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HomeMy WebLinkAboutSR - - APPLICATION TO LOCAL AGENCY FORMATION COMMISSIONry �'��.Rn 4U!r. •�li� AGENDA ITEM June 9, 2015 TO: Honorable Mayor and Members of the City Council THRU: Rick Otto Interim City Manager FROM: Irma Hernandez Deputy City Manager 1. SUBJECT ReviewedNerified By: City Manager f � c - - Finance Director To Be Presented By: Irma Hernandez, Deputy City Manager Cons Calendar X City Mgr Rpts Council Reports _ Legal Affairs Boards /Cmtes _ Public Hrgs Admin Reports Plan /Environ Irvine Ranch Water District (IRWD) Application to Local Agency Formation Commission ( LAFCO) regarding provisions for Sewer Service in the City of Orange Sphere of Influence specifically Orange County Sanitation District (OCSD) Area 7. 2. SUMMARY OCSD has indicated its intent to transfer local sewer service of their Area 7. In response, East Orange County Water District (EOCWD) and IRWD have submitted Applications to LAFCO to provide local sewer service to this OCSD area. At its January 13, 2015 meeting, the City Council authorized a letter of support for EOCWD's application. Attached is a draft letter of support for City Council consideration for the IRWD application. 3. RECOMMENDED ACTION Review and authorize a letter of support for IRWD's application for the transfer of OCSD Area 7 local sewer service to Orange County Local Agency Formation Commission ( LAFCO). 4. FISCAL IMPACT No Fiscal Impact. 5. STRATEGIC PLAN GOAL(S) 3e. Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services. ITEM 6/9/15 I ' "A. - - 2 • I DATE OF MEETING: ^-' 6. GENERAL PLAN IMPLEMENTATION Infrastructure Element Goal 1.0: Ensure water, sewer, and storm drain systems that meet the needs of residents and businesses. Policy 1.1: Provide sufficient levels of water, sewer, and storm drain service throughout the community. 7. DISCUSSION and BACKGROUND During the last several months, City staff has been participating in the LAFCO Focused Municipal Service Review (MSR) process in reference to the OCSD Service Area 7. In response to proposed reorganization of Area 7, LAFCO has received applications from EOCWD and IRWD to be considered as potential local sewer providers for this area. In order to evaluate all potential sewer service providers, LAFCO initiated a focused MSR to review the potential transfer of local sewer service for OCSD Service Area 7. Attachment B is a map of OCSD Area 7 which consists of areas within the City of Tustin, North Tustin and surrounding unincorporated areas. The current local sewer service provider for Area 7 is OCSD, however, they have indicated that they are no longer interested in providing local sewer service. OCSD would like to focus on their regional development and maintenance of major sewer transmission infrastructure, and the collection and treatment and disposal of wastewater. Staff has been monitoring this issue closely in an effort to protect the future annexation rights in both the El Modena and Fairhaven unincorporated areas within OCSD Area 7. These two areas are surrounded by the City of Orange or are on our city border, and properties within these areas currently receive water service from the City. There are approximately 850 -900 sewer service connections within El Modena and Fairhaven that meet this criteria within Area 7. These areas have been identified by LAFCO as to potentially be annexed by the City of Orange at a future date. Annexation of these areas would involve complex negotiations with the County, and staff is not recommending annexation at this time. LAFCO has received applications from EOCWD and IRWD as potential sewer service providers for OCSD Service Area 7 and LAFCO Executive Officer can file a Certificate of Filing and set a proposal for hearing. However, neither EOCWD's nor IRWD's applications are complete as both are missing key documents that are required. In addition, the current MSR is nearing completion and LAFCO will have specific MSR determinations reviewing and comparing each potential sewer provider. As a component of their review, LAFCO will review the condition of the infrastructure, available cash reserves, capital outlay, emergency response, current and projected sewer fee rates, staffing levels, and service delivery methods for both potential local sewer providers. ITEM 6/9/15 The LAFCO staff anticipates that the MSR for Local Sewer Service for Area 7 will be presented at their July 8, 2015 Board meeting for consideration. The following is the proposed MSR timeline: Date Event Wednesday, June 17, 2015 Wednesday, July 1, 2015 Wednesday, July 8, 2015 August - September Community workshop & presentation of draft MSR (6:00 — 8:00 pm at Foothill High School) — City staff will attend Staff report and MSR available for public review LAFCO regular meeting — MSR will be presented Reorganization Applications scheduled for LAFCO Hearing Per City Council direction at the January 13, 2015 meeting, a Letter of Support for the EOCWD Reorganization Application to LAFCO was submitted. The letter of support was contingent that EOCWD approve a Memorandum of Understanding (MOU) which protects the City's future sewer annexation rights for both El Modena and Fairhaven areas within the City's Sphere of Influence. EOCWD approved the MOU at their February 19, 2015 Board Meeting. Furthermore, at that January 13, 2015 City Council meeting, staff was directed to work with IRWD once they submitted an application to LAFCO to provide local sewer to OCSD Area 7. On March 23, 2015, IRWD filed an application that would permit them to provide local sewer service to OCSD Area 7. Staff placed a copy of the application in the City Council workroom for your review. Following their application submission, staff worked with IRWD to prepare an MOU that is consistent with the one that was executed between the City and EOCWD. The IRWD Board approved the requested MOU at their May 11, 2015 Board meeting. The following are key obligations that both EOCWD and IRWD approved in their MOU's: EOCWD /IRWD • Would not oppose its detachment of these sewer services into the City • Will transfer sewer services at no cost to the City at the time of annexation • Will maintain the infrastructure in these areas at or above industry standards, and make necessary repairs prior to transfer • Upon future transfer of sewer service, EOCWD /IRWD would transfer a reserve fund for future capital replacement in this area City of Orange • The City will support EOCWD /IRWD's Reorganization Application to LAFCO. • The City will sign a support letter ITEM 6/9/15 Per Council direction, should IRWD submit an Application and agree to an MOU that is consistent with the terms agreed to by EOCWD, staff was to bring a draft letter of Support for the IRWD application for City Council consideration. The attached Letter of Support is similar to the letter submitted by the City for the EOCWD Application. Conclusion For each proposed change in organization or reorganization considered by LAFCO, the application must include a Plan for Service. The Plan for service is the basis for LAFCO evaluation of: (1) the ability of an agency to provide services in a cost - effective manner, and (2) the benefit received by an area. The Final MSR will have a detailed comparison of both the EOCWD and IRWD Plans for service which will include an analysis of rates and a breakdown the cost of service. The MSR serves as the vehicle for comprehensive review and provides opportunity for stakeholder and community input. The Final MSR will be released on July 1, 2015 and will be reviewed by LAFCO Board at their July 8, 2015 meeting. The LAFCO Commission is the governing Board with the authority to determine if EOCWD or IRWD should assume local sewer service, or if OCSD should continue to provide local sewer service to the rate payers in OCSD Area 7. Ultimately, the public will be given the opportunity to support or oppose any change in jurisdictional responsibility, specifically for sewer service. 8. ATTACHMENTS A- Draft Letter of Support for IRWD B- Orange County Sanitation District Area 7 Map C- MOU with IRWD ITEM 6/9/15