovalorallowforaprotestprocess.
OperatingCostsEstimatedsystemoperatingcostsarebasedonAECOMestimatesfortheproposedsystemdescribedinChapter4.Theoperatingcostsincludestaff,suppliesandequipment,andreservesforreplacement.ItisassumedthatallgovernanceoptionswouldincursimilarcostsforoperationofthesystemandwouldallocateandbillthosecoststotheLosOlivosratepayers.Thebilledcostsalsowouldincludeadministrativeandoverheadchargesasdescribedbelow.
AdministrationandOverheadCSDcostestimatesassumeapart-timegeneralmanagerandsecretary/treasurer;thesepositionsmaybecontracted.TheCSDwouldalsorequirecontractservicesforlegalandfinancialreporting.Asmall500squarefootofficespaceisassumed,plusutilitiesandofficeequipment/supplies.CSDhearingswouldbeheldinalocalschoolorsimilarfacility.
29Gov.CodeSec.61115.30Gov.CodeSec.61016.31Gov.Code61121-2232Gov.Code61124,pursuanttotheUniformStandbyChargeProceduresAct,Chapter12.4(commencingwithSection54984)ofPart1ofDivision2ofTitle5.
33Gov.CodeSec.61126,pursuanttoArticle11(commencingwithSection5790)ofChapter4ofDivision5ofthePublicResourcesCode.
34Gov.CodeSec.61126-27.
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Theinitialyearspriortowastewatersystemoperationswillprimarilyrevolvearoundplanning,communityworkshopsandconsensusgathering,seekinggrantsandotherfunding,andspecialstudies.Itisanticipatedthattherewillbenoneedforofficespace,andthatstaffrequirementswillbeless.Table3illustratesapotentialbudget.Theinitialcostscouldbefundedthroughsomecombinationofcommunitycontributionsandassessments.Actualcostswilldependonthefinalsystemdesignanddecisionstobemadebyafutureboard.
Table3EstimatedOverheadandAdministrativeCosts-LosOlivosCSD
Item FirstYear Buildout
AdministrationBoard 6,000 6,000 (3)Legal 20,000 20,000Accounting/Finance 15,000 15,000OfficeSpace,Utilities 0 (5) 15,000 (1)Equip/Supplies/Internet 2,500 (6) 5,000Memberships 3,000 3,000OtherOverhead/Admin. 10,000 17,000 (2)
Subtotal(exc.Staff) 56,500 81,000Admin.StaffSalaries/Benefits $54,000 (5) $108,000 (4)
TOTALExpenditures $110,500 (5) $189,000perResidentialUnitEquivalent(RUE) $283 (7) $376 (7)perRUEpermonth $24 $31
(1)Assumes500sq.ft.at$2.50permonth.(2)Other/Contingencyat10%ofotheradmincostsinc.staff.(3)Assumestipendof$100/month,5boardmembers.(4)50%GM/Operatorat$100k,50%Sec'yTreasurer$60k,+35%taxes,benefits.(5)Assumesfirstyear(ormore)primarilyplanningwithnooperationalstafforcontractstoadminister;50%staffassumed,andnoofficespacerequired.(6)Equipment/Supplies/Internetreducedfirstyearduetonoofficespace.(7)ResidentialUnitEquivalentsare"LoadAdjusted"forcommercialstrengthfactor.
AnnualAmount
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FINANCIALCONTROLSANDACCOUNTABILITYTheCSDBoardmustadoptanannualbudget,andmayestablishseparatereservefundsfromcontingenciesandcapital.AnnualindependentfinancialauditsandreportstotheStatearerequired.
ADVANTAGESANDDISADVANTAGESOFFORMINGACSDGovernance
• Pro:ALosOlivos-electedBoardofDirectorsprovidesgreaterlocalcontrol.Bycontrast,annexationtoalargerdistrict,suchastheSYCSD,orformationofaCounty-dependentspecialdistrictgovernedbytheBoardofSupervisorswouldresultindecisionsbeingmadebygoverningboardsinwhichLosOlivosisasmallconstituency.
• Pro:ACSDcouldrepresentthecommunityintheplanningandimplementationprocessifaregionalwastewatersystemprovestobeamoreviableoptionthanalocalcommunitysystem.
• Con:Relativelysmalldistrictscanhavedifficultyattractingqualifiedboardmembers.However,LosOlivoscurrentlyappearstobenefitfromstrongcommunityparticipationbyresidentswitharangeofprofessionalskillsandexperience.
• Con:Theboardofasmalldistrict,whichislimitedtoresident,couldbemoreeasilydominatedbyspecialinterestswhoseneedsdivergefromothercommunityinterest;forexampleinLosOlivos,thecommercialcorehasauniquesetofneedsthatdifferfromsurroundingresidentialareas.Thispotentialissuemaybemitigatedbythecreationofzonestohelpassurethatresidentialareasdonotpayforservicesneededincommercialareas,andviceversa.
Services
• Pro:ALosOlivosCSDcouldtailorservicestotheneedsofthelocalcommunity.ItwouldnotbesubjecttodecisionsmadetothebenefitofalargercommunityofinterestthatmaydivergefromtheneedsofLosOlivos.Asnotedabove,thelatterissuemaybemitigatedbythecreationofaLosOlivos“zone”ifannexedtoSYCSD,althoughzonelimitationsmayalsolimittheabilitytoexpandtherangeandtypeofservicesprovidedinLosOlivos.
• Pro:ACSDcouldseeopportunitiestoreduceoperatingcostsbycontractingwithalargerentity,forexample,theSYCSDortheCountyPublicWorksDepartment.
• Pro:ACSDcouldserveasthelocalgoverningentitynecessarytoobtainStategrantsandloansforupgradeofonsitesystems,whichmaybeanoptionforlargerresidentialpropertiesincombinationwithacommunitysystemservingthecommercialcore.
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RevenuesandExpenditures
• Con:ALosOlivosCSDprovidesasmallerrevenuebaseatgreaterfinancialriskofadverse,unanticipatedfinancialeventsrelativetoothergovernanceoptions.
• Con:Arelativelysmalldistrictwillbenefitlessfrompotential“scaleeconomies”comparedtoalargerentitythatmaycontractatlowercosts.ThiscanbeaddressedtosomedegreebytheCSDcontractingwithalargerentitysuchastheSYCSDortheCounty.
• Con:ACSDwillincurcostsforannualauditsandfinancialreports.
FinancialControlsandAccountability
• Pro:AlocallyelectedboardconsistingofLosOlivosresidentswillbefinanciallymotivatedtominimizecosts,maximizethevalueofdistrictservicesandcontractoversightsincetheywillalsoberatepayersofthedistrict.
• Con:Annualaudits,financialreports,publicnoticinganddisclosurecanrepresentagreatercostandefforttoasmalldistrictcomparedtolargerentities,andcreateadministrativecoststhatrequirehigherfeesandrates.
• Con:Publicinformationandoutreach(e.g.,website)representrequiremoreeffortandcostbyasmalldistrictrelativetoitsstaffandfinancialresources,creatingrisksofreducedtransparencyandaccountability.
FORM A COUNTY-DEPENDENT SPECIAL DISTRICT AcommonformofCounty-dependentspecialdistrictisaCountyServicesArea(CSA),whichisaspecialdistrictformedunderCalifornialaw.35CountyServiceAreas(CSAs)mayprovideanyservicethatacountycanprovide,andarethemostcommonformofspecialdistrictinCalifornia.36AnotherexampleofaCounty-dependentdistrictisacountysanitationdistrict;unlikeaCSA,whichpotentiallycanprovidearangeofservices,asanitationdistrictislimitedtosanitation.ThisreportgenerallyreferstoaCSAduetoitspotentialforadditionalservices,however,similarissuesapplytosanitationdistricts.
TheLagunaCountySanitationDistrictinSantaBarbaraCounty,withannualrevenuesinexcessof$13million,isanexampleofaCountydependentdistrict.SantaBarbaraCountyalsomanages
35Gov.CodeSec.25210-25217.436What’sSoSpecialAboutSpecialDistricts?(FourthEdition),SenateLocalGovernmentCommittee,October2010
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otherCSAsforsanitationpurposes,forexampleCSA12,butthesearegenerallymuchsmallerserviceareaslargelylimitedtorevenuecollection,andhavenofull-timestaff.
County-dependentspecialdistrictsaregovernedbytheCountyBoardofSupervisors,butmayappointanadvisorybodytoprovideinput.
FORMATIONANDGOVERNANCEACounty-dependentspecialdistrictmaybeformedbyresolutionoftheCountyBoardofSupervisors,37orbyapetitionsignedbynolessthan25percentofregisteredvoterslivingwithintheproposedboundaries.38LAFCOapprovalisrequired.39Eithermajorityvoterapprovalorvoterorpropertyownerapprovalof,respectively,aspecialtaxorassessmentmaybenecessarytogeneratesufficientrevenuetocarryoutitspurposes.40
TheCSAisgovernedbythecountyboardofsupervisors.LosOlivos’1,000residentsrepresentaverysmallpercentageofthepopulationofthecountythatelectsthesupervisors.TheboardofsupervisorsmayappointoneormoreadvisorycommitteestogiveadvicetotheboardofsupervisorsregardingaCounty-dependentspecialdistrict’sservicesandfacilities.41
SERVICESACounty-dependentspecialdistrictcanprovidearangeofservicessimilartothosethataCSDcanprovide.42CSAservicesmayincludethecollection,treatment,ordisposalofsewage,wastewater,recycledwater,andstormwater.43Iftheboarddesirestoexercisealatentpower,theboardshallfirstreceivetheapprovalofthelocalagencyformationcommission.44
ZONES37Gov.CodeSec.25211.3.38Gov.CodeSec.25211.1.39Gov.CodeSect.25211.4.40Gov.CodeSec.25211.4(f)(2).41Gov.CodeSec.25212.4.42Gov.CodeSec.25213.43Gov.CodeSec.25213(g).44Gov.CodeSec.25213.5(a),pursuanttoArticle1(commencingwithSection56824.10)ofChapter5ofPart3ofDivision3.
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Whenevertheboarddeterminesthatitisinthepublicinteresttoprovidedifferentservices,providedifferentlevelsofservice,providedifferentfacilities,orraiseadditionalrevenueswithinspecificareasofthedistrict,itmayformoneormorezones.45AzonemaybeapplicabletotheextentthatadditionalservicesareconsideredfortheLosOlivoscommercialcore,whichwouldpayforthoseserviceswithouttaxingotherareas.
REVENUESANDEXPENDITURESACSAhasbroadpowers.Itcanestablishratesandchargesforservices46andreceivegrantandotherrevenuesfromotherpublicagencies.47ACSAmaylevyspecialtaxesorbenefitassessmentsforcapitalimprovementsandoperations.48Adistrictmaycharge“standbycharges”forsewerthatallowsforthecollectionofaservicechargeorassessmentbasedonthebenefitderivedfromtheavailabilityofsewer,whetherornottheserviceisutilized.49AdistrictmayissueGeneralObligationbonds(nottoexceed5percentofthedistrict’sassessedvalue)50andrevenuebonds.51Allchargesandfeesarerequiredtoequalthecostoftheserviceorfacility;utilityservicechargesmaybeadoptedandincreasedthroughtheProposition218majorityprotestprocess.Alltaxesrequirevoterapprovalorallowforaprotestprocess.
Althoughnotassumedinthecurrentanalysis,theboardmayloanCountyfundstotheCSA,contingentuponrepaymentwithinthesameyearunlesstheboardextendstherepaymentperiodby4/5thsvote.52Theboardofsupervisorsmayalsoestablisharevolvingloanfundupto$10millionforloanstoCSAs,andrepaymenttooccurwithin10years.53
OperatingCosts
45Gov.CodeSec.25217-25217.446Gov.CodeSecs.25215.4–25215.5.47Gov.CodeSec.25214.2(a).48Gov.Code25215.2–25215.3,25216.3.49Gov.Code61124,pursuanttotheUniformStandbyChargeProceduresAct,Chapter12.4(commencingwithSection54984)ofPart1ofDivision2ofTitle5.
50Gov.CodeSec.25216.1.51Gov.CodeSec.25216.1.52Gov.CodeSec.25214.4(b).53Gov.CodeSec.25214.5(a).
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EstimatedoperatingcostsarebasedonAECOMestimatesfortheproposedsystem.Theoperatingcostsincludestaff,suppliesandequipment,andrepair/replacement.ItisassumedthatallgovernanceoptionswouldincursimilarcostsforoperationofthesystemandwouldallocateandbillthosecoststotheLosOlivosratepayers.Costsavingsmaybepossible,dependingonfinalsystemdesignanddecisionstobemadebyafutureboardregardingstaffing,i.e.,contractingwithprivatefirmsorsharingstaffwithotherpublicentities.
Allocatedcostswouldincludeadministrativeandoverheadchargesasdescribedbelow.
AdministrationandOverheadCSAcostestimatesassumethatexistingCountyPublicWorksDepartmentstaffwouldprovidemanagementandadministrativeservicesneededbytheCountyServiceArea(CSA)ordependentcountysanitationdistrict,andtheCountywouldapplyacostallocationtobillforservicesfromotherCountydepartments,forexample,legal,accounting,buildings,etc.
TheestimatesshowninTable4willberefinedbytheCountyifthisoptionmovesforward,andmayvarydependingonthefinalconfigurationofthewastewatersystem.
• ManagementandAdministration–Theinitialestimateassumesthat0.25FTE(approximately10hours/week)willberequiredformanagementoversightanddirection,includingcontractreview,reportingandinteractionwithratepayersandapotentiallocaladvisorycommittee,managementofanylegalissuesthatmayarise,andothermanagementtasks.Astaffcostforthemanager,includingsalary,taxesandbenefits,assumes$220,000basedonareviewofCountymanagementpositions.Administrativesupportwouldberequired;theinitialcostestimatesassumesapproximately0.20FTE,or8hours/week,atatotalcostof$120,000includingsalary,taxesandbenefits.
Actualcostsmayvarydependingonthespecificstaffrequiredandtheirsalaries;forexample,theadministrativesupportmayincludeservicesofacontracttech,andaccounting/paymentservicesfromfinancialstaff.
• IndirectCostAllocations–Thepreliminarybudgetestimateassumesa$20,000annualindirectcostallocation.TheamountwilldependontheextenttowhichtheCSAordependentcountysanitationdistrictrequiresservicesfromotherCountydepartments.Bycomparison,indirectCountychargestotheLagunaCountySanitationDistrict,whichhasrevenuesofabout$13.5million,ischargedapproximately$100,000annuallyforindirectCountyservices.
• Other–Anadditional$25,000annuallyisincludedformiscellaneousexpenses,forexample,periodicsystemmanagementreportsandotherplansandstudies,expensesrelatedtopublicinformationmaterials,andanyextraordinarylegalortechnicalservices.
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Asnotedabove,wastewatersystemoperatingcostswillbesimilartotheothergovernanceoptions,dependingonspecificstaff,contractingandotherdecisionstobemadebyfutureboards,andwillbefundedbyservicechargesthatincludetheoverhead/administrationcharges.
Table4EstimatedAdministrationCosts–CSA/County-dependentSpecialDistrict
FINANCIALCONTROLSANDACCOUNTABILITYTheboardisrequiredtoadoptanannualbudget,andprovideforregularauditsofCSAaccounts.54
ADVANTAGESANDDISADVANTAGESOFFORMINGACSAGovernance
• Pro:ACSAorotherCounty-dependentspecialdistrictisconsistentwithLAFCOpolicies,secondonlytocityannexationinpriority,whichgenerallyencourageconsolidationoffunctionswithexistingagencies,anddiscouragecreationofnew,potentiallyredundantpublicentities.
• Pro:Noneedforcostsforongoinglocalelections,asrequiredforaCSD.
• Con:BoardofSupervisorsservesasCSAboard,andthereforethecommunitydoesnothavedirectcontroloftheCSA.Thiscanbepartiallyaddressedbycreationofanadvisory
54Gov.CodeSec.25214.
ItemAnnualAmount
AdministrationStaffSalaries/Benefits $79,000OtherAdmin/Overhead 45,000
TOTALExpenditures $124,000
(1)Assumes0.25FTEExec.at$220,000w/taxes,benefitsand8hrs/wkContractTech/Financeat$120,000.(2)Includes$20,000Countycostallocationforlegal,finance,etc.,and$25,000miscandcontingency.Note:CountycostallocationtoLagunaapprox.$100k.(Lagunaservicerevenuesareabout$13.5million).
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bodytooverseeCSAaffairsandtoprovidedirectiontotheBoardonCSApolicyandimplementation.
• Con:ThisoptionrequiresconcurrenceandsupportbytheCountyBoardofSupervisors.
Services
• Pro:TheCounty’sPublicWorksDepartmenthastheexperienceandexpertisetomanageaLosOlivoswastewatersystem,andtoseekgrantfundingopportunities.
RevenuesandExpenditures
• Pro:ACounty-dependentspecialdistrictislikelytoprovideadministrativeandmanagementeconomiesofscaleandcostsavingscomparedtoformationofanewCSD.
• Pro:WhiletheCounty-dependentspecialdistrictisintendedtobefinanciallyself-supportingfromrevenuesgeneratedwithinitsboundaries,theCountycouldprovideshort-termloansandotherfinancingassistanceifnecessary,atthediscretionoftheBoardofSupervisors.
• Con:County-dependentspecialdistrictcostswouldincludeallocationofCountyoverheadcoststhatcouldoffset,tosomedegree,thesavingsnotedabove.
FinancialControlsandAccountability
• Pro:Asnotedabove,annualfinancialauditingandfinancialreportingisprovidedaspartofoverallCountyprocess,reducingassociatedcostsandhelpingtoassuredisclosureandtransparency.Anadvisorycommitteewouldfurtherimprovefinancialreviewanddisclosure.
ANNEX TO SANTA YNEZ CSD (SYCSD) TheSantaYnezCommunityServicesDistrict(SYCSD)wasformedNovember15,1971andoperatespursuanttotheCommunityServicesDistrictAct(GovernmentCodeSection61000etseq.).55ItislocatedinnorthernSantaBarbaraCounty,primarilynorthofStateHighway246,threemileseastoftheCityofSolvangandaboutamileandahalfwestofStateHighway154,and4.5milesfromLosOlivos.
TheSYCSDisgovernedbyafive-memberboardofdirectors,electedat-large.AGeneralManagerisresponsibleforadministrativefunctions.
55SantaYnezCommunityServicesDistrictMunicipalServiceReviewandSOIUpdate,SantaBarbaraLAFCO,April2012
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TheDistrictcollectsandtransportswastewater.EffluentfromtheDistrictistreatedanddisposedofbytheCityofSolvang'swastewatertreatmentplant.TheDistrict,bycontract,maintainsthecollectionlines,pumpstationandwastewatertreatmentplantfortheChumashTribeIndianReservation.TheDistrictprovidesstreetlightinginthecommunity.
ANNEXATIONANDGOVERNANCETheSYCSDcouldapplytoLAFCOfortheannexationofLosOlivos,contingentonLAFCOapprovaloftheDistrict’spendingapplicationtofirstamenditsSphereofInfluencetoincludeLosOlivos.Ifitapprovestheannexation,LAFCOwouldconductprotestproceedings,includingmailingnoticetovoters.LAFCOwouldrequireanelectionontheannexationproposalifatleast25percent,butlessthan50percent,ofvotersprotesttheannexation;aprotestof50percentormorewouldterminatetheproceedings.Iffewerthan25percentprotestisreceivedattheprotesthearing,theannexationcanproceed.56
TheSYCSDboardwouldprovidepolicydirectionandoversightofDistrictoperations,includingservicestoLosOlivos.ResidentsofLosOlivoswouldparticipateinelectionsforthefivedirectorselected“atlarge”fromtheentireterritoryoftheSYCSDincludingannexedareasofLosOlivos.LosOlivos’1,000residentswouldrepresentapproximately20percentofthecombined5,000SYCSDresidentsfollowingannexation.ParticipationontheSYCSDboardwilldependontimingofopenpositionsontheSYCSDboard.
SERVICESTheSYCSDwouldmanageandoperatetheLosOlivoswastewatersystem.ExistingSYCSDstaffwouldmanageservicesandadministrativefunctions,andexistingtechnicalstaffwouldhandleongoingmaintenancefunctions,augmentedbycontractservicesasneeded.
ZONESAsnotedfortheformationofanewCSD,iftheSYCSDboardofdirectorsdeterminesthatitisinthepublicinteresttoprovidedifferentservices,providedifferentlevelsofservice,providedifferentfacilities,orraiseadditionalrevenueswithinspecificareasofthedistrict,itmayformoneormorezones.57
56GovernmentCodeSec.57075etseq.57Gov.CodeSec.61140(a).
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LAFCOTermsandConditionscouldrequirethattheSYCSDcreateaseparatezonefortheannexedterritory.AssumingLAFCOimposedsuchaterm,thiszonewouldprovidefortheestablishmentofratesspecifictoservicestoLosOlivos,andcouldalsoestablishthatservicesinLosOlivoscouldbelimitedsolelytowastewater-relatedservices.
REVENUESANDEXPENDITURESTheSYCSDwouldchargeuserfeestoLosOlivosresidentswhoareconnectedtothewastewatersystemtofundoperations,includinganallocationofSYCSDoverheadandadministrativecosts.
Inadditiontotestingandmaintenanceresponsibilities,theSYCSDwouldmanageandprovideoversightforthesystem’sconstructionandimplementation,futureconnections,andrepairandreplacement.TheDistrictwouldalsofacilitatethefundingofinitialconstructionandexpansion,includingseekinggrants,andoverseeinganyassessmentanddebtissuanceprocess.Revenuestofundmaintenanceandcapita,includingashareofSYCSDadministrationandoverhead,wouldcomeexclusivelyfromrevenuesgeneratedfromwithintheLosOlivosarea.
OperatingCostsEstimatedoperatingcostsarebasedonAECOMestimatesfortheproposedsystem.Theoperatingcostsincludestaff,suppliesandequipment,andreservesforreplacement.ItisassumedthatallgovernanceoptionswouldincursimilarcostsforoperationofthesystemandwouldallocateandbillthosecoststotheLosOlivosratepayers.Thebilledcostswouldincludeadministrativeandoverheadchargesasdescribedbelow.
AdministrationandOverheadTable5estimatestheallocationofSYCSDadministrativeandoverheadcoststoLosOlivospropertyownersproportionatetothenumberofconnections.58InadditiontooperatingandcapitalcostsfortheLosOlivoswastewatersystem,whichareaddressedseparatelyinthisreport,itisassumedthatSYCSDwouldallocateashareofthefollowingcosts:
• GeneralManagerandSecretary/Treasurer–CurrentlytheSYCSDallocatesapercentageofthecostofitsGeneralManagerandSecretary/Treasurertodifferentfunctions,includingadministration;operations;andtheTribecollectionsystemandtreatmentplant.Allocatingthesecosts(otherthantheTribe’scosts)overabroaderratebasethatincludesLosOlivoscouldimproveeconomiesofscaleandreducecoststoexistingSYCSDratepayers.TheestimatedLosOlivosallocationisbasedontheapproximatenumberofLosOlivosconnectionsrelativetototalSYCSDconnections.
58CorrespondencewithSYCSD,August31,2016.
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TheLosOlivosoperatingcostswouldaccountfornearly50%ofSYCSDcosts,post-annexation,butonly33%ofconnections.This33%factorisappliedtotheGeneralManagerandSecretary/Treasurercosts(includingtaxes,benefitsandworkerscomp)currentlyallocatedtoSYCSDoperationstotaling$141,500,foranallocationof$47,200.
• OverheadContributionandAdministrativeFee–InadditiontoashareoftheGeneralManagerandSecretary/Treasurercostsallocatedtooperations,itisassumedthatLosOlivosrateswouldincludeashareofSYCSD’scurrentoverheadandadministrativecoststotalingapproximately$200,000(afterdeductingTribecontributions).A33%sharewouldallocate$66,900toLosOlivos.
Theestimatedannualcostsof$114,100allocatedtoLosOlivoswouldberefinedifthisoptionmovesforward.ActualchargeswillnotbedetermineduntiltheLosOlivossystemhasbeendesignedandtheareaincludedwithintheSYCSDSphereofInfluence.ThestaffallocationsassumethatnoadditionaladministrativeoroverheadstaffwillneedtobehiredfollowingannexationandoperationoftheLosOlivossystem,andthattheadministrativestaffcanhandletheadditionalresponsibilitieswithoutadverselyaffectingservicestoexistingSYCSDratepayers.
Table5EstimatedOverheadandAdministrativeCostAllocations-SYCSDAnnexation
Item Amount Comments
OperatingCostsLosOlivosOperatingCosts(1) 685,934 49% Estimatefrom2013PFS(underrevision)SYCSDOperatingCosts(2) 711,650 51% Excludingadministration&Tribecollection/plantTotal $1,397,584 100% SYCSDOperationsafterLosOlivosAnnexation
ConnectionsLosOlivos 400 33%SYCSD 800 67%Total 1,200 100%
ManagementAllocations:CurrentSYCSDOperations(3)GeneralManager42% 78,000 42%ofsalaryw/ 35% taxes,benefits,workerscompSecretary/Treasurer60% 63,526 60%ofsalaryw/ 35% taxes,benefits,workerscompTotal $141,526 Managementcostsallocatedtoexpandedoperations
TotalAllocationtoLosOlivosOperations(4)Management 47,175 33%LOshareoftotalconnectionstimestotalop'smanagementAdmin/Overhead 66,900 33%LOshareoftotalconnectionstimestotalOH/adminTotal $114,075 note:TribecontributionsdeductedfromtotalOH/admin
(1)Estimatefrom2013PFS(underrevision);includesoperationsstaff,equipmentandsupplies,reservesforrepair/replacement.Updatescostswilladdinsurance.(2)FY16-17budget,OperationsexcludingTribecollection/plant.(3)FY16-17budget,shareofGMandSecretary/Treasurersalariesallocatedtooperations(excludesTribe).(4)Admin/Overheadallocationbasedonadmin.andbldg.budgetof$245,700lessTribecontributionof$45,000.AllocationproportionatetoLosOlivosconnectionsas%oftotal.
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FINANCIALCONTROLSANDACCOUNTABILITYTheSYCSDbudgetandfinancialreportswoulddocumentandaccountforservicestoandrevenuesfromtheLosOlivosarea.Costs,revenues,assetsandliabilitiesspecifictoLosOlivosshouldbeseparatelytracked;thecreationofaLosOlivoszonewouldhelptosegregatethefinancialreportingforthearea.
TheSYCSDwouldberesponsibleforpublicoutreachanddisseminationoffinancialandotherinformation.TheDistricthasprovidedinformationanddocumentsrequestedforthecurrentStudyinatimelymanner,buttheDistrict’swebsitehasnotbeenoperationalsincelate2015,limitingitsabilitytoprovideinformationtothecommunity.
ADVANTAGESANDDISADVANTAGESOFANNEXATIONTOSYCSDGovernance
• Pro:AnnexationtoSYCSDisconsistentwithLAFCOpolicies,thirdinprioritybehindcityannexationandCountyCSAformation,whichgenerallyencourageconsolidationoffunctionswithexistingagencies,anddiscouragecreationofnew,potentiallyredundantpublicentities.
• Pro:CostsofelectionswouldbesharedwiththerestofSYCSD.
• Con:TheSYCSDboardwillmanageservicesprovidedtoLosOlivos,ratherthanalocallyelectedboardofLosOlivosresidents,aswouldbethecasewithanewCSD.ThiscanbeaddressedtosomedegreebycreationofanadvisoryboardtoprovideinputtotheSYCSD.
• Con:TheSYCSDboard,ratherthanalocallyelectedboard,wouldcontroldecisionsregardingwastewatercapacityandexpansion,aswellascosts,indirectlyaffectingnewgrowthanddevelopmentinLosOlivosandtheSantaYnezValley,particularlyifaregionalwastewaterplantisSYCSD’soptionforLosOlivos.
Services
• Pro:TheSYCSDhastheexperienceandexpertisetomanageaLosOlivoswastewatersystem.
• Con:TheSYCSDcouldexpandservicestoSYCSDand/oradoptchargesforservicesnotdesiredbyLosOlivosresidents,whowouldrepresentaminorityoftheSYCSDelectorate.ThiscanbeaddressedbycreationofaseparateLosOlivoszoneasaLAFCOconditionthatwouldlimitservicesinLosOlivostowastewater.
• Con:theSYCSDboardwoulddeterminetheexpansionofservicesinLosOlivos.ExpansionofserviceswouldalsobesubjecttoanyLAFCOconditionsrestrictingservicesinLosOlivosorSYCSD,andsubjecttoLosOlivosvoterapprovalofnewLosOlivostaxes.
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NewtaxesandchargesapplicabletotheentireSYCSDwouldbesubjecttovoterapprovaltheentireSYCSDelectorate,ofwhichLosOlivosrepresentsaminority.
RevenuesandExpenditures
• Pro:AnnexationtoSYCSD,similartotheformationofaCounty-dependentspecialdistrict,islikelytoprovideadministrativeandmanagementeconomiesofscaleandcostsavingscomparedtoformationofanewCSD.
• Pro:WhileservicestotheLosOlivosarea,orzone,wouldbeintendedtobefinanciallyself-supportingfromrevenuesgeneratedwithinitsboundaries,theSYCSDcouldprovideshort-termloansandotherfundingifnecessary,asdeterminedbytheSYCSDboard.TheavailabilityofSYCSDresourcesislikelytobelessrelativetoaCounty-dependentspecialdistrictoption.
• Pro:AnnualfinancialauditingandfinancialreportingisprovidedaspartofcurrentSYCSDoperations,reducingassociatedcoststoLosOlivos.
• Con:TheSYCSDcostsandchargestoLosOlivoswouldincludeanallocationofSYCSDoverheadcoststhatcouldoffset,tosomedegree,thesavingsnotedabove.
FinancialControlsandAccountability
• Pro:Asnotedabove,annualfinancialauditingandreportingisprovidedaspartofcurrentSYCSDoperations,reducingassociatedcostsandhelpingtoassuredisclosureandtransparency.ALosOlivosadvisorycommitteewouldfurtherimprovefinancialreviewanddisclosure.
• Con:TheSYCSD’swebsitehasbeennon-operationalsinceNovember2015,raisingconcernsaboutSYCSD’sabilitytocommunicatewithitscustomersinanefficientandtransparentmanner.
SANTA YNEZ WATER CONSERVATION DISTRICT ID-1 TheSantaYnezRiverWaterConservationDistrict,ImprovementDistrictNo.1(SYRWCDID-1)isnotauthorizedbyStatelawtoprovidewastewaterservices,althoughithaslatentpowerstoenterintocontractstoaccept,treatanddisposeoftreatedwastewaterfromotheragencies.SYRWCDID-1soughtlegislationin2008thatwouldhaveexpandeditsservicestoincludewastewater,buttheGovernorvetoedthebill.59Therefore,SYRWCDID-1isnotconsideredaviableentityatthistimetomanageaLosOlivoswastewatersystemintheabsenceofaseparatepublicentityinLosOlivos.AnewlyformedLosOlivosCSDorCounty-dependentdistrictcouldconsidercontractingwithID-1ifcostefficienciescouldbeachieved.
59CURRENTSANDUNDERCURRENTSINTHESANTAYNEZVALLEY,SantaBarbaraGrandJury,5/6/2010.
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4. WASTEWATER SYSTEM
ArecentreporttoSantaBarbaraCounty’sEnvironmentalHealthServicesDepartment60refinedtheanalysispreparedin2013ofLosOlivoswastewatersystemoptions.61The2016FocusedFeasibilityStudy(“FFS”)furtheranalyzedtheMembraneBioreactor(“MBR”)option.Thisoptionwasoneoffourtreatmentsystemsstudiedin2013;MBRwasanalyzedfurtherinthe2016reportbecauseofitsreducedfootprintrelativetootheroptions,anditshigherqualityeffluentcomparedtoothermethods.62The2016FFSdidnotevaluateconnectiontoaregionalsystem.The2016studydidnotevaluateaphasedsystemservingthecommercial-core,whichcouldsignificantlyreducetotalcosts,whileotherlargerresidentialpropertiesupgradeonsitesystems.
PRELIMINARY SYSTEM ThefollowinggraphicillustratesthebasiccomponentsofMBR.AsdescribedintheFFS,theMBRprocessconsistsofactivatedsludgereactors(oraerationbasins)thatusemembranefiltrationforsolidsseparation.Thesludgemustberemovedandseparatelydisposed.Thesystemincludesa300,000-gallonequalizationtankorbasininstalledtosmooththespikesinflowduringpeaktourismdays.
Figure2ComponentsofaMembraneBioreactorSystem
Source:AECOM,2016
60RevisionstoLosOlivosWastewaterSystemPreliminaryEngineeringReport(“FFS”),AECOM,September13,2016
61LosOlivosWastewaterSystemPreliminaryEngineeringReport(PreliminaryFeasibilityStudy,or”PFS”),AECOM,January8,2013
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Thetreatedeffluentissuitableforcertaintypesofnon-potablereuse(“NPR”),includingagriculturalirrigation.However,theFFSconcludedthatanNPRsystemwouldbeoflimitedbenefitduetominimaldemandforirrigationduringthewinterseasonandcoststoconstructwinterstoragefacilities,andlackofindustrialuserswithlargewaterdemands.IfasuitablenumberofNPRuserscouldbeidentified,somecostsavingscouldbeachievedinconstructingtheNPRdistributionlinesincommonwiththecollectionsystem.63
ThealternativetoNPRistheuseofinfiltrationponds,whicharereservoirswherewaterisstoredandallowedtoeitherinfiltrateintothegroundorevaporate.
The2016FFSrecommendsagravitycollectionsincetheLosOlivosterraingenerallyslopestothesouth.Aliftstationwouldberequiredsincethedisposalsiteisassumedtobetothenorthduetomorefavorablesoilconditionsthatmaximizegroundwaterrechargebenefits.
CAPITAL COSTS Table6summarizesthe2016FFScapitalcostestimates.Thelandcostassumesacquisitionof0.50acresrequiredfortherecommendedsystem,including0.20acresfora300,000-gallonequalizationtankorbasin.Thecostoftheequalizationtank,whichisrequiredtoservepeakflowsgeneratedbysummertourism,hasbeenallocatedinthecurrentreporttocommercialuses.Costsincludea20%contingency.TheEngineering,AdministrationandLegalcostsarecalculatedas35%ofconstructioncosts(excludingland).
Anadjustmenttothecommercial“LoadFactor”hasbeenaddedinthisreporttoreflectthegreaterstrengtheffluentofcertaintypesofcommercialuses.Forexample,restaurantwastewaterflowsarenotonlygreaterthanresidentialuses,buttypicallyhavea“strengthfactor”asmuchassixtimesthatofaresidentialuse.Theactualstrengthfactorswillbedeterminedbyengineeringanalysis,butaconservativefactoraveraging“2.0”(forallcommercialuses,includingrestaurants,hotels,retailandoffice)isincludedtoillustratetherelativedistributionofcostsbetweenresidentialandcommercialuses.
63FFS,Section4.2.1.
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Table6EstimatedCapitalCostsandAllocationsforaCommunityWastewaterSystem
ItemExistingTOTAL New Buildout
TotalImprovementCosts(1)EqualizationTank(comm'l)Other(allocatedperRUE)
Costsw/PotentialSavings
ResidentialUnitEquivalents(RUE's)(2)ResidentialUnitsCommercialRUE's(3)
TotalCommercialSq.ft.
$20,869,000 $20,869,000$516,000 $516,000
$20,353,000 $20,353,000
$16,827,000 $16,827,000
ResidentialUnitEquivalents(RUE's)(2)336 0 33655 29 83391 29 419
228,990 120,539 349,529
RUE'sLoadAdjustedResidential 1.00Commercial 2.00
Total
336 0 336109 57 167445 57 503
CapitalCostAllocationsResidential(RUEalloc.)Commercial
Commercial(RUEalloc.)Commercial(Tank)
SubtotalCommercial
Total
Allocation/RUEAllocation/Com'lSq.ft.
Allocationsw/SavingsResidentialCommercial
Total
Allocation/RUEAllocation/Com'lSq.ft.
(1)AECOMSept.13,2016.(2)ResidentialbasedonparcelcountinSPA;numberislessthanAECOManalysis.(3)CommercialRUE'snotshowninAECOMFFS;estimateshownbasedoncommercialflows/daydividedby221gpdavg/residentialconnection.
$15,362,700 74% $13,606,500 65%
4,990,300 6,746,500516,000 516,000
$5,506,300 26% $7,262,500 35%
$20,869,000 100% $20,869,000 100%
$45,700 $40,500$24.05 $20.78
$12,387,200 74% $10,971,100 65%4,439,800 26% 5,855,900 35%
$16,827,000 100% $16,827,000 100%
$37,800 $33,480$19.39 $16.75
(2)ResidentialbasedonparcelcountinSPA;numberislessthanAECOManalysis.(3)CommercialRUE'snotshowninAECOMFFS;estimateshownbasedoncommercialflows/daydividedby221gpdavg/residentialconnection.
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Asindicatedinthe2013PFS,“…carefulprojectplanningandmanagementcouldresultinadministrationfeesaslowas20%oftheconstructioncosts”,comparedtothe35%assumption.ThePFSfurthernotesthata“design-build”typeprojectcouldreduceadministrativecosts.ThePFScalculatedpotentialcostsavingsthatintherangeof$1,500,000ingrantsorcostreduction,andEngineering,AdministrationandLegalcostsof20%ofthetotalconstructioncosts.64
Applyingthepotentialcostreductionsdescribedabovecouldresultinsavingsofapproximately$4million,andatotalcostof$16.8million.
OPERATING COSTS The2016FFSestimatedannualoperatingcostsof$685,900assummarizedinTable7.Costsincludecollectionsystempowercosts,linecleaning,inspectionandreplacement;laborassumesoneoperatorwouldberequiredattheplantforhalfoftheday,5daysperweek.Foroneofthesedays,anadditionaloperatorwouldlikelyberequiredtoassistwithmaintenance.65
Asnotedinthe2013PFS,“O&Mcostsareapproximateandactualcostscouldbehalfofthevaluespresenteddependingonthefinalproject.”ThePFSrecommendedthatcostsavingstrategiessuchassharingpersonnelandequipmentwithsurroundingdistrictstoperformO&Mdutiesshouldbefullyexploredtolowerannualcosts.66
642013PFS,Section10.2.2.652016FFS,Section5.1.5.662013PFS,Section10.2.4.
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Table7EstimatedAnnualSystemOperatingCostsandAllocations
Item
OperatingCosts(1)CollectionSystemTreatment/Disposal
TOTALExisting
$127,400558,500
Buildout
$127,400558,500
Total $685,900 $685,900
Units,Sq.ft.andRUE'sResidentialUnits(RUE's)CommercialRUE
TotalCommercialSq.ft.
33655391
228,990
33683419
349,529
RUE'sLoadAdjustedResidential 1.0Commercial 2.0
Total
336109445
336167503
OperatingCostAllocationsResidentialCommercial
TotalAllocation/RUEAllocation/Com'lSq.ft.
OperatingCostsw/Savings(2) 50%Allocation/RUEAllocation/Com'lSq.ft.
(1)AECOMFFS,Sept.13,2016.(2)O&Mcostsavingsassumes50%reductioninoperations&maintenancecosts.
$517,725$168,175$685,900$1,541$0.73
$770$0.37
(2)O&Mcostsavingsassumes50%reductioninoperations&maintenancecosts.
$458,543$227,357$685,900$1,365$0.65
$682$0.33
(2)O&Mcostsavingsassumes50%reductioninoperations&maintenancecosts.
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5. DISTRICT BUDGET ThissectiondescribesapreliminarybudgetforaLosOlivosspecialdistrict.EstimatedcostsareshownforaCSD;dependingonthetypeofdistrictorannexation,administrativecostscouldbelessasdescribedinChapter3.Iftheproposalmovesforward,thebudgetwillberefinedadoptedbythedistrictboard.
ADMINISTRATION & OPERATING EXPENDITURES AsshowninTable8,ongoingmanagementandadministrativecostsareestimatedatjustunder$200,000annually.Thefirstyears,inadvanceofwastewatersystemoperations,areassumedtorequireasmallerbudgetofslightlyover$100,000duetolessstafftime,nooffice,andreducedequipmentexpenses.Theloweroperatingcostsmayextendfromonetothreeyears,dependingonthetimerequiredtoplanandconstructawastewatersystem.Theinitialcostscouldbefundedbyacombinationofcommunitycontributionsandassessments.
Table8EstimatedOverheadandAdministrativeCosts-LosOlivosCSD
Item FirstYear Buildout
AdministrationBoard 6,000 6,000 (3)Legal 20,000 20,000Accounting/Finance 15,000 15,000OfficeSpace,Utilities 0 (5) 15,000 (1)Equip/Supplies/Internet 2,500 (6) 5,000Memberships 3,000 3,000OtherOverhead/Admin. 10,000 17,000 (2)
Subtotal(exc.Staff) 56,500 81,000Admin.StaffSalaries/Benefits $54,000 (5) $108,000 (4)
TOTALExpenditures $110,500 (5) $189,000perResidentialUnitEquivalent(RUE) $283 (7) $376 (7)perRUEpermonth $24 $31
(1)Assumes500sq.ft.at$2.50permonth.(2)Other/Contingencyat10%ofotheradmincostsinc.staff.(3)Assumestipendof$100/month,5boardmembers.(4)50%GM/Operatorat$100k,50%Sec'yTreasurer$60k,+35%taxes,benefits.(5)Assumesfirstyear(ormore)primarilyplanningwithnooperationalstafforcontractstoadminister;50%staffassumed,andnoofficespacerequired.(6)Equipment/Supplies/Internetreducedfirstyearduetonoofficespace.(7)ResidentialUnitEquivalentsare"LoadAdjusted"forcommercialstrengthfactor.
AnnualAmount
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Thebudgetassumesapart-timeGeneralManagerandpart-timesecretary/treasurer.ThestaffmaybeemployeesoftheDistrict,ormaybecontractedservicesfromaprivatefirmoranotherpublicagency.Similarly,theDistrictmaycontractforotherservicessuchasaccounting,fromaprivatefirmorpublicagency.Acontingencyof10percentofnon-staffcostsisincluded.Theactualmannerofobtainingservices,levelsofservices,andassociatedbenefitspaid(ifemployees)willbedeterminedbyafutureCSDBoard.
WASTEWATEROPERATIONSAsdescribedinChapter3,the2016FFSestimatesannualoperatingcostsat$686,000.Theprior2013studynotedthatthesecostscouldbeupto50%lowerdependingonthefinaldesign,anddependingonpossiblesavingsbycontractingwithsurroundingdistricts.
OPERATING REVENUES AND RATES Table9illustratespotentiallyratesrequiredtocovertheprojectedadministrativeandsystemoperatingcosts,withandwithoutpotentialoperatingcostsavings.Withtheassumedsavings,ratesapproachthoseofothertertiarytreatmentsystemsintheregion(seeAppendixA).
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Table9EstimatedTotalAnnualAdmin.andOperatingCostsandRates-LosOlivosCSD
Actualrateswilldependonthespecificfinalsystemdesign,districtmanagementandadministrativecosts,andcontractingandratedecisionstobemadebytheBoardofDirectors.
Item FirstYear Ongoing Buildout
AdminandOperatingCostsAdmin/Overhead $110,500 $189,000 $189,000WastewaterSystemOperations 685,900 685,900
Total $110,500 $874,900 $874,900
Units,Sq.ft.andRUEs(LoadAdjusted)ResidentialUnits(RUEs) 336 336 336CommercialRUEs 109 109 167
Total 445 445 503CommercialSq.ft. 228,990 228,990 349,529
TotalAdminandOperatingCostAllocationsResidential $83,400 $660,400 $584,900Commercial 27,100 214,500 290,000
Total $110,500 $874,900 $874,900
Allocation/RUE $248 $1,965 $1,741Allocation/Com'lSq.ft. $0.12 $0.94 $0.83
Allocationsw/Savings(1)Residential $83,400 $401,500 $355,600Commercial 27,100 $130,400 $176,300
Total $110,500 $531,900 $531,900
Allocation/RUE $248 $1,195 $1,058Allocation/Com'lSq.ft. $0.12 $0.57 $0.50
(1)Assumesupto50%potentialsystemoperationssavings.
AnnualAmount
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6. CAPITAL EXPENDITURES AND FUNDING
AsdescribedinChapter3,costsfortheproposedsystemtotal$20.9million,or$16.8millionifpotentialcostsavingscanbeachieved.Totalcostscouldbesignificantlylowerifthesystemisphasedtofirstserveonlythecommercialcore,withotherlargerresidentialpropertiesupgradingtoimprovedonsitesystems.Thesecostsareassumedtobethesameforallgovernanceoptions.Additionalgrantfundingmaybepossibleforplanning,designandconstructiontofurtherreducecosts.Remainingcostsarelikelytobefundedthroughdebtissuancesecuredbybenefitassessmentspaidbypropertyowners,asdescribedbelow.
CAPITAL FINANCING Arangeoffundingsourcesmaybetappedtohelppayforthesystem’splanningandconstructioncosts.Loansmayalsobeutilizedwherepossibletoreducefinancecosts.Examplesoffundingsourcesinclude:
• CountyofSantaBarbara
• StateWaterResourceControlBoard’sCleanWaterStateRevolvingFundandWaterRecyclingFundingProgram
• UnitedStatesDepartmentofAgriculture’sWaterandWasteDisposalLoanandGrantProgram
Thegovernanceentitywillneedtoinvestigateandapplyforthesesources,andexploreotheropportunitiesforrelatedfunds,forexample,tohelpfundsustainableenergysourcessuchassolarpanelstohelpreduceoperatingcosts.
Table10illustratesthepotentialallocationofcapitalcostsbeforeandafterpossiblecostreductionsdiscussedinChapter3.ThetotalcostsareallocatedtoResidentialUnitEquivalents(“RUE’s).Thetablealsoshowsanaverageloadadjustmentof“2”toreflecttheincreasedcostsattributabletowastewaterfromcommercialuses,whichvariesdependingonthetypeofuse;forexample,restaurantsnotonlygeneratesignificantlygreaterflowsthanofficeortypicalretail,butthewaste“strength”alsorequiresadditionalcoststoprocess.Forexample,theSYCSDratesincludeastrengthfactorof“6”forrestaurants.Theactualadjustmentfactorswillbedeterminedaftermoredetailedengineeringanalysis,anddecisionstobemadebyafuturegoverningboard.
Theallocationsofcostshavebeenadjustedforequipmentrequiredbycommercialuses.Forexample,thesystemdesignincludesan“equalizationtank”tohandlepeakflowsduringthesummerfromtourists;thesecostsareallocatedtocommercialuses.
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Table10EstimatedCapitalCostAllocations
ItemExistingTOTAL New Buildout
TotalImprovementCosts(1)EqualizationTank(comm'l)Other(allocatedperRUE)
Costsw/PotentialSavings
ResidentialUnitEquivalents(RUE's)(2)ResidentialUnitsCommercialRUE's(3)
TotalCommercialSq.ft.
$20,869,000 $20,869,000$516,000 $516,000
$20,353,000 $20,353,000
$16,827,000 $16,827,000
ResidentialUnitEquivalents(RUE's)(2)336 0 33655 29 83391 29 419
228,990 120,539 349,529
RUE'sLoadAdjustedResidential 1.00Commercial 2.00
Total
336 0 336109 57 167445 57 503
CapitalCostAllocationsResidential(RUEalloc.)Commercial
Commercial(RUEalloc.)Commercial(Tank)
SubtotalCommercial
Total
Allocation/RUEAllocation/Com'lSq.ft.
Allocationsw/SavingsResidentialCommercial
Total
Allocation/RUEAllocation/Com'lSq.ft.
(1)AECOMSept.13,2016.(2)ResidentialbasedonparcelcountinSPA;numberislessthanAECOManalysis.(3)CommercialRUE'snotshowninAECOMFFS;estimateshownbasedoncommercialflows/daydividedby221gpdavg/residentialconnection.
$15,362,700 74% $13,606,500 65%
4,990,300 6,746,500516,000 516,000
$5,506,300 26% $7,262,500 35%
$20,869,000 100% $20,869,000 100%
$45,700 $40,500$24.05 $20.78
$12,387,200 74% $10,971,100 65%4,439,800 26% 5,855,900 35%
$16,827,000 100% $16,827,000 100%
$36,870 $32,650$19.39 $16.75
(2)ResidentialbasedonparcelcountinSPA;numberislessthanAECOManalysis.(3)CommercialRUE'snotshowninAECOMFFS;estimateshownbasedoncommercialflows/daydividedby221gpdavg/residentialconnection.
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AlikelysourceoffinancingistheUSDept.ofAgriculture(USDA),whichoffersloansthroughitsRuralUtilitiesServiceWaterandEnvironmentalPrograms(WEP)fortheconstructionofwastefacilitiesinruralcommunities.Theprogramistargetedtocommunitieswithpopulationslessthan10,000.Theseloansarecommonlyusedforcapitalfundingbypublicagenciesandofferlowinterestratesandlongamortizationterms.Currentlyinterestratesarebetween1.625%and2.75%for40-yearloans.
Table11showstheannualdebtserviceforaloantofundthesystem’scosts.Thedebtamountincludes$150,000forcompletingtheUSDAapplication,preparinganengineer’sReportforassessments,forminganassessmentdistrictandconductingavotetoapprovetheassessmentdistrict.Theassumedinterestrateisassumedat3%;actualrateswilldependonfinancingconditionsatthetimethedebtisissued.Debtissuanceisapproximately10%ofthearea’sassessedvalue.
GRANTSInadditiontoitsloanprogram,theUSDAalsooffersWasteDisposalPredevelopmentPlanningGrants,andotherformsofgrantsforconstruction.Itisanticipatedthatafuturegoverningboardandstaffwillpursuegrantstohelpfundthesystemandreducecoststoratepayers.
ASSESSMENTSTable11calculatesannualassessmentbasedonthesystem’scostanddebtfinancingasdescribedabove.Theallocationstocommercialusesincludea“loadfactor”toaccountfortheadditionalwasteprocessingrequiredforcommercialwaste.Anassessmentengineerwilldeterminetheactualassessments,andthegoverningboardofthedistrictwilladoptassessments.Assessmentsarelikelytovarybyspecificcommercialandresidentialuse.
Althoughabenefitassessmentisafixedamountperparcel,thetableillustratestherelativeincreaseintaxburdenwhentheassessmentsareaddedtoexistingpropertytaxratesof1.07%ofassessedvalue.Theresultingequivalentratesrangefrom1.44%to1.53%comparedtototalassessedvalueinthearea.Theequivalenttaxrateswillvarybyspecificpropertiesdependingontheirvalue.Theseaverageratesarelessthangenerallyacceptedmaximumcapsof1.8-2.0.Totaldebtisapproximately10%oftotalareavalue.
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Table11EstimatedAnnualAssessments
ItemExistingTOTAL Buildout
RUE'sLoadAdjustedResidential 1.00Commercial 2.00
Total
DebtIssuanceImprovementCostsIssuanceCosts(1)
336 336109 167445 503
$20,869,000 $20,869,000$150,000 $150,000
TotalDebtw/PotentialSavings
$21,019,000 $21,019,000$16,977,000 $16,977,000
AnnualDebtService(2) 3.0% $909,000 $909,000
AnnualDebtServiceAllocations-LoadAdjustedResidentialCommercial
TotalAllocation/RUEAllocation/Com'lSq.ft.
AnnualDebtServiceAllocations-LoadAdjusted$685,400 $608,200$222,700 $301,500$908,100 $909,700$2,040 $1,810$3.97 $2.60
AnnualDebtServicew/SavingsAllocation/RUEAllocation/Com'lSq.ft.
$734,000 $734,000$1,650 $1,460$3.21 $2.10
AssessedValueResidentialCommercial
TotalA.V.(3)DebtService/TotalA.V.Totalw/currentTaxOverridesTotalw/savings
(1)Estimatedissuancecostsincludeloanprocess/application,assessmentengineer'sreport,assessmentdistrictformation/vote.(2)Rates(8/2016)arebetween1.625%and2.75%;40yearUSDAloan.(3)Includesunsecureda.v.Excludes23vacantparcelsand42ranchoestates.
Burden Burden$137,600,000 0.50% $137,600,000 0.44%$63,400,000 0.35% $88,018,899 0.34%
$201,000,000 $225,618,8990.45% 0.40%1.53% 1.48%1.44% 1.40%
(1)Estimatedissuancecostsincludeloanprocess/application,assessmentengineer'sreport,assessmentdistrictformation/vote.(2)Rates(8/2016)arebetween1.625%and2.75%;40yearUSDAloan.(3)Includesunsecureda.v.Excludes23vacantparcelsand42ranchoestates.
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APPENDIX A
SUMMARYOFSEWERRATESINTHEREGIONSource:LagunaSanitationDistrictpresentationre:FY16-17rates
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Treatment Level Agency Monthly Rate Inc. Tertiary $113.45* 3.0%
10.5% 6.0%
$ 84.00 $ 80.31 $ 75.67
Secondary $102.40* $ 82.17* 3.7% $ 69.87 3.7% $ 66.00 $ 63.40* $ 61.26* $ 47.87 5.5% $ 40.78* 9.6% $ 36.57* $ 36.05 3.1% $ 34.65 1.6% $ 19.20 5.0%
Primary $ 39.53
Summerland Lompoc Laguna Vandenberg Village
Montecito Santa Ynez Mission Canyon Cuyama Los Alamos Carpinteria Santa Barbara Goleta West Sanitary Goleta Sanitary Guadalupe Solvang Santa Maria
Mission Hills Buellton $ 25.00
Average $ 59.91
* These rates include estimated property tax contributions.