This is the final report of the Rio Linda / Elverta Chamber of Commerce Community Services District (CSD) committee.   Committee members are Jay O’Brien (Chairman), Jim Hockett (Vice Chairman) and Bill Shepherd. The President of the Chamber of Commerce is George Reidenbach.

The Committee was formed on March 4th.  It has held 15 weekly meetings, attended all meetings of the Boards of Directors of the Water District and Recreation and Parks District, and reviewed over 100 related documents in preparing this report and reaching a conclusion.

The Committee was tasked to “proactively help the business and residential communities to become aware of what a CSD is, including pros and cons.”  The Committee issued a preliminary report which was published in the May 1, 1997 issue of the Rio Linda Elverta News which expressed the preliminary finding that “a CSD would be good for Rio Linda and Elverta if....”  After publishing its preliminary report, the Committee solicited position statements from the directors of the Water and Recreation Districts and from their managers.  Statements were received from 9 of these 12 community leaders and were published in the News.  Those statements are included later in this final report.

The position of the Chamber’s Committee remains the same in this final report.  The Committee suggests that a Community Services District be formed through action by the elected district directors.  All of the concerns expressed in the preliminary report (the “if’s”) are under the control of the Water and Recreation district directors who hold elected positions to represent the citizens of Rio Linda and Elverta who, in turn, could benefit from the formation of a Community Services District.

This final report restates and expands the preliminary report.

A CSD may add other services if authorized by a vote of the people.  Because a CSD could assume other functions with such a vote, it has credibility when and if it acts as the voters’ representative to providers of other functions, such as police, fire, refuse, road maintenance and the like.

A Community Services District has been called a “junior city” with many of the advantages of an incorporated city.

A document called the “Rio Linda - Elverta Township Community Services District Feasibility Study” was prepared in January 1997 by Bill Katen and Mike Phelan, the Managers/Administrators of the two districts.  This study was prepared at the direction of the two Boards of Directors and was given to each director.  The CSD Committee has independently obtained much of the information contained in the feasibility study and has reviewed other information which confirms the information contained in the study.  The Committee did not identify any additional information which would modify or improve the study.  It is an excellent and thorough reference volume.  Interested parties should review this and all related public documents which are available at both the Water and Parks & Recreation District offices.

A Public Utility District, or PUD, was offered as an alternative to a CSD.  A PUD would allow up to nine elected Directors rather than five.  Also, strict accounting methods are prescribed by law.  In contrast, a Community Services District’s accounting methods are written into the charter of the CSD.  In addition, a CSD allows for the public library function, while a PUD does not.  As a result, the Committee concluded that a properly written CSD charter can provide all of the protection inherent in a PUD without the restrictions of a PUD.

The directors would then vote to form the CSD and instruct staff to work with legal counsel to prepare an application and submit the application to the Local Agency Formation Commission (LAFCO).  The application would detail exactly how the new CSD would be organized, and should be written to satisfy the concerns we have identified in this report.

As an alternative, it is also possible to circulate a petition and place the issue on the general election ballot.  Such an effort, would, however, be time consuming and expensive.  Therefore, the Committee recommends that the district directors, who are themselves elected community leaders, take positive action so as to avoid the cost of a special election.

• IT PROVIDES A PLACE TO BE HEARD AND A COMBINED VOICE.  Taxpayers and voters could attend regular “town hall” meetings where any community service (not limited to water and parks & recreation) could be discussed and actions recommended to the service provider.
• IT GETS THINGS DONE.  Board members and staff would deal forcefully with Sacramento County agencies and with the American River Fire District to obtain services or corrective actions to issues other than water or parks & recreation items, acting as representatives of the taxpayers and voters.  Because a Community Services District could, through a vote of the people, take over such services, it would “carry a big stick” when dealing with other agencies.
• COSTS AND SERVICES ARE MAINTAINED. Taxes and fees from the present districts do not change, and the services rendered remain the same or are enhanced.  Recreation & Parks District funds are not used to support the water function other than paying for water used, as at present.  Fees collected from water ratepayers are not used to support the parks and recreation functions.
• EMPLOYEES AND DIRECTORS ARE CONSIDERED.  Present employees of both districts must maintain or improve pay and benefits.  Almost all Board members and employees must “buy-in” on the concept.  A CSD won’t work if employees, administrators or board members are actively fighting it.  Five of the present ten directors are selected by the voters over a “phase-in” period of time, perhaps through the next two elections.
• EVERYONE (well, ALMOST everyone) INVOLVED SEES A BENEFIT.  Directors Robinson and Sullivan articulated concerns in their statements to the Committee which are included in the Appendix of this report.

Rio Linda-Elverta Recreation and Parks District:  31 square miles.  10 park sites, 100 acres.  Population in excess of 20,000.  First established as a county service area in 1961-1962.  It became an independent district in 1993, with elections held  in 1994.  4 full-time employees, 9 part-time employees.

Rio Linda Water District:  17.7 square miles.  11 wells.  100,000 gallon water tower. Population aproximately 20,000.  4,000 water customers.  Formed in 1948 as an independent special water district. 7 full-time employees, 2 temporary employees.

Past Performance - Amounts in Thousands                  1994-1995         1995-1996
                                                       Parks    Water    Parks   Water
Revenues                                              $457.6   $777.3   $404.7   $737.1
Non-operating revenues (Water only)                             470.3             375.6
Expenditures - (Parks figures exclude capital outlay)  510.4    840.9    452.7    767.1
Excess/(Deficit) Revenues over Expenditures          $ (52.8)  $406.7  $ (48.0)  $345.6

A brief analysis of the above information reveals that both districts are spending slightly more funds than they take in, on a strict operational basis.  In the most recent two years, the Rec/Park District spent about 11 percent more than it took in. Although the Water District revenues have exceeded expenses during the past two years, this is due to the large amount of “non-operating” revenues the district takes in.  These non-operating revenues come mainly from interest and dividends earned on funds reserved for future pipeline or well development.  If the non-operating revenue is excluded, the district expenditures exceeded revenues by 8.2 percent in 1994-95 and 4.1 percent in 1995-96.

In our opinion, each of these conditions taken alone could be considered minor in nature, perhaps even considered normal year-to-year variations.  However, as discussed below, each district has other, more serious problems looming on the horizon.

The Rec/Park District received about 2/3 of its revenues from property taxes in 1995-96.  Property tax revenues have been declining in recent years, and thus, the district has experienced a revenue decline.  This situation is compounded by a potential loss of significant property tax revenue the district receives from businesses near Northgate Boulevard, on the district’s western edge.  Although not certain, the City of Sacramento has suggested that it may annex that property.

Neither of the potential problems discussed above would be significantly improved or diminished by the formation of a Community Services District.  Whether combined or separate, both operations require appropriate attention to current and future financial situations.

1. Improved local political responsibility.  Locally elected and  locally controlled.
2. Improved political accountability.  Local input to community concerns and priorities.
3. Improved financial responsibility.  Better accounting of revenues and expenditures.
4. Improved financial responsibility.  Monies due this community will return to this community.
5. Improved infrastructure.  Parks and water now; libraries, open space districts and other services as voters decide in the future.
6. Improved infrastructure opportunities.

No responses were received from:  Jerry Wickham, Director, Water District; Wilma Dyer, Director, Recreation & Parks District; Bill Katen, Administrator, Recreation & Parks District.

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