Score: -53
(4/10/57)
Orange County Grand Jury
• 2011-2012
Independent Special Districts of Orange County, California "let There BE Light" Dragging Special Districts from the
Published: December 02, 2011
32 pages
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 15 findings
F1
Most Orange County special districts, with or without the assistance of the Local Agency Formation Commission (LAFCO), have been incapable or unwilling to consolidate, absorb, or eliminate these outmoded and/or redundant agencies. LAFCO typically addresses larger issues such as merging of cities and elimination of “islands” within the county. The special districts themselves have not worked seriously toward their consolidation or demise. In this regard, the enterprise special districts and the non-enterprise special districts require independent evaluation and handling.
Related Recommendations (1)
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 fiscal year is budgeted for consolidation, absorption and/or elimination of these districts. (See F1, F2, F3, F4, F5, & F6.)
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Related Recommendations (1)
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 fiscal year is budgeted for consolidation, absorption and/or elimination of these districts. (See F1, F2, F3, F4, F5, & F6.)
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Related Recommendations (2)
R1
All special districts (except the Vector Control District and the County Cemetery District) should be eliminated from the county tax rolls and should rely solely on fees or the services of surrounding governments. (See F2, F3, F4, F5, & F6.)
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Related Recommendations (2)
R1
All special districts (except the Vector Control District and the County Cemetery District) should be eliminated from the county tax rolls and should rely solely on fees or the services of surrounding governments. (See F2, F3, F4, F5, & F6.)
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
F5
The sixteen enterprise districts typically started as local agricultural irrigation providers and sanitation providers for local communities. These special districts have transitioned into providers of potable water and sewerage disposal for the cities that blossomed around them after 1950. These districts grew until their boundaries met a neighboring special district that was also growing. Some of these local smaller providers have already been absorbed by larger districts under one management.
Related Recommendations (1)
R4
Water and sewer districts should be consolidated into no more than six regional districts. Consideration should be given to including the city water agencies in the consolidation. LAFCO should meet with the water and sewer districts before October 31, 2012 to develop plans and schedules for consolidation. (See F5, F6 & F9.)
F6
The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely up- on taxes collected by the county while three rely on fees and other sources for their revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsi- dies and rely on fees for their revenue. Severance from the tax subsidies would enable financial transparency and let the customers see the true cost of the services provided.
Related Recommendations (2)
R1
All special districts (except the Vector Control District and the County Cemetery District) should be eliminated from the county tax rolls and should rely solely on fees or the services of surrounding governments. (See F2, F3, F4, F5, & F6.)
R5
Water and sewer districts should be removed from the tax rolls and operate solely on fees and other revenues for their services. Consideration should be given to forming non-profit agen- cies with ownership shared by the constituents. These districts should meet with county officials before October 31, 2012 to prepare plans and schedules to remove themselves from the county tax rolls. (See F2, F5, & F6.)
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Related Recommendations (2)
R6
Special districts should adopt “board of director‟s practices” for all their reserves, re- stricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.)
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Related Recommendations (1)
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
F9
The Orange County Auditor-Controller allocated nearly $35,000,000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Wa- ter District, and Yorba Linda Water District) that did not show this revenue in their budgets pro- vided to the Grand Jury. What happened to that money is not clearly recorded. Budgeting with- out the allocated taxes indicates that, along with the three other enterprise special districts that do not rely on tax revenue, these enterprise special districts could function without tax revenues.
No recommendations for this finding
F10
The enterprise special districts could save millions of dollars in administration costs by consolidation into regional special districts. Five or six such enterprise special districts within Orange County could save at least $500,000 per year for each special district absorbed.
Related Recommendations (1)
R4
Water and sewer districts should be consolidated into no more than six regional districts. Consideration should be given to including the city water agencies in the consolidation. LAFCO should meet with the water and sewer districts before October 31, 2012 to develop plans and schedules for consolidation. (See F5, F6 & F9.)
F11
The Buena Park Library and the Placentia Library (the oldest special districts in Orange County) have long outlived their original intent of providing reading materials for their original isolated communities with an electorate of about 100 people. They could readily be absorbed into the County Library System or the cities.
Related Recommendations (1)
R3
Library districts should be absorbed into the County Library System. Both the Buena Park and the Placentia Libraries should meet with LAFCO and their cities or County Library System before September 30, 2012 to develop plans and schedules for consolidation and removal from the tax rolls. (See F11.)
F12
The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services.
Related Recommendations (1)
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
F13
The Surfside Colony Storm Water Protection District was formed in 1941 to protect the community from ocean swells during storms and high tide. Since then the community has changed and the local governments have grown to where these services can be performed by other county or city services, resources and equipment.
No recommendations for this finding
F14
The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the cus- tomers include all the costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency.
Related Recommendations (1)
R10
The Orange County Tax Collector should obtain all the specific allocations for the 1% property tax from the County Auditor-Controller and show them on the tax bill (not just the cur- rent generalized summary) sent to each property owner so that the taxpayers are informed of how much each service is costing them. (See F14.) *******
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Related Recommendations (1)
R8
Each special district should have an independent performance audit at least every three years. The executive summary of the performance audit should be distributed to all the taxpay- ers of each special district. Each of the special districts that has not had a performance audit within the last five years should contract with an independent outside consultant to conduct such an audit during 2012. These audits should be repeated at least every three years. (See F15.)
Agency Responses 24
Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.
▶
Capistrano Bay Dist 7/24/12, 2.8M
July 24, 2012
•
6 pages
• 12 responses
•
Score: -9
(+0, 3, -9)
View Details ▾
12 responses to findings and recommendations
F1
Most Orange County special districts, with or without the assistance of the Local Agency Formation Commission (LAFCO), have been incapable or unwilling to consolidate, absorb, or eliminate these outmoded and/or redundant agencies. LAFCO typically addresses larger issues such as merging of cities and elimination of “islands” within the county. The special districts themselves have not worked seriously toward their consolidation or demise. In this regard, the enterprise special districts and the n...
Response: Disagree
Score: -1
disagrees with Finding F1.
R1
All special districts (except the Vector Control District and the County Cemetery District) should be eliminated from the county tax rolls and should rely solely on fees or the services of surrounding governments. (See F2, F3, F4, F5, & F6.)
Response: Will Not Implement
Score: -1
R1: This recommendation will not be implemented by CBCSD because it is not warranted or reasonable.
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
disagrees with Finding F2.
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
Response: Will Not Implement
Score: -1
R2: This recommendation will not be implemented by CBCSD because it is not warranted and it is not reasonable.
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Disagree
Score: -1
disagrees with Finding F3.
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree
Score: -1
disagrees with Finding F4.
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Disagree Partially
Score: 0
partially agrees with Finding F7.
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
Response: Will Not Implement
Score: -1
R7: This recommendation will not be implemented by CBCSD because it is not feasible or reasonable.
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Disagree Partially
Score: 0
partially agrees with Finding F8.
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 f...
Response: Will Not Implement
Score: -1
R9: This recommendation will not be implemented by CBCSD because it is not feasible or reasonable.
F12
The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services.
Response: Disagree
Score: -1
disagrees with Finding F12.
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Disagree Partially
Score: 0
partially agrees with Finding F15.
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Midway City Sanitary District – Supplemental Response
February 06, 2013
•
2 pages
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No structured response data extracted yet.
View the PDF for full details.
▶
Municipal Water District of Orange County 9/11/12, 2.73M
September 11, 2012
•
7 pages
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No structured response data extracted yet.
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Three Arch Bay Comm Svcs Dist 7/2/12, 2.9M
July 02, 2012
•
8 pages
• 13 responses
•
Score: -9
(+0, 0, -9)
View Details ▾
13 responses to findings and recommendations
F1
Most Orange County special districts, with or without the assistance of the Local Agency Formation Commission (LAFCO), have been incapable or unwilling to consolidate, absorb, or eliminate these outmoded and/or redundant agencies. LAFCO typically addresses larger issues such as merging of cities and elimination of “islands” within the county. The special districts themselves have not worked seriously toward their consolidation or demise. In this regard, the enterprise special districts and the n...
Response: Disagree
Score: -1
disagrees with finding F.1, insofar as the District is concerned.
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
The District lacks independent knowledge of other special districts sufficient to respond to finding F.2 in the aggregate. Moreover, the District cannot respond to this request to the extent that it is vague and ambiguous as to what specific "recommendations" and "governmental agencies" are referenced. The District, as a general practice, considers and, in many cases, implements recommendations made by governmental agencies. E33 Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once [sic] only available through the special dis...
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
Response: Will Not Implement
Score: -1
Recommendation R.2 will not be implemented by the District, because it is not warranted insofar as the District is concerned. The District continues to provide important services to residents within its boundaries that are not provided by the surrounding cities and the county. The District meets regularly with LAFCO to address, among other things, growth and 228:4/015346-0001 3443343. a07002/12 -5-
population projections, present and planned capacity of facilities and services, financial ability of the District to provide services, accountability for community service needs, including governm...
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Disagree
Score: -1
disagrees with finding F.3, insofar as the District is concerned.
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree
Score: -1
disagrees with finding F.4, insofar as the District is concerned.
R6
Special districts should adopt “board of director‟s practices” for all their reserves, re- stricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.)
Response: Unknown
Score: 0
Resolutions adopted by the District's board of directors comprise policies and procedures for the District's operations. Those standards are used in preparing the District's budgets. Additional reserve policies and procedures will be considered by the District. R.7: Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. Response: The District cannot respond to this recommendation to the extent that it is vague and ambiguous as to the phrase "excessi...
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Disagree
Score: -1
disagrees with finding F.7, insofar as the District is concerned.
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
Response: Unknown
Score: 0
The District cannot respond to this recommendation to the extent that it is vague and ambiguous as to the phrase "excessive unrestricted reserves". The District designated money toward saving in order to respond to emergencies, keep rates affordable, maintain existing infrastructure and plan for future projects. As previously noted, the District has spent allocated reserves in fiscal year end 2011 for a storm drain rehabilitation project. The financials reflecting this work were pending at the time the Grand Jury Report was published. The District's board of directors will continue to execute ...
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Disagree
Score: -1
The District has spent the allocated reserves referenced above in the immediate fiscal year (2011) and prior to the publication of the Grand Jury Report. The District has amassed reserves in anticipating of master storm drain project for Vista Del Sol - from the upper end of the community to the lower portion and across Pacific Coast Highway. The completion of this project, along with the related financial data, is reflected in the most recent District audit (FYE 2011). Finally, the Three Arch Bay District has commissioned an independent reserve study to analyze reserve funds and future projec...
R8
Each special district should have an independent performance audit at least every three years. The executive summary of the performance audit should be distributed to all the taxpay- ers of each special district. Each of the special districts that has not had a performance audit within the last five years should contract with an independent outside consultant to conduct such an audit during 2012. These audits should be repeated at least every three years. (See F15.)
Response: Unknown
Score: 0
The District's board of directors currently provides for regular audits of the district's accounts and records pursuant to Government Code section 26909. These audit reports are available to the public. Furthermore, LAFCO regularity conducts MSRs of the District. MSRs are required to address matters such as growth and population projections, present and planned capacity of facilities and services, financial ability of the District to provide services, accountability for community service needs including governmental structure and operational efficiencies, and any other matter related to the Di...
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 f...
Response: Unknown
Score: 0
As required by law, LAFCO's budget is already funded in equal parts by the special districts, by the cities and by the County. The District does not have the authority to contribute additional revenues to LAFCO. The District's board of directors will continue to execute their fiduciary responsibility to their constituents. CONCLUSION Extensive legislation and regulation currently exists with respect to the governance of Community Service Districts. Moreover, the District's board of directors has itself established extensive policies and regulations in connection with the further implementation...
F12
The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services.
Response: Disagree
Score: -1
disagrees with finding F.12, insofar as the District is concerned.
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Disagree
Score: -1
disagrees with finding F.15, insofar as the District is concerned.
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Silverado Modjeska Recreation and Park District 01/22/13, 2.59M
January 22, 2013
•
6 pages
• 7 responses
•
Score: -5
(+0, 0, -5)
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7 responses to findings and recommendations
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
The SMRPD strongly disagrees with this conclusion. LAFCO's response to the Grand Jury Report states "LAFCO believes that each special district should be evaluated on its own with clearly defined and mutually agreed upon criteria to evaluate its efficiency and effectiveness." The SMRPD makes a conscious effort to comply with known recommendations when appropriate and works closely with other county agencies. Grand Jury Finding F3. Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that were once only available through the special district...
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
Response: Will Not Implement
Score: -1
R2; This recommendation will not be implemented by the SMRPD because it is not warranted and is unreasonable and we are not a community service district.
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Disagree
Score: -1
SMRPD strongly disagrees. We do not believe that the Silverado Modjeska Recreation and Park District has out lived its usefulness, but rather it has worked diligently to keep pace with the recreational and family needs of the residents of the remote canyon communities. As the only local agency providing these services, the SMRPD remains a critical component to the health of the residents and to the health of the community itself. The surrounding cities provide no services to our community nor are they interested in doing so. Grand Jury Finding F4 . The eleven non-enterprise special districts o...
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree
Score: -1
SMRPD strongly disagrees. The population in our district has not substantially grown since our founding and other cities have yet to expand close to our borders. The Silverado Modjeska Recreation and Park District has ongoing responsibilities that are unique to the remote children and families of canyon communities. Its services could not be provided elsewhere without causing residents 1o commute to cities. County agencies would need to carry the burden at a much higher cost to residents, and the county has publicly stated that it wants to stop providing municipal level services and focus on a...
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Unknown
Score: 0
1) We have no reserves. 2) Local citizens are informed regarding all income and expenses at monthly scheduled meetings. Contrary to the Grand Jury finding, district board directors are not permitted to "spend as they please." With an annual budget of approximately $100,000 for expenses to run two separate canyon community centers and two parks, caring for facilities and maintenance, managing possible open spaces within the district boundaries, and overseeing the community's only family day care center, the SMRPD has very little to 'dilly-dally' with. Furthermore, no fee increases, special asse...
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Unknown
Score: 0
The SMRPD maintains no reserves. (no responses required for F9-F14) Grand Jury Finding F15. Only one of the special districts, The South Coast Water District, has had recent performance audits. The lack of performance audits for the remaining special districts leaves the potential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contributed to the public's ignorance of these districts. SMRPD
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Disagree
Score: -1
LAFCO has been required to conduct MSRs every five (5) years of all public agencies including special districts under its purview. "LAFCO is finishing the third cycle of MSRs and has found no significant issues with special districts of Orange County." LAFCO has found no issues with regard to SMRPD provision of services. We do not believe we can afford to do a performance audit with our limited funds but will look into the feasibility of doing one.
Feb 13 13.01:37p Gregory Bates DC RECOMMENDATIONS Grand Jury Recommendation R1. All special districts (except the Vector Control District and the ...
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Office of the Treasurer-Tax Collector 10/23/12, 396K
October 23, 2012
•
1 pages
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No structured response data extracted yet.
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Trabuco Canyon Water Dist 7/25/12, 6.8M
July 25, 2012
•
14 pages
• 11 responses
•
Score: -7
(+2, 0, -9)
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11 responses to findings and recommendations
F5
The sixteen enterprise districts typically started as local agricultural irrigation providers and sanitation providers for local communities. These special districts have transitioned into providers of potable water and sewerage disposal for the cities that blossomed around them after 1950. These districts grew until their boundaries met a neighboring special district that was also growing. Some of these local smaller providers have already been absorbed by larger districts under one management.
Response: Agree
Score: +1
TCWD agrees with this finding which shows that special districts provide a focused service to specific communities and those special districts have been consolidated when and where deemed appropriate. The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely upon taxes collected by the county while three rely on fees and other sources for revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsidies and rely on fees for their re...
F6
The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely up- on taxes collected by the county while three rely on fees and other sources for their revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsi- dies and rely on fees for their revenue. Severance from the tax subsidies would enable financial transparency and let the cus...
Response: Agree
Score: +1
TCWD agrees with this finding which shows that special districts provide a focused service to specific communities and those special districts have been consolidated when and where deemed appropriate. The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely upon taxes collected by the county while three rely on fees and other sources for revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsidies and rely on fees for their re...
R6
Special districts should adopt “board of director‟s practices” for all their reserves, re- stricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.)
Response: Will Not Implement
Score: -1
TCWD will not support implementation of this recommendation because the Grand Jury has failed to present any factual evidence that it is warranted or that there is any reasonable basis for the number of regional districts referenced. Please see TCWD's Response to Finding F10 Special districts should adopt "board of director's practices" for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to...
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
Response: Will Not Implement
Score: -1
TCWD will not support implementation of this recommendation because the Grand Jury has failed to present any factual evidence that it is warranted or that there is any reasonable basis for the number of regional districts referenced. Please see TCWD's Response to Finding F10 Special districts should adopt "board of director's practices" for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to...
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Disagree
Score: -1
TCWD is unable to confirm the validity of the Grand Jury's above referenced conclusions and thus makes no comment on this finding. However, TCWD respectfully notes that, based on current reporting, the failure of the City of San Bernardino to manage and maintain its fiscal reserves has apparently been a significant contributing factor to that City's decision to file for bankruptcy. The Orange County Auditor-Controller allocated nearly $35,000,0000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Water District, and Yorba Linda Water...
R8
Each special district should have an independent performance audit at least every three years. The executive summary of the performance audit should be distributed to all the taxpay- ers of each special district. Each of the special districts that has not had a performance audit within the last five years should contract with an independent outside consultant to conduct such an audit during 2012. These audits should be repeated at least every three years. (See F15.)
Response: Will Not Implement
Score: -1
.
Response: TCWD will not support implementation of this recommendation because the Grand Jury has failed to present any factual evidence that it is warranted or that there is any reasonable basis for the number of regional districts referenced. Please see TCWD's Response to Finding F10 Special districts should adopt "board of director's practices" for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves...
F9
The Orange County Auditor-Controller allocated nearly $35,000,000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Wa- ter District, and Yorba Linda Water District) that did not show this revenue in their budgets pro- vided to the Grand Jury. What happened to that money is not clearly recorded. Budgeting with- out the allocated taxes indicates that, along with the three other enterprise special districts that do not rely on tax revenu...
Response: Disagree
Score: -1
TCWD is unable to confirm the validity of the Grand Jury's above referenced conclusions and thus makes no comment on this finding. However, TCWD respectfully notes that, based on current reporting, the failure of the City of San Bernardino to manage and maintain its fiscal reserves has apparently been a significant contributing factor to that City's decision to file for bankruptcy. The Orange County Auditor-Controller allocated nearly $35,000,0000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Water District, and Yorba Linda Water...
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 f...
Response: Will Not Implement
Score: -1
F10.
clearly provides a nexus between revenues and expenditures taking into consideration available reserves and future reserve requirements. Further, Proposition 218 prescribes specific rate payer transparency as it relates to formal customer notification and protest procedures. The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of the special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestri...
F10
The enterprise special districts could save millions of dollars in administration costs by consolidation into regional special districts. Five or six such enterprise special districts within Orange County could save at least $500,000 per year for each special district absorbed.
Response: Disagree
Score: -1
TCWD is unable to confirm the validity of the Grand Jury's above referenced conclusions and thus makes no comment on this finding. However, TCWD respectfully notes that, based on current reporting, the failure of the City of San Bernardino to manage and maintain its fiscal reserves has apparently been a significant contributing factor to that City's decision to file for bankruptcy. The Orange County Auditor-Controller allocated nearly $35,000,0000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Water District, and Yorba Linda Water...
R10
The Orange County Tax Collector should obtain all the specific allocations for the 1% property tax from the County Auditor-Controller and show them on the tax bill (not just the cur- rent generalized summary) sent to each property owner so that the taxpayers are informed of how much each service is costing them. (See F14.) *******
Response: Will Not Implement
Score: -1
clearly provides a nexus between revenues and expenditures taking into consideration available reserves and future reserve requirements. Further, Proposition 218 prescribes specific rate payer transparency as it relates to formal customer notification and protest procedures. The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of the special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted r...
F14
The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the cus- tomers include all the costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency.
Response: Disagree
Score: -1
TCWD is unaware of the evaluation methodology used by the Grand Jury to derive this conclusion, and is concerned that projected savings fails to recognize the potential for degradation of the current service models. Thus TCWD will not comment on and/or confirm, or disagree with, the validity of the Grand Jury's above-referenced conclusions. The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the customers include all the costs for these services without the tax subsidy wil...
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Placentia Library Dist 7/24/12, 5.7M
July 24, 2012
•
13 pages
• 3 responses
•
Score: -3
(+0, 0, -3)
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3 responses to findings and recommendations
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
The Placentia Library District respectfully disagrees with the Orange County Grand Jury Finding #2 as evidenced by LAFCO's 2005 MSR findings as stated the "Placentia Library expenditures are based on efficient methods of operation, the infrastructure is sound and adequate for the delivery of library services, the fee schedule was similar to that of other public libraries, the Placentia Library District is financially solvent and efficient, and that the Placentia Library District operates with a high degree of transparency and accountability to the public.
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree
Score: -1
The Placentia Library District respectfully disagrees with the Orange County Grand Jury's Finding #4.
F11
The Buena Park Library and the Placentia Library (the oldest special districts in Orange County) have long outlived their original intent of providing reading materials for their original isolated communities with an electorate of about 100 people. They could readily be absorbed into the County Library System or the cities.
Response: Disagree
Score: -1
The Placentia Library District respectfully disagrees with the Grand Jury's Finding #11 as it is not supported by facts.
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Santa Margarita Water Dist 7/23/12, 3.3M
July 23, 2012
•
8 pages
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OC Vector Control Dist 7/20/12, 2.1M
July 20, 2012
•
4 pages
• 7 responses
•
Score: -1
(+0, 6, -1)
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7 responses to findings and recommendations
F1
Most Orange County special districts, with or without the assistance of the Local Agency Formation Commission (LAFCO), have been incapable or unwilling to consolidate, absorb, or eliminate these outmoded and/or redundant agencies. LAFCO typically addresses larger issues such as merging of cities and elimination of “islands” within the county. The special districts themselves have not worked seriously toward their consolidation or demise. In this regard, the enterprise special districts and the n...
Response: Disagree Partially
Score: 0
OCVCD disagrees wholly. OCVCD is not "outmoded and/or redundant" and maintains its position of serving the entire County of Orange. The District has expanded its mission to include emerging and re-emerging vectors and vector-borne disease. OCVCD is the only special district in Orange County charged with protecting the public from vectors and vector-borne disease. The mission of OCVCD is very different from all other County agencies and this makes it difficult to participate in joint projects. The District continues to explore areas of collaboration with any agency where the sharing of informat...
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree Partially
Score: 0
OCVCD disagrees wholly. OCVCD has made a conscious effort to comply with known recommendations made by other governmental agencies when appropriate. The District works closely with all cities and county agencies. F3. Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that were once only available through the special district are now being provided by the surrounding cities and the expanding county. RESPONSE: OCVCD disagrees wholly. The District has kept pace with the public health needs of Orange County and is in fact controlling emergin...
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Disagree Partially
Score: 0
OCVCD disagrees wholly. The District has kept pace with the public health needs of Orange County and is in fact controlling emerging threats that did not exist before. As the only agency providing these services, the District remains a critical component to the public health of Orange County residents. F4. The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special ...
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree Partially
Score: 0
OCVCD disagrees partially. While some special districts could be consolidated or absorbed, as the only vector control agency in the County, OCVCD could not feasibly be absorbed. The day-to-day operations of OCVCD are so unlike those of any other agency in the County, consolidation would be a wasted effort. Due to the fact that vectors are mobile, regional treatment would ensure the entire County receives the same level of protection. It is virtually impossible to effectively manage vectors and vector-borne disease at the city or community level. Compliance with ever changing regulations is als...
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Disagree Partially
Score: 0
OCVCD disagrees wholly. OCVCD is primarily funded through benefit assessments and property taxes which are collected and distributed in April and December of each year. Much of the District's reserve is to fund operations between these distributions. Other monies are committed to District liabilities, such as equipment and vehicle replacement and facilities improvement. There are also funds committed to regulatory compliance and emergency response to public health issues.
OCVCD Response to "Let There Be Light - Dragging Special Districts from the Shadows" Page - 3 F8. The twenty-seven special...
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Disagree Partially
Score: 0
OCVCD disagrees partially. While the District cannot comment about other special districts, OCVCD maintains appropriate reserves for our operation. The reserves are required to fund operations during the year and must be sufficient to cover expenses between tax distributions. The operating fund is far smaller just prior to the December funding distribution than at any other time. F15. Only one of the special districts, The South Coast Water District, has had recent performance audits. The lack of performance audits for the remaining special districts leaves the potential for inefficiencies, po...
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Disagree
Score: -1
OCVCD disagrees wholly. Through the District's committee system there are continual audits of performance, especially in the area of financial management. One of the advantages of having many elected officials is that the District has many accountants, investment professionals, and attorneys on the Board to offer additional oversight to District staff. Committees exist for financial, property, and personnel issues. The committee chair reports to the full Board. In addition, of course, the District undergoes an outside audit as all special districts must. OCVCD will examine the cost and benefit...
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Surfside Colony Storm Water Dist 7/16/12, 3.8M
July 16, 2012
•
7 pages
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Surfside Colony Community Services District 7/16/12, 3.8M
July 16, 2012
•
7 pages
• 3 responses
•
Score: -2
(+0, 0, -2)
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3 responses to findings and recommendations
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Unknown
Score: 0
, we are not surrounded by Seal Beach. ave been geographically separated from the city of Seal Beach and many of our requirements are unduplicated by the city as a whole. In the
F4
The eleven non-enterprise special districts of Orange County founded before 1965 have not reflected the growth of the cities and county. The services that were unavailable from cities or the county have long since been made available as both the cities and county grew. Some of these special districts could be removed from the county tax rolls, and their services funded and absorbed by the county, surrounding cities or homeowners associations wherein they abide.
Response: Disagree
Score: -1
, we mentioned that the city was in existence long before the district was requested and approved. The services that existed at that time have not gone away but instead, more responsibilities have been added. F13 & F14 - No response required. Only one of the districts, The South Coast Water District, has had recent performance lits. The lack of performance audits for the remaining special districts leaves the potential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contr...
F9
The Orange County Auditor-Controller allocated nearly $35,000,000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Wa- ter District, and Yorba Linda Water District) that did not show this revenue in their budgets pro- vided to the Grand Jury. What happened to that money is not clearly recorded. Budgeting with- out the allocated taxes indicates that, along with the three other enterprise special districts that do not rely on tax revenu...
Response: Disagree
Score: -1
, F10, F11 - No response required. F12. - The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services. Response DF op ry tn As stated in the response to Finding #3, we are not surrounded by Seal Beach. ave been geographically separated from the city of Seal Beach and many of our requirements a...
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Sunset Beach Sanitary Dist 7/13/12, 2.7M
July 13, 2012
•
6 pages
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Midway City Sanitary Dist 7/12/12, 5.7M
July 12, 2012
•
12 pages
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Rossmoor Comm Svcs Dist 7/10/12, 713K
July 10, 2012
•
8 pages
• 12 responses
•
Score: -7
(+2, 0, -9)
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12 responses to findings and recommendations
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
. "Special Districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coordination is needed from the city and county agencies." Response: The District is unaware of any such recommendations made or not followed. F3. "Most non-enterprise special districts of Orange County have outlived their purpose and usefulness. Services that were only available through the special districts are now being provided by the surrounding cities and expanding county." Response: The District has insufficient kno...
R2
Community service districts should be absorbed either in the cities surrounding them or into surrounding private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner‟s association to develop plans and schedules for the future of these special districts. This meeting should be take place before Sep- tember 30, 2012. (See F3, F4, & F12.)
Response: Will Not Implement
Scheduled: FY 2010-2011
Score: -1
. "Community services districts should be absorbed either in cities surrounding them or into private homeowners associations. Each community service district should meet with LAFCO and with the appropriate city or homeowner's association to develop plans and schedules for the future of these special districts. This meeting should take place before September 30, 2012." Response: The recommendation is not warranted in the case of the District and, consequently, will not be implemented. The residents of Rossmoor have repeatedly rejected efforts that would have resulted in the elimination of the D...
F3
Most non-enterprise special districts in Orange County have outlived their purpose and usefulness. Services that they once only available through the special district are now being pro- vided by the surrounding cities and the expanding county.
Response: Disagree
Score: -1
. "Most non-enterprise special districts of Orange County have outlived their purpose and usefulness. Services that were only available through the special districts are now being provided by the surrounding cities and expanding county." Response: The District has insufficient knowledge or information to respond to this broad finding. Speaking for itself, Rossmoor is a unique community of approximately 10,500 residents who possess a powerful historic community identity. The District provides only the following limited services: parks and recreation services, street sweeping, street lighting, p...
R6
Special districts should adopt “board of director‟s practices” for all their reserves, re- stricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.)
Response: Will Implement
Due: December 15, 2012
Scheduled: FY 2010-2011
Score: +1
. "Special districts should adopt 'board of director's practices' for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-14 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets." Response: It is unclear what the Grand Jury means by "board of director's practices." All of the District's reserves are managed in accordance with all applicab...
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Disagree
Score: -1
. "The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not appear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use." Response: The District has insufficient knowledge or information to respond to this broad finding. Speaking for itself, the District's unrestricted reserves are primarily used to fun...
R7
Excessive unrestricted reserves should be used to reduce existing debts. Future revenues should be reduced to avoid the accumulation of unallocated revenue that does not meet the adopted new standards. (See F7 & F8.)
Response: Will Not Implement
Scheduled: FY 2010-2011
Score: -1
. "Excessive unrestricted reserves should be used to reduce existing debts." Response: While the Rossmoor CSD does not have what could reasonably be described as "excess" reserves, the District has used its restricted reserves to pay down debt, most recently allocating $495,000 to pay down debt obligations. In addition to paying down debt, a sizeable portion of unrestricted
reserves are annually transferred to the District's Capital Improvement Fund 40 for capital projects. This is the only source of funds for capital improvement projects within the District. R8. "Each special district should...
F8
The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year without taxes, fees, interest, or other sources of revenue. The boards of directors have the sole discretion to spend these unrestricted reserves.
Response: Disagree
Score: -1
. "The twenty-seven special districts in Orange County have amassed unrestricted reserves of over $866,000,000. That is enough money to fund all of these special districts for more than year [sic] without taxes, fees, interest, or other sources of income, The boards of directors have the sole discretion to spend these unrestricted reserves." Response: The District has insufficient knowledge or information to respond to this broad finding. Speaking for itself, the District currently has total unrestricted fund balances of only $885,396. As stated in response to previous findings, the District's...
R8
Each special district should have an independent performance audit at least every three years. The executive summary of the performance audit should be distributed to all the taxpay- ers of each special district. Each of the special districts that has not had a performance audit within the last five years should contract with an independent outside consultant to conduct such an audit during 2012. These audits should be repeated at least every three years. (See F15.)
Response: Will Not Implement
Scheduled: FY 2010-2011
Score: -1
. "Each special district should have an independent performance audit at least every three years... Each of the special districts that has not had a performance audit within the last five years should contract with an independent outside consultant to conduct such an audit during 2012." Response: Given the very limited size of the District and the limited scope of services it provides, this recommendation is not warranted or reasonable and will not be implemented. As discussed more fully in the District's response to Finding 15, supra, the District believes that a one-size-fits-all approach to...
F10
The enterprise special districts could save millions of dollars in administration costs by consolidation into regional special districts. Five or six such enterprise special districts within Orange County could save at least $500,000 per year for each special district absorbed.
Response: Disagree
Score: -1
. "The enterprise special districts could save millions of dollars in administration costs by consolidating into regional special districts. Five or six such enterprise special districts within Orange County could save at least $500,000 per year for each special district absorbed." Response: This recommendation does not apply to the District as it is a non-enterprise special district. F12. "The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes fo...
F12
The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services.
Response: Disagree
Score: -1
. "The community services that the original non-enterprise special districts provided can be provided by the surrounding cities and the county that have engulfed these districts. Continuing to collect taxes for these special duplicative services is a disservice to both the community they serve and the surrounding communities that provide the same or similar services." Response: Disagree. The District provides its services in a very cost-efficient manner and the degree of local control made possible by the District allows those services to be precisely tailored to the local community's unique c...
F14
The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the cus- tomers include all the costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency.
Response: Agree
Score: +1
. "The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the customers include all costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency." Response: The District does not provide water or sanitary sewer services. Therefore, this finding is not applicable to the District. F15. "Only one of the special districts, the South Coast Water District, has had recent performance audits. The lack o...
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Unknown
Score: 0
, supra, the District believes that a one-size-fits-all approach to a performance audit requirement is unwarranted. As stated in the Report, district budgets range from $135,000 to $159,100,000. Districts like the Rossmoor CSD with small annual budgets and a limited scope of services are not are not of the size and scope that would likely benefit from a performance audit. R9. "Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and setting of standards for reserves for the sp...
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Mesa Consolidated Water Dist 7/10/12, 4.7M
July 10, 2012
•
9 pages
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Costa Mesa Sanitary Dist 7/3/12, 4.1M
July 03, 2012
•
9 pages
• 9 responses
•
Score: -8
(+0, 0, -8)
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9 responses to findings and recommendations
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree
Score: -1
. "Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coordination and cooperation is needed from the city and county agencies." Response: CMSD cannot comment on how this organization responded to the recommendations made by various governmental agencies in the past because CMSD had a different administration. CMSD did, however, comply with the 2010-11 Orange County Grand Jury recommendations for greater transparency by making the General Manager's contract available on the w...
F5
The sixteen enterprise districts typically started as local agricultural irrigation providers and sanitation providers for local communities. These special districts have transitioned into providers of potable water and sewerage disposal for the cities that blossomed around them after 1950. These districts grew until their boundaries met a neighboring special district that was also growing. Some of these local smaller providers have already been absorbed by larger districts under one management.
Response: Disagree
Score: -1
. "The sixteen enterprise districts typically started as local agricultural irrigation providers and sanitation providers for local communities. These special districts have transitioned into providers of potable water and sewerage disposal for the cities that blossomed around them after 1950. These districts grew until their boundaries met a neighboring special district that was also growing. Some of these local smaller providers have already been absorbed by larger districts under one management." Response: The Costa Mesa Sanitary District was incorporated in 1944, nine years before Costa Me...
R5
Water and sewer districts should be removed from the tax rolls and operate solely on fees and other revenues for their services. Consideration should be given to forming non-profit agen- cies with ownership shared by the constituents. These districts should meet with county officials before October 31, 2012 to prepare plans and schedules to remove themselves from the county tax rolls. (See F2, F5, & F6.)
Response: Unknown
Score: 0
CMSD does not agree that water and sewer districts should be removed from the tax rolls and operate solely on fees and other revenues for their services. As indicated earlier, CMSD believes that special districts will have no alternative but to raise fees and/or reduce service levels to account for the loss revenue from property taxes. R6. Special districts should adopt "board of director's practices" for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts t...
F6
The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely up- on taxes collected by the county while three rely on fees and other sources for their revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsi- dies and rely on fees for their revenue. Severance from the tax subsidies would enable financial transparency and let the cus...
Response: Disagree
Score: -1
. "The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely upon taxes collected by the county while three rely on fees and other sources for their revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsidies and rely on fees for their revenue. Severance from the tax subsidies would enable financial transparency and let the customers see the true cost of the services provided." Response: CMSD receives little more than $200,000...
F7
The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not ap- pear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use.
Response: Disagree
Score: -1
. "The unrestricted reserves of the special districts are available to the governing boards to spend as they please. Local citizens are not openly informed of this wealth when agencies ask for fee increases, special assessments, or bond measures. Most of the special districts do not appear to have specific criteria for amassing these reserves nor do they have published long-range plans for their constructive use." Response: CMSD has not had a solid waste rate increase for the last seven consecutive years and no sewer rate increase has occurred in the last three consecutive years. The solid was...
F9
The Orange County Auditor-Controller allocated nearly $35,000,000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Wa- ter District, and Yorba Linda Water District) that did not show this revenue in their budgets pro- vided to the Grand Jury. What happened to that money is not clearly recorded. Budgeting with- out the allocated taxes indicates that, along with the three other enterprise special districts that do not rely on tax revenu...
Response: Disagree
Score: -1
. "The Orange County Auditor-Controller allocated nearly $35,000,000 to four enterprise special districts (Costa Mesa Sanitary District, South Coast Water District, Trabuco Canyon Water District, and Yorba Linda Water District) that did not show this revenue in their budgets provided to the Grand Jury. What happened to that money is not clearly recorded. Budgeting without the allocated taxes indicates that, along with the three other enterprise special districts that do not rely on tax revenue, these enterprise special districts could function without tax revenues." Response: Of the $35,000,00...
F10
The enterprise special districts could save millions of dollars in administration costs by consolidation into regional special districts. Five or six such enterprise special districts within Orange County could save at least $500,000 per year for each special district absorbed.
Response: Disagree
Score: -1
. "The enterprise special districts could save millions of dollars in administration costs by consolidation into regional special districts. Five or six such enterprise special
July 3, 2012 Page 5 of 9 districts within Orange County could save at least $500,000 per year for each special district absorbed." Response: It is unclear what criteria was used to estimate millions of dollars in savings by consolidating into regional special districts. Also, it is not mentioned as to which five or six enterprise special districts within Orange County can save at least $500,000 per year, so CMSD cannot...
F14
The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the cus- tomers include all the costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency.
Response: Disagree
Score: -1
. "The true cost of water and sanitary sewers in the enterprise special districts is hidden when both taxes and fees fund these districts. Only when the monthly service bills to the customers include all the costs for these services without the tax subsidy will the public understand the true cost of these services and achieve financial transparency." Response: For the past three years, CMSD has not used property taxes to fund its programs and/or operations. The fees charged to CMSD residents are the true cost for providing said services. F15. "Only one of the special districts, the South Coast...
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Disagree
Score: -1
. "Only one of the special districts, the South Coast Water District, has had recent performance audits. The lack of performance audits for the remaining special districts leaves the potential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contributed to the public's ignorance of these districts." Response: The Costa Mesa Sanitary District is one of the most efficient local governments in California. Our personnel costs is less than twenty percent compared to the average...
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Rossmoor Sewer Dist 6/28/12, 3.6M
June 28, 2012
•
2 pages
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Office of the Treasurer (Extension) 6/26/12, 306K
June 26, 2012
•
1 pages
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East OC Water Dist 6/21/12, 5.6M
June 21, 2012
•
9 pages
• 3 responses
•
Score: -2
(+0, 0, -2)
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3 responses to findings and recommendations
R6
Special districts should adopt “board of director‟s practices” for all their reserves, re- stricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.)
Response: Will Not Implement
Score: -1
. Special districts should adopt "board of director's practices" for all their reserves, restricted and unrestricted. All reserves should be classified in their 2013-2014 budgets according to GASB Standard No. 54. LAFCO should work with the special districts to prepare standard criteria for accumulating reserves according to the new classifications by December 15, 2012. These standards should be used in preparing the 2013-2014 budgets. (See F7 & F9.) Response: This recommendation requires input from our Auditor and analysis and discussion with our Board ; both wiil occur within the next six mo...
R9
Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO‟s future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 f...
Response: Will Not Implement
Score: -1
. Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO's future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 fiscal year is budgeted for consolidation, absorption and/or elimination of these districts. (See F...
F15
Only one of the special districts, The South Coast Water District, has had recent perfor- mance audits. The lack of performance audits for the remaining special districts leaves the po- tential for inefficiencies, poor practices, outmoded operations, etc. hidden from the governing boards and the communities they serve. The lack of published performance audits has contribut- ed to the public‟s ignorance of these districts.
Response: Unknown
Score: 0
).
R9. Each special district should contribute 1% of its unrestricted reserve fund to LAFCO to help finance preparing and directing the consolidation, absorption, or elimination, and the setting of standards for reserves for the special districts. These funds should be included in LAFCO's future programs and budgets until the consolidation, absorption or elimination of each special district is achieved. With these additional funds, LAFCO should begin meeting with each special district before the 2014 fiscal year is budgeted for consolidation, absorption and/or elimination of these districts. ...
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OC Auditor-Controller(Extension) 6/20/12, 267K
June 20, 2012
•
1 pages
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Buena Park Library Dist 6/5/12, 6M
June 05, 2012
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11 pages
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OC Local Agency Formation Comm 5/9/12, 3.5M
May 09, 2012
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7 pages
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South Coast Water Dist 7/25/12, 2.1M
March 20, 2012
•
16 pages
• 2 responses
•
Score: 0
(+0, 1, 0)
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2 responses to findings and recommendations
F1
Most Orange County special districts, with or without the assistance of the Local Agency Formation Commission (LAFCO), have been incapable or unwilling to consolidate, absorb, or eliminate these outmoded and/or redundant agencies. LAFCO typically addresses larger issues such as merging of cities and elimination of “islands” within the county. The special districts themselves have not worked seriously toward their consolidation or demise. In this regard, the enterprise special districts and the n...
Response: Unknown
Score: 0
, the original South Coast Water District has undergone four separate consolidations into its present size and services. It covers today an area of approximately 8.3 miles and serves a population of approximately 40,000, plus 1,000 businesses and more than two million visitors a year. It operates the Joint Regional Water Supply System under contract to two cities, three water districts and the San Diego County Water Authority. SCWD is continually exploring options and opportunities for improvement and to provide services to its surrounding cities and the County (See
F2
Special districts have made very little progress in complying with the recommendations made by various governmental agencies. To ensure recommendations are followed, more coor- dination and cooperation is needed from the city and county agencies.
Response: Disagree Partially
Score: 0
) PROPERTY TAX REVENUES/NEED F6. The sixteen enterprise special districts of Orange County founded between 1919 and 1964 have grown with the urbanization of the county. Thirteen of these special districts rely upon taxes collected by the county, while three rely on fees and other sources for their revenue. This suggests that all of these enterprise special districts could wean themselves from tax subsidies and rely on fees for their revenue. Severance from the tax subsidies would enable financial transparency and let the customers see the true cost of the services provided. SCWD disagrees with...