FRESNO LOCAL AGENCY FORMATION COMMISSION (LAFCO) EXECUTIVE OFFICER S REPORT

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1 FRESNO LOCAL AGENCY FORMATION COMMISSION (LAFCO) EXECUTIVE OFFICER S REPORT DATE: December 5, 2007 CONSENT AGENDA ITEM NO. 13-B TO: FROM: SUBJECT: Fresno Local Agency Formation Commission Rick Ballantyne, Executive Officer Darrel Schmidt, Deputy Executive Officer Consider Adoption Municipal Service Review and Sphere of Influence Update prepared for the Mercy Springs Water District Summary / Background The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 requires LAFCo to review and update, as necessary, city or 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 Mercy Springs Water 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 is 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 boundaries 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. Infrastructure needs or deficiencies 2. Growth and population projections for the affected area 3. Financing constraints and opportunities 4. Cost avoidance opportunities 5. Opportunities for rate restructuring 6. Opportunities for shared facilities 7. 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

2 As part of the SOI update, if the Commission determines that modifications to a district s SOI boundary is appropriate, it is required to consider the following four criteria and make appropriate determinations in relationship to each of the following criteria: 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 18 water districts operating within Fresno County. This report addresses Mercy Springs Water District. MSRs and SOI updates prepared for Farmers, Firebaugh Canal, Ora Loma, and Pleasant Valley Water Districts also appear on today s agenda. MSRs and SOI updates prepared for the 13 additional water districts were approved at prior hearings. California Government Code Sections thru enables the formation of water districts in order to acquire, plan, construct, maintain, improve, operate, and keep in repair the necessary works for the production, storage, transmission, and distribution of water for irrigation, domestic, industrial, and municipal purposes, and any drainage or reclamation works connected therewith or incidental thereto. 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

3 Discussion & Summary of Determinations Mercy Springs Water District is an independent special district located approximately 10 miles northwest of the City of Firebaugh. The District shares common boundaries with Ora Loma and Panoche Water Districts and is near a number of other water districts. The District encompasses approximately 3,710 acres. The District provides agricultural water delivery to meet area needs. It should be noted, however, that the District manages relatively little water since it previously had sold a large portion of its water rights to the Westlands Water District. However, the District has stated that it still provides a valuable service and with remaining established water rights, should be maintained in order to ensure the proper delivery of water. The District does not own any capital facilities or equipment and indicates that it has no plans for any facilities. A canal, owned by the Bureau of Reclamation, serves property owners. Turnouts, pumps, etc. are owned by the farmers who receive water from the District. The District contracts for staffing needs with the Panoche Water District. The District notes that Panoche Drainage District owns 95% of the land within Mercy Springs Water District. The boundaries of Panoche Drainage District and Mercy Springs also overlap. Given that the Panoche Drainage District owns such a significant portion of the District, significant growth within the District is not anticipated. The District is financed through per-acre property assessments. The largest source of the District s funding comes from Panoche Drainage District, as that District is the primary landowner within Mercy Springs Water District. The District provided financial statements from FY , with the year ending February 28, Revenues totaling $54,696 were derived from operations and maintenance charges ($32,050), water sales ($10,872), and reimbursements ($11,774). Expenses for the same year totaled $45,590 including water purchases, legal and accounting costs, administration, and other costs. The District s net surplus of $9,106 for the year was returned to water users. The District maintains no assets on an annual basis, either returning surpluses or allocating deficits to water users. The District has debt of $30,937 (as of February 28, 2007) payable to Westlands Water District. This debt is being paid in monthly installments of $392 and should be retired in The District has engaged in cost avoidance opportunities by partnering with Westland Water District in the construction of the Delta-Mendota Canal. The District may also accept water from Panoche Water District in order to establish salt tolerant crops. The District is governed by a five-member Board of Directors who are elected at large. One regular meeting is held each year to adopt the District s budget. Additional meetings are held as necessary. The District utilizes the Panoche Water District s office for its Board meetings. The frequency of meetings may not be consistent with the Brown Act. The District states that it is satisfactorily meeting the needs of the landowners within the District. As indicated above, the District states that despite the fact that it does not provide direct service to its customers, it is important that the District be retained as dissolution of the District would result in the loss of water rights in the District area. 3

4 Given that the District has no employees, no facilities, has sold a large portion of its water rights, and is 95% owned by Panoche Drainage District, staff believes a more thorough review of alternative government structures and how they might impact the District is warranted; specifically, consolidation with Panoche Drainage District. The District s Sphere of Influence is coterminous with the District s boundary. The District did not identify a need or desire to revise its Sphere of Influence. Staff recommends the Commission update the District s SOI by affirming its current Sphere and that staff be directed to confer with the District further regarding possible consolidation of Mercy Springs Water District with Panoche Drainage District. 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 Update qualifies 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 Mercy Springs District are complete and satisfactory. 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 and make the required determinations for the Municipal Service Review and Sphere of Influence Update, adopt the Municipal Service Review prepared for Mercy Springs Water District by Pacific Municipal Consultants, Inc., and update the Sphere of Influence for said District by reaffirming its current boundary. E. Direct staff to confer further with Mercy Springs Water District and Panoche Drainage District concerning potential consolidation of the Districts, or other potentially beneficial reorganization for the respective Districts. G:\LAFCO WORKING FILES\DECEMBER 5, 2007 HEARING\STAFF REPORT - MERCY SPRINGS WATER DISTRICT.doc 4

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9 MERCY SPRINGS WATER 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 December 2007

10 1.0 EXECUTIVE SUMMARY 1.0 EXECUTIVE SUMMARY I. ROLE AND RESPONSIBILITY OF LAFCO The Cortese-Knox-Hertzberg (CKH) Local Government Reorganization Act (Government Code Section 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 the Mercy Springs Water 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 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. Fresno LAFCo, December 2007 Municipal Service Review #.#-1

11 1.0 EXECUTIVE SUMMARY Infrastructure This section analyzes whether sufficient infrastructure and capital are in place, and reviews capabilities for accommodating future growth in service demands. Financing Constraints and Opportunities 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. 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 Mercy Springs Water District. The determinations and findings reached are based upon surveys of agency representatives, meetings, and assessments of existing documents. Water Districts Water Districts are dependent special districts formed pursuant to Division 12 of the California Water Code. This MSR analyzes the Mercy Springs Water District Municipal Service Review Fresno LAFCo, December 2007

12 5.9 MERCY SPRINGS WATER DISTRICT MERCY SPRINGS WATER DISTRICT Irrigation Water CONTACT INFORMATION Address: W. Althea Drive Firebaugh CA, Phone: Website: none MANAGEMENT INFORMATION Manager: Governing Body: Board Members: Board Meetings: Staffing: Marcos Hedrick Board of Directors Dennis Falaschi vice president Term ends 2009 Marcos Hedrick director Term ends 2009 Michael Linneman president Term ends 2007 Michael Gardner director Term ends 2007 Julie Cascia secretary Term ends 2007 As needed and one annual budgetary meeting. None SERVICE INFORMATION Empowered Services: Services Provided: Latent Powers: Area Served: Population Served: Infrastructure: Water Water None Approximately 3,710 acres 95% of land within the District is owned by Panoche Drainage District. None FISCAL INFORMATION Budget: $25, Sources of Funding: Property Assessments Rate Structure: Estimated at $6 per acre, per year.

13 1.0 MERCY SPRINGS WATER DISTRICT I. SETTING Mercy Springs Water District (District) was formed to provide irrigation water services within its boundaries. The District is an independent special district, governed by Water Code section Area Served The District provides service to approximately 3,710 acres within the unincorporated area west of the City of Firebaugh, in Fresno County. Widren, Panoche and Broadview Water Districts are all in the vicinity of Mercy Springs Water District, however; none of these agencies overlaps with the District. Panoche Drainage District owns 95% of the land within Mercy Springs Water District and the boundaries of the Panoche Drainage District overlap with the boundaries of Mercy Springs Water District. 5.9 MERCY SPRINGS WATER DISTRICT Figure shows the District s boundaries. The District does not provide services outside of its service boundaries. Services Provided Mercy Springs Water District indicated that it is not a direct service district. It does not have any capital facilities, it only administers district needs. Over the past few years, the District has sold some of its water rights. Many of the District s rights were sold to the Westlands Water District. As of November 2007, there is little water managed by the District. Mercy Springs Water District indicated that it is essential for service provision due to its established water rights, which are used to ensure an adequate water supply for its landowners. II. GROWTH AND POPULATION The District indicated that they do not anticipate any growth within their area and future service projections are minimal. III. INFRASTRUCTURE Existing Infrastructure Facilities and Conditions The District does not own any buildings or facilities. A canal, owned by the Bureau of Reclamation, serves property owners. Turnouts, pumps, etc. are owned by the farmers and are utilized to take water from the canal onto their properties The District s financial statement shows that the District is entitled to receive 2,842 acre-feet of water per year under contract with the Bureau of Reclamation. Amounts are based on a 100% allocation, after reducing for partial assignments in 1999 and Planned Facilities No plans for infrastructure were identified however; the District may accept water from Panoche Water District. Fresno LAFCo December 2007 Municipal Service Review 5.9-2

14 OXFORD AVE T:\_GIS\FRESNO_COUNTY\MXDS\FRESNO_LAFCO\WATER DISTRICT MSR\MERCY SPRINGS.MXD - 11:48:01 AM POLE LINE RD ORLEANS AVE Merced County ALTHEA AVE CAMBRIA AVE RUSSELL AVE DOS PALOS RD MERCY SPRINGS WD WIDREN WD FAIRFAX AVE HUDSON AVE MERRILL AVE OXALIS AVE JERROLD AVE SILAXO AVE COPPER AVE LYON AVE Stanislaus San Benito Merced Monterey Mono Mariposa Madera Inyo Fresno Map Extent Tulare Kings Madera County NEES AVE WASHOE AVE Firebaugh PANOCHE WD HERNDON AVE HERNDON AVE LITTLE PANOCHE RD Source: County of Fresno, 2007; PMC, MILES SHAW AVE SHIELDS AVE BULLARD AVE WESTLANDS WD BROADVIEW WD SHIELDS AVE JERROLD AVE DOUGLAS AVE ASHLAN AVE SHAW AVE Legend District SOI SAN DIEGO AVE SANTA FE GRD District Area DOS PALOS RD Panoche Drainage District Neighboring District Figure Mercy Springs Water District

15 IV. FINANCING AND RATE RESTRUCTURING The District is financed through per-acre property assessments. The largest source of the District s funding comes from Panoche Drainage District, as the primary landowner in the District. Financial statements from FY were reviewed to determine the fiscal status, assess financial practices, and review pertinent management findings. The District provided financial statements for the year ended February 28, The District s statement of net assets, as of February , included $43,591 in current assets and $36,926 in other assets (intertie Project). Total assets were $80,517. The District s liabilities include current liabilities of $52,807 and long-term debt of $27,710. Total liabilities are $80,517; equivalent to total assets, resulting in net assets of $0. The District s statement of revenues and expenses shows that operating revenues totaled $54,696 for the year ended February 28, Operating revenues included operations and maintenance charges ($32,050), water sales ($10,872) and reimbursements ($11,774). 5.9 MERCY SPRINGS WATER DISTRICT The District s operating expenses for the year ended February 28, 2007 included water purchases ($9,855), legal and accounting ($6,874), water assignment costs ($5,280), dues ($2,912), insurance ($3,511), administration ($14,400), water rights fee ($1,123), and other expenses ($1,635). The District noted that the administration fee of $14,400 accounts for two years worth of fees, because the District was, mistakenly, not billed for this amount in the year ended February 28, The District s total operating expenses for FY were $45,590. The District s operating expenses ($45,590) and income ($54,696) resulted in a net surplus of $9,106. This surplus is returned to water users; the District maintains no net assets, as annually, the current year s surplus or deficit is allocated to the District s water users. As of September 30, 2007, the District had $49,739 in the County Bank Checking account and $10,985 in the County Bank Savings account. Total finances in the County Bank were $60,724. In addition to financial statements, the District provided their operating budget for the FY The District s proposed budget includes SL&DMWA dues ($4,500), CVP Water Association Dues ($800), the State Board of Eq. ($1,200), Administration ($7,200), Eng. Water Conservation ($1,200), Audit ($2,750), Insurance ($1,750), Legal ($6,200) and Other expenses ($200). The total proposed budget for FY is $25,800. The District s budget anticipates income from W. Sloan of $5, and income from Panoche Drainage District of $20,352, resulting in a total-projected income of $25,800. The District s financial statements include a summary of the District s debt. The District s debt is paid to Westlands Water District for Mercy Springs Water District s share of the Delta-Mendota Canal, California Aqueduct Intertie Project. The total debt as of March 1, 2006 was $34,006. The District paid $3,069 over the FY ending on February 28, 2007, and the total debt remaining at the end of the year was $30,937. The District plans to repay the total debt by the year With 5% interest, the total amount paid between 2007 and 2015 will be $37,632. The District s payments will total $4,704 each year, and are paid with monthly payments of $392. Fresno LAFCo December 2007 Municipal Service Review 5.9-4

16 4.0 INFRASTRUCTURE ANALYSIS The District collects approximately $6 per acre of land within the District s boundaries. Fees for water are revised, as needed. V. COST AVOIDANCE OPPORTUNITIES This section of the Municipal Service Review considers the potential cost avoidance opportunities available to each service provider. Cost avoidance opportunities include any potential sources of reduction in costs associated with service provision, potential sharing of facilities, and any other capital or operational actions or programs which may result in a more efficient and streamlined provision of services to the properties within the service area. This analysis includes both potential and previously implemented cost avoidance measures. The District partnered with Westlands Water District in the construction of the Delta-Mendota Canal, and the District may accept water from Panoche Water District in order to establish salt tolerant crops. No additional cost avoidance opportunities were identified. VI. OPPORTUNITIES FOR SHARED FACILITIES 5.9 MERCY SPRINGS WATER DISTRICT The District does not own any buildings or facilities. As such, there is limited opportunity for shared facilities. The District uses staff employed by the Panoche Water District and uses Panoche Water District s offices in Firebaugh to hold board meetings. No additional opportunities for shared facilities were identified. VII. GOVERNMENT STRUCTURE AND MANAGEMENT EFFICIENCIES California Water Code section enables the formation of Water Districts to provide water services to lands within California. Mercy Springs Water District is an independent special district which has a separate board of directors not governed by other legislative bodies (either a city council or a county board of supervisors). The District indicated it does not rely on the County for any support. Mercy Springs Water District indicated it is not a direct service district; the District solely administers services to meet the needs of its landowners. The District is governed by a five-member board of directors, who are elected at large to fouryear, overlapping terms. The board holds meetings as necessary. One regular meeting is held each year, at which the budget is adopted. The District does not have any staff. Services are contracted out to Panoche Water District staff. Panoche Drainage District has purchased land within Mercy Springs Water District s jurisdiction and now owns 95% of the land within Mercy Springs Water District. Panoche Drainage District has no water rights for its purposes. This land receives water that cannot be put into the San Joaquin River. Mercy Springs Water District is in the process of selling its water rights. Approximately 95% of its land is owned by another District and it does not provide any service, other than administrative needs. Further, all activities are contracted out to the Panoche Water District. The District does not own any facilities and is entirely housed within Panoche Water District. This arrangement appears to be working efficiently and allows the District to provide adequate service. The District indicated that although it is not providing direct service and is operating under these conditions, dissolving the District would result in the loss of the water rights in the District area, however; a full analysis of the financial and operational impacts of any such transition should be made prior to formal action to change the government structure. Fresno LAFCo December 2007 Municipal Service Review 5.9-5

17 VIII. LOCAL ACCOUNTABILITY The District does not have regular meetings, other than one annual meeting each year, at which the budget is established. Meeting announcements and agendas are posted on a bulletin board at the meeting place, five days in advance of the meeting. The lack of quarterly meetings and the lack of minutes from these meetings indicate that the District is out of compliance with several provisions of the Brown Act. The District did not indicate additional meeting noticing and does not have any mechanisms for measuring customer satisfaction. As the District contracts all services out to the Panoche Water District, is housed in Panoche Water District facilities, 95% of land within the District is owned by Panoche Drainage District, and Panoche Drainage District also contracts with Panoche Water District for staff and is housed in Panoche Water District facilities, it is likely that most affairs can be resolved internally by Panoche Drainage District. IX. SPHERE OF INFLUENCE RECOMMENDATIONS 5.9 MERCY SPRINGS WATER DISTRICT The Sphere of Influence (SOI) recommendations analyzes the appropriateness of the District s SOI boundaries, relative to the capabilities of the service provider and future growth. 1) The present and planned land uses in the area, including agricultural and open space lands. Present land uses include agricultural uses. Land uses within the District are not anticipated to change. 2) The present and probable need for public facilities and services in the area. Landowners within the District own and maintain infrastructure. The District itself does not own any buildings or facilities and does not anticipate the need for facilities in the future. 3) The present capacity of public facilities and adequacy of public services that the agency provides or is authorized to provide. The District provides services which are primarily administrative, and meets the needs for public services within its area. 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 District did not identify any social or economic communities of interest. X. MUNICIPAL SERVICE REVIEW DETERMINATIONS Growth and Population Mercy Springs Water District indicated that they do not foresee population growth within the area of the District. The District s budget indicates projected income from only two users within the District; W. Sloan and Panoche Drainage District. Fresno LAFCo December 2007 Municipal Service Review 5.9-6

18 4.0 INFRASTRUCTURE ANALYSIS Infrastructure Mercy Springs Water District does not own any buildings or facilities. The landowners within the District own and maintain infrastructure for acquiring water from the canal. The District does not plan to construct any facilities. Financing Constraints and Opportunities Mercy Springs Water District appears to operate efficiently. The District s surplus revenues, each year, are returned to landowners within the District. The District does not have a net annual income, however; landowners are only charged as much as is expended for the services provided. The District has outstanding debt, totaling $30,937, which will be repaid at a rate of $392 per month. The total is anticipated to be completely repaid in the year Rate Restructuring Mercy Springs Water District collects approximately $6 per acre of land from landowners/farmers within the District. Fees are reviewed and updated as needed, and surplus income is returned to District landowners on an annual basis. 5.9 MERCY SPRINGS WATER DISTRICT Cost Avoidance Opportunities Mercy Springs Water District shared the cost of construction for the Mendota Canal. The District contracts all services out to Panoche Drainage District. Additionally, the District may accept water from Panoche Water District. No additional cost avoidance opportunities were identified. Opportunities for Shared Facilities Mercy Springs Water District s users share the Delta-Mendota Canal. Additionally, the District is housed within Panoche Water District facilities, as Panoche Water District is contracted out to provide District services. No additional cost avoidance opportunities were identified. Government Structure Options Mercy Springs Water District is an independent special district, managed by a five-member board of directors. The District has recently sold much of its water rights and solely provides administrative services. The District indicated that dissolving the District would result in the loss of the water rights in the District area, however, a thorough review of alternative management structures is recommended. Specifically, consolidation or merger with the Panoche Drainage District should be considered by the two districts and LAFCo, given the overlap in services and the existing operations of the two providers. Evaluation of Management Efficiencies Mercy Springs Water District does not have any of its own employees, nor facilities. The District employs Panoche Water District to conduct the District s services. Additionally, the District utilizes Panoche Water District s facilities and offices. The District appears to provide adequate services within its boundaries. Fresno LAFCo December 2007 Municipal Service Review 5.9-7

19 Local Accountability Mercy Springs Water District is governed by a five member board of directors, elected at large. The District holds few meetings, and the only regular meeting is an annual meeting for the adoption of the budget. The frequency and recording of meetings do not appear consistent with the Brown Act. Meeting notices and agendas are posted at the meeting location. The District has no mechanisms in place for customer feedback. XI. BIBLIOGRAPHY Schmidt, Darrel; Fresno LAFCo. Phone interview with Mercy Springs Water District Manager; Marcos Hedrick RE: Municipal Service Review. November Nickel Randy; Certified Public Accountant. Mercy Springs Water District, Financial Statements Fiscal Year Ended February 28, April 24, MERCY SPRINGS WATER DISTRICT Fresno LAFCo December 2007 Municipal Service Review 5.9-8