FRESNO LOCAL AGENCY FORMATION COMMISSION (LAFCO)
EXECUTIVE OFFICER’S REPORT
AGENDA ITEM NO. 18
DATE:
October 10, 2007
TO:
Fresno Local Agency Formation Commission
FROM:
Rick Ballantyne, Executive Officer
Darrel Schmidt, Deputy Executive Officer
SUBJECT:
Consider Adoption – Municipal Service Review and Sphere of
Influence Update Prepared for the Pinedale Public Utility District
Summary / Background
The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 requires LAFCo to
review and update, as necessary, city and special district Spheres of Influence (SOI) before
January 1, 2008, and every five years thereafter. Prior to, or in conjunction with an agency’s
SOI update, LAFCo is required to conduct a Municipal Service Review (MSR) for each agency.
On December 13, 2006, the Commission directed staff to enter into a contract with Pacific
Municipal Consultants (PMC) to prepare MSRs and SOI Updates for numerous special districts.
The attached MSR and SOI Update have been prepared for the Pinedale Public Utility District.
Municipal Service Reviews provide a comprehensive review of the services provided by a city or
special district and present recommendations with regard to the condition and adequacy of
these services and whether or not any modifications to a city or district’s SOI are necessary.
MSRs can be used as informational tools by LAFCo and local agencies in evaluating the
efficiencies of current district operations and may suggest changes in order to better serve the
public.
SOI updates may involve an affirmation of the existing SOI boundary or recommend
modifications to the SOI boundary. LAFCo is not required to initiate changes to an SOI based
on findings and recommendations of the service review, although it does have the power to do
so. Such updates are required by State law to be conducted every five years. MSRs are
required to be prepared prior to or in conjunction with SOI updates.
State law requires that the Commission in its consideration of the MSRs adopt written
determinations for each of the following nine criteria:
1.
2.
3.
4.
5.
6.
7.
Infrastructure needs or deficiencies
Growth and population projections for the affected area
Financing constraints and opportunities
Cost avoidance opportunities
Opportunities for rate restructuring
Opportunities for shared facilities
Government structure options, including advantages and disadvantages of the
consolidation or reorganization of service providers
8. Evaluation of management efficiencies
9. Local accountability and governance
1
As part of the SOI update, the Commission is required to consider the following four criteria and
make appropriate determinations in relationship to each of the following:
1. The present and planned land uses in the area, including agricultural and open-space
lands.
2. The present and probable need for public facilities and services in the area.
3. The present capacity of public facilities and adequacy of public services that the agency
provides or is authorized to provide.
4. The existence of any social or economic communities of interest in the area if the
Commission determines that they are relevant to the agency.
There are three Public Utility Districts (PUDs) within the County of Fresno. These Districts
include: Pinedale PUD, Riverdale PUD, and Tranquillity PUD. This report addresses the
Pinedale PUD. MSRs and SOI Updates prepared for the Riverdale and Tranquillity PUDs were
approved by the Commission at its August 22nd hearing.
Environmental Determination
The California Environmental Quality Act ("CEQA") requires that the Commission undertake and
review an environmental analysis before granting approval of a project, as defined by CEQA.
The MSR is categorically exempt from the preparation of environmental documentation under a
classification related to information gathering (Class 6 - Regulation Section 15306), which
states: "Class 6 consists of basic data collection, research, experimental management, and
resource evaluation activities which do not result in a serious or major disturbance to an
environmental resource. These may be strictly for information gathering purposes, or as part of
a study leading to an action which a public agency has not yet approved, adopted, or funded."
Indeed, this MSR collects data for the purpose of evaluating municipal services provided by the
agency. There is no land use change or environmental impact created by such a study.
Furthermore, the MSR qualifies for a general exemption from environmental review based upon
CEQA Regulation Section 15061(b)(3), which states: "The activity is covered by the general
rule that CEQA applies only to projects which have the potential for causing a significant effect
on the environment. Where it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment, the activity is not subject to
CEQA. Additionally, the SOI update qualifies for the same general exemption from
environmental review based upon CEQA Regulation Section 15061(b)(3).
There is no possibility that this MSR or SOI update may have a significant effect on the
environment because there are no land use changes associated with either document. If the
Commission approves and adopts the MSR and SOI update and determines that the project is
exempt from CEQA, staff will prepare and file a Notice of Exemption with the County of Fresno,
as required by CEQA Regulation Section 15062.
Discussion & Summary of Determinations
Pinedale Public Utility District is an independent special district surrounded by the City of Fresno
and roughly bounded by the San Joaquin River (north), Bullard Avenue (south), Ingram Avenue
(east), and Forkner Avenue (west). A significant portion of the 362-acre District is located within
the City of Fresno.
2
Territory within the District is divided into two non-contiguous areas (see District map attached).
The District’s SOI encompasses approximately 645 acres. A portion of the District’s boundary
and SOI overlaps the Pinedale County Water District.
The District also provides service to an area located west of the District and outside its current
SOI boundary (see attached map). The City of Fresno, in its review of the MSR and SOI Update
has recommended that the District transfer to the City all facilities and customers currently
served by the District in those areas located outside the District’s SOI. Alternatively, the City
states the District’s SOI, at a minimum, should be amended and the District’s boundary be
changed to include all territory served by the District but currently located outside its SOI.
The City also commented that when this area was developed (land generally bounded by
Marks, Valentine, Chenault, and Bluff Avenues) that the District was allowed to serve this area
since the City’s Herndon-Cornelia Interceptor sewer had not been constructed. The City
indicates that such service should have been transferred to the City in 1977, when the
Interceptor line was constructed--but such transfer never occurred.
The District owns the sewer lines and street lights within its service area. The District maintains
its sewer collection system. District lines discharge sewage effluent into the City of Fresno’s
collection system for transport to the Fresno/Clovis Regional Wastewater Treatment Plant. The
City provides this service through an existing service agreement. The District does not have
any plans for upgrading or expanding its system.
The District provides wastewater, street lighting, street sweeping, and landscape maintenance
service. The wastewater service has approximately 2,050 customers. An estimated 2,400
residential units are served by the street lighting, street sweeping, and landscape maintenance
services. The District contracts with private providers for the street lighting and sweeping and
landscape maintenance services.
The District is governed by a three-member, elected Board of Directors. It is administered by a
District Manager and has three employees including the manager, a secretary, and part-time
attorney.
The District indicates that there are no additional cost avoidance opportunities available that
could result in a significant avoidance of costs.
The District utilizes shared facilities in that its sewer collection system discharges into the City of
Fresno’s collection system for transport to the wastewater treatment plant.
Financial documents submitted by the District indicate it had $318,809 in operating revenue for
FY 2006. Operating expenses totaled $218,358. Projected revenue for FY 2007 totals
$323,658. Expenses are anticipated to be $277,600. Revenues are derived from property
taxes, utility rate charges, and interest. Seventy percent of utility charges are paid to the City of
Fresno for use of its sewer collection and treatment facilities. The District has no outstanding
loans or debt.
The City in its review of the MSR and SOI Update also has questioned the District’s
maintenance budget. According to the City, the District is to submit 70% of its sewer revenues
to the City for use of City facilities, with the remaining 30% to be used by the District for
operation and maintenance of its sewer collection system. Based on information submitted by
the District, it will retain an estimated $157,180 of the sewer charges it receives from its
3
customers in the current fiscal year. The system maintenance budget is identified as $15,000, a
$142,180 difference from the $157,180 it expects to retain. The City also comments that
$15,000 is inadequate to maintain the 25 miles of sewer lines owned by the District.
The City concludes its comments with a recommendation that LAFCo should “carefully consider
whether or not it is in the best interests of the tax paying/rate paying public that (the District) be
dissolved and all assets, all liabilities, and all District employees (2) be transferred to the City of
Fresno.”
The County of Fresno Department of Public Works and Planning staff also reviewed the MSR
and SOI Update prepared for the District and indicated that dissolution of the District and
transfer of service responsibilities to the City could be more cost effective due to economies of
scale. No other potential governmental structure options were identified in this review.
LAFCo staff believes that the City of Fresno should be considered as an alternative
governmental structure for provision of services currently provided by the District. The District is
surrounded by the City and a significant portion of the District is located within the City. The City
provides transport of District wastewater via the City’s wastewater collection infrastructure. The
City also provides street sweeping, street lighting, and landscape maintenance services to City
areas adjacent to the District and throughout the City. It is possible that greater economy and
efficiency may be achieved by dissolving the District and transferring its assets and service
obligations to the City of Fresno.
Recognizing that the California State Legislature has found and declared that “a single
multipurpose governmental agency is accountable for community service needs and financial
resources and, therefore, may be the best mechanism for establishing community service
priorities especially in urban areas” (Govt. Code 56001), the Commission encourages the
District and the City of Fresno to participate in a joint investigation of the best mechanism for
providing existing necessary services to the area served by the Pinedale Public Utility District.
Staff recommends that the Commission authorize staff to confer with the City of Fresno and the
District concerning this possibility. Staff also recommends that such discussions should include
other topics raised by the City including the District’s continuing provision of service outside its
boundary.
The District is “land-locked” by the City of Fresno and has no opportunity or plans for expansion
in the future. With the exception of potential dissolution of the District, no changes to the
District’s SOI are proposed.
Recommendations:
A.
Acting as Lead Agency pursuant to California Environmental Quality Act (CEQA)
Guidelines, find that prior to adopting the written determinations, the Municipal Service
Review and Sphere of Influence determinations under consideration are Categorically
Exempt from the provisions of the California Environmental Quality Act (CEQA) under
Section 15306, “Information Collection” and the general exemption from environmental
review, CEQA Regulation Section 15061(b)(3), and find that the SOI Updates qualify
for the same general exemption from environmental review based upon CEQA
Regulation Section 15061(b)(3).
B.
Find the Municipal Service Review and Sphere of Influence Update prepared for the
Pinedale Public Utility District are complete and satisfactory.
4
C.
Find that the written determinations within the Municipal Service Review and Sphere of
Influence Update satisfy State Law.
D.
Pursuant to Government Code Sections 56425 and 56430 make the required
determinations for the Municipal Service Review and District Sphere of Influence Update,
adopt the Municipal Service Review prepared for the Pinedale Public Utility District by
PMC, and update the Sphere of Influence for said District by reaffirming its current
boundary.
E.
Authorize the LAFCo staff to confer with the Pinedale Public Utility District and the City of
Fresno regarding the status of the District’s continuing provision of service outside its
current boundary, as well as the possible dissolution of the District and concurrent
transfer of District assets, employees, and service obligations to the City of Fresno.
F.
Encourage the Pinedale Public Utility District and the City of Fresno to participate in a
joint investigation of the best mechanism for providing existing necessary services to the
area served by the District. Such investigation should include consideration of possible
dissolution of the District with the concurrent transfer of its assets and service obligations
to the City of Fresno.
G.
Authorize the LAFCo staff to confer with the Pinedale Public Utility District and the City of
Fresno regarding the possible dissolution of the District with the concurrent transfer of its
assets and service obligations to the City of Fresno.
G:\LAFCO WORKING FILES\OCTOBER 10, 2007 HEARING\STAFF REPORT - PINEDALE PUD MSR.doc
5
PINEDALE PUBLIC UTILITY
DISTRICT
MUNICIPAL SERVICE REVIEW AND
SPHERE OF INFLUENCE UPDATE
Report to the
Fresno Local Agency Formation Commission
Prepared by:
PMC
2729 Prospect Park Drive
Rancho Cordova, CA 95670
October 2007
0.1 EXECUTIVE SUMMARY
0.1
EXECUTIVE SUMMARY
I.
ROLE AND RESPONSIBILITY OF LAFCO
The Cortese-Knox-Hertzberg (CKH) Local Government Reorganization Act (Government
Code Section 56000 et seq) requires all Local Agency Formation Commissions (LAFCos),
including Fresno LAFCo, to conduct municipal service reviews (MSR) prior to updating the
spheres of influence (SOI) of the various cities and special districts in the County,
excluding community facility districts and school districts (Government Code Section
56430). The fundamental role of a LAFCo is to implement the CKH Act, providing for the
logical, efficient, and most appropriate formation of local municipalities, service areas,
and special districts. The focus of this MSR is to provide LAFCo with all necessary and
relevant information related to the provision of services by Pinedale Public Utility District.
II.
MUNICIPAL SERVICE REVIEW PROCESS
The Municipal Service Review (MSR) and Sphere of Influence Update (SOI Update)
process is a comprehensive assessment of the ability of government agencies to
effectively and efficiently provide services to residents and users. The form and content
of the MSR/SOI Update is governed by requirements of the Cortese-Knox-Hertzberg Local
Government Reorganization Act of 2000 (CKH Act) and the State of California’s LAFCo
MSR Guidelines (Guidelines), published in August 2003.
This MSR/SOI Update evaluates the structure and operation of the service providers and
discusses possible areas for improvement or coordination. Key sources for this study were
information gathered through research and interviews, as well as the Municipal Service
Review Guidelines published by the Governor’s Office of Planning and Research (OPR).
This MSR/SOI Update has been prepared for Fresno LAFCo in accordance with the
requirements of the Cortese-Knox-Hertzberg Local Government Reorganization Act of
2000 as a means of identifying and evaluating public service providers within Fresno
County and possible changes to their Sphere of Influence (SOI).
III.
PURPOSE OF THE MUNICIPAL SERVICE REVIEW
The MSR contains analysis and conclusions, referred in this document as determinations,
regarding nine topic areas set forth in the CKH Act. These areas of analysis contain the
essential operational and management aspects of each service provider, and together
constitute a review of the ability of each provider to meet the service demands of the
residents within their existing and potentially expanded boundary. The topic areas
represent the nine required topic areas set forth in the CKH act. Each report contains the
following sections:
Growth and Population
This section reviews projected growth within the existing service boundaries of the special
district and analyzes the growth potential within the service area and surrounding areas.
Infrastructure
This section analyzes whether sufficient infrastructure and capital are in place, and
reviews capabilities for accommodating future growth in service demands.
Fresno LAFCo, October 2007
Public Review Draft Municipal Service Review
0.1-1
#.#-1
Financing Constraints and Opportunities
0.1 EXECUTIVE SUMMARY
This section evaluates the way the district is funded and possible opportunities to
increase funding if needed.
Cost Avoidance Opportunities
This section evaluates factors affecting the financing of needed improvements, including
outstanding opportunities and utilized opportunities for service providers to reduce costs.
Rate Restructuring
The fiscal history of the service provider and rate structure is evaluated to determine
viability and ability to meet existing and expanded service demands.
Opportunities for Shared Facilities
This section evaluates the existing sharing of facilities and the ability to share facilities with
other service providers.
Evaluation of Management Efficiencies
This section evaluates the overall managerial practices.
Government Structure
This section evaluates the ability of the service provider to meet its demands under its
existing government structure. This includes discussion of potential reorganizations or
other forms of governance that may result in the more efficient provision of services to
local residents. Consideration of boundaries and their adequacy is also a key
component of this analysis.
Local Accountability
This section examines how well the service provider makes its processes transparent to
the public and invites and encourages public participation.
IV.
SERVICE PROVIDERS
This document contains MSRs/SOI Updates for various water and wastewater providers
within Fresno County. The determinations and findings reached are based upon surveys
of agency representatives, meetings, and assessments of existing documents.
Public Utility Districts
Public Utilities Districts (PUDs) are formed pursuant to Section 15501-18055 of the Public
Utilities Code 15501-18055. PUDs are empowered to provide lighting, water, power, heat,
transportation, telephone services, or other means of communication, or means for the
collection, treatment, or disposition of sewage; construct facilities necessary for the
generation, transmission, or distribution of electricity and construct, maintain, improve,
and operate public recreational facilities appurtenant to any water reservoir owned or
operated by the district. The Public Utility District analyzed in this MSR/SOI Update is the
Pinedale PUD.
0.1-2
Public Review Draft Municipal Service Review
Fresno LAFCo, October 2007
4.1 PINEDALE PUBLIC UTILITY DISTRICT
PINEDALE PUBLIC UTILITY DISTRICT
Street lights, Sewer, Street sweeping, Landscape maintenance
Contact Information
Address:
2560 W Shaw #102
Fresno, CA 93711
Phone:
(559) 431-8516
Website:
None
Management Information
Manager:
Jim Tsuruoka
Governing Body:
Board of Directors
Glen Goto
Larry Neyman
Gordon Martindale
Board Members:
Elected 2003, Expires 2007
Elected 2003, Expires 2007
Appointed 2005, Expires 2009
4th Tuesday of each month at 6:30pm
Board Meetings:
District Office, 2560 W. Shaw, #102, Fresno CA
3 employees
Staffing:
Service Information
Empowered
Services:
Street lights, sewer, street sweeping, landscape maintenance
Services Provided:
Street lights, sewer, street sweeping, landscape maintenance
Area Served:
Within Forkner Ave, Bullard Ave, Palm Ave, and Nees Ave and
within Marks Ave., Valentine Ave., Chenault Ave., and Bluff Ave
Population Served:
1,950 residential and 100 commercial customers for wastewater
services
2,400 residential units for street sweeping, street lighting, and
landscape maintenance services
Infrastructure:
Sewer lines, street lights
Fiscal Information
Budget:
Sources
Funding:
Rate
$323,658
of Property taxes and utility fees
Structure: $14.92 per month for wastewater, based on the City of Fresno’s
Fresno LAFCo, October 2007
Public Review Draft Municipal Service Review
4.1-1
#.#-1
rates
4.1 PINEDALE PUBLIC UTILITY DISTRICT
4.1
PINEDALE PUBLIC UTILITY DISTRICT
I.
SETTING
Area Served
The Pinedale Public Utility District (District) was formed in 1956 for the transfer and
treatment of sanitary waste from an area located west of the Community of Pinedale.
Authorization to provide sewer service was provided pursuant to California Regional
Water Quality Control Board resolution No. 53-28. The District is located in the central part
of Fresno County (County), in the northern portion of the City of Fresno (City). Portions of
the District and the District’s Sphere of Influence (SOI) are within the City. The District is
surrounded by the City. The District’s boundaries are Forkner Ave, Bullard Ave, Palm Ave,
and Nees Ave, west of the Pinedale County Water District boundaries. Figure 4.1 shows
the District’s boundaries.
The District also provides service outside of the District’s current boundaries, to the areas
between Marks Ave., Valentine Ave., Chenault Ave., and Bluff Ave. This area is within the
City of Fresno’s service area.
Services Provided
The Pinedale Public Utility District (PUD) provides wastewater, street lighting, landscape
maintenance, and street sweeping services to residents. Street sweeping, street lighting
and landscape maintenance services have all been contracted to private providers Corner Sweep, Am-Tec Lighting, and Gene Green, respectively. The three private
providers are the original contractors and the contracts have been renewed since the
contracts were first awarded. In addition, the District utilizes the City of Fresno’s
wastewater lines to transport wastewater to the regional wastewater plant for treatment.
Services provided within the District’s powers are authorized in their enabling legislation,
Public Utilities Code 15501-18055. The PUD does not provide services outside of their
enabling legislation. Services provided extend beyond designated service boundaries, as
the District is currently providing services to an area just west of the District. The District is
not contracted to provide service to other service providers.
II.
GROWTH AND POPULATION
The District is currently providing wastewater services to approximately 1,950 residential
and 100 commercial customers. The District provides street sweeping, street lighting, and
landscape maintenance services to approximately 2,400 residential units.
The District is a fixed service area within the City’s Sphere of Influence (SOI). Portions of
the District, and the District’s SOI are within the City limits. Overlap with the City restricts
the District’s ability to expand. Lands within the District are built out and the District does
not have any plans for future expansion.
4.1-2
Public Review Draft Municipal Service Review
Fresno LAFCo, October 2007
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T:\_GIS\FRESNO_COUNTY\MXDS\FRESNO_LAFCO\WATER DISTRICT MSR\PINEDALE PUD.MXD - 10/4/2007 @ 9:41:42 AM
Sta
Legend
District SOI
District Area
City of Fresno SOI
City of Fresno
Figure 4.1
Pinedale Public Utility District
4.1 PINEDALE PUBLIC UTILITY DISTRICT
III.
INFRASTRUCTURE
Existing Infrastructure Facilities and Conditions
The District owns the street lights and 25 miles of sewer lines within its service area. The
District maintains its own sewer collection system and discharges the effluent into the City
of Fresno’s collection system for transport to the regional wastewater plant for treatment.
The City of Fresno provides wastewater treatment to the District through an existing
service agreement. The Herndon Trunk Sewer, constructed in 1974, connects the existing
urban development in the District to the City’s Wastewater Reclamation Facility. The
District’s existing sewer pipeline infrastructure is able to adequately provide sewer service
for existing and future service demands anticipated by the District.
Planned Facilities
The District currently does not have plans for infrastructure and facilities upgrade or
expansion.
IV.
FINANCING AND RATE RESTRUCTURING
The following information and analysis sections are based on financial statements,
annual budgets, and other supporting documents provided by Pinedale PUD in response
to an initial questionnaire survey, information requests, and follow-up phone
conversations and interviews with District personnel.
The District provided financial statements, and an auditor’s report for the Fiscal Years (FY)
2005 and 2006 (Ezell and Company, 2006). The District also provided its rate fee schedule.
Financial statements from FY 2005 and FY 2006 were reviewed to determine the District’s
fiscal status, assess financial practices, and review pertinent management findings. In
addition, information was provided by the District in response to PMC’s survey (January,
2007) and is included in the discussion below. All figures provided in this discussion are
based on information provided by the District, and analyzed with the assumption that
figures provided are correct and up-to-date.
Taxes, monthly service fees and interest earned are the primary sources of financing for
the District. The PUD receives most of its funding from rates charged per unit per month
for wastewater services. Rates for wastewater service are based on the City’s
wastewater rate fee schedule, currently at $14.92 per month. Property taxes fund the
street lighting, landscape maintenance, and street sweeping services and no monthly
fees are charged for these services.
The 2006 audited financial statements for the District indicate that current assets were
$1,652,153 compared to current liabilities of $91,712, whereas total assets were $2,827,721
compared to total liabilities of $91,712 for FY 2006 . This translates to increased assets and
decreased liabilities from the FY 2005 budget. In addition, operating revenues at
$318,809 were greater than operating expenses at $218,358 for FY 2006. This resulted in
an operational income of $100,451 in FY 2006, or an approximate $35,743 decrease in
operational income from FY 2005. However, along with interest income and retained
earning balances from FY 2005, the District’s retained earnings for FY 2006 totaled
$2,736,009. This was an increase of $143,130 from total retained earnings for FY 2005.
4.1-4
Public Review Draft Municipal Service Review
Fresno LAFCo, October 2007
Expenditures for 2007 are expected to go towards salaries ($50,000), state mandated slip
charges ($35,000), professional services ($30,000), strip maintenance ($22,000), litigation
with the City ($20,000), trees and tree maintenance ($20,000), system maintenance
($15,000), director’s fees and payroll taxes ($14,000), rent ($14,000). Additional expenses
include auto, insurance, supplies, District facility map update, debts, utilities, postage,
street sweeping, elections, special districts dues and county collection fees and account
for $57,600 of the budget. The total budgeted expenditures are estimated to be
$277,600, or $46,058 less than the estimated revenue.
4.1 PINEDALE PUBLIC UTILITY DISTRICT
The FY 2007 operating budget projected that revenues are expected to come from the
utility rate charges ($157,180), property tax revenue ($123,798), and interest ($42,679). The
total estimated revenue budget is $323,658. The estimated budget for utility rate is based
on a fee schedule of approximately $14.92 per customer per month, for 2,050 customers,
which would amount to a total of $367,032; however, the budgeted amount of $157,180
accounts for payment to the City of Fresno of 70% of the service fee revenue. Although
the actual amount retained by the District, if they collected fees of $367,032 and paid
70% to the City, would be $110,110, the District has estimated fee revenues of $157,180.
The District has not indicated the rational behind the estimate, or provided an
explanation of the $47,000 difference.
The District currently has no outstanding loans and debts.
V.
COST AVOIDANCE OPPORTUNITIES
The District has indicated that there are no cost avoidance opportunities which could
result in a significant avoidance of costs.
VI.
OPPORTUNITIES FOR SHARED FACILITIES
The District currently has an agreement with the City of Fresno to discharge wastewater
into the City’s collection system for transport to the regional wastewater treatment plant.
The District uses certain City facilities and the City’s transmission lines. 70% of user billings
are paid to the City for this use. No additional opportunities for shared facilities have
been identified.
VII.
GOVERNMENT STRUCTURE AND MANAGEMENT EFFICIENCIES
California Public Utilities Code section 15501-18055 enables the formation of Public Utility
Districts to provide a variety of services to district residents. However, the California
Government Code offers very few government structure options for districts the size of
Pinedale PUD.
This District is an independent special district with a separate board of directors not
governed by other legislative bodies (either a city council or a county board of
supervisors). The District currently has a three person staff; a District Manager, a
Secretary, and an Attorney who works part-time. The District’s organizational structure is
shown in Figure 4.1-2. Under its current legal form, the District has demonstrated an ability
to function properly. The government structure is appropriate and adequate to ensure
service provision.
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4.1-5
FIGURE 4.1-2: PINEDALE PUD SERVICE AREA ORGANIZATIONAL CHART
4.1 PINEDALE PUBLIC UTILITY DISTRICT
BOARD OF DIRECTORS
Attorney
Manager
District Secretary
The only alternative governmental agency in place that could feasibly provide the
services currently provided by the District would be the City of Fresno. The City may be
interested in absorbing the District into the City’s service area. The City currently provides
transport of the District’s wastewater to the Regional Wastewater Treatment Facility via
the City’s collection system. Additionally, the City also provides sewer, street sweeping,
street lighting, and landscape maintenance services to City areas adjacent to the
District and throughout the City. It is possible that greater efficiency may be achieved if
the City assumed the assets and service obligations of the District. The City of Fresno has
not formally evaluated the assumption of the District or made any formal declaration of
intent to assume such services, however, the City did indicate its opinion that LAFCo
should “carefully consider” if it is in the best interests of the public whether the District
should be dissolved and the City should assume provision of services in the District area.
The time, cost, and complexity of such a transition would need to be evaluated prior to
undertaking such a transition.
There are no legal or administrative limitations on the District for future service provision.
However, the District is currently providing services to residents outside its SOI. Though
infrastructure is adequate to provide sufficient services, the PUD should anticipate no
further expansion of its service area, since the District is surrounded by the City and utilizes
some of the services provided by the City.
The District has been in conflict with the City of Fresno over the District’s use of City
facilities for approximately thirty years. Litigation involving this issue was settled in July,
2007. The following paragraphs outline the events leading up to the court case, as
summarized by the City’s Attorney.
Conflicts between the City and the District began in the early 1970s when the District’s
treatment plant was required, by the California Regional Water Quality Control Board
(CRWQCB), to upgrade its facilities to a secondary level of treatment, or to consolidate
with the City of Fresno’s facilities. At that time the City had secured aid from Federal and
State grants in the amount of $22,000,000 for the construction of regional wastewater
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Pinedale PUD entered into a contract with the City for use of the interceptor and the
treatment plant. The stipulations of the contract were that the City would construct the
facilities and Pinedale PUD, in turn, would pay to the City 70% of the sewer service
charge to connect to new City facilities. The District was connected to the City’s
treatment facilities in the mid 1970’s.
In 1987 the City audited the Pinedale PUD and found that the District was not billing all of
its customers correctly, nor was the District using the service rates established by the City.
The District was setting its own rates and was not billing approximately 100 homes within
its service area. Pinedale PUD had also diverted flows into the City’s system without the
City’s consent or knowledge. The District eventually paid a part of the $25,000 fee for
connecting into the City’s collection main, but the amount paid was significantly less
than the $25,000 owed to the City.
The District was further required to pay a share of upgrades to the City’s sewer treatment
plant, for its portion of the use. The District failed to pay its portion of the improvement
costs. According to the City, as of January 1, 2005, the District had failed to make
approximately $344,554.45 in Capital Component payments. The City commenced
litigation for the recovery of these funds in March of 2005. In July, 2007, the litigation was
settled.
4.1 PINEDALE PUBLIC UTILITY DISTRICT
treatment facilities and the West Fresno-Herndon Interceptor, which passed through the
area served by the District. The new sewer treatment plant was designed to process 60
million gallons per day (MGD) of wastewater.
The City has concerns regarding the ability of the District to provide efficient service to its
customers without subsidization from other users of the regional wastewater treatment
plant; and that the District’s actions will impair the City’s ability to obtain additional
public funds for future projects that benefit all users of the wastewater treatment
facilities.
Typically, a district’s budget is an indicator of management efficiency. According to
information contained in the District’s most recent financial audit, the financial
statements and accounting polices of the District conform with the generally accepted
accounting principals applicable to governments. The Governmental Accounting Board
is the accepted standard-setting body for establishing governmental accounting and
financial reporting principles.
The District has a contract with California Water Services, a private firm, to provide backup and sewer operation and maintenance to ensure continued operation of district
facilities.
VIII.
LOCAL ACCOUNTABILITY
Citizen vote is an essential component of local accountability. An elected body of three
officials serves as the Board governing the District, with terms for two of the current
members expiring in 2007, and the term for one of the members expiring in 2009. Board
members are subject to recall by District voters through the recall procedures set forth in
Chapter 2, Division 13 of the Elections Code.
The Board creates policies by adopting resolutions or ordinances through duly noticed
public hearings. District meetings are held on the 4th Tuesday of each month at 6:30pm
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4.1 PINEDALE PUBLIC UTILITY DISTRICT
at the District’s office located at 2560 W. Shaw, #102, in Fresno. Meetings are noticed
consistent with Brown Act requirements, which include postings in public places, such as
the District office. There appears to be ample opportunities for public involvement and
input at regularly scheduled meetings.
IX.
SPHERE OF INFLUENCE RECOMMENDATIONS
The boundary of the District’s service area is within its SOI. State law requires SOIs to be
updated at least once every five years. As part of this update, State law requires LAFCo
to prepare written statements assessing the District’s capacity to serve its customers with
regard to the following four areas:
1) The present and planned land uses in the area, including agricultural and open
space lands.
The current land uses within the District are primarily residential in nature. Future
land uses are expected to remain the same.
2) The present and probable need for public facilities and services in the area.
The present facilities are adequate for current and future demands for service, as
the District cannot physically expand further without annexing lands from another
service provider.
3) The present capacity of public facilities and adequacy of public services that the
agency provides or is authorized to provide.
The wastewater collection system, street sweeping, street lighting, and landscape
maintenance services provided are sufficient and adequate for current and
future demands.
4) The existence of any social or economic communities of interest in the area if the
commission determines that they are relevant to the agency.
The community of Pinedale and the City of Fresno are in the District’s service
area.
X.
MUNICIPAL SERVICE REVIEW DETERMINATIONS
Growth and Population
Demands for Pinedale Public Utility District services are not increasing. No significant
growth or population increases are physically possible due to the District’s fixed service
area. Future land uses are anticipated to remain primarily residential.
Infrastructure
The District’s infrastructure consists of a wastewater collection system and street lights. All
other infrastructure related to the District’s services is contracted out through private
providers. District facilities are adequate for current service demands. There are no plans
for expansion of facilities.
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The Pinedale PUD is financed through utility fees and property taxes. No additional
financing opportunities have been identified by the PUD. The District does not have
outstanding debts.
Rate Restructuring
Rates for wastewater service for the District are currently based on the City’s wastewater
rate fee schedule. Rates charged are sufficient to provide adequate service.
Cost Avoidance Opportunities
No cost avoidance opportunities have been identified by the District.
Opportunities for Shared Facilities
The District currently utilizes the City’s sewer trunks to transport wastewater to the City’s
wastewater treatment plant. No additional opportunities for shared facilities have been
identified by the PUD.
4.1 PINEDALE PUBLIC UTILITY DISTRICT
Financing Constraints and Opportunities
Government Structure Options
The current government structure is sufficient for the type of service the District provides.
Future assumption of services by the City of Fresno may provide efficiencies and
economies of scale, although the full impacts and potential benefits of such a change in
structure have not been evaluated to date.
Evaluation of Management Efficiencies
The overall management structure is sufficient for the District to operate efficiently with
three employees. Financial statements conform to the generally accepted accounting
principals.
Local Accountability
Meetings are held and noticed, consistent with the Brown Act. There are sufficient
opportunities for local involvement in PUD activities, and information regarding the
District is readily available to members of the public. No significant issues regarding local
accountability were noted.
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4.1 PINEDALE PUBLIC UTILITY DISTRICT
4.1-10
XI.
BIBLIOGRAPHY
Ezell and Company, October 12, 2006, FY 2006 and FY 2005 Independent Auditor’s
Report
Pinedale Public Utility District, Pinedale Public Utility District Financial Statements, Fiscal
Year 2005 and 2006
Pinedale Public Utility District, Pinedale Public Utility District FY 2007 Budget
Pacific Municipal Consultants, Survey response, February 2007
City of Fresno, May 2002, City of Fresno Draft Master Environmental Impact Report for the
2025 Fresno General Plan
Correspondence and personal communication with Jim Tsuruoka, Pinedale Public Utility
District, contacted February 16 to March 23, 2007
Sanchez, James C; City of Fresno Attorney. Memo RE: Sewer Service History Summary:
Pinedale Public Utility District. February 16, 2007.
Public Review Draft Municipal Service Review
Fresno LAFCo, October 2007