City of Santa Clarita Municipal Service Review & Sphere of Influence Update

Transcription

1 City of Santa Clarita Municipal Service Review & Sphere of Influence Update Including summary reviews of the following special districts and agencies serving the City of Santa Clarita: Castaic Lake Water Agency Consolidated Fire Protection District of Los Angeles County Greater Los Angeles Vector Control District Los Angeles County Sanitation Districts Newhall County Water District Santa Clarita Water Division Valencia Water Company Final Draft MSR Report April 2, C ity of Santa Clarita MSR

2 Table of Contents EXECUTIVE SUMMARY... 5 Background... 5 Financial Summary... 6 INTRODUCTION... 8 Background... 8 Composition of the Commission... 9 What are LAFCOs? What LAFCOs Can and Cannot Do Purpose of Municipal Service Reviews CHAPTER 1: CITY OF SANTA CLARITA PROFILE Exhibit A Santa Clarita City and Sphere of Influence Boundary Population Employment Land Use Sphere of Influence City Government Table 1 - City of Santa Clarita Key Services Table 2 - Financial Information (FY /FY ) Table 3 City of Santa Clarita General Fund Revenue Summary Table 4 - City of Santa Clarita General Fund Expenditure Summary Table 5 - City of Santa Clarita Special Funds Summary Table 6 - City of Santa Clarita RDA Summary Table 7 - City of Santa Clarita 5-Year CIP Projection Table 8 - City of Santa Clarita Fund Balances CHAPTER 2: PROPOSED ANNEXATIONS TO THE CITY OF SANTA CLARITA Proposed Annexations to the City of Santa Clarita Table 9 Proposed Annexations to the City of Santa Clara Exhibit B Proposed Annexations and Sphere of Influence for the City of Santa Clarita Proposed Copperstone Annexation to the City of Santa Clarita Table 10 - Copperstone Annexation Area Service Providers City of Santa Clarita MSR

3 Proposed Elsmere Annexation to the City of Santa Clarita Table 11- Elsmere Annexation Area Service Providers Proposed Norland Road Annexation to the City of Santa Clarita Table 12 - Norland Road Annexation Area Service Providers North Copperhill Annexation to the City of Santa Clarita Table 13 - North Copperhill Annexation Area Service Providers Soledad Commons Annexation to the City of Santa Clarita Table 14 - Soledad Commons Annexation Area Service Providers Vista Canyon/Fair Oaks Annexation to the City of Santa Clarita Table 15 - Vista Canyon/Fair Oaks/Jakes Way Annexation Area Service Providers South Sand Canyon Annexation to the City of Santa Clarita Table 16 - South Sand Canyon Annexation Area Service Providers CHAPTER 3: DISTRICTS AND AGENCIES SERVING THE CITY OF SANTA CLARITA Introduction Regional Districts Consolidated Fire Protection District Exhibit C Consolidated Fire Protection District of Los Angeles County SOI Boundary Table 17 - Financial Information (FY /FY ) (OP/CIP) County Sanitation Districts Exhibit D Los Angeles County Sanitation Districts Table 18 - Financial Information (FY /FY ) (OP/CIP) Greater Los Angeles Vector Control District Exhibit E Greater Los Angeles County Vector Control District Table 19 - Financial Information (FY /FY ) (OP/CIP) Water Agencies Exhibit F Santa Clarita Water Agencies Castaic Lake Water Agency Exhibit G Castaic Lake Water Agency Table 20 - Financial Information (FY /FY ) Table 21 - Castaic Lake Water Agency FY 10/11 & FY 11/12 Fund Balances Table 22 - Castaic Lake Water Agency FY Projected Reserve Table 23 - Castaic Lake Water Agency 5-Year Operating Fund Projection C ity of Santa Clarita MSR

4 Table 24 - Castaic Lake Water Agency 5-Year COP Debt Service Coverage Projection Table 25 - Summary of Projected Water Demands Capital Improvement Plan (CIP) Funding Table 26 - Castaic Lake Water Agency CIP Categories/Expenditures Newhall County Water District Exhibit H Newhall County Water District Table 27 - Financial Information (FY /FY ) Table 28 - Newhall County Water District FY 10/11 & FY 11/12 Fund Balances Table 29 - Newhall County Water District 5-Year Operating/CIP Fund Projection Table 30 - Newhall County Water District 5-Year Reserve Fund Projection Capital Improvement Plan (CIP) Funding Table 31 - Newhall County Water District CIP Categories/Expenditures Santa Clarita Water Division Exhibit I Santa Clarita Water Division Table 32 - Financial Information (FY /FY Estimates) Table 33 - Santa Clarita Water Division FY 10/11 & FY 11/12 Reserve Fund Balances Capital Improvement Plan (CIP) Funding Table 34 - Santa Clarita Water Division CIP Categories/Expenditures Valencia Water Company Exhibit J Valencia Water Company Table 35 - Financial Information (CY 2010 & CY 2011) Water Supply and Delivery Issues City of Santa Clarita Table 36 - Summary of Current and Planned Water Supplies and Banking Programs (AF) Santa Clarita Valley Table 37 - Groundwater Production (AF) for Santa Clarita Aquifers Table 38 - Recent Historical Groundwater Production (AF) Table 39 - Projected Groundwater (AF) Production in Normal Year Table 40 - Recycled Water Master Plan Participating Agencies Table 41 - Projected Wastewater Generation Available for Recycled Water Use (AF) Table 42 - Projected Multiple-Dry Year Supplies and Demands (AF) CHAPTER 4: MSR DETERMINATIONS THE CITY OF SANTA CLARITA City of Santa Clarita: MSR Determinations C ity of Santa Clarita MSR

5 Table 43 - City of Santa Clarita: MSR Determinations CHAPTER 5: SOI RECOMMENDATIONS THE CITY OF SANTA CLARITA City of Santa Clarita: Sphere of Influence Recommendations Exhibit K City s Proposed Sphere of Influence Exhibit L Recommended Sphere of Influence for the City of Santa Clarita Table 44 - City of Santa Clarita: SOI Determinations R E F E R E N C E S C ity of Santa Clarita MSR

6 EXECUTIVE SUMMARY Background In creating Local Agency Formation Commissions (LAFCOs), the State Legislature recognized that the logical formation of local agency boundaries is an important factor in promoting orderly development, and in efficiently extending municipal services. One of the statutory requirements for each LAFCO is to establish a sphere of influence (SOI) for cities and special districts. An SOI is defined in Government Code Section as a plan for the probable physical boundaries and service area of a local agency, as determined by the commission. LAFCOs are required to review and update each city s and each special district s SOI every five years, or as necessary. In order to prepare and to update an SOI, however, LAFCO must conduct a service review of the municipal services provided and prepare a written statement of its determinations with respect to each of the following: Growth and population projections for the affected area. Present and planned capacity for public facilities and adequacy of public services, including infrastructure needs or deficiencies. Financial ability of agencies to provide services. Status of, and opportunities for, shared services. Accountability for community service needs, including governmental structure and operational efficiencies. Any other matter related to effective or efficient service delivery, as provided by Commission policy. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. The City of Santa Clarita Municipal Service Review (MSR) study area includes approximately square miles - all of the territory within the City s current boundary (52.66 square miles) plus all of the territory within the City s proposed SOI (38.85 square miles). Additionally, the MSR includes a discussion of seven unincorporated areas proposed for annexation to the City, and a summary review of the following special districts and agencies which provide services to Santa Clarita residents: Castaic Lake Water Agency Consolidated Fire Protection District of Los Angeles County Greater Los Angeles Vector Control District Los Angeles County Sanitation District (Santa Clarita Valley Sanitation District) Newhall County Water District Santa Clarita Water Division Valencia Water Company The City of Santa Clarita and the County of Los Angeles have recently undertaken a joint planning process for the comprehensive planning of the Santa Clarita Valley. Called the One Valley One Vision 5 C ity of Santa Clarita MSR

7 planning effort, it has resulted in the adoption of a new City of Santa Clarita General Plan and a Santa Clarita Valley Area Plan (adopted by the County), with consistent land uses and common goals and policies. It is intended to serve as a long-term blueprint for the Santa Clarita Valley over the next 20 years. The One Valley One Vision planning process was facilitated by the availability of current data including, but not limited to, 2010 Census data, local and regional transportation analysis data, and the recently completed joint Urban Water Management Plan prepared for the Santa Clarita Valley water agencies. Between January 2011 and December 2011, the City of Santa Clarita filed seven annexation applications with LAFCO. LAFCO commissioned this MSR to evaluate the proposed annexations and proposed SOI expansion. The City s proposed SOI generally includes: A significant reduction to the existing SOI in the Vasquez Canyon area north of the City; An expansion of the SOI to include North Tesoro and adjacent areas; A reduction of the SOI in the San Francisquito Canyon area; and An expansion of the SOI to include territory both south and east of the existing City limits. A recommended SOI alternative is also included for consideration which, among other modifications to the City s alternative, proposes: A deletion of the proposed expansion of the SOI on the east side of the City; An expansion of the SOI south of the City to include the area adjacent to the confluence of the I-5 and Antelope Valley Freeways; and A deletion of the entire San Francisquito Canyon area from the City s SOI. Both SOI alternatives are discussed in detail in Chapter 5 of this report. Financial Summary The City of Santa Clarita is in sound financial condition and has weathered the economic down turn well. Short-term and long-term General Fund and Special Funds revenue and budgetary projections, coupled with strong reserve balances, have placed the City in a good position to emerge from the recession in relatively good condition. Prudent budgetary and management policies have allowed the City to adjust quickly and efficiently to what can now be termed as the new normal with respect to revenues. With the economic recovery at a slow crawl, it will be well into the future before property tax and sales tax revenues will return to pre-recession levels. The City has anticipated this dynamic well, and has planned accordingly. However, with the recent Supreme Court decision abolishing redevelopment agencies, it is unclear to what extent the impact will be on the City. The City will have to carefully assess this impact on the City s General Fund, if any, once the County Auditor-Controller determines the disposition of the redevelopment tax increment per the legislative requirements. The City has proposed seven annexations for the near future and several SOI expansions. Review of each of the proposed annexations indicates that, in most cases, revenues generated from the proposed annexations will be sufficient to offset any additional costs of services. Several of the proposed annexations involve significant open space and limited servicing requirements. The proposed 6 C ity of Santa Clarita MSR

8 annexations, taken individually and collectively, should not require any significant increase in City staffing. The primary additional service cost will be in law enforcement. However, this cost will be limited primarily to the two larger residential area annexations. Overall, current and future revenues that will accrue to the City should be sufficient to offset these costs. A key component of the revenue offset will be the property tax exchange agreement that will be required between the County and the City. The City of Santa Clarita MSR determinations indicate that while population growth within the Santa Clarita Valley (projected to increase by 32 percent by 2035) will continue to be a major issue for decades to come, the City appears well-positioned to provide an adequate level of services to existing and future residents. The proposed SOI expansion areas are primarily open space areas with some future development. As these areas are considered for future annexations, additional analysis should be performed to ascertain the financial impact to the City on a revenue generation to cost of services basis. 7 C ity of Santa Clarita MSR

9 INTRODUCTION Background 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 21 st Century focused their energies on ways to empower the already existing Local Agency Formation Commissions (LAFCOs), originally established in The Commission s final report, Growth Within Bounds, recommended various changes to local land use laws and LAFCO statutes. Assembly Speaker Bob Hertzberg incorporated many of the recommendations of the Commission into the Cortese-Knox- Herzberg Local Government Reorganization Act of The law provided LAFCOs with additional responsibilities and powers. Beginning in 2001, LAFCOs in each county in California were required to review and, as necessary, update the sphere of influence (SOI) of each city and special district. SOIs are boundaries, determined by LAFCO, which define the logical, ultimate service area for cities and special districts. No SOI can be updated, however, unless the LAFCO first conducts a Municipal Service Review (MSR). California Government Code Section provides that LAFCOs, upon receipt and consideration of an MSR, are required to adopt written findings addressing each of the following seven issues: 1. Growth and population projections for the affected area. 2. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies. 3. Financial ability of agencies to provide services. 4. Status of, and opportunities for, shared facilities. 5. Accountability of community service needs, including governmental structure and operational efficiencies. 6. Any other matter related to effective or efficient service delivery, as required by the Commission. 7. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Below is a summary of what each determination will assess: (1) Growth and population projections for the affected area. An analysis of current and future population and demographic characteristics related to city and special district service plans and delivery. Local and regional growth projections will be analyzed for compatibility with planned facilities. (2) Present and planned capacity for public facilities and adequacy of public services, including infrastructure needs or deficiencies. 8 C ity of Santa Clarita MSR

10 Existing infrastructure will be analyzed to determine existing sufficiency and future demand. The analysis will address future planned expansions within the MSR study area, both locally and regionally. (3) Financial ability of agencies to provide services. A detailed analysis will be conducted on the present and future ability of the affected agencies to financially support the current and long-term municipal service needs within the MSR study area. (4) Status of, and opportunities for, shared services. An analysis of existing facilities and service providers will be conducted to identify potential opportunities, if any, for enhancing operational efficiencies by sharing services and/or facilities. (5) Accountability for community service needs, including governmental structure and operational efficiencies. A review of the current and alternative government structures and boundaries of service providers within the MSR study area. In addition, a review will be conducted of the public participation opportunities provided by each service agency. (6) Any other matter related to effective or efficient service delivery, as provided by Commission policy. A review of any other matters as they are presented through the data analysis, agency interviews or questionnaires will be included in the report. (7) Location and characteristics of any disadvantaged unincorporated communities. An analysis will be conducted to identify the location and service characteristics of disadvantaged unincorporated communities within, or contiguous to, the City of Santa Clarita s sphere of influence. Composition of the Commission In accordance with Government Code Section 56326, the Local Agency Formation Commission for the County of Los Angeles (LAFCO) is composed of nine regular Commissioners: two members from the Board of Supervisors; one representative from the City of Los Angeles; two members who represent the other 87 cities in Los Angeles County; two members who represent special districts; and two public members, one representing the public as a whole, and the other representing the San Fernando Valley Statistical Area. There are six alternate Commissioners one from each of the above-referenced membership categories. 9 C ity of Santa Clarita MSR

11 What are LAFCOs? LAFCOs were created in the early 1960s primarily as boundary agencies. Significant population growth in California following World War II resulted in the proliferation of new cities and special districts. Unfortunately, many of these cities and special districts were formed with little planning which led to a multitude of overlapping, inefficient jurisdictional and service boundaries. To respond to California s sprawling growth, Governor Pat Brown and the State Legislature created LAFCOs in 1963 (one in each of California s 58 counties) to oversee the orderly creation of new cities and districts and the logical annexation of new territory to these agencies. What LAFCOs Can and Cannot Do LAFCOs cannot, on their own, initiate annexation of unincorporated territory to a city, form a new city, or consolidate two or more cities into a single city. In addition, LAFCOs cannot, on their own, form Joint Powers Authorities (JPAs) or Community Services Districts (CSDs). For LAFCO to consider these types of proposals, they would have to be initiated by either the affected agencies (e.g., cities or special districts) or the residents of the affected areas, and an application would have to be filed with LAFCO. LAFCOs do have the authority to reorganize, dissolve, consolidate, and merge special districts, approve and amend agency SOIs, conduct special studies, and complete MSRs. Purpose of Municipal Service Reviews The purpose of an MSR is for LAFCO to evaluate how agencies currently provide municipal services within the MSR study area and to evaluate the impacts on those services from future growth and other changes that may occur in the study area over the next 10 to 20 years. The MSR report is also required to identify potential opportunities to address any shortfalls, gaps, and/or impacts on services and governmental structure that may currently exist or are anticipated in the future. MSRs are also required to be conducted prior to, or concurrent with, SOI updates. The City of Santa Clarita MSR Study Area includes approximately 91.5 square miles (58,560 acres) and is composed of the following: (1) all of the territory within the City s jurisdictional boundary (52.68 square miles), and (2) all of the territory within the City s proposed SOI (38.85 square miles). In addition, the MSR also includes: (1) a discussion of seven unincorporated areas proposed for annexation to the City; and, (2) a summary review of the following special districts and agencies which provide municipal services to City residents: Castaic Lake Water Agency Consolidated Fire Protection District of Los Angeles County (Los Angeles County Fire Department) Greater Los Angeles Vector Control District Los Angeles County Sanitation Districts (Santa Clarita Valley Sanitation District) Newhall County Water District Santa Clarita Water Division Valencia Water Company 10 C ity of Santa Clarita MSR

12 CHAPTER 1: CITY OF SANTA CLARITA PROFILE Incorporated in 1987, the City of Santa Clarita is the fourth largest city in Los Angeles County, and the 24th largest city in California. Situated between the San Gabriel Mountain Range to the east and the Santa Susana Mountain Range to the west, Santa Clarita is located north of the San Fernando Valley, 30 miles from downtown Los Angeles, and 40 miles east of the Pacific Ocean. The total area of the City is square miles (33,715 acres) and includes the communities of Canyon Country, Newhall, Saugus, and Valencia. The City s current sphere of influence totals square miles (18,906 acres). Exhibit A, below, depicts the City s current boundary and SOI. Exhibit A Santa Clarita City and Sphere of Influence Boundary 11 C ity of Santa Clarita MSR

13 Population Since incorporation, 20 unincorporated communities located adjacent to the City were annexed and have become a part of the City of Santa Clarita, adding 8.03 square miles to the City. Based on U.S Census figures, the City had an April 1, 2010 population of 176,320 residents. During the past ten years, the City s population grew by almost 17%, easily eclipsing the overall growth rate (3.1%) of Los Angeles County during that same period. Only the cities of Los Angeles, Lancaster, and Palmdale added more population than Santa Clarita during this time period. (The City s growth during this period is partially due to the annexations of adjoining communities. In 2006, the City annexed three areas that added 2,643 units and 7,901 residents to the City s population.) 300,000 Chart A - City of Santa Clarita Population , , , , , , , , ,000 Population 100,000 50,000 Source: SCAG Socio Economic Forecast Report, June The Southern California Association of Governments (SCAG) is a federally designated metropolitan planning organization for the Southern California region. The City of Santa Clarita is located within the six-county jurisdiction of SCAG, which includes Los Angeles, Orange, Riverside, San Bernardino, Imperial, and Ventura counties. One of SCAG s primary functions is to forecast population, housing and employment growth for each region, sub-region and city. The latest forecast was completed as part of the 2008 Regional Transportation Plan (RTP) update which was adopted in May By 2035, SCAG projects the City s population to reach 239,923, a 32 percent increase over the current City s population. SCAG s 2010 population estimate for the City of Santa Clarita runs slightly higher than data obtained from the 2010 Census and the California Department of Finance. 12 C ity of Santa Clarita MSR

14 Employment According to SCAG s 2011 Local Profile Report for the City of Santa Clarita, the City s diverse economy continues to expand. Benefiting from a moderate climate, skilled labor pool, low crime rate, and a highly regarded quality of life, the City of Santa Clarita had, until 2008, increased the number of jobs in the City by 5.6% annually. Since the economic downturn, however, the total job growth was expected to slow down to 1.1% annually. Top employers in the Santa Clarita Valley include Six Flags California, Princess Cruises, HR Textron, Henry Mayo Newhall Memorial Hospital, and the local colleges and school districts. SCAG s most recent employment forecast for Santa Clarita, completed in 2008, indicates a more aggressive employment growth rate with the creation of 25,247 jobs between 2010 and 2035 (a 41 percent increase). The SCAG forecast likely does not reflect the full impact of the economic recession post Chart B - City of Santa Clarita Employment ,227 68,605 72,678 77,466 82,579 87, Employment Source: SCAG Socio Economic Forecast Report, June 2008 In 2010, the Education-Health sector was the largest job sector, accounting for 20.4 percent of the total jobs in the City. Other large sectors included Professional Management (14.5%), Retail (14.3%), and Leisure Hospitality (12.2%). Average salaries for jobs located in the City of Santa Clarita increased from $31,064 in 2003 to $39,796 in 2009, a 28.1 percent change. In 2009, the sector providing the highest salary per job in the City was Wholesale ($63,082). The Leisure-Hospitality sector provided the lowest annual salary per job ($17,242). 13 C ity of Santa Clarita MSR

15 Chart C - City of Santa Clarita Jobs by Sector: 2010 Public Administration 3% Agriculture 0% Other 4% Construction 7% Leisure-Hospitality 12% Education/Health 20% Manufacturing 9% Wholesale 5% Finance/Ins/Real Estate 6% Transportation/ Warehousing/Utilities 3% Information 3% Professional/Mgmt 14% Retail 14% Source: SCAG s City of Santa Clarita Local Profiles Report, 2011 Housing The City of Santa Clarita provides a diverse array of housing types which meet the needs of City residents, including single-family detached neighborhoods, executive estates, apartments, condominiums, and senior communities. According to the City of Santa Clarita s General Plan Housing Element (June 2011), there were 58,714 dwelling units in Santa Clarita in January Between 2000 and 2008, Santa Clarita housing stock increased by 6,258, of which 2,643 units were annexed into the City in The remaining 3,615 units were newly constructed. Average housing production over the eight-year period, according to California Department of Finance, was 426 units per year. According to growth statistics and projections for the Santa Clarita Valley compiled by City of Santa Clarita staff (for the June 2011 Housing Element), 40,500 dwelling units have received land use approval (33,500 units in the unincorporated areas and 7,000 units within the City). In addition, several thousand more dwelling units were the subject of pending land use applications. Although the economic recession has deterred the construction of new dwelling units throughout Southern California, it is 14 C ity of Santa Clarita MSR

16 expected that growth within the Santa Clarita Valley, and identifying logical providers to serve that growing population, will continue to be a major issue for decades to come. Between 2000 and 2006, median home sales price increased 138 percent, going from $230,000 to $548,000. Reaching a market peak in 2006, the City s housing prices decreased by 35.7 percent between 2006 and In 2010, the median home sales price in the City ($352,326) was $19,326 higher than in Los Angeles County overall. Chart D - Median Home Sales Price (in $ thousands) Median Home Sales Price (in $ thousands) $263 $240 $230 $352 $382 $412 $354 $418 $497 $498 $548 Source: SCAG City of Santa Clarita Local Profiles Report, 2011 Land Use Within the City of Santa Clarita, approximately 91 percent of the land is developed (30,695 acres). Residential uses comprise approximately 65 percent of 21,985 acres of the City s total acreage. These residential areas are located in the communities of Valencia, between the I-5 and Railroad Avenue; Saugus, northwest of Bouquet Canyon Road and Magic Mountain Parkway; Canyon Country in the northeast portion of the City; and Newhall, in the southeast portion of the City. Existing communities include Canyon Country, Sand Canyon, Newhall, Placerita Canyon, Saugus, and Valencia. Commercial and industrial uses encompass approximately 5.7 percent (1,932 acres) and approximately 2.6 percent (877 acres) of the City s total acreage, respectively. Open space accounts for approximately 8.9 percent (3,018 acres) of the City s territory. Sphere of Influence The City of Santa Clarita has an existing SOI of approximately square miles (18,906 acres) of unincorporated territory adjacent to its current boundaries. SOIs define the ultimate, logical service area for a city or special district as determined by the Local Agency Formation Commission. By law, territory must be located within a City s SOI prior to annexation of that territory into a City. The City of Santa Clarita is proposing a modified SOI that would include SOI reductions in some areas of the City and significant expansions in other areas. The City s proposed SOI includes square miles (24, C ity of Santa Clarita MSR

17 acres), an increase of 9.31 square miles (5,958 acres) over the current SOI. Additional discussion of the City s proposed SOI is included in Chapter 5 of this report. City Government The City of Santa Clarita is a general law city operating under a council-manager form of government, with the City Council acting as the part-time legislative body. Five members are elected to the City Council at-large on a nonpartisan basis, with members serving four-year terms. Elections are staggered every two years, with the Council-appointed mayor serving a one-year term and acting as the Council s presiding officer. The City Council appoints a City Manager as chief administrative officer, responsible for day-to-day operations for the City. The City Manager s duties include appointing department directors who are each responsible for department operations, including selecting division managers and support staff. Also appointed by the City Council is the City Attorney, who serves as legal advisor to the Council, commissioners, and other City officials. The City is a full service municipal government that provides many of its services through contracts with other agencies and through special districts. The City offers the following key services to its residents: Service Animal Control Ambulance Community Development Fire Protection and Emergency Medical Services Law Enforcement Parks, Recreational Services & Programs Land Use Planning & Code Enforcement Street Maintenance Street Lighting Sewer Maintenance Flood Control Financial Overview Table 1 - City of Santa Clarita Key Services Provider LA County Animal Control (contract) American Medical Response (contract) City LA Consolidated Fire Protection District LA County Sheriff s Department (contract) City City City/Contract City LA County Sewer Maintenance District LA County Flood Control District Short-term and long-term General Fund and Special Funds revenue and budgetary projections, coupled with strong reserve balances, have placed the City in a sound financial condition. Prudent budgetary and management policies have allowed the City to adjust quickly and efficiently to what can effectively now be termed as the new normal with respect to revenues. With the economic recovery at a slow crawl, it will be well into the future before property tax and sales tax revenues will return to pre-recession levels. The City has anticipated this dynamic well, and has planned accordingly. However, with the recent Supreme Court decision abolishing redevelopment agencies, it is unclear to what extent the impact will be on the City. The City has accepted responsibility as the Successor Agency and will have to carefully 16 C ity of Santa Clarita MSR

18 assess this impact on the City s General Fund, if any. Under the new legislation, the City should continue to receive sufficient funding for debt service obligations and some administrative costs; however, this cannot be directly quantified until the County Auditor-Controller determines the disposition of the redevelopment tax increment per the legislative requirements. The City s annual budget is prepared on an accrual basis, the same basis of accounting used for the financial statements. Revenues are recorded at the time they are earned, and expenses are recorded at the time the liability is incurred. The City receives funding from a variety of sources, including property tax, sales tax, transient occupancy tax, franchise fees, business license fees, charges for services, fines & forfeitures, road restricted revenues and taxes, other restricted revenues, and various other miscellaneous revenues and interest. Expenditures generally include employee salaries and benefits, administrative expense, operations and maintenance, capital outlays and capital projects, and debt service. For FY , the City budget documents acknowledge the continuing challenge to the City s budget due to the economic recession as noted in the City Manager s budget letter- The Great Recession has created serious economic and fiscal pressures for cities across the nation, thus requiring local governments to renovate practices and spending indefinitely. The City of Santa Clarita was no exception; however, our long history of conservative and strategic budget practices has allowed the City to maintain a balanced budget during every year of the Great Recession without layoffs or drastic cuts in services. The City estimates that it has lost 15.3%, or $14 million, of its annual General Fund revenues since This includes an almost 19% decline in Sales Tax and a 50% decline in fees collected for development services. The City estimates that the cumulative General Fund revenue impact to the City is approximately $47.5 million. Although signs of improvement exist, the City's budget continues to be faced with threats from State diversion of revenues for State budgetary issues, and the continued sluggish economy. Total expenditures for FY are budgeted at $159,376,274. These expenditures will be funded from total revenues of $159,791,339 (includes Redevelopment Revenue). CIP funding for FY included in the overall expenditures is $25,957,836. Table 2 on the following page depicts the FY and FY overall budget projections. As depicted in Table 2, there is a significant reduction in budgeted revenues and expenditures between FY and FY The revenue decrease is primarily due to a one-time loan repayment from the Redevelopment Fund in FY that would not be reflected in the FY budget. Additional revenue reductions are anticipated for various sources of General Fund revenue. The differential in total expenditures and the CIP is primarily due to a one-time expenditure in FY of Capital Improvement Funds for the Newhall Library. This expenditure is not carried forward into FY C ity of Santa Clarita MSR

19 Table 2 - Financial Information (FY /FY ) FY Rev 177,613,399 Exp 177,302,643 Fund Bal 101,372,052 CIP 50,891,172 FY Rev 159,791,339 Exp 159,376,274 Fund Bal N/A CIP 25,957,836 General Fund The City s budget is composed of a number of various funds for operational and accounting purposes. These include the General Fund, Special Revenue Funds, Internal Service Funds, Capital Improvement Fund, and Debt Service Funds among others. The General Fund is the primary financing mechanism for City operations with unrestricted revenues from a variety of sources. The following Tables depict the major categories of General Fund Revenues and Expenditures for FY and FY Table 3 City of Santa Clarita General Fund Revenue Summary Revenues FY FY Property Taxes 11,300,000 11,300,000 Property Taxes in lieu of VLF 13,421,872 13,420,000 Sales Tax & Prop Tax in lieu of Sales Tax 26,500,000 26,500,000 Franchise Fees 6,107,001 6,246,276 Business License Fees 317, ,000 Transient Occupancy Tax 2,050,000 2,050,000 Real Property Transfer Tax 525, ,000 Licenses & Permits 2,677,350 2,683,800 Fines, Forfeitures & Penalties 332, ,000 Use of Money & Property 2,549,335 1,155,805 Intergovernmental 1,193,902 1,299,862 Charges for Service 6,849,071 6,392,080 Other 3,716,731 3,356,293 Transfers In 3,752,672 2,014,352 Total Revenue 81,292,101 77,790,468 The primary differences in revenue reduction from FY and FY are in the areas of Use of Money & Property (Interest Earnings), Charges for Services (Permits, etc.), Other (Miscellaneous sources), and inter-fund transfers In from other funds. 18 C ity of Santa Clarita MSR

20 Table 4 - City of Santa Clarita General Fund Expenditure Summary Expenditures FY FY City Manager s Office 5,696,070 5,432,239 Administrative Services 5,664,494 5,931,472 Community Development 4,278,890 3,923,606 Public Works 13,620,724 13,978,807 Public Safety/Sheriff 18,941,612 20,332,471 Parks, Recreation & Community Services 19,614,316 19,884,058 City Attorney s Office 1,944,028 1,944,028 Non-Departmental 1,064, ,397 Transfers Out 20,354,337 5,231,274 Total Expenditures 91,179,369 77,560,352 The significant difference in expenditures from the General fund from FY to FY is reflected in the reduction of inter-fund transfers out of the General Fund into various other special funds. Public Safety/Sheriff reflects the only major expenditure increase, approximately 7.3%, for FY Reserves are a critical component of the General Fund budget because it is a funding source that can be counted on in case of an emergency or unforeseen opportunity. The City has designated some of its unrestricted General Fund balance for reserve purposes. For Fiscal Year , the operating reserve is budgeted to be approximately $11.2 million, or 15%, of operating expenditures. Special Revenue Funds Special Revenue Funds account for non-discretionary monies that are restricted to expenditures for specific purposes. The City has established numerous Special Revenue Funds, (in excess of 40 funds) most of which derive their monies from specific sources, such as grants, assessments, special taxes, and developer fees. Table 5 on the following page provides a summary of the various Special Revenue Funds for FY (projected) and FY (budgeted). There is a significant difference noted in total combined revenues and expenditures related to these funds from FY to FY The differences are spread throughout virtually all of the funds. Review of the various funds indicates revenue and expenditure variances in every fund ranging from minor to significant. These variances are attributable to capital project revenue and expenditure variations, grant funding revenue and expenditure variations, inter-fund transfer variations, and operating revenue. Total combined Fund Balance for FY was reported at $102,327,124, and for FY estimated at $104,209, C ity of Santa Clarita MSR

21 Table 5 - City of Santa Clarita Special Funds Summary Revenue/Transfers In Expenses/Transfers Out Net Surplus/(Deficit) FY ,866, ,381,970 (31,515,349) FY ,049,489 91,166,947 1,882,542 Redevelopment Agency (RDA) The City of Santa Clarita RDA utilizes tax increment funds, which are targeted for specific project areas, to address slum and blight areas. The RDA primarily consists of debt service, capital projects, and the Low and Moderate Income Housing Program. However, with the recent Supreme Court decision abolishing redevelopment agencies, it is unclear to what extent the impact will be on the City. The City has accepted responsibility as the Successor Agency and will have to carefully assess this impact on the City s General Fund, if any. Under the new legislation, the City should continue to receive sufficient funding for debt service obligations and some administrative costs, however, this cannot be directly quantified until the County Auditor-Controller determines the disposition of the redevelopment tax increment per the legislative requirements. Table 6, below, provides a summary of the RDA for FY (projected) and FY (budgeted). The significant difference in expenditures between FY and FY is due to the one time repayment in FY of the loan made to the RDA from the City. Table 6 - City of Santa Clarita RDA Summary Revenue/Transfers In Expenses/Transfers Out Net Surplus/(Deficit) FY ,990,444 41,175,558 (31,515,349) FY ,001,037 7,229,861 (3,228,824) Library Services The City recently completed transfer of library services, and associated revenues, from the County to the City. There was a desire within the community at large to increase services provided by the library system in the region, and the City determined that it could support this transfer of responsibility. The City has successfully accomplished this transfer of service. Capital Improvement Program (CIP) The City annually reviews and updates its Five-Year CIP, which is a key component of the budget, and of vital importance to the City as a whole. The CIP is the planning program for accomplishing the City s major infrastructure goals, while maintaining critical ongoing maintenance. The CIP is made up of a variety of multi-year and multi-funded capital projects. These projects are designed and constructed as needed, and funding will come from a variety of sources. Table 7 depicts the City s Five-Year CIP projection. The year-to-year variances in anticipated expenditures are reflective of the strategic planning of infrastructure improvements as related to anticipated available revenues. 20 C ity of Santa Clarita MSR

22 Table 7 - City of Santa Clarita 5-Year CIP Projection FY FY FY FY FY Beaut/Landscape 1,624,450 4,900, Circulation 2,476, , , , ,000 Facilities/Buildings 2,909, , Infrastructure 75, Maintenance 10,503,400 76,862,025 25,242,560 21,597,100 22,338,649 Parks 53,000 53,000 53,000 55,000 55,000 Resource Mgt/Cons 206, Streets/Bridges 1,518,576 6,849,718 13,167,403 35,000,000 31,000,000 Trails/Transit 6,591, ,982 50,000 50,000 50,000 Total 25,957,836 89,942,725 38,712,963 56,902,100 53,643,649 Fund Balances & Reserves The City s financial statements generally categorize the City s fund balance (reserve) capacity within three major fund categories: General Fund, Major Governmental Funds, and Non-Major Governmental Funds. The General Fund is the primary operating fund, while the Major and Non-Major governmental Funds comprise a myriad of activities that are generally classified separately due to revenue and expenditure allocation restrictions. Although the City utilizes internal reserve designation policies for unrestricted cash assets, the fund balances reflect total unrestricted available fund balances. Table 8 reflects the FY (audited) and FY (unaudited) fund balances for each fund. Table 8 - City of Santa Clarita Fund Balances General Major Gov t Non-Major Gov t Total Gov t FY ,757,523 22,882,214 40,099, ,738,744 FY ,690,219 (27,962,751) 45,646, ,374,052 Long Term Debt The City has several long-term debt obligations for various Certificates of Participation (COPs), lease revenue bonds issued through the City s Public Financing Authority, and other bond issuances, loan obligations, compensated absences, and claims. Maturity dates for the bonds range from 2021 to The total current FY debt service obligation for all long term debt (excluding compensated absences) is $5,862,852. Total principal balance outstanding as of June 30, 2011 on all COPs, bonds, loans, compensated absences, and claims is $82,439, C ity of Santa Clarita MSR

23 CHAPTER 2: PROPOSED ANNEXATIONS TO THE CITY OF SANTA CLARITA Proposed Annexations to the City of Santa Clarita Between January 2011 and December 2011, the City of Santa Clarita filed seven annexation applications with LAFCO which are described later in this chapter. LAFCO commissioned this MSR to evaluate the proposed annexations and proposed SOI expansion. Cumulatively, the annexations include a total of 6, acres and, at build-out, would add a projected 20,491 residents to the City. Four of the proposed annexations are located within the City s current SOI (Copperstone, Norland Road, North Copperhill, and Soledad Commons). This means that LAFCO has already designated the City of Santa Clarita as the logical, long-term service provider for these areas. For the three annexations that are not located within the City s current SOI (Elsmere, Vista Canyon/Fair Oaks, and South Sand Canyon), an SOI amendment will be required for these areas prior to, or concurrent with, consideration by LAFCO for annexation to the City. Review of each of the annexations proposed indicates that, in most cases, revenues generated from the proposed annexations will be sufficient to offset any additional costs of services. Several of the proposed annexations involve significant open space and limited servicing requirements. The proposed annexations, taken individually and collectively, should not require any significant increase in City staffing. The primary additional service cost will be in law enforcement. However, this cost will be limited primarily to the two larger residential area annexations. Overall, revenues that will accrue to the City should be sufficient to offset these costs. A key component of the revenue offset will be the negotiated property tax exchange agreement that will be required between the County and the City. A summary of the seven proposed annexations is included in Table 9 on the following page. This chapter includes: (1) a location map illustrating the annexation areas with respect to the existing City of Santa Clarita boundary (Exhibit B), and (2) a detailed profile of each annexation proposal, including a description of existing and proposed service providers. Because the City of Santa Clarita contracts with the County and special districts for many municipal services (e.g., police, animal control, flood control, sanitation, fire, emergency medical, and water), many of the service providers will not change should these areas be successfully annexed into the City. 22 C ity of Santa Clarita MSR

24 Proposal Name Copperstone ( ) Elsmere Canyon ( ) Norland Road ( ) North Copperhill ( ) Soledad Commons ( ) Vista Canyon/Fair Oaks/Jakes Way ( ) South Sand Canyon ( ) Table 9 Proposed Annexations to the City of Santa Clara Applicant City of Santa Clarita City of Santa Clarita City of Santa Clarita City of Santa Clarita City of Santa Clarita City of Santa Clarita City of Santa Clarita Date Filed Acres Current Population Population at Build-Out Within City s SOI? 1/26/ ,284 Same Yes 6/13/ Same No 10/11/ Yes 10/31/11 2,473 9,543 Same Yes 1/21/ Yes 7/26/11 2,442 15,422 20,366 No Proposed Land Uses Residential Undeveloped 40 homes and Open Space Preservation Residential Retail Shopping Center 1,750 Residential Units, 950,000 SF of Commercial, 436,000 SF of Business Park 12/13/ Same No None General Financial Overview Collectively, all of the proposed annexations appear to be feasible from a financial standpoint. Individually, most will have minimal to moderate impact on the City, with some having more significant impact in some areas, most notably law enforcement. However, there will be sufficient additional revenue generated with the current and additional planned development to allow the City to efficiently manage the annexations. Additional property tax revenue will be a primary revenue stream that the City will receive. This revenue is subject to a property tax exchange agreement for each annexation with the County, a critical component to maintaining fiscal viability of the proposed annexations. Franchise fee revenue, future sales tax revenue from new development, as well as per capita revenues such as motor fuel taxes will also accrue to the City. Additionally, all proposed annexations will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There will be service increase responsibility to the City associated with each annexation, primarily in law enforcement and road maintenance responsibility. These increases, in most cases, are offset wholly or partly from generated revenues. However, at least one annexation (Vista/Fair Oaks/Jakes Way) will likely generate a deficit until the planned future commercial development occurs. There are no new facilities or other short-term infrastructure improvements required for the proposed annexations. Longterm infrastructure maintenance, primarily roads, can be absorbed into the City s annual CIP program with sufficient road-related funds available from the current and future development within the areas. 23 C ity of Santa Clarita MSR

25 Exhibit B Proposed Annexations and Sphere of Influence for the City of Santa Clarita 24 C ity of Santa Clarita MSR

26 Proposed Copperstone Annexation to the City of Santa Clarita The proposed Copperstone annexation area, approximately 69 acres in size, is located near the northeast corner of Copper Hill Drive and Decoro Drive along the northerly boundary of the City (see Exhibit B). The annexation territory is a fully developed residential neighborhood of 428 residential units (320 single-family and 108 multi-family) and an estimated 1,284 residents. The subject territory is immediately north of the existing Alta Vista residential neighborhood located within Santa Clarita. North and west of the proposed annexation area is the West Creek/West Hills neighborhood which is partially developed and located within unincorporated Los Angeles County. The proposed annexation area is located within the City of Santa Clarita s designated SOI as determined by LAFCO. A May 2010 survey conducted by the City indicated that 92 percent of Copperstone residents favored annexation to the City. Table 10 describes existing service providers to the Copperstone area and proposed service providers if the area is successfully annexed to the City. Table 10 - Copperstone Annexation Area Service Providers Service Current Proposed Fire and Emergency Consolidated Fire Protection District (CFPD) Same Same* Flood Control LA County Flood Control and LA *5-10 percent of flood control facilities have not been accepted by Los Angeles County Dept. of Public Works County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita Same* *Upon annexation, residents will receive priority registration and reduced registration fees. Police LA Sheriff s Dept. Same (by contract) Road Maintenance LA County City of Santa Clarita Solid Waste LA County (by contract) City of Santa Clarita (by contract) Street Lighting LA Street Lighting District LLA-1 Santa Clarita Streetlight Maintenance District No. 1 Water Valencia Water Company Same Wastewater Santa Clarita Valley Sanitation District Same Financial Overview This relatively small, fully developed residential area is anticipated to generate primarily property tax revenue with some franchise fee revenue, as well as per capita revenues such as motor fuel taxes. Additionally, the area will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. 25 C ity of Santa Clarita MSR

27 There will be minimal service increase responsibility to the City. Law enforcement and some road maintenance responsibility will be the primary service costs associated with this annexation. These costs will be easily absorbed and offset by the increased revenue. There are no new facilities or other shortterm infrastructure improvements required for the area. Long-term infrastructure maintenance, primarily roads, can be readily absorbed into the City s annual CIP program. Proposed Elsmere Annexation to the City of Santa Clarita The proposed acre Elsmere Annexation area is characterized by steep hillsides and canyons. The majority of the property is owned by public agencies, including the City of Santa Clarita and the Mountain Recreation and Conservation Authority (MRCA), with the intent to preserve the property as deed-restricted open space. The territory is bounded by the Santa Clarita corporate limit to the north in the Whitney Canyon area, the Angeles National Forest to the east, and the City of Los Angeles SOI to the south (see Exhibit B). The area is populated by an estimated three residents residing in one single family home located in the northwest portion of the annexation area. The area also includes a Los Angeles City aqueduct and power transmission corridors. State Route 14 is the only improved road in the area. According to the City of Santa Clarita, no future development will likely occur within the annexation area. The one existing single family home will remain. Because the area is not located within the City of Santa Clarita s SOI, an SOI amendment would be required prior to, or concurrent with, annexation. Table 11 describes existing service providers to the Elsmere Canyon area and proposed service providers if the area is successfully annexed to the City. Table 11- Elsmere Annexation Area Service Providers Service Current Proposed Fire and Emergency CFPD Same Same* Flood Control LA County Flood Control and LA *5-10 percent of flood control facilities have not been accepted by Los Angeles County Dept. of Public Works County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation City of Santa Clarita Police LA Sheriff s Dept. Same (by contract) Road Maintenance CalTrans (State Route 14) CalTrans (State Route 14) City of Santa Clarita (public streets) Solid Waste LA County (by contract) City of Santa Clarita (by contract) Street Lighting None Santa Clarita Streetlight Maintenance District No. 1 Water Newhall County Water District Same Wastewater None (onsite septic system) Same 26 C ity of Santa Clarita MSR

28 Financial Overview This relatively large, but primarily undeveloped area, will have no foreseeable financial impact on the City. The area will generate some property tax revenue, however should not add any additional service costs. The one residential parcel will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. Minimal law enforcement and road maintenance responsibility will be required in this area. There are no new facilities or other short or long term infrastructure improvements required for the area. Proposed Norland Road Annexation to the City of Santa Clarita The proposed acre Norland Road Annexation is located north and east of the existing rural community of Sand Canyon in the City of Santa Clarita SOI area (see Exhibit B). The northern 57 acres of the annexation area consists of vacant land owned by the City of Santa Clarita. The remaining 130 acres consists of vacant residential land with a Los Angeles City Metropolitan Transportation Authority rail line that connects the City of Los Angeles with the Antelope Valley. Currently, the area has a total population of three residents residing in one single family home. According to the City of Santa Clarita, the 57 acres owned by the City will be preserved as open space. Of the remaining 130 acres, 42 acres will remain as rail right-of-way and vacant land, and 88 acres are proposed for the development of 40 single family residences. At build-out, it is estimated that the annexation area will be home to 125 residents. The property is located within the City of Santa Clarita s SOI. Table 12 describes existing service providers to the Norland Road area and proposed service providers if the area is successfully annexed to the City. Table 12 - Norland Road Annexation Area Service Providers Service Current Proposed Fire and Emergency LA County Fire Department Same Flood Control LA County Flood Control and LA County Dept. of Public Works Same* *5-10 percent of flood control facilities have not been accepted by Los Angeles County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita City of Santa Clarita Police LA Sheriff s Dept. Same (by contract) Road Maintenance City of Santa Clarita City of Santa Clarita Solid Waste None City of Santa Clarita (by contract) Street Lighting None Santa Clarita Streetlight Maintenance District No. 1 Water Santa Clarita Water Division Same Wastewater None Santa Clarita Valley Sanitation District 27 C ity of Santa Clarita MSR

29 Financial Overview This relatively small, undeveloped area is anticipated to generate primarily property tax revenue in the short-term. Future limited residential development will increase property tax, franchise fees, and per capita revenues such as motor fuel taxes. Additionally, the area will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There will be minimal service increase responsibility to the City. Law enforcement, and some road maintenance responsibility, will be the primary service costs associated with this annexation, but will be easily absorbed and offset by the increased revenue. There are no new facilities or other short-term infrastructure improvements required for the area. Limited long-term infrastructure maintenance, primarily roads, can be readily absorbed into the City s annual CIP program when the limited future development occurs. North Copperhill Annexation to the City of Santa Clarita The proposed North Copperhill Annexation comprises 2,473 acres generally located east of San Francisquito Canyon Road, south of the Angeles National Forest boundary, north of the existing City of Santa Clarita corporate limit, and west of Bouquet Canyon Road (see Exhibit B). The area consists of established neighborhoods and undeveloped land. There are 3,181 homes, a neighborhood shopping center, three elementary schools, two Los Angeles County probation camps (Camp Scott and Camp Scudder), two aqueducts, and the Dry Canyon Reservoir site. In addition, the proposed annexation territory includes publicly-owned open space parcels. According to the City of Santa Clarita, the North Copperhill Annexation area is home to an estimated 9,543 residents. No additional development is anticipated within the annexation area. The territory is located within the City of Santa Clarita s SOI. Table 13 on the following page describes existing service providers to the North Copperhill Annexation area and proposed service providers if the area is successfully annexed to the City. 28 C ity of Santa Clarita MSR

30 Table 13 - North Copperhill Annexation Area Service Providers Service Current Proposed Fire and Emergency LA County Fire Department Same Same* Flood Control LA County Flood Control and LA *5-10 percent of flood control facilities have not been accepted by Los Angeles County Dept. of Public Works County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita City of Santa Clarita Police LA Sheriff s Dept. Same (by contract) Road Maintenance LA County City of Santa Clarita Solid Waste LA County (by contract) City of Santa Clarita (by contract) Street Lighting LA County Street Lighting Districts Santa Clarita Streetlight LLA-1 and 1687 Maintenance District No. 1 Water Santa Clarita Water Division, Newhall County Water District and Same Valencia Water Company Wastewater SCVSD SCVSD Financial Overview This large, primarily developed residential area, with a significant amount of open space land, is anticipated to generate significant property tax revenue, franchise fee revenue, as well as per capita revenues such as motor fuel taxes. Additionally, the area will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There is limited future development anticipated in the area which will generate additional revenue when that development occurs. There will be service increase responsibility to the City associated with this annexation, primarily in law enforcement and road maintenance responsibility. This service increase responsibility will have an impact to the City. However, these increases should be able to be absorbed by the City, with most, if not all of associated costs offset by the increased revenue. There are no new facilities or other short-term infrastructure improvements required for the area. Long-term infrastructure maintenance, primarily roads, can be readily absorbed into the City s annual CIP program. Soledad Commons Annexation to the City of Santa Clarita The proposed Soledad Commons Annexation, acres in size, consists of vacant, largely commercially zoned property, owned by one landowner, located at the eastern edge of the City of Santa Clarita. The site is located just north of State Route 14, bounded by the City of Santa Clarita to the north and west, and sharing a boundary with Los Angeles County to the east and south (see Exhibit B). Entitlements have been approved by the Los Angeles County Department of Regional Planning for a 60,000 square foot commercial center within the annexation territory. The remaining acres is comprised of Caltrans right-of-way for State Route C ity of Santa Clarita MSR

31 There are no residents within the proposed annexation site, nor are any anticipated in the future due to the commercial use approved for the property. The property is located with the City of Santa Clarita s current SOI. Table 14 describes existing service providers to the Soledad Commons Annexation area and proposed service providers if the area is successfully annexed to the City. Table 14 - Soledad Commons Annexation Area Service Providers Service Current Proposed Fire and Emergency LA County Fire Department Same Same* Flood Control LA County Flood Control and LA *5-10 percent of flood control facilities have not been accepted by Los Angeles County Dept. of Public Works County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita City of Santa Clarita Police LA Sheriff s Dept. Same (by contract) Road Maintenance LA County City of Santa Clarita Solid Waste None City of Santa Clarita (by contract) Street Lighting LA County Street Lighting Districts Santa Clarita Streetlight LLA-1 Maintenance District No. 1 Water Newhall County Water District Same Wastewater Santa Clarita Valley Sanitation District Same Financial Overview This small, undeveloped area is proposed for commercial development. It is anticipated to generate primarily property tax revenue and sales tax revenue with some franchise fee revenue. Additionally, the area will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There will be very minimal service increase responsibility to the City. Law enforcement and some road maintenance responsibility will be the primary service costs associated with this annexation, but will be easily absorbed and offset by the increased revenue. There are no new facilities or other short-term infrastructure improvements required for the area. Limited long-term infrastructure maintenance, primarily roads, can be readily absorbed into the City s annual CIP program when the limited future development occurs. Vista Canyon/Fair Oaks Annexation to the City of Santa Clarita Of the seven annexation applications considered in this report, the proposed Vista Canyon/Fair Oaks/Jakes Way Annexation area has the most development potential, according to the City of Santa 30 C ity of Santa Clarita MSR

32 Clarita. Currently, the 2,442-acre annexation area includes 1,766 single-family dwelling units and 3,225 multi-family dwelling units. An additional 1,750 residential units, 950,000 square feet of commercial floor area, and 436,000 square feet of business park uses are proposed to be built within the next ten years within the annexation area according to the City of Santa Clarita. The annexation territory is generally located south of State Route 14, west of Sand Canyon Road, and north of Placerita Canyon Road (see Exhibit B). Home to an estimated 15,422 residents, the proposed annexation area will grow to a population of approximately 20,366 (an increase of 4,944 residents) at build-out. Currently, the property is not located with the City of Santa Clarita s SOI. An SOI amendment placing the property within the City s SOI would be required prior to, or concurrent with, annexation. Table 15, below, describes existing service providers to the Vista Canyon/Fair Oaks Annexation area and proposed service providers if the area is successfully annexed to the City. Table 15 - Vista Canyon/Fair Oaks Annexation Area Service Providers Service Current Proposed Fire and Emergency CFPD Same Flood Control LA County Flood Control and LA County Dept. of Public Works Same* *5-10 percent of flood control facilities have not been accepted by Los Angeles County DPW; these facilities will be maintained by City. Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita City of Santa Clarita Police LA Sheriff s Dept. Same (by contract) Road Maintenance LA County City of Santa Clarita Solid Waste LA County (by contract) City of Santa Clarita (by contract) Street Lighting LA County Street Lighting Districts Santa Clarita Streetlight Maintenance LLA-1 District No. 1 Water Santa Clarita Water Division Same Wastewater Santa Clarita Valley Sanitation District Same Financial Overview This large, partially developed residential area, with a significant amount of future planned development area, is anticipated to generate significant property tax revenue, and franchise fee revenue, as well as per capita revenues such as motor fuel taxes in the short-term. Future planned additional residential development, coupled with significant commercial retail and business park development, will enhance those revenue streams as well as provide significant sales tax revenue. Additionally, the area will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There will be service increase responsibility to the City associated with this annexation, primarily in law enforcement and road maintenance responsibility. Initially, these increases will not be offset by the 31 C ity of Santa Clarita MSR

33 revenues generated, particularly with law enforcement due to the significant amount of additional population to be served. As future commercial development occurs, the additional revenue generated, in particular sales tax, should alleviate the initial imbalance significantly. However, until this commercial development occurs, the City will be required to ensure that servicing to this area is managed as efficiently as possible given the revenues generated. There are no new facilities or other short-term infrastructure improvements required for the area. Long-term infrastructure maintenance, primarily roads, can be absorbed into the City s annual CIP program with sufficient road-related funds available from the current and future development. South Sand Canyon Annexation to the City of Santa Clarita The proposed South Sand Canyon Annexation, approximately acres in size, is primarily (630.3 acres) located in the Angeles National Forest and held in private ownership (see Exhibit B). Two movie ranches are located within the proposed annexation area: the Sable Ranch/Rancho Maria Movie Ranch and the Ranch Deluxe Movie Ranch. The Sable Ranch/Rancho Maria Movie Ranch consists of approximately 400 acres of existing temporary filming sets, natural areas use for filming operations, and accessory single-family homes. Rancho Deluxe includes approximately 140 acres of filming operations as well as accessory single-family residences. In addition, there are 13 single family homes within the annexation area. The remaining territory (approximately acres), located south and east of the Sand Canyon Community and north of Sand Canyon Road, remains undeveloped. The proposed annexation area is unlikely to see any growth in the future. The City of Santa Clarita conducted public meetings and community meetings for the property owners within the proposed South Sand Canyon Annexation area. The City has indicated that the property owners of the movie ranches, which make up a majority of the annexation territory, support annexation to the City of Santa Clarita. The City has also indicated that the other property owners within the annexation area have not objected to annexation of their respective properties to the City. Table 16 on the following page describes existing service providers to the South Sand Canyon area and proposed service providers if the area is successfully annexed to the City. 32 C ity of Santa Clarita MSR

34 Table 16 - South Sand Canyon Annexation Area Service Providers Service Current Proposed Fire and Emergency CFPD Same Flood Control LA County Flood Control and LA Same County Dept. of Public Works Library LA County City of Santa Clarita Parks and Recreation LA County Dept. of Parks & Recreation and City of Santa Clarita Same Police LA Sheriff s Dept. Same (by contract) Road Maintenance LA County City of Santa Clarita Solid Waste LA County (by contract) City of Santa Clarita (by contract) Street Lighting LA County Street Lighting Districts Santa Clarita Streetlight LLA-1 Maintenance District No. 1 Water Santa Clarita Water Division Same Wastewater Santa Clarita Valley Sanitation District Same Financial Overview This large, sparsely developed area, with a significant amount of open space land, is anticipated to generate minimal revenue other than some property tax. Additionally, the developed areas will be subject to imposition of various special assessments for lighting/landscape maintenance, open space preservation, and storm water maintenance fees. There is no future development anticipated in the area which would generate additional revenue. There will be minimal service increase responsibility to the City associated with this annexation, primarily some law enforcement and some road maintenance responsibility. These increases can be easily absorbed by the City, with some of those costs offset by the increased revenue. There are no new facilities or other short-term infrastructure improvements required for the area. Long-term infrastructure maintenance, primarily roads, can be readily absorbed into the City s annual CIP program. 33 C ity of Santa Clarita MSR

35 CHAPTER 3: DISTRICTS AND AGENCIES SERVING THE CITY OF SANTA CLARITA Introduction As indicated in Chapter 1 of this report, the City of Santa Clarita provides a wide range of municipal services to its residents. Services provided by the City include administrative, land use planning and building regulation, public safety, park and recreation services, street lighting, street maintenance, and transit services. As of July 1, 2011, the City became responsible for all library services which were previously provided by the County. Other municipal services are provided to City of Santa Clarita residents through either the County or special districts. This Chapter provides profiles of County agencies, special districts and other agencies that serve the City of Santa Clarita. A discussion of long-term service and supply issues for the four water districts serving the City of Santa Clarita - Castaic Lake Water Agency, Newhall County Water District, Santa Clarita Water Division and the Valencia Water Company is provided at the end of this Chapter. Regional Districts Consolidated Fire Protection District The City of Santa Clarita receives fire protection, emergency medical, hazardous materials response, and rescue services from the Consolidated Fire Protection District for the County of Los Angeles (CFPD), also referred to as the Los Angeles County Fire Department. The Los Angeles County Board of Supervisors acts as its governing body. The District serves the unincorporated portions of Los Angeles County and 58 cities, and also the City of La Habra located in Orange County. In total, the Department s service area exceeds 2,200 square miles. In July 2002, three regional operations bureaus were formed North Region, Central Region and East Region. Each region is under the command of a Deputy Chief, assisted by a Community Service Unit Captain, a Public Information Officer, and a Training/Safety Captain. The North Region Headquarters is located in the City of Santa Clarita (Station 126). The East and Central Region Headquarters are located in the Cities of Industry and Inglewood, respectively. A special tax approved by voters in 1997, and billed on annual property tax bills, funds essential fire suppression and emergency medical services. A map of the District s service area is included as Exhibit C on the following page. 34 C ity of Santa Clarita MSR

36 Exhibit C Consolidated Fire Protection District of Los Angeles County Sphere of Influence Boundary 35 C ity of Santa Clarita MSR

37 Currently, there are eight fire stations located within the City of Santa Clarita and the immediately surrounding unincorporated area (Stations 73, 76, 104, 107, 111, 123, 124 and 126). In 2007, the fire stations in the Santa Clarita Valley responded to 15,432 calls, of which 594 were fire-related and 10,093 were emergency medical services. The Department has an adopted goal of responding to calls in urban areas within five minutes, in suburban areas within eight minutes, and in rural areas within 12 minutes. The 2007 median response times were five minutes with the City of Santa Clarita, and less than eight minutes within unincorporated areas. Agency Information District Address: 1320 N. Eastern Avenue, Los Angeles, CA Contact: Kien Chin Phone: (323) Website: Date Formed: 1920 Governing Body: County Board of Supervisors Service Area Information Service Area: 2,200 square miles Staffing: 2,763 uniformed Firefighters and administrative staff; 132 full-time/650 seasonal lifeguards Stations: 172 Equipment: 239 engines, 2 fireboats, 8 helicopters Table 17 - Financial Information (FY /FY ) (OP/CIP) FY Rev 974,588,000 Exp 937,950,000 Reserve N/A CIP 16,616,000 FY Rev 971,033,000 Exp 971,033,000 Reserve N/A CIP 19,103,000 Financial Overview The City of Santa Clarita and its SOI area are included within the greater CFPD budget. The District operates under a regional concept in its approach to providing fire and emergency services. Review of CFPD budget and financial documents reflect the District being in generally sound financial condition, and has adapted well to the negative impact on revenues due to the economic downturn. Total budgeted FY revenues for the District is $971,033,000 with expenditures of $971,033,000, reflecting a balanced budget. Within the expenditures is a budgeted designation to reserves of $29,229,000. The District historically utilizes fund balance carryover from previous fiscal years and reserve designations when appropriate. Overall, the District has adequate funds for current service levels, assumes reasonable projections for future service and capital infrastructure obligations, and maintains sufficient reserves. The District s annual budget is prepared in conjunction with the Los Angeles County budget, and incorporates all of the District s long range forecasting into the overall County budget process. The District has recently updated its countywide long-range facilities needs forecast based on future growth trends identifying requirements for an additional 20 new permanent fire stations, one temporary fire station, and two permanent stations to replace temporary stations. Additionally, the forecast includes all equipment associated for outfitting and staffing the stations. The total cost of the forecast requirements is $148,713,877 to be funded primarily from developer fees. Several of these new facilities 36 C ity of Santa Clarita MSR

38 are projected for the Santa Clarita Valley area. The City indicates that in 2012, three new fire stations will open, one in Sand Canyon, and two on Golden Valley Road. The District receives funding primarily from property tax, charges for services, and miscellaneous intergovernmental revenues. Additionally, a special tax is levied in planned annexation areas related to new development. The City of Santa Clarita and the County have also entered into an agreement for collection of developer impact fees for construction of any required new facilities within the City. Expenditures include provision of fire protection, fire suppression, emergency medical services, and capital improvements. The District recently retired its only significant long-term debt obligation Pension Obligation Bonds. County Sanitation Districts Sewer and solid waste management services are provided to the City of Santa Clarita through the County Sanitation Districts of Los Angeles. The County Sanitation Districts function on a regional scale and consist of 24 dependent special districts serving approximately 5.7 million residents in Los Angeles County. The service area covers approximately 820 square miles, including 78 cities and the unincorporated territory within the County. Individual Sanitation Districts were first formed in Los Angeles County in 1923 to construct, operate, and maintain facilities that collect, treat, recycle and dispose of domestic and industrial wastewater. By the 1950s, with a growing County population and a significant number of new cities forming, it became clear that a regional approach to solid waste management was necessary to effectively protect the public health and environment. The 23 separate Districts operate under one administration, but each District has its own Board of Directors. The agency maintains 1,400 miles of main trunk sewers and 11 wastewater treatment plants that treat half the wastewater in Los Angeles County. In addition, the Sanitation Districts operate three sanitary landfills, four landfill energy recovery facilities, two recycle centers, three materials recovery/transfer facilities, and participate in the operation of two refuse-to-energy facilities. The Santa Clarita Valley Sanitation District, one of the 23 dependent special districts under the County Sanitation Districts of Los Angeles, serves the sewer needs of the City of Santa Clarita. A map of the District s service area is included as Exhibit D on the following page. Agency Information District Address: 1955 Workman Mill Road, Whittier, CA Contact: Phone: (562) Website: Date Formed: 1923 Governance: Partnership of 23 dependent special districts Service Area Information Service Area: 800 square miles Population Served: 5.7 million 37 C ity of Santa Clarita MSR

39 Exhibit D Los Angeles County Sanitation Districts 38 C ity of Santa Clarita MSR

40 Santa Clarita Valley Sanitation District Table 18 - Financial Information (FY /FY ) (OP/CIP) FY Rev 55,860,000 Exp 55,860,000 Reserve N/A CIP 11,215,000 FY Rev 53,638,000 Exp 53,638,000 Reserve N/A CIP 9,961,000 Financial Overview The City of Santa Clarita and its SOI area are serviced by the Santa Clarita Valley Sanitation District (SCVSD), one of 23 districts within the Los Angeles County Sanitation Districts. The District operates under a regional concept in its approach to providing sanitation/sewer and wastewater treatment services to the District. Review of the SCVSD budget and financial documents reflect the District being in generally sound financial condition, with minimal impact on District revenues as a result of the economic downturn. Total budgeted FY revenues for the District are $53,638,000, with expenditures of $53,638,000 reflecting a balanced budget. The District s FY debt service obligation totals $6,459,000 for bond and state loan repayment. The District receives funding primarily from property tax, charges for services, and interest and other miscellaneous revenues. Additionally, for budgeting and cash flow purposes, the District relies on interfund transfers on fund balance carry over from previous years. Expenditures include employee salaries and benefits, administrative expense, facility operation and maintenance, capital improvement, and debt service. The District also maintains reserve funds designated for debt service and capital projects. As of FY , the total combined designated reserves were $95,322,338. Overall, the District has adequate funds for current service levels, assumes reasonable projections for future service and capital infrastructure obligations, and maintains sufficient reserves. The SCVSD has identified six major CIP projects to be under construction prior to 2015 within the District. These projects include various facilities with a cost totaling $38,350,000 and comprise necessary projects identified as part the SCVSD 2015 Sewerage Plan and the 2009 Urban Water Management Plan. These CIP Projects include expansion of facilities to implement the approved Master Plan of Recycled Water Projects to supply additional recycled water to the area water agencies. (See Table 41.) Greater Los Angeles Vector Control District Established on August 21, 1958, by the Los Angeles County Board of Supervisors, the Greater Los Angeles Vector Control District (GLACVCD) is a non-enterprise, independent special district with a mission to prevent and control vectors and vector-borne diseases. Specific powers include: (1) the extermination of mosquitoes, flies, and other insects; (2) the extermination of rats; and, (3) algae research, control and monitoring projects. 39 C ity of Santa Clarita MSR

41 The largest vector control district in Los Angeles County, GLACVCD serves approximately six million residents in a 1,330 square mile area. The service area covers 34 cities, including the City of Santa Clarita, and unincorporated portions of Los Angeles County. Annexation of territory into the City of Santa Clarita for those areas currently not served by GLACVCD will require concurrent annexation into GLACVCD and its assessment district. A map of the District s service area is included as Exhibit E below. Exhibit E Greater Los Angeles County Vector Control District 40 C ity of Santa Clarita MSR

42 Agency Information Address: Florence Avenue, Santa Fe Springs Contact: Phone: (562) Website: Date Formed: 1958 Governance: 35-member Board of Trustees Service Area Information Service Area: 1,330 square miles Population Served: 4.5 million Table 19 - Financial Information (FY /FY ) (OP/CIP) FY Rev 9,731,200 Exp 8, Unrest Res 5,527,807 CIP 5,800 FY Rev 9,753,754 Exp 9,753,754 Unrest Res 5,591,8005 CIP 38,258 Financial Overview The City of Santa Clarita and its SOI area are included within the GLACVCD budget. The District operates under a regional concept in its approach to providing vector control and mosquito abatement services. Review of the GLACVCD budget and financial documents reflect the District being in generally sound financial condition, with minimal impact on District revenues as a result of the economic downturn. Total budgeted FY revenues for the District are $9,753,754 with expenditures of $9,753,754, reflecting a balanced budget. The District receives funding primarily from property tax, special assessments, and miscellaneous revenues. Expenditures include employee salaries and benefits, administrative expense, materials and supplies, facility maintenance and capital improvement. The District has no long-term debt obligations for capital acquisitions. Although the District has the ability to increase special assessment rates annually to offset cost increases, the district has not been required to affect a rate increase in the last three years. The District also maintains three reserve funds: an unrestricted fund, a designated reserve fund, and a restricted reserve fund. Total projected FY end-of-year combined Reserve Fund balance for the District s three funds is $8,286,300. The Unrestricted Reserve Fund is projected to be 57% of expenditures. This ratio is considered more than adequate for long-term fiscal stability. Overall, the District has adequate funds for current service levels, assumes reasonable projections for future service and capital infrastructure obligations, and maintains sufficient reserves. Water Agencies Water service to the City of Santa Clarita and its unincorporated Sphere of Influence area is currently provided through one wholesale water district, the Castaic Lake Water Agency, and three retail water agencies, the Santa Clarita Water Division, the Newhall County Water District, and the Valencia Water Company. A joint Santa Clarita Urban Water Management Plan (SCUWMP) was adopted by all of these water agencies in June An additional retail district, the Los Angeles County Waterworks District 41 C ity of Santa Clarita MSR

43 #36, cooperated in the completion of the SCUWMP but does not provide water service to either the City of Santa Clarita or its SOI and is included in this report for reference purposes only. Following an overview of each of the four water agencies, this Chapter includes discussion of long-term water supply and delivery issues for the City of Santa Clarita. A map depicting the service boundaries for the water agencies serving the City of Santa Clarita is included as Exhibit F on the following page. [Section Intentionally Left Blank] 42 C ity of Santa Clarita MSR

44 Exhibit F Santa Clarita MSR Water Service 43 C ity of Santa Clarita MSR

45 Castaic Lake Water Agency The Castaic Lake Water Agency (CLWA), a wholesale public water agency, was formed in 1962 through passage of the Castaic Lake Water Agency Law. At that time, CLWA s purpose was contracting with the State of California through the Department of Water Resources to acquire and distribute State Water Project water to retail water purveyors. The retail purveyors, referenced previously, include CLWA s Santa Clarita Water Division, Los Angeles County Waterworks District No. 36, Newhall County Water District, and Valencia Water Company. Since 1962, subsequent legislation broadened CLWA s purpose, which now includes, but is not limited to: (1) acquiring water from the State; (2) distributing wholesale water through a transmission system acquired or constructed by CLWA; (3) reclaiming (recycling) water; (4) selling retail water within certain boundaries; and (5) exercising other related powers. The CLWA service area, Exhibit G below, comprises approximately 195 square miles (124,800 acres) in Los Angeles and Ventura counties. CLWA serves the incorporated and unincorporated areas in, or adjacent to, the Santa Clarita Valley. The service area includes largely urban areas, such as the City of Santa Clarita, other smaller communities, and rural areas. CLWA is a contractor of the State Water Project and maintains approximately 80 service connections. The West Branch of the California Aqueduct terminates at Castaic Lake, in the northern portion of the service area. Exhibit G Castaic Lake Water Agency 44 C ity of Santa Clarita MSR

46 Table 20 - Financial Information (FY /FY ) FY Rev 65,122,800 Exp 90,237,600 Reserve 59,282,820 CIP 44,221,700 FY Rev 70,835,700 Exp 92,963,800 Reserve 59,292,800 CIP 25,901,900 Agency Information Address: Bouquet Canyon Road, Santa Clarita, CA Contact: Dan Masnada Phone: (661) Website: Date Formed: 1962 Governance: 11 member Board (6 from 3 divisions, 2 at-large, 1 from each retail purveyor) Service Area Information Service Area: 124,000 acres Population Served: 286,751 No. Water Treatment Plants: 2 No. Turnouts to Agencies: 25 Other Facilities: Sand Canyon Reservoir & Pump Station Rio Vista WTP Expansion Financial Overview Review of CLWA s budget and financial documents reflect the agency being in sound financial condition, and adapting well to the negative impact on agency revenues due to the economic downturn. Over the past several years, CLWA has experienced escalating costs without a full corresponding increase in revenue, but has adjusted well to compensate. Total expenditures for FY 2011/12 are budgeted at $92,963,800 and are comprised of General Fund/Operating Budget expenditures (less transfers) of $16,538,500, Capital Improvement Program (CIP) expenditures of $25,901,900, State Water Contract Fund expenditures of $25,617,200, and COP principal and interest payments of $24,615,200. These expenditures will be funded from total revenues of $70,835,700, a transfer of $22,128,100 million from COP proceeds, and one percent property tax revenues fund balances. The increase in budgeted revenues from FY to FY is primarily due to anticipated increases in water sales revenues, capital facility fee revenue, and tax revenue from the State Water Contract. Expenditure increases are primarily for water resources and administrative functions. The decrease in CIP expenditures is due to less cost of major projects anticipated to be performed in FY The agency s annual budget is prepared on a modified accrual basis, the same basis of accounting used for the financial statements. Revenues are recognized in the accounting period they become measurable and available to finance expenditures of the current period. Expenses are recorded at the time the liability is incurred. The agency receives funding from a variety of sources, including wholesale water sales, facility capacity fees, property tax revenues, and other non-operating revenues and interest revenues. Expenditures include purchase and treatment of water, pumping costs, employee salaries and benefits, administrative expense, materials and maintenance and debt service. Additionally, the cost allocation of labor costs between the agency s enterprise retail division, SCWD, and the agency are updated annually during the budget cycle. 45 C ity of Santa Clarita MSR

47 For FY , the agency budget documents acknowledge the continuing challenge to the agency s operating and capital improvement budgets due to the economic recession and the impact on the housing and commercial markets. They indicate that the budget is considered a flat budget that continues key water resources initiatives and transitions a significant major capital projects construction program to a more modest design program. This is in response to the continuing economic slowdown and the agency s low revenue levels, but the continued need to maintain a reliable water supply. The Final FY 2011/12 Budget does not propose any significant new programs and does not add or upgrade staff. The budget is composed of four funds: an operating fund, a capital improvement fund, a state water contract fund, and a debt service fund from which agency activities are conducted. The following Table reflects the FY (projected) and FY (budgeted) fund balances for each fund. Table 21 - Castaic Lake Water Agency FY 10/11 & FY 11/12 Fund Balances Operating Capital State Water Debt Service FY ,712 47,901,940 15,468, ,200 FY ,796,612 26,760,590 14,679, ,200 The agency continues to maintain significant annual reserves. The reserves are composed of Operating, Capital, Debt Service and Economic Uncertainty funds. Total budgeted FY end of year combined reserve fund balance is $59,292,800. The following Table reflects the FY budgeted reserves. Table 22 - Castaic Lake Water Agency FY Projected Reserve Operating Capital Debt Service Econ Uncertainty FY ,330,000 18,032,900 10,075,300 29,854,600 Overall, the agency has adequate funds for current service levels, assumes reasonable projections for future service and capital infrastructure obligations, and maintains sufficient reserves. Review of the agency s 5-Year Operating Fund forecast reflect maintaining a stable Operating Fund Balance annually, accounting for fluctuations in revenues and operating expenditures, and a commitment to increasing the fund balance annually. The projected increase in fund balance over the 5 years is approximately $5,200,000. Table 23 summarizes the agency s 5-Year Projections for the Operating Fund. 46 C ity of Santa Clarita MSR

48 Table 23 - Castaic Lake Water Agency 5-Year Operating Fund Projection FY FY FY FY FY Carryover (454,288) 1,090,612 1,871,026 2,883,068 4,020,183 Revenues 17,377,400 18,785,688 20,057,358 21,289,315 22,364,198 Expenditures 16,123,500 18,310,824 19,366,142 20,489,069 21,684,081 Transfers In 291, , , ,869 0 Fund Balance 1,090,612 1,871,026 2,883,068 4,020,183 4,700,301 The agency has several long-term liability and debt obligations including several COP bond issues, the State Water Contract, and Buena Vista/Rosedale-Rio Bravo Water Acquisition. The combined COP bond remaining principal balance at the conclusion of FY was $316,698,876, with the FY debt service obligation being $24,316,771. Maturity dates range from 2014 to The Buena Vista/Rosedale-Rio Bravo acquisition debt service is based on the cost per acre foot of 11,000 acre feet of water, adjusted annually by the change in the CPI. The State Water Contract is a long-term water supply contract funded through a special assessment within the agency boundaries. Table 24 summarizes the District s Five- Year Projections for the COP debt service coverage from FY Table 24 - Castaic Lake Water Agency 5-Year COP Debt Service Coverage FY FY j FY i FY FY Avail Rev 27,918,707 30,954,181 44,309,585 50,386,408 64,111,433 Debt Serv 22,088,470 24,316,771 24,274,607 29,533,928 29,550,921 Bal Avail 5,830,237 6,637,410 20,034,978 20,852,480 34,560,512 Trends and Projections CLWA obtains its water supply for wholesale purposes principally from the State Water Project (SWP) and currently has a Water Supply Contract with the Department of Water Resources (DWR) for 95,200 acre-feet (AF) per year. The maximum annual amount in SWP s water supply contract with DWR was originally 23,000 AF, but was amended to 41,500 AF in In 1991, CLWA purchased 12,700 AF from the Devil s Den Water District in Kern County. In 1999, CLWA purchased an additional 41,500 AF from another Kern County water district for the current total of 95,200 AF. CLWA also imports water from two other Kern County water districts, the Buena Vista Water Storage District and the Rosedale-Rio Bravo Water Storage District. Buena Vista s high flow Kern River entitlements are captured and recharged within the Rosedale-Rio Bravo s service area on an ongoing basis. CLWA receives 11,000 AF of these supplies through direct delivery of water to the California Aqueduct via the Cross Valley Canal. All imported water is delivered to Castaic Lake through SWP facilities. From Castaic Lake, which serves as the terminal reservoir of the SWP s West Branch, the water is treated at either CLWA s Earl Schmidt Filtration Plant or Rio Vista Water Treatment Plant and delivered to the retail water purveyors through transmission lines owned and operated by CLWA. The 2010 SCVUWMP, jointly prepared for CLWA, the Santa Clarita Water Division, the Newhall County Water District, and the Valencia Water Company (with the cooperation of Los Angeles County Waterworks District No. 36), states that the CLWA service area is projected to grow at an average annual rate of approximately 1.5 percent per year over a 40-year planning period to Year Over the entire 40-year span, the service area population is projected to grow from 286,751 in 2010 to 511,918, an 47 C ity of Santa Clarita MSR

49 increase of 78 percent. The total demand trend on water supplies is expected to continue to rise within the Santa Clarita area (along with most of California) because of population, economic activity, environmental and water quality needs, and regulatory requirements. Projected water demands for each of CLWA s four retail purveyors were estimated in the 2010 Santa Clarita UWMP and are listed in Table 25. Table 25 - Summary of Projected Water Demands LACWD # 36 1,243 1,759 2,189 2,619 3,048 3,478 3,908 4,338 4,768 NCWD 10,560 12,571 14,246 15,922 17,598 19,273 20,949 22,624 24,300 SCWD 27,816 31,633 34,814 37,995 41,176 44,357 47,358 50,719 53,900 VWC 30,354 34,107 37,235 40,362 43,490 46,617 49,745 52,872 56,000 Total Demand 69,973 80,070 88,484 96, , , , , ,968 Capital Improvement Plan (CIP) Funding As the wholesale water supply agency for the Greater Santa Clarita Valley area, CLWA has invested hundreds of millions of dollars in facilities and capacity to purchase, transport, store, and deliver water to its customers and the retail water purveyors. Capacity in Castaic Lake, water treatment plants and upgrades, transmission pipelines, pump stations, delivery metering stations, and other related improvements are included in their inventory of capital facilities. The CLWA s adopted Capital Improvement Program and Budget is funded through a mix of revenue sources. These include capacity fees, user fees in the water rates, a portion of local property taxes, and other assorted fee revenues to meet the financial needs to fund the CIP. As shown in the prior agency description, CLWA also maintains a Facility Capacity Fee Fund, a Debt Service Fund, and a Reserve Fund to accumulate needed funds for the acquisition of property, easements, and construction of facilities as approved by the Board of Directors in the Annual Budget and CIP. CLWA classifies its CIP into five categories (identified in Table below) for purposes of identifying its projects and defines a capital project as non-operating expense items of the budget, which includes expenditures for fixed asset/equipment purchases as well as the accumulation of expenditures associated with construction projects, typically with a life of five years or more. Table 26 - Castaic Lake Water Agency CIP Categories/Expenditures Project Types Total Costs FY 2010/11 FY 2011/12 Major Capital Projects 253,294,200 29,487,400 11,122,100 Minor Capital Projects 4,820,100 2,262,500 2,192,000 Capital Planning, Studies Ongoing 10,819,300 11,388,800 & Administration New Capital Equipment Ongoing 370, ,000 Repair & Replacement Ongoing 1,282, , C ity of Santa Clarita MSR

50 While all of these program components are crucial to the mission of the agency, the Capital Planning, Studies and Administration component is a key strategic element of the CIP. These efforts focus on planning for the future needs and capabilities of the agency in water supply, recycled water, energy sustainability, reliability, and vulnerability contingency planning. The agency also periodically updates its System Hydraulic Model and Master Plan of Facilities. Newhall County Water District The Newhall County Water District (NCWD) is a County Water District, formed under Division 12 of the California Water Code, with authority to provide retail water service within its jurisdictional boundaries. NCWD s service area covers 34 square miles serving a population of approximately 44,000 in four geographic areas of the of the Santa Clarita Valley: Newhall, Pinetree, Castaic and Tesoro. A map of the NCWD service area is included as Exhibit H below. The boundaries of the District s service area are not contiguous. Exhibit H Newhall County Water District 49 C ity of Santa Clarita MSR

51 Agency Information Address: North Pine Street, Newhall, CA Contact: Stephen L. Cole, General Manager Phone: (661) Website: Date Formed: 1953 No. Employees: 31 Governance: District w/ 3 Elective Divisions Service Area Information Population Served: 44,400 Communities Served: Newhall, Castaic, Pinetree and Tesoro No. Service Connections: 9,637 Miles of Pipeline: 158 Water Sources: 59% groundwater wells; 41% Castaic Lake Water Agency Potable Deliveries: 9, acre feet or 3.28 billion gallons No. Reservoirs: 25 Storage Capacity: million gallons Other Facilities: 11 active wells, 15 booster stations Table 27 - Financial Information (FY /FY ) FY Rev 11,378,499 Exp 10,125,116 Op Reserve 1,253,383 CIP 938,463 FY Rev 12,302,825 Exp 11,902,825 Op Reserve 400,000 CIP 1,572,687 Financial Overview Review of NCWD s budget and financial documents reflect the District being in generally sound financial condition, and has adapted well to the negative impact on district revenues due to the economic downturn and four-year drought ( ). Over the past several years, NCWD has experienced escalating costs without a full compensating increase in revenue, thus requiring utilization of carryover surplus funds in some years in its operating budget, but has adjusted well to compensate. Total budgeted FY combined Operating and CIP revenues is $12,302,825 with expenditure of $11,902,825. The District continues to maintain an adequate annual combined Operating/CIP fund balance and significant total reserves. Total projected FY end-of-year Reserve Fund balance is $5,497,519, and projected fund balances for all Funds combined is $6,058,054. Overall, the District has adequate funds for current service levels, assumes reasonable projections for future service, and capital infrastructure obligations, and maintains sufficient reserves. The District s annual budget is prepared on a full accrual basis, the same basis of accounting used for the financial statements. The intent of the District is to establish and maintain water user rates sufficient to provide for payment of general operations and maintenance expenses, capital improvements, and annual debt service. Revenues are recorded at the time they are earned, and expenses are recorded at the time the liability is incurred. The District receives funding from a variety of sources, including retail water sales, connection fees, property tax revenues, and other non-operating revenues and interest revenues. Expenditures include purchase of water, pumping costs, employee salaries and benefits, administrative expense, materials and maintenance, and debt service. For FY , the District budget documents acknowledge the continuing challenge to the District s operating and capital improvement budgets due to the economic recession and the impact on the housing and commercial markets. They indicate that the combination of these events negatively affects the revenue assumptions used by the District in the preparation of its five-year water revenue projections. Further pressure comes from increased costs which must be incorporated into department 50 C ity of Santa Clarita MSR

52 budgets, such as purchased water costs, purchased power, medical insurance, fees, and fuel. The budget emphasizes short and long-term planning recognizing the lack of growth and associated costs within the District s fiscal constraints. It is the responsibility of the District to make sure expenses do not exceed revenues to create a balanced budget. The budget is composed of four funds: an Operating Fund, a Capital Fund, a Reserve Fund, and a Restricted Fund. Table 28 reflects the FY (projected) and FY (budgeted) fund balances for each fund. Table 28 - Newhall County Water District FY 10/11 & FY 11/12 Fund Balances Operating Capital Reserve Restricted FY , ,383 4,968, ,089 FY , ,497, ,535 Review of the district s 5-Year combined Operating/CIP Fund forecast and the Reserve Fund forecast reflect maintaining a stable Operating/CIP Fund Balance annually, accounting for fluctuations in revenues and Operating/CIP expenditures, and a commitment to increasing the Reserve Fund annually. The projected increase in the Reserve Fund over the 5 years is approximately $1,000,000. Tables 29 and 30 summarize the District s Five-Year Projections for the combined Operating/CIP Funds and the Reserve Fund. As indicated in the projection, the Reserve Fund balance is maintained at 46%- 54% of annual expenditures. Table 29 - Newhall County Water District 5-Year Operating/CIP Fund Projection FY FY FY FY FY Revenues 12,302,825 11,323,123 11,857,686 12,227,749 12,528,074 Expenditures 11,902,825 10,923,123 11,457,686 11,827,749 12,128,074 Fund Balance 400, , , , ,000 Table 30 - Newhall County Water District 5-Year Reserve Fund Projection FY FY FY FY FY Op/Maint 427, , , , ,803 Rate Stab 946, , , ,764 1,014,508 CIP 2,155,007 2,178,281 2,201,806 2,225,586 2,249,622 Debt Serv 1,023,509 1,336,068 1,659,186 1,692,369 1,734,679 Emergency 945, , , ,472 1,013,184 Total 5,497,519 5,856,542 6,238,318 6,342,827 6,469,795 The District has five long-term debt obligations for various loans originating between 1998 and Maturity dates range from 2018 to Total outstanding principal balances as of June 30, 2011 stands at $14,150, 280. The annual debt service obligation on the loans is $1,840,090. For FY , this 51 C ity of Santa Clarita MSR

53 annual obligation is approximately 15% of the total budgeted Operating and Capital Improvement Program expenditures. Capital Improvement Plan (CIP) Funding The Newhall County Water District (NCWD) was formed by the voters in 1953, when the community began to experience growth beyond the previous private ranches and landowners. When the Newhall Water Company became the NCWD, its infrastructure consisted of several wells, one wooden reservoir, and a small pipeline distribution system. The District expanded over the next 50 years to serve a diverse group of areas of the Valley, connected to the CLWA supply system and also using groundwater as a local supply. The booming growth in the 1960 s to 2000 era resulted in abandoning the old system and building a completely new one. Even elements of the current storage and distribution system are now aged to the point of being replaced and modernized. The NCWD is also coordinating with the CLWA and SCWD on developing alternative water supply sources (as described in other areas of the report). As part of the Integrated Regional Management Plan (IRWMP) completed and submitted in 2009, the District has several proposed projects that will provide reliability and future supply capability, including groundwater and the next phases of the Master Plan for Recycled Water. With growth at a three-year stable point, the District is in the middle of a modernizing and system replacement process utilizing reserve funds and water rate revenues to invest for the future growth and life of the water system. The Five-Year CIP for through has identified projects estimated at a total cost of $7,512,687 and is dependent on funding availability. The CIP is funded at $1,572,687 and includes pipeline replacements, reservoir refurbishing, valve and SCADA upgrades, and other important system repairs to extend the life of the system. The District utilizes an asset management system to track age, replacement timing, and value for all physical assets of the District. Proactively replacing equipment and facilities at appropriate points such as wells, pump stations, and reservoirs is designed to provide reliability and prevent major system failures. Upgrades, in concert with development, have also allowed the District system to gain capacity and reliability. The District s new administrative offices were constructed in to meet the growing demands of new customers and operations. The CIP contains four main types of projects (identified Table 31, below) that are planned for the following levels of funding: Table 31 - Newhall County Water District CIP Categories/Expenditures Project Types Total Costs 2011/ /13 Asset Replacement (pipelines, valves, 5,852,687 1,382,687 1,435,000 meters) Rehabilitation (reservoir coating, painting) 920,000 20,000 New Capital (medium/small equip) 155,000 25,000 25,000 Upgrades (SCADA, software systems, GIS) 585, , , C ity of Santa Clarita MSR

54 Santa Clarita Water Division The Santa Clarita Water Division (SCWD) is operated as an enterprise activity by the Castaic Lake Water Agency (CLWA), with a clear separation between wholesale and retail operations. In 1973, the Santa Clarita Water Company was formed as the result of a merger between the Bouquet Water Company and the Solemint Water Company. In 1999, CLWA acquired the stock of the Santa Clarita Water Company and created SCWD to provide retail water service as a public agency. SCWD s water supply is sourced from both groundwater and imported water. The SCWD operates a service area of approximately 32 square miles. The service area includes portions of the City of Santa Clarita and unincorporated portions of Los Angeles County in the communities of Saugus, Canyon Country, Valencia and Newhall (see Exhibit I below). Water is supplied from both groundwater and Castaic Lake Water Agency (CLWA) imported water. SCWD operates and maintains an infrastructure system of approximately 300 miles of existing pipeline, 48 water tanks containing nearly 74 million gallons of storage capacity, 29 pump stations and 15 groundwater production wells. Exhibit I Santa Clarita Water Division 53 C ity of Santa Clarita MSR

55 Agency Information Address: Summit Circle, Santa Clarita, CA Contact: Mauricio Guardado, Retail Manager Phone: (661) Website: Date Formed: 1973 Governance: District w/ 7 Elective Divisions Service Area Information Population Served: 84,000 Service Area: 32 square miles Miles of Pipeline: 300 miles Water Sources: Groundwater wells and Castaic Lake Water Agency No. Reservoirs: 47 Pump Stations: 29 Storage Capacity: 74 million gallons Table 32 - Financial Information (FY /FY Estimates) FY Rev 24,645,876 Exp 18,216,858 Op Reserve 3,200,108 CIP 6,878,655 FY Rev 26,300,200 Exp 19,534,900 Op Reserve 3,818,475 CIP 5,485,417 Financial Overview Review of SCWD s budget and financial documents reflect the Division being in sound financial condition. As a retail component enterprise fund within the Castaic Lake Water Agency (CLWA), the Division is in an advantageous position to adapt to the negative impact on division revenues due to the economic downturn. Total budgeted FY operating revenues are $26,300,200, with operating expenditures of $19,534,900. After payment of debt service obligations and transfers into reserve funds, the FY budget is balanced. The Division continues to maintain an adequate annual reserve fund balance and sufficient total reserves. Total projected FY end-of-year Operating Reserve fund balance is $3,818,475, and the projected Reserve Fund balance for all three primary reserve funds (Operating, Rate Stabilization & CIP) is $4,588,018. Additionally, the Division maintains fund balances in COP, Expansion, and Developer Deposit Funds. Overall, the Division has adequate funds for current service levels, assumes reasonable projections for future service and capital infrastructure obligations, and maintains sufficient reserves. The Division s annual budget is a collaborative effort of CLWA staff and management, the Retail Operations Committee and the CLWA Board of Directors. A key component of each year s budget process is the use of a strategic plan specific to SCWD to relate the mission statement to the annual work program objectives. Additionally, the cost allocation of labor costs between SCWD and CLWA are updated annually during the budget cycle. The budget is composed of several funds: an Operating Fund, a Capital Project Reserve Fund, an Operating Reserve Fund, a Rate Stabilization Reserve Fund, a COP Fund, a Developer Deposit Fund, and an Expansion Fund. The Division receives funding primarily from retail water sales, with some revenue from impact capacity fees, miscellaneous other non-operating revenues, and interest revenues. Expenditures include 54 C ity of Santa Clarita MSR

56 purchase of water, pumping costs, employee salaries and benefits, administrative expense, materials, and maintenance and debt service. The Division s three categories of Reserve funds are the Operating Expense, Rate Stabilization, and Capital Improvement funds. The projected Operating Reserve Fund balance for FY is approximately 20% of the Operating budget. This reserve is below the Division s targeted amount of 25%. Table 33 reflects the FY (projected) and FY (budgeted) Reserve Fund balances for each Reserve Fund. Table 33 - Santa Clarita Water Division FY 10/11 & FY 11/12 Reserve Fund Balances Operating Capital Rate Stabilization FY ,200,108 4,674, ,808 FY ,818, , ,004 As SCWD operates as an enterprise fund within the CLWA, there is no specific Five-Year forecast available for the Division. The CLWA does include long range forecasting within its overall annual budgeting and strategic planning process. This forecast integrates the SCWD into that master forecast which was previously reviewed under the CLWA discussion. The Division has long-term debt obligations, including COPs issued in 2010 for $14,475,000 maturing in 2014, and an inter-fund loan obligation in 2000 with an initial principal amount of $64,756,670. This inter-fund loan was effectuated as part of the purchase transaction of the Santa Clarita Water Company by CLWA in The current principal balance is $56,838,845. Maturity date for the loan is The annual debt service obligation on the long-term debt is $4,942,269. For FY , this annual obligation is approximately 15% of the total budgeted Operating and Capital Improvement Program expenditures. Capital Improvement Plan (CIP) Funding The CLWA s Santa Clarita Water Division has a separately developed and funded CIP based upon a Water Master Plan last updated in The Division identified needed improvements over the next 20 years of $62,396,000 based on existing needs, and $87,159,000 based on projected needs of future development of its service area (in 2008 dollars). These projects will be designed and constructed as needed, and funding will come from a variety of sources including Capacity Fees, a portion of property taxes, water rates and, where justified, bond financing over the life of the facilities. Each Annual FY Budget and CIP outlines the status of the program and updated revenues and costs to continue the program. Projects are identified and evaluated to meet the infrastructure and operational needs of the Division. Six categories of Capital Projects have been identified and are identified in Table 34, below. 55 C ity of Santa Clarita MSR

57 Table 34 - Santa Clarita Water Division CIP Categories/Expenditures Project Types Total Costs 2011/ /13 Capital Projects Major (over 3,717,175 1,806, ,000 $250,000) Minor Capital Projects 920,000 20, (under $250,000) Upgrades to Existing Assets Replacements ( pipes, 367,608 2,946,477 2,510,580 tanks, pumps) Studies & Administration , Equipment 2,121, ,000 1,485,000 Valencia Water Company The Valencia Water Company (VWC) is an investor-owned water company regulated by the California Public Utilities Commission (CPUC) and is not under the purview of LAFCO. The CPUC is the State Agency charged with regulatory oversight of investor-owned utilities in California. VWC, the largest water retailer in the Santa Clarita Valley, serves approximately 113,000 residents in Valencia, Stevenson Ranch, and portions of Newhall, Saugus, and Castaic. The customer base is approximately 85 percent residential, with the remaining 15 percent consisting of commercial, industrial, public authority and irrigation customers. VWC serves a mix of approximately 50% groundwater pumped from wells and 50% imported state water which is purchased from Castaic Lake Water Agency. Groundwater is pumped from the shallow Alluvial Aquifer as well as the underlying deeper Saugus Formation. Recycled water for irrigation in the VWC service area first began delivery in July Exhibit J on the following page depicts the service area for the VWC. 56 C ity of Santa Clarita MSR

58 Exhibit J Valencia Water Company Agency Information Address: Avenue Rockefeller, Valencia, CA Contact: Cris Perez, Operations Manager Phone: (661) Website: Date Formed: Governance: Privately Owned Water Company Service Area Information Population Served: 113,000 Service Area: 30 square miles Water Sources: Groundwater and Castaic Lake Water Agency Total Annual Water Delivery: 10.3 billion gallons Average Residential Usage: 15,583 gallons/month Average Residential Annual Cost: $487/year Financial Overview Table 35 - Financial Information (CY 2010 & CY 2011) CY 2010 Rev 22,295,000 Exp 19,015,000 Reserves N/A CIP N/A CY 2011 Rev 23,117,000 Exp 21,702,000 Reserves N/A CIP 1,726,000 The VWC, a private retail water service provider, operates on a calendar year budget cycle. Review of VWC s budget and financial documents reflect the company being in sound financial condition. Total budgeted FY Operating Revenues are $23,117,000, with Operating Expenditures of 57 C ity of Santa Clarita MSR

59 $21,702,000. The VWC receives funding primarily from retail water sales, with some revenue from miscellaneous other non-operating revenues and interest revenues. Expenditures include purchase of water, pumping costs, employee salaries and benefits, administrative expense, materials and maintenance, taxes, debt service, and a limited capital improvement program. The VWC has long-term liability obligations, including secured notes payable, advances for construction, deposits held for construction, and other obligations. As of FY 2010, these long-term obligations totaled $41,980,000. As the VWC is a private company, Reserve Funds are not included as part of the overall budget. Water Supply and Delivery Issues City of Santa Clarita Water Supply Planning The Cortese-Knox-Hertzberg Act of 2000 and other laws of the State of California require water supply and retail agencies to complete plans and studies to demonstrate that a reliable and safe water supply is reasonably expected to be available for the next year horizon. The following presents an overview and description of the plans and systems that each water agency serving the City of Santa Clarita has in place to respond to these requirements. Several recent studies and reports have been completed by the agencies and are the basis for a majority of this portion of the report. Each will be referenced as a noted source document in the reference section of the report. As previously stated, the Castaic Lake Water Agency is the wholesale water agency primarily responsible for providing imported and regional water supplies to the Santa Clarita Valley. The CLWA is a State Contractor and obtains a majority of its imported water via the State Water Project (SWP) that delivers water from areas north of the agency including the San Joaquin Valley. Several additional sources include seasonal supplies, out of area purchases, and transfers in-lieu of use increase the supply beyond the State Contractor allocation. Additionally, CLWA, NCWD, and VWC each have developed groundwater sources and storage systems that provide an ongoing supply averaging approximately 30% of the water used historically by the districts. New water supply sources are also being developed, primarily through a master planned recycled water system in cooperation with the Santa Clarita Valley Sanitation District. These sources of water are described in Table 36 on the following page, excerpted from the 2010 Santa Clarita Valley Urban Water Management Plan (SCUWMP), adopted in June, As indicated in the 2010 SCUWMP, the participating agencies have determined that an adequate water supply will be available for the City of Santa Clarita into the foreseeable future (to year 2050) if planned supply and demand management programs are developed. 58 C ity of Santa Clarita MSR

60 Table 36 - Summary of Current and Planned Water Supplies and Banking Programs (AF) Santa Clarita Valley Existing Supplies Alluvial Aquifer 24,385 24,000 24,000 24,000 25,000 25,000 25,000 25,000 25,000 Saugus Formation 6,725 9,225 10,225 10,225 10,225 10,225 10,225 10,225 10,225 Total Groundwater 31,110 33,225 34,225 34,225 35,225 35,225 35,225 35,225 35,225 Total Recycled Water Imported Water State Water Project 58,300 58,100 57,900 57,600 57,400 57,400 57,400 57,400 57,400 Flexible Storage Accts 6,060 6,060 4,680 4,680 4,680 4,680 4,680 4,680 4,680 Buena Vista-Rosedale 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 Nickel Water Newhall Land 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 Total Imported Water 76,987 76,767 75,187 74,887 74,687 74,687 74,687 74,687 74,687 Existing Banking Programs Rosedale Rio-Bravo Semi tropic Semi tropic-newhall 20,000 15,000 4,950 20,000 15,000 4,950 20,000 15,000 4,950 20,000-4,950 20,000-4,950 20,000-4,950 20,000-4,950 20,000-4,950 20,000-4,950 Total Banking 39,950 39,950 39,950 24,950 24,950 24,950 24,950 24,950 24,950 Planned Supplies Alluvial Aquifer - - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Saugus Formation - 1,375 1,375 1,375 1,375 1,375 1,375 1,375 1,375 Total Groundwater - 1,375 2,375 3,375 4,375 5,375 6,375 7,375 8,375 Total Recycled ,725 6,225 7,775 10,275 13,775 17,275 20,975 Total Banking Prog s ,000 10,000 20,000 20,000 20,000 20,000 Available Groundwater Supplies The available groundwater supply in the Santa Clarita Valley is provided primarily through two aquifers, the Alluvium and Saugus Formation Aquifers. Groundwater issues in Santa Clarita Basin have been documented in a 2009 Groundwater Management Plan (GWMP) developed over the last 25 years. The ongoing work of the GWMP has produced three technical reports and detailed modeling that establish a reasonable production and recharge program to sustain the two aquifers and projected uses of the basin. Groundwater productions estimates for the Alluvium and Saugus Formation Aquifers are summarized in the Table below. Table 37 - Groundwater Production (AF) for Santa Clarita Aquifers Aquifer Normal Years Dry Year 1 Dry Year 2 Dry Year 3 Alluvium 30,000 to 40,000 30,000 to 35,000 30,000 to 35,000 30,000 to 35,000 Saugus Formation 7,500 to 15,000 15,000 to 25,000 21,000 to 25,000 21,000 to 35,000 Total 37,500 to 55,000 45,000 to 60,000 51,000 to 60,000 51,000 to 70, C ity of Santa Clarita MSR

61 Recent historical groundwater pumping by the retail water purveyors, other groundwater users, and projected future groundwater pumping in normal years is summarized in the following Tables. Table 38 - Recent Historical Groundwater Production (AF) SCWD 12,408 13,156 10,686 11,878 10,007 Alluvium Saugus Formation 12, , , , ,077 0 LACWWD #36 Alluvium Saugus Formation NCWD Alluvium Saugus Formation 4,824 1,389 3,435 5,572 2,149 3,423 5,497 1,806 3,691 5,912 1,717 4,195 5,728 1,860 3,868 VWC Alluvium Saugus Formation 14,471 12,228 2,513 14,333 11,884 2,449 15,570 13,140 2,367 16,094 14,324 1,770 15,295 12,459 2,836 Total Purveyor 32,316 33,061 31,690 33,884 31,100 Groundwater Fraction of Total Municipal Water Supply 46% 45% 41% 45% 44% Table 39 - Projected Groundwater (AF) Production in Normal Year LACWWD #36 Alluvium Saugus Formation NCWD Alluvium Saugus Formation SCWD Alluvium Saugus Formation VWC Alluvium Saugus Formation Total Purveyor Alluvium Saugus Formation Agricultural and Other Alluvium Saugus Formation Total Basin Alluvium Saugus Formation ,825 4,400 10,500 2,850 11,675 2,850 24,000 10,600 14, ,500 11, ,825 4,400 10,500 3,350 12,675 3,350 25,000 11,600 13, ,500 12, ,825 4,400 10,350 3,350 13,675 3,350 26,000 11,000 12, ,500 12, ,825 4,400 11,500 3,350 14,675 3,350 28,000 11,600 10, ,100 12, ,825 4,400 11,500 3,350 15,675 3,350 29,000 11,600 9, ,100 12, ,825 4,400 11,500 3,350 16,675 3,350 30,000 11,600 8, ,100 12, ,825 4,400 11,500 3,350 17,675 3,350 31,000 11,600 7, ,100 12, ,825 4,400 11,500 3,350 18,675 3,350 32,000 11,600 6, ,600 12, C ity of Santa Clarita MSR

62 As reflected in the previous Tables, the groundwater operating plan recognizes ongoing pumping by the two major uses in the Santa Clarita Basin, municipal and agricultural water supply. It is projected that agricultural uses will decrease and municipal uses will increase by a similar amount. The distribution of groundwater among the water purveyors is expected to continue in accordance with the adopted 2009 Groundwater Management Plan. Reliability factor is a term used to describe the ability of a water supplier, both wholesale and resale, to meet short-term and long-term water demands. Reliability can be affected by groundwater contamination. The SCUWMP provides a detailed history of perchlorate contamination and the steps already taken to remedy its impact on both alluvial and deep groundwater wells. The CLWA, SCWD, VWC and the NCWD have jointly identified two well areas that require remediation from local contaminants. CLWA has developed a pilot remediation program which was approved by the Department of Health Services and Regional Water Quality Control Board. CLWA received a Proposition 84 grant to fund further testing of the wells and implement the preferred remediation alternative. Recycled Water Supplies The use of existing sources of recycled water (and the development of future sources of recycled water) is important for increased supply and reliability to the Santa Clarita and CLWA service area. As stated earlier, an initial recycled water program has been developed in cooperation with the County of Los Angeles Sanitation Districts. In 1993 and 2002, CLWA in cooperation with the area water and sanitation agencies, developed Draft Recycled Water Master Plans for the Santa Clarita Valley area. The Plans and EIR were adopted in March The agencies that participated in the implementation of the Recycled Plan are listed in the Table below. Table 40 - Recycled Water Master Plan Participating Agencies Participating Agencies Role in Plan Development Castaic Lake Water Agency Wholesale water provider Newhall County Water District Retail water purveyor Santa Clarita Water Division Retail water purveyor Valencia Water Company Retail water purveyor Los Angeles County Waterworks Dist. #36 Retail water purveyor Santa Clarita Valley Sanitation District Recycled water supplier Berry Petroleum Potential recycled water supplier Phase 1 of the Recycle Plan has been constructed with capability to deliver 1,700 AFY to the VWC service area. Although recycled water deliveries are only at the 325 AFY level currently, plans are in place to increase deliveries with planned development to the VWC. CLWA has completed a design for the second phase that will take water from the Saugus Water Reclamation Plant (WRP) and distribute it to areas to the north, west and east. Several large users have been identified for use of up to 500 AFY. Plans are 61 C ity of Santa Clarita MSR

63 underway for the expansion of the South End Recycled Water Project (Phase 2C). These projects will substitute for existing demands on the imported and groundwater supplies. To accommodate anticipated growth in the Santa Clarita Valley, a 6 MGD expansion of the Valencia WRP is planned that will increase the plant production capacity to 27.6 MGD (30,912 AFY). No expansion of the Saugus WRP is planned. Based upon the Recycled Water Plan, reuse of this tertiary treated water from the two WRPs is anticipated at 15.5 MGD (17,400 AFY) by 2030 and beyond. Based upon the adopted Recycled Water Plans and agreements between the public agencies, the existing and projected wastewater flows and potential recycled water use are summarized in the Table 41, as presented in the 2010 SCUWMP. Table 41 - Projected Wastewater Generation Available for Recycled Water Use (AF) Projected Wastewater Generation 27,620 30,649 33,314 35,924 38, ,976 46,643 49,308 Demand w/conservation 69,673 72,343 71,908 80,236 88,564 96, , , ,877 Recycled Water LACWWD NCWD ,000 2,275 2,775 3,775 4,775 5,775 SCWD ,500 2,275 2,775 3,775 4,775 5,775 VWC 325 1,000 2,000 3,000 4,500 6,000 8,000 10,000 12,200 Total Purveyor 325 1,300 3,050 5,550 8,100 10,000 14,100 17,600 21,300 Non-Purveyor (Honor Rancho) ,500 1,500 1,500 1,500 1,500 Total Purveyor and Non-Purveyor Recycled Water 325 1,300 3,050 5,550 9,600 12,100 15,600 19,100 22,500 Possible Demand 69,348 71,043 68,858 74,686 78,964 84,792 89,620 94,449 99,077 Supplies to Meet Potable Demand Groundwater 31,100 34,600 36,600 37,600 39,600 40,600 41,600 42,600 43,600 Imported (foreign) Water 38,248 36,443 32,258 37,086 39,364 44,192 48,020 51,849 55,477 Foreign % of Potable Demand 55% 51% 47% 50% 50% 52% 54% 55% 56% Potentially Available for Recycled Water Use 15,233 15,722 15,607 17,838 19,265 21,531 23,563 25,605 27,609 As can be seen in the above Table, the retail water agencies each plan to participate as purveyors of recycled water to their service areas. By 2020, NCWD plans to use 500 AFY of recycled water. SCWD projects the use of 500 AFY. Finally, VWC plans to use 2,000 AFY of recycled water, a portion of which will be used in the Newhall Ranch area but will also relieve impacts on imported and groundwater supplies. It is also projected that excess tertiary treated water may be available if grants and projects can be developed for its use. 62 C ity of Santa Clarita MSR

64 The water agencies are also pursuing planning grants to develop additional projects under State Proposition 84, a State Bond initiative for providing grant funding for parks and recreation and water quality and reliability projects to local agencies, and other sources. One of the ongoing challenges of increasing use of recycled water is the cost to retrofit existing sites to be able to use the water under Health and Safety Code Title 22 and 23. The other related fiscal impact is the overall cost for construction of the separate system and the cost of producing the tertiary treated water for sale to the retail purveyors. Other issues such as groundwater basin plan standards for salinity and other nutrients must be resolved to obtain necessary basin and site approvals. Water Supplies and Demands As the above description of supplies from imported, groundwater, and recycled sources shows, the SCUWMP and participating agencies plans provide for a projected reliable water supply portfolio. The Table on the following page summarizes the Multiple-Dry Year Supplies and Demands which is the required three-year dry scenario as part of the SCUWMP. It should be noted that the Table includes: (1) the calculation for the recently required SB7X reduction of 20 percent, and (2) a planned reduction in demand through approved water conservation programs by the four water agencies. While it contains some information on adjacent service areas, it is a comprehensive summary of the Santa Clarita Valley water supply and demand forecast until As noted in the SCUWMP under Section Summary of Comparisons, CLWA and the retail purveyors have adequate supplies to meet CLWA service area demands during normal, single-dry, and multiple-dry years throughout the 40-year planning period. [Section Intentionally Left Blank] 63 C ity of Santa Clarita MSR

65 Table 42 - Projected Multiple-Dry Year Supplies and Demands (AF) Existing Supplies Existing Groundwater Alluvial Aquifer 20,425 20,425 20,425 21,825 21,825 21,825 21,825 21,325 Saugus Formation 19,700 19,700 19,700 19,700 19,700 19,700 19,700 19,700 Total Groundwater 40,126 40,125 40,125 41,525 41,525 41,525 41,525 41,025 Recycled Water Imported Water State Water Project 32,900 32,900 33,000 33,000 33,000 33,000 33,000 33,000 Flexible Storage Accts. 1,510 1,170 1,170 1,170 1,170 1,170 1,170 1,170 Buena Vista-Rosedale 11,000 11,000 11,000 11,000 11,000 11,000 11,000 11,000 Nickel Water Newhall 1,607 1,607 1,607 1,607 1,607 1,607 1,607 1,607 Total Imported 47,017 46,677 46,777 46,777 46,777 46,777 46,777 46,777 Banking Programs Rosedale Rio-Bravo 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Semi tropic 11,500 11, Semi tropic-newhall 4,950 4,950 4,950 4,950 4,950 4,950 4,950 4,950 Land Total Banking 31,450 31,450 19,950 19,950 19,950 19,950 19,950 19,950 Total Existing Supplies 118, , , , , , , ,577 Planned Supplies Future Groundwater Alluvial Aquifer - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Saugus Formation (Restored Well) 2,375 1,625 1,500 1,400 1,275 1,125 1, Saugus Formation (New Wells) 2,250 10,325 10,450 10,550 10,675 10,825 10,950 11,075 Total Groundwater 4,625 12,950 13,950 14,950 15,950 16,950 17,950 18,950 Recycled Water 975 2,725 5,225 7,775 10,275 13,775 7,275 20,975 Banking Programs - - 7,500 7,500 15,000 15,000 15,000 15,000 Total Planned Supplies 5,600 15,675 26,675 30,225 41,225 45,725 50,225 54,925 Total Existing and Planned Supplies 124, , , , , , , ,002 Demand w/o Conserve. 88,077 87, , , , , , ,865 20x2020 Reduction 9,027 19,626 21,266 22,770 24,342 25,914 27,486 29,058 Reduction from Recycled Water 1,300 3,050 5,550 8,100 10,600 14,100 17,600 21,300 Reduction from Water 7,727 16,576 16,662 16,748 16,833 16,919 17,005 17,091 Conservation Demand w/conserve. 80,350 80,757 89,926 99, , , , , C ity of Santa Clarita MSR

66 CHAPTER 4: MSR DETERMINATIONS THE CITY OF SANTA CLARITA City of Santa Clarita: MSR Determinations As referenced in the Introduction to this MSR Report, California Government Code Section provides that LAFCOs, upon receipt and consideration of an MSR, are required to adopt written findings addressing each of the following seven issues: Growth and population projections for the affected area. Present and planned capacity of public facilities and adequacy of public services, including infrastructure needs or deficiencies. Financial ability of agencies to provide services. Status of, and opportunities for, shared facilities. Accountability of community service needs, including governmental structure and operational efficiencies. Any other matter related to effective or efficient service delivery, as required by the Commission. The location and characteristics of any disadvantaged unincorporated communities within or contiguous to the sphere of influence. Based on the review of the City s projected population growth, financial capabilities, public infrastructure, and the special districts and regional agencies providing services to the City of Santa Clarita, contained within this MSR, the City of Santa Clarita s MSR determinations are summarized in Table 43 on the following page. 65 C ity of Santa Clarita MSR

67 Table 43 - City of Santa Clarita: MSR Determinations Growth and Population Projections Present and Planned Capacity of Public Facilities and Adequacy of Public Services, including Infrastructure Needs or Deficiencies Financial Ability of Agencies to Provide Services Status of, and Opportunities for, Shared Facilities The City of Santa Clarita s current population is approximately 176,320. By 2035, the City s population is expected to reach 239,923, a 32 percent increase over the City s current population. Approximately 7,000 housing units have received land use approval within the City of Santa Clarita and several thousand more housing units are the subject of pending land use applications. Although the economic recession has deterred the construction of new dwelling units throughout Southern California, it is expected that growth within the Santa Clarita Valley, and identifying logical service providers to serve that growing population, will continue to be a major issue for decades to come. The City of Santa Clarita provides its residents with an adequate level of municipal services, utilizing both regional service providers (fire, sheriff, vector control and sanitation) and four water purveyors (one wholesale and three retail agencies). No significant infrastructure needs or deficiencies were identified. Further, adequate CIP programs are in place to accommodate the City s future infrastructure needs. The City of Santa Clarita is in sound financial condition and has adapted well to the negative impact on City revenues due to the economic recession. Total expenditures for FY are budgeted at $159,376,274. These expenditures will be funded from total revenues of $159,791,339. CIP funding for FY included in the overall expenditures is $25,957,836. Despite an estimated loss of $14 million in General Fund revenues since 2007 due to declining sales tax and development fee revenues, the City s strategic budget practices have allowed the City to maintain a balanced budget during the recession without layoffs or drastic cuts in services. Of the regional agencies and special districts serving the City of Santa Clarita, no significant financial issues were identified. Although a full service City, Santa Clarita provides many of its key services through sharing facilities and services with other agencies and districts. 66 C ity of Santa Clarita MSR

68 Accountability of Community Service Needs, Including Government Structure and Operational Efficiencies Any Other Matter as Required by the Commission Location and Characteristics of Disadvantaged Unincorporated Communities These include, but are not limited to, fire protection and law enforcement, animal control, sewer maintenance, flood control, and water services. No additional opportunities were identified. City Council meetings are webcast live allowing easy access for residents and increased operational transparency. All public hearing notices are published online. The City uses a variety of advisory groups to act as liaisons to the community on issues concerning law enforcement, library, fire and other city service issues. The City has implemented an notification system to automatically update residents on current city topics and events of interest. City Briefs is a monthly newsletter accessible through the City s website ( which provides an additional source of city information. Santa Clarita also uses a full array of social media (Facebook, Twitter, and YouTube) to keep residents informed on emerging local government issues. Many City services can be completed online through the City s website, including service requests. Emergency notification is also offered through . No significant issues concerning government structure or operational efficiencies were identified. No other matters were identified at this time. No disadvantaged unincorporated communities are located with the City of Santa Clarita s sphere of influence. 67 C ity of Santa Clarita MSR

69 CHAPTER 5: SPHERE OF INFLUENCE RECOMMENDATIONS THE CITY OF SANTA CLARITA City of Santa Clarita: Sphere of Influence Recommendations The City of Santa Clarita and the County of Los Angeles utilized a joint planning process ( One Valley One Vision ) in developing the City s 2011 General Plan which resulted in coordinated City/County planning for land use, roadways, infrastructure needs and resource management within the Santa Clarita Valley. The City also consulted with the County of Los Angeles in developing its proposed SOI request, illustrated in Exhibit K. Current City SOI Government Code Section defines a sphere of influence as a plan for the probable physical boundaries and service area of a local agency, as determined by the commission. SOIs are planning tools used by LAFCOs and public agencies to plan for the logical extension of municipal services. SOIs are not precise boundaries and do not require legal metes and bounds descriptions. As conditions change, SOIs are periodically updated by LAFCO. SOIs can be increased or decreased at the sole discretion of LAFCO. Annexation of territory into a city cannot be approved by LAFCO unless the territory is located within the city s SOI. However, just because territory is located within a city s SOI, there is no guarantee that the territory will be annexed into that city. In 1999, twelve years following the City s incorporation in 1987, LAFCO approved an initial sphere of influence for the City of Santa Clarita. That SOI has remained unchanged with the exception of the annexation of several adjacent communities which were approved over the years. Currently, the City contains square miles (33,702 acres). The City s existing sphere of influence totals square miles (18,906 acres). Proposed City SOI The City of Santa Clarita s 2011 General Plan, the availability of 2010 Census data, and the recently completed joint Urban Water Management Plan provided a framework for the City to evaluate its longterm service boundary or sphere of influence. In developing their proposed SOI, the City worked with the County of Los Angeles to jointly develop a long-term service boundary for the City. The City is 68 C ity of Santa Clarita MSR

70 proposing a modified SOI that would include SOI reductions in some areas of the City and significant expansions in other areas. The City s proposed SOI includes square miles (24,864 acres), an increase of 9.31 square miles (5,958 acres) over the current SOI. It is depicted in Exhibit K on the following page. [Section Intentionally Left Blank] 69 C ity of Santa Clarita MSR

71 Exhibit K City s Proposed Sphere of Influence 70 C i t y o f S a n t a C l a r i t a M S R

72 The City s proposed SOI expansion area includes seven areas which are generally described below: Area A on Exhibit K is located between the southern end of the City and the I-5 Freeway. Approximately.91 square miles (595 acres) in size, the majority of the area is undeveloped and contains natural grassland, trees, and other flora. In addition, the property contains an 81-unit mobile home park, one single family home, and two large residential estates. Additional development of the property is unlikely due to the area s significant topography. Extending the City s SOI to include this area would generally align the watershed ridge which physically separates the Santa Clarita and San Fernando Valleys. Area 3 on Exhibit K contains the Elsmere Canyon area which is proposed by the City for annexation (see Chapter 2 for additional information). The area is 1.26 square miles (806 acres) in size and contains steep hillsides and canyons. The area is proposed for open space preservation and utility uses only. Area B on Exhibit K is located southeast of the Antelope Valley Freeway, is bisected by Placerita Canyon Road, and abuts the proposed South Sand Canyon Annexation area. The property is 4.35 square miles (2,784 acres) in size and contains vacant land and existing movie ranches used for television and video production. No additional development is proposed. The majority of the property is planned for open space preservation uses only. Areas 4 and 7 on Exhibit K contain the Vista Fair Oaks and South Sand Canyon Annexation areas (see Chapter 2 for additional information) located south of the Antelope Valley Freeway and which total 4.34 square miles (2,777 acres). Vista Fair Oaks is planned to include an additional 1,750 residential units, 800,000 square feet of commercial uses, and 436,000 square feet of business park uses. The majority of the South Sand Canyon area is within the Angeles National Forest under private ownership. The property currently contains two movie ranches and 13 existing homes. No additional development is proposed for the South Sand Canyon area. Area C on Exhibit K is the largest proposed SOI area and is located at the eastern edge of the City. Bisected by the Antelope Valley Freeway, the area is 5.7 square miles (3,659 acres) in size. Approximately 25 percent of the area is owned by the City for open space preservation uses. There are existing mineral extraction operations in the area. Area D on Exhibit K is 2.01 square miles (1,289 acres) in size and currently undeveloped. The property is currently used for filming operations. The area s single property owner is interested in future annexation to the City. Area E on Exhibit K includes the northern portion the Tesoro residential project. Approximately 3.36 square miles (2,150 acres) in size, development has stalled on the project due economic conditions and ongoing disputes over infrastructure improvements. Ultimately, the City sees itself as the logical, long-term municipal service provider for the entire Tesoro project area. East of Area E is the rural residential area of San Francisquito Canyon. The City has proposed to exclude a majority of that community from its proposed SOI. 71 C ity of Santa Clarita MSR

73 Vasquez Canyon Area (Area F on Exhibit K) the City has proposed a significant reduction in the existing SOI in the Vasquez Canyon area of approximately 10.5 square miles (6,740 acres). The SOI realignment excludes some rural residential areas where the extension of City services is not anticipated in the near future. The SOI does include the Pardee Homes Skyline Ranch project which was approved by the County in Recommended City SOI Alternative SOIs, by their very nature, are speculative. Development and growth trends are often neither consistent nor reliable over the long-term. Drawing a boundary to define where municipal services will be needed in the next 10 to 15 years is a difficult task. That is why the State Legislature (Government Code Section 56425) requires SOIs to be revisited, as necessary.. While imperfect, SOIs play an important role by promoting cooperative planning efforts among counties, cities, and districts to facilitate the logical and economical extension of their facilities and services. In developing a recommended alternative to the City s proposed SOI map, the following evaluative criteria were used: Considerable weight was given to the City s proposed SOI, developed jointly with the County, per Government Code Section SOIs should only include territory that is expected to need municipal services in the next 10 to 15 years. The seven proposed annexation areas, discussed in Chapter 2, are presumed to be successfully annexed into the City within the next 10 to 15 years. Areas that have approved development plans by the County ( potential annexation areas ), which are expected to be developed within the next 10 to 15 years, should be included in the City s SOI. Whenever possible, SOI boundaries should be clear, logical and follow significant man-made barriers (e.g., roads, freeways), natural barriers, ownership lines, or parcel lines. Exhibit L, on page 74, depicts the recommended SOI alternative. While the recommended SOI is generally consistent with the City s SOI proposal in many areas, there are some significant differences which are described below: Area A (on Exhibit L) is located between the southern end of the City, near the I-5 and Antelope Valley Freeways. The City s proposed SOI boundary is aligned along a watershed ridge separating the Santa Clarita and San Fernando Valleys. The recommended SOI boundary in this area includes the area abutting the I-5/Antelope Valley interchange. The confluence of the two freeways forms a logical, defined boundary for the City. Area 7 (on Exhibit L) depicts the South Sand Canyon Annexation area. The southern boundary of the City s proposed SOI in this area is irregularly shaped primarily following property ownership 72 C ity of Santa Clarita MSR

74 or section lines. The recommended SOI boundary squares off the southern portion of this territory to create a logical SOI boundary in this area. Area C (on Exhibit L) is located on the eastern edge of the City. The area is used for various mining operations and open space preservation uses. Since neither use requires an extension of municipal services in the near term, the property has not been included in the recommended SOI boundary. Area F (on Exhibit L) depicts the San Francisquito Canyon, a rural residential area protected by a Community Standards District (approved by the Board of Supervisors in November 2009). Annexation of this area is not anticipated by the City. The Community Standards District extends southerly to the existing City boundary. The recommended SOI in this area extends southerly to align with the boundaries of the City and the San Francisquito Canyon Community Standards District. 73 C ity of Santa Clarita MSR

75 Exhibit L Recommended Sphere of Influence for the City of Santa Clarita 74 C ity of Santa Clarita MSR