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Focused Municipal Service Review 10/10/2018 FOCUSED MUNICIPAL SERVICE REVIEW City of San Juan Capistrano Water and Wastewater Utilities ORANGE COUNTY LOCAL AGENCY FORMATION COMMISSION TABLE OF CONTENTS I. INTRODUCTION .......................................................................................................................................... 1 MSR Background and Determinations ...................................................................................................... 2 Focused MSR Overview ............................................................................................................................. 4 Governance Alternatives ........................................................................................................................... 7 Affected Agencies’ Profiles ....................................................................................................................... 8 II. FOCUSED MSR DETERMINATIONS .......................................................................................................... 17 III. PLAN FOR SERVICE……………………………………………………………………………………………………………………………..45 IV. MSR Assessments (See Appendices 1 and 2) LIST OF EXHIBITS AND APPENDICES Exhibit 1: City of San Juan Capistrano Vicinity Map ......................................................................................5 Exhibit 2: City of San Juan Capistrano Population ..……..…………………….………………………………………………..…..6 Exhibit 3: City of San Juan Capistrano Profile ............................................................................................. ..9 Exhibit 4: City of San Juan Capistrano Sphere of Influence Map ................................................................ 10 Exhibit 5: Moulton Niguel Water District Profile ........................................................................................ 11 Exhibit 6: Moulton Niguel Water District Sphere of Influence Map ........................................................... 12 Exhibit 7: Santa Margarita Water District Profile ....................................................................................... 13 Exhibit 8: Santa Margarita Water District Sphere of Influence Map .......................................................... 14 Exhibit 9: South Coast Water District Profile .............................................................................................. 15 Exhibit 10: South Coast Water District Sphere of Influence Map ............................................................... 16 Appendix 1: Focused MSR Infrastructure Assessment Appendix 2: Focused MSR Fiscal Assessment i | P a g e Focused MSR for City of San Juan Capistrano Utility Systems October 10, 2018 I. INTRODUCTION The City of San Juan Capistrano Focused Municipal Service Review (MSR) contains seven key sections: MSR Background and Determinations, Focused MSR Overview, Governance Alternatives, Affected Agencies’ Profiles, Focused MSR Determinations, Plan for Service, and the Focused MSR Assessments (Infrastructure and Fiscal). To provide an overview of the MSR’s content and organization for the reader, a general description of each section is summarized below: • MSR Background and Determinations – provides the background on the history and legislative requirements for MSRs and brief discussion of each of the MSR determinations. This section also summarizes the MSR processes conducted by Orange County Local Agency Formation Commission (OC LAFCO) since the early 2000s. • Focused MSR Overview – provides an overview of the following: 1) application submitted by the City of San Juan Capistrano to explore the potential transfer of its water and wastewater operations and facilities to a public successor agency; and, 2) discussion of the focus study area’s location, land use, and population and the history of the City’s utility systems. • Governance Alternatives – provides a discussion of the existing provision of water and wastewater services within the MSR focus area and an overview of the potential governance alternatives that may improve service efficiency in accordance with Government Code Section 56430(b). • Affected Agencies’ Profiles – provides operational profiles for the City of San Juan Capistrano (CSJC) and each of the alternative service providers included in the MSR: Moulton Niguel Water District (MNWD), Santa Margarita Water District (SMWD), and South Coast Water District (SCWD). The profiles provide a snapshot of each agency’s key services, service area map, and an overview of the governance structure. This section also includes data on each agency’s water and wastewater infrastructure system. • Focused MSR Determinations – includes the written statement of determinations required for MSRs in accordance with Government Code Section 56430. This section of the report includes a discussion of the MSR determinations for the CSJC and each of the three alternative service providers reviewed in the focused MSR. 1 | P a g e Focused MSR for City of San Juan Capistrano Utility Systems October 10, 2018 • Plan for Service – includes the requirements of a plan for service in accordance with Government Code Section 56653 and other recommended areas to be addressed by the three alternative service providers relative to the potential annexation of the CSJC’s utility systems. • Focused MSR Assessments – provides in-depth analyses of the CSJC and three alternative service providers in the following areas and are intended to inform OC LAFCO, CSJC and affected agencies as to options regarding transferring of CSJC’s systems and services: 1) Infrastructure Assessment (Appendix 1) – an assessment of the CSJC’s water and wastewater infrastructure systems that is also intended to inform the OC LAFCO and CSJC as to options regarding the transferring of these infrastructure and operations to a public successor agency. This assessment focuses on MSR Determination #3, “the present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies.” 2) Fiscal Assessment (Appendix 2) – an assessment of the present fiscal conditions of the CSJC’s systems and potential alternative service providers. This assessment focuses on MSR Determination #4, “the financial ability of an agency to provide services” and MSR Determination #6, accountable and efficient governance structure and operational efficiencies, as related to the potential transfer of the CSJC’s utility systems. MSR BACKGROUND AND DETERMINATIONS In 1997, the State Legislature convened a special commission to study and make recommendations to address California’s rapidly accelerating growth. The Commission on Local Governance for the 21st Century focused their energies on ways to empower the already existing County LAFCOs, originally established in 1963. One of the major new responsibilities of LAFCOs that came out of the effort of this Commission was to begin conducting regional studies of municipal services (Municipal Service Reviews, or MSRs) every five years. MSRs are a way to assist agencies and residents by: (1) evaluating existing municipal services and relevant alternatives, and (2) identifying any future constraints or challenges that may impact service delivery in the future. 2 | P a g e Focused MSR for City of San Juan Capistrano Utility Systems October 10, 2018 The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 requires that LAFCOs review municipal services before updating the spheres of influence and to prepare a written statement of determination with respect to each of the following: 1) Growth and population projections for the affected area. 2) The location and characteristics of any disadvantaged communities within or contiguous to the sphere of influence. 3) Present and planned capacity of public facilities, adequacy of public services, and infrastructure needs or deficiencies related to sewers, municipal and industrial water, and structural fire protection in any disadvantaged, unincorporated communities within or contiguous to the sphere of influence. 4) Financial ability of agencies to provide services. 5) Status of, and opportunities for, shared facilities. 6) Accountability for community service needs, including governmental structure and operational efficiencies. 7) Any other matter related to effective and efficient service delivery, as required by commission policy. To meet these statutory requirements, OC LAFCO has conducted multiple MSRs involving Orange County cities, special districts, the County and other municipal service providers. MSRs for the City of San Juan Capistrano and the three potential alternative service providers (Moulton Niguel Water District, Santa Margarita Water District and South Coast Water District) were conducted as a part of these processes. Information from these past studies, where relevant, were considered in completing this service review. The MSR process does not require OC LAFCO or an affected agency to initiate changes of organization based on service review findings; it only requires that OC LAFCO make determinations regarding the provision of public services per Government Code Section 56430. MSRs are not subject to the provisions of the California Environmental Quality Act (CEQA) because they are only feasibility or planning studies for possible future action that OC LAFCO has not approved (Cal. Pub. Res. Code § 21150). The ultimate outcome of conducting a service review, however, may result in OC LAFCO updating a single or multiple spheres of influence and may be used in subsequent consideration
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